EDITORIAL: Untapped potential
The necessary infrastructure should be built to enhance earnings from tourism as Nepal is among the must-visit tourism sites in the world
The seven-fold increase in the trade deficit in the last decade shows that there is something wrong. Experts attribute this to the weak production base in the country.
The available figures show that growth in imports has caused a trade deficit of Rs. 201.69 billion in the first quarter of this fiscal year (mid-July to mid-October). This deficit is 80 per cent in comparison to the same period last fiscal.
Goods worth a staggering Rs.220.62 billion were imported while exports were worth only Rs. 18.9 billion. This ever widening gap has the policy makers deeply concerned.
Moreover, imports will be on the rise for there is requirement of a huge amount of construction materials for post-earthquake reconstruction. Remedies should therefore be sought in dealing with this alarming development at the earliest.
The major imports in the review period were vehicles and spare parts followed by petroleum products and iron and steel, while exports comprised mainly tea, apparel and clothing accessories and coffee.
Industries have closed and many others are on the verge of doing so because the production costs have risen because of power outages, labour unrest and lack of investment-friendly environment.
This has led to de-industrialization which has proved to be costly and also the low yields from agrarian country badly in need of modernization. The focus should be on self-reliance on agricultural production.
The manufacturing sector would also stand to gain if there was cheap and reliable energy supplies with cordial relations between the laborers and employers. We should realize that Nepal is not in isolation but in competition.
The food for thought is why a country like Somalia gets three times more Foreign Direct Investment per capita than Nepal. One of the major reasons for this is that the environment is not conducive for foreign investors in Nepal.
They face hassles such as delay in getting approval for the dividend repatriation from Nepal government. In comparison to other LDCs the cost of doing business in Nepal is high and also risky.
The issue of protection of property rights – real and intellectual -- is another area that needs to be addressed. Nepal has the potential of developing software.
At present the country depends on remittances. Although this is bolstering the economy at present, we need to create more opportunities and jobs.
The Nepali economy depends on agriculture and tourism and mostly small investments. Little development is seen in other sectors. Nepal could also collaborate with big foreign industries and manufacture some components.
Since the cost of production in Nepal would be less than other big economies it stands to benefit by manufacturing them. The world’s largest economy, the US, allows duty free access for 66 Nepali products in the market.
The focus should be on those items which have comparative advantages. Moreover, the tourism industry should be given due importance for it could be one of the largest income generators.
The necessary infrastructure should be built to enhance earnings from tourism as Nepal is among the must-visit tourism sites in the world.
The economy would improve if we were able to tap the high hydroelectricity potential.
Public health officials in the Kathmandu district are reported to have express concerns that the residents of the valley are more prone to such infectious diseases as dengue, cholera, jaundice and typhoid than the people living in the outlying districts.
It may seem somewhat strange because the Kathmandu Valley has the best of medical facilities in the country.
But their conclusion is that health coverage in the valley is lower in terms of the provision of basic preventive health services such as the distribution of Vitamin A capsules.
The concerned agency sent only 126,000 Vitamin A capsules instead of the 157,000 capsules required during a recent campaign.
A degree of truth in this conclusion may not be denied. But it is difficult to accept this alone as the whole truth in the absence of adequate and reliable data.
Better and more facilities are available in the Valley for various kinds of vaccination and drops and capsules aimed at preventing various kinds of diseases.
The Valley is a densely populated area, along with many rented rooms, unregistered houses and slums. This may cause problems in reaching the services to all the targeted residents.