EDITORIAL: Focus on export
In order to increase export, Nepal must look for other areas where it has fairly competitive advantages
The country’s trade deficit is widening every year due to huge imports of goods compared to the sluggish export. This is a serious issue that will have a negative impact on the balance of payment. The country’s foreign currency reserve will also squeeze if the government does not take concrete steps to boost export of major commodities that Nepal has competitive advantages. Nepal witnessed trade deficit of Rs 1.03 trillion in the first 11 months of this fiscal (mid-July 2017 to mid-June 2018). However, the export remained stagnated despite the fact that the country has got a stable government and industries are now enjoying regular supply of electricity. As per the latest data provided by the Department of Customs (DoC) the country imported goods worth Rs 1.11 trillion during the review period against the export of Rs 74.32 billion. This means that Nepal imported goods worth Rs 14.90 against export of every rupee.
The widening trade deficit has so far been sustained by the inflow of remittance, which has also been in a downward trend, especially after the 2015 earthquake, as more and more youths have stayed back and are involved in rebuilding their damaged houses. Economists believe the volume of imports grew higher this fiscal as compared to the last fiscal due to imports of additional capital goods — cement or clinker, MS billet, iron and steel, mills and machinery — for the reconstruction of damaged physical infrastructure, individual houses and construction of highways and hydropower projects. Imports of petroleum products and electricity have also contributed to absorb foreign currency reserve. Trade deficit is growing at an unsustainable pace. But there is limited remedy to cope with this alarming trend. The DoC has said imports surged by 24 per cent while export rose at a moderate pace of 10.5 per cent.
Nepal’s foreign trade is largely concentrated with India. The country’s total import and export stand at 66.2 and 57 per cent with India, respectively, while its import and export with China stand at around 13 and four per cent, respectively. Nepal also does business with the USA, Thailand, Vietnam and Turkey. But the volume of the country’s export in these countries is very low. Tea and coffee, ginger, yarn, carpets, apparel, iron and steel have always been the major export of the country. In order to increase export to India, China and the third countries, Nepal must look for other areas where it has fairly competitive advantages such as herbal medicines and low-volume, high-value products that have high demand in international markets. We must also be able to tap the zero tariff facility on 66 listed items provided by the USA till 2025 under the Trade Facilitation and Trade Enforcement Act, also approved by US Congress and General Council of World Trade Organisation. If this facility, which was offered to Nepal after the 2015 earthquake, is tapped properly, Nepal can fetch around US$ 10 billion in the coming 10 years. The government and private sector must work together to reduce trade deficit by boosting the country’s export of select items.
A bird in hand
Birds are indicators of climate change. They are a crucial component of our natural ecosystem, and their presence indicates biological richness of our environment. And some birds are important pollinators. For these reasons, scientists have long been talking about bird conservation. A three-day bird fair in Pokhara of Kaski, which started on Tuesday, hence is a good event, as it would help raise awareness about bird conservation. According to Pokhara Bird Society, the organiser, the bird fair also aims to promote avian tourism.
But these beautiful creatures are under threat. A recent global study on birds suggests that one in eight birds are threatened with extinction. Over 100 species of birds in Nepal are considered nationally threatened. Climate change, human activities and habitat are putting different bird species at risk. According to Hemanta Dhakal, secretary of Pokhara Bird Society, destruction of Fewa wetlands and encroachment of lake areas are posing serious threats to different bird species. In light of the important role birds play in our natural ecosystem, there is a need to raise awareness about conservation of birds, and more attention needs to be paid to protect those species which face extinction threat.