Nepal needs to diversify trade with China for more options

Himalayan News Service

Kathmandu, April 2:

Governor of Nepal Rastra Bank (NRB), Dr Tilak Rawal while speaking at the pre-consultation forum in the run-up to the Nepal Development Forum (NDF), has said that Nepal needs to diversify trade with China to reduce its dependency on India. Nepal has to enhance its competitive strength by concentrating on economic diplomacy, suggested governor Rawal today. Concerned sectors of the country need to be mobilised in promoting trade and commerce and it should not depend merely on the ministry of industry, commerce, and supplies, said Rawal.

Presenting a paper on trade and commerce, Purushottam Ojha, joint secretary at the ministry of industry, commerce and supplies said that following the adoption of liberal policy, the trade/GDP ratio continued to increase and was around 41 per cent in 2000. However, it has gone down in 2001-02, said Ojha. "Export also declined in 2002 compared to an average growth rate of 28 per cent during the 1990s."Ojha said that the decline in export is attributed to structural weaknesses as the export sector is very narrowly concentrated in a few products -- garments, carpets and pashmina which alone accounted for the 50 per cent of export earnings in 2001.He said that the gaps exist not only in the understanding about formulating appropriate trade policies but also in the capacity to implement the trade policies. "The government needs to confine itself to the formulation of policy, development of institution and implementation and regulation of the policy. In this context, inter-ministerial coordination on policy formulation process, including sufficient dialogue with stakeholders and civil society and the establishment of an economic and trade intelligence unit to monitor the flow of goods and services are required."Dr Dilli Raj Khanal, former member of National Planning Commission (NPC), today chaired the function. He said that while making such policies, stakeholders should also be consulted. "During 1996, exports had gone up but the leakage had not been wiped out despite various policies, Khanal said. Weak implementation of policies also contributed to weak trade development"Prof Bishwambher Pyakuryal, president of Nepal Economic Association (NEA) said that Nepal is already in trouble with various trading agreements with India and has not been able to enhance its competitive strength yet.