Nepal | July 18, 2019

EDITORIAL: Sluggish export

The Himalayan Times

The government must create conditions in which farmers and producers can export their goods at competitive prices

The export of priority products has declined this fiscal year even though there has been a favourable investment climate within the country. Exports of goods such as yarn, footwear and leather products listed under the Nepal Trade Integration Strategy (NTIS) have declined as compared to their export before the 2015 earthquake and subsequent economic blockade in 2016. Nepal generally exports woolen carpets, tea, noodles and pasta, textile, hide and skins, medicinal herbs, woolen and pashmina shawls, cardamom, ginger, yarns (polyester and cotton) and footwear. These are the major exportable items from which the country earns foreign currency to meet its cost for imports and keep the balance of payments, besides the contribution from remittances. Roughly, Nepal exported goods worth Rs. 28 billion in the fiscal year 2015/16 while export of such items dropped by about Rs. two billion to Rs. 26 billion during the fiscal year 2016/17. If this trend continues export of merchandise goods under the NTIS may drop to four percent of the gross domestic product by 2020 from two percent in 2015/16. The government has prioritized them as export items under the NTIS, and they are 41 percent of the total export.

The traders and manufacturing industries blame the devastating earthquake and economic blockade for the sluggish export. The export sector has yet to fully recover from  natural disasters and trade disruption. The NTIS has envisioned a four-year target (2016-20) to boost export by taking special measures to be undertaken by joint secretary of the concerned ministry or head of departments. The government had expected a growth of exports as the political and economic situation had gradually normalised for economic activities. The results were not so encouraging despite some notable improvements on the supply of electricity and investment climate, cordial labour-employer relations and less political disturbances. Officials at the Commerce Ministry have, hoped that things will improve in the coming years.

In order to make improvement in the export sector the government’s efforts of providing support and incentives to the producers within the country are not enough. The government should also do additional homework to make sure that the prioritized goods do not face any hindrances at the time of their export, especially at the customs points of the countries where these items are being exported. Such goods often face anti-dumping or countervailing duties and such hindrances take months to be removed. The farmers who produce tea/coffee, ginger and cardamom, for example, do not get a fair price for their produce after harvest. The government must fix the support price of such goods so that the small-scale farmers are not cheated by middlemen. Development of trade related infrastructure, trade and transport facilitation, institutional capacity building for trade negotiation, development of standard and technical regulations, sanitary and phyto-sanitation standards, intellectual property rights and payment related issues, among others, are keys to boost export and the government must do adequate homework. Branding of Nepali goods in the international market is another aspect which is lacking. The government must create conditions in which farmers and producers can export their goods at competitive prices.

Lifting ban

The government is mulling lifting restrictions on late-night businesses in popular hubs like Thamel, Durbar Marg and Lake Side. It is estimated that nearly 80 per cent of the tourists visit Thamel. The necessary security would be there to run discotheques, bars, restaurants, guest houses, night clubs, travel agencies and money exchange facilities round the clock. Installing CCTV cameras and street lights and also deploying policemen would help ensure security for all those concerned.

The district administration and police offices would coordinate their activities with business people so that they would be able to deal with crime. Since these tourists have become noisy the authorities moot compelling discotheques and dance bars to have a soundproof system so as not to disturb people residing here. It is a matter of concern that such sites see a lot of criminal activities. Therefore, if the security would be there to run businesses throughout the day and night there is every reason to decide in favour of round-the-clock business there. This would help tourism and make these sites popular.

A version of this article appears in print on July 10, 2017 of The Himalayan Times.

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