It is only through the promotion of SMEs that both our economy and exports can grow
Nepal's ever dwindling exports, now reduced to just about half a billion dollars, speak volumes about our inability to foray into the international markets to sell our products, whether agricultural, industrial or handicrafts. Although Nepali products, produced mostly by small and medium-sized enterprises (SMEs), hold tremendous potential for export, yet in the absence of proper branding and packaging, they are unable to find a market. This was reiterated by experts participating in the SME Summit organised by the Federation of Nepalese Chambers of Commerce and Industry in Kathmandu the other day. For decades, both the government and private entrepreneurs have been talking about how our products, ranging from ready-made garments, handwoven woolen carpets and pashmina to tea, coffee, ginger and cardamom, as well as semi-precious stones, hold great potential for export, yet nothing has happened to make a splash in the global market.
It should be plain to all that marketing goods is a mix of product identification, pricing, targeting the right audience and, not the least, promotion. All this requires investment, which is sorely lacking in Nepal.
Quality control is another aspect of winning the trust and loyalty of customers, especially in the international market. One may recall that the export of pashmina shawls, whose exports were doing so well in the Nineties after the collapse of handwoven woolen carpets, slumped in no time due to compromises in their quality.
And it has never been the same since then, costing both the entrepreneurs and the country dearly. In recent years, young entrepreneurs have made a name for themselves in the clothing business, creating brands that appeal to both Nepali and international customers. Still, the businesses are too small to become major exportable items in the near future.
Mass production and sustainability are thus just as important in how much we can export globally.
Since Nepali entrepreneurs are unable to invest in large industries, SMEs will dominate the Nepali economy. And it is only through their promotion that both our economy and exports can grow in the future.
It surprises many that export-oriented Japan has close to 4 million SMEs, accounting for almost 98 per cent of all companies, which employ about 32 million people. However, SMEs in Nepal face numerous hurdles in their expansion related to access to finance, skilled manpower, market promotion, procedural difficulties and high interest rates on loans.
Given Nepal's dwindling exports and revenue, the new government definitely has the onerous task of propping up an ailing economy it has inherited. Yet the entrepreneurs have no one but the government to look up to shore up the SMEs that employ 1.7 million people. The government must thus set its priorities right – does it want Nepal to remain an import-dependent economy or does it prefer to see a proliferation of SMEs for achieving great economic progress? The summit concluded with a 10-point manifesto aimed at supporting the development, expansion and promotion of SMEs in Nepal. The stakeholders must see to it that they are implemented and not forgotten until the next summit.
Erring pilots
Nepal's civil aviation sector always comes in the news for the wrong reason. No sooner had an ATR aircraft of Yeti Airlines crashed in the tourist city of Pokhara, killing all 72 people on board on January 15, than three pilots of Nepal Airlines (NAC) were barred from flying after they disobeyed the instruction from the air traffic control specialists (ATCS) of Hong Kong. The NAC, as per the direction of the Civil Aviation Authority of Nepal (CAAN), has decided to ground the three pilots on charges of breaching the instruction of the ATCS of Hong Kong. It is learnt that the three pilots had flown the NAC aircraft at a lower altitude than permitted by the ATCS. CAAN officials have said they had to take action against the erring NAC pilots based on the complaint from the ATCS of Hong Kong.
They will be grounded until the investigation is completed. However, this action has tarnished the reputation of the state-owned airline, which never improved its institutional capacity to operate at a profit. Such acts - either aircraft accident or breaching instructions of foreign airports - are some of the reasons why the European Union has blacklisted Nepali airlines and barred them from flying in its skies since 2013. How long will it take for the people engaged in the civil aviation sector to learn from such bad news?
A version of this article appears in the print on January 25, 2023, of The Himalayan Times.
