Export potential of services

Kathmandu, July 11:

Nepal has comparative advantage over other countries in the region in terms of services like health, education and high-end retail services.

Experts in a workshop organised here today by South Asia Watch on Trade, Economics and Environment (SAWTEE) on behalf of the Ministry of Industry, Commerce and Supplies (MoICS) said that Nepal, due to lack of coordinated effort and poor infrastructure, has been unable to reap the benefits.

Presenting his report on ‘Nepal’s Export Potential in Health, Education and high-end Retail Services,’ Dr Nephil Matangi Maskey said the survey result suggested natural comparative advantage in services export for Nepal. Dr Maskey, however, pointed out lack of coordinated effort, poor infrastructure for trade in services and unfriendly business environment as constraints in potential service export.

“The present understanding of trade has to be redefined. Trade has to be understood

as a comprehensive process, from start to conclusion, which involves a number of distinct factors,” he said, adding that the government has to come up with a comprehensive trade policy which necessarily updates the existing Trade Policy, 1992.

Offering his comments on the study report, Dr Dinesh Shrestha, president of Nepalgunj Medical College, felt the need for strong political commitment to promote service exports. “The quality of our education is one of the best in the region. However, students are still unsure about the acceptability of Nepali educational degrees throughout the world. The government needs to work on this issue seriously,” he said. He also asked the government to recognise intangible goods like services as export commodities and provide facilities accordingly.

The Three-Year Interim Plan (TYIP) has recognised service business as an important contributor to the national economy. Likewise, World Trade Organisation (WTO) has also recognised service business as trade while efforts are underway to include service business in fora like South Asia Free Trade Association (SAFTA) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

Bodh Raj Niraula, joint secretary to MoICS, said the study was conducted to understand the potential of service export in Nepal. “We have immense prospects for development of service export. But we are lacking policies and modalities to take advantage from these prospects. I am hopeful that the study will help institutionalise service export as an important aspect of our national economy,” Niraula added.

The study was jointly conducted by MoICS, SAWTEE and United Nations Development Programme (UNDP).