Nepal’s exports have been suffering over the years due to slump in international demand for hand-knotted woolen carpets, readymade garments and pashmina products. The blame has been put on lack of quality consistency, delay in technology upgradation, political instability and low quality infrastructure, among other things.
In the last fiscal year, country’s exports stood at Rs 60 billion whereas imports topped Rs 226 billion, pushing country’s trade deficit up to about Rs 165 billion. Because of this dismal scenario the trade sector has not been able to play a significant role in the economic development of the country.
“In order to boost exports, we are now trying to identify at least 15-20 potential products and services that have demand in the international market,” Commerce Secretary Purushottam Ojha told the consultation meeting of Nepal Development Forum in Kathmandu on Friday. “In this regard, the government is soon conducting Nepal Export Potential Study.”
The Study is not only expected to identify products and services of competitive and comparative advantage but also determine the impact export of those products and services can have on poverty reduction – the overarching goal of the country.
“We are, thus, trying to link trade with poverty alleviation for the first time in Nepal,” Ojha said.
His comments come at a time when many are blaming the private sector of exporting imported goods without adding any local value to it. “This does not give any benefit to the common people – a trend which has to be reversed,” Ojha said.
Kush Kumar Joshi, president of the Federation of Nepalese Chambers of Commerce and Industry, however, said the government will not be able to achieve any of its goals unless it addresses the ongoing power crisis.
“On top of that there are numerous bandas [shutdowns] and strikes,” he said. According to Joshi, a total of 121 bandas were organized last year that cost the economy Rs 12 million per day. “Private sector cannot function in uncertain atmosphere,” he said. These factors, he said, have been lowering the contribution of industrial sector to the country’s GDP. Contribution of industrial sector to GDP which used to stand at seven percent in 1991 had gone up to 10 percent by 2000. However, it came down to around seven percent last year.
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