Kathmandu, May 5:

The government of Japan has asked the Nepali government to send a proposal for providing aid to Nepal for the development of the export sector for the current fiscal year 2006.

The Japanese government has shown its interest following the decision at the sixth

WTO ministerial meet held in Hong Kong in December 2005 for giving aid to least developed countries (LDCs) under ‘Aid for Trade’ programme, sources at the Ministry of Industry, commerce and supplies (MOICS) disclosed to The Himalayan Times.

A budget of $2 billion has already been decided by Japan for this, which will be distributed among the 32 LDC member countries of the WTO. This is the first time that Japan is proposing to give aid to Nepal under the Aid for Trade, following Nepal’s accession to WTO, sources revealed.

The forthcoming Japanese aid will be for a period of three years.

MOICS is preparing to send a proposal to the Japanese government after discussing it with concerned stakeholders here. MOICS, Ministry of Agriculture and Cooperatives (MoAC), Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and other stakeholders held a meeting yesterday at the MoICS chamber.

However, they could not decide on the modalities of the proposal.

At least two more meetings, involving all stakeholders, will be held before finalising the list of exportable products, especially to Japan, said ministry sources.

Exportable products to Japan currently are constituted of handicrafts and agricultural products.

Interestingly, Japan is giving aid for only those Nepali exportable products which are being exported to Japan currently, under the ‘Aid for Trade’ mechanisms, according to ministry officials.

Japanese aid to Nepal under ‘Aid for Trade’ will be used for skill training, processing, product development, packaging and standardisation of products to boost exports as per the WTO provisions, said senior ministry officials.

In a few days, the ministry will prepare its proposal and send it to the government of Japan. Products such as honey and agricultural products are being proposed by the Nepali side, said ministry officials. However, US and EU are yet to prepare separate products’ list to be imported to their countries.

Due to political instability, US and European countries are yet to decide on how much aid they will provide to LDCs as per their commitment at Hong Kong WTO meeting.

Initially, US had proposed to give one million dollar to Nepal, according to ministry officials. US and EU countries have already hinted that they would focus their aid in Nepal to boost exportable products’ development, infrastructure development, institutional development and removal of export barriers.