Experts urge better policy, infrastructure

Kathmandu, November 13:

Experts today underscored the need for proper planning and right policy in realising a vision of developing Nepal as a transit country for facilitating trade between India and China.

They also noted that implementation through public-private-partnership approach in realising the vision would be beneficial. Nepal holds a huge potential and could serve as one of

the best land transit route to the world’s two largest economies in north and south.

Meanwhile, they also pointed out the need of a comprehensive homework and preparations before opening up Nepal as a transit route to these two fastest growing economic super powers. Some of the preconditions that Nepal needs to fulfil at present are proper policy measures, well-equipped infrastructure and integration of the Nepali economy into the regional and multilateral trading system.

Dr Shanker Sharma, vice-chairman of National Planning Commission (NPC), speaking at a national seminar on ‘Nepal as a transit state: Emerging possibilities’, organised by the Institute of Foreign Affairs (IFA) in cooperation with the Confederation of Nepalese Industries (CNI) here today, said that necessary homeworks have been already started as per the recommendations made by the high-level taskforce.

“Taking into consideration of rapidly growing bilateral trade, Nepal could be much more cost effective transit route for both India and China. Nepal’s topographical status is best suited for a transit state, as length from north to south is approximately 300km.”

He also said that the idea of developing transit point was conceived of mainstreaming rural economy following advancement of transportation and improving the existing infrastructure, which ultimately will be instrumental in reducing poverty. “Once it is translated into action more other sectors such as tourism, communications, trade and foreign direct investment (FDI) will foster simultaneously,” he added.

In order to start off, government is upgrading Araniko Highway, which links Kathmandu with Zhangmu (Khasa) of Tibet Autonomous Region of China and expedite construction of Syabrubeshi-Rasuwagadhi Highway. “Necessary works have begun to this regard,” he informed.

Atma Ram Murarka, acting president of CNI said that the private sector is keen in assisting the government to realise the vision. He, however, said that Nepal should be a proactive partner while facilitating Indo-China trade by providing transit route.

“Nepal could reap benefits by value adding in a

form enhanced logistic support such as transporting goods, providing warehouse and developing special economic zones at the border areas,” he said.

Presenting a paper ‘Nepal as a Transit State: Emerging Possibilities’, Tara Dahal highlighted prospects of transit point in terms of facilitating trade and taking advantages out of it.

“There is an urgent need of developing better road links and communication facilities as well as develop good neighbourly political understanding with both India and China,” she said.

Some preconditions that Nepal requires to fulfil are freedom of transit, fuller integration of its economy into regional and multilateral trading system, modernisation of roads and communications, upgrading of warehouse facilities, expansion of dry ports, scientific customs handling procedures, proper security and dynamic banking services.

Dahal also emphasised in integrating the market in tune with regional and global integration process envisioned by the SAFTA and WTO. “Nepal has to see welfare of its people and seek political stability through economic development, expansion of production and trade diversification,” she added.

Giving a brief overview of skyrocketing Indo-China trade, Nischal Nath Pandey, executive director at IFA said the potential for growth in trade is staggering. The bilateral trade between China and India recorded $14 billion in 2004 and is predicted to be as much as $450 billion by 2010.

“Nepal should look beyond Tibet and India, once transit point comes into operation. Since Tibet is only a small market and politically sensitive, Nepal should expand its trade beyond the Central Asian countries and the Mainland China,” said Dilli Prasad Bhattarai, an economist presenting his paper ‘Nepal at the first and second cross roads: Opportunities for a win-win situation in the new development context’.

Prakash A Raj and Keshav Raj Jha, president of Nepal Council of World Affairs also presented papers on the occasion.