Thursday, December 29, 2022

Experts blame lack of coordination for poor export trade

Kathmandu, Dec. 28

Top government officials and private sector experts have said that the failure in forging collaboration among various government agencies, and among the public and private sector agencies has barred the country from expanding foreign trade and promotion of Nepali goods in the international markets.

It is discouraging that we have been talking about the inter-agency coordination for the past three decades but the situation has not been improved on any front, they lamented while speaking at a talk on 'Trade policy and economic diplomacy in Federal Nepal' organised by the South Asia Watch on Trade, Economics and Environment (SAWTEE) and The Asia Foundation on Wednesday in the Capital.

Secretary of the Ministry of Foreign Affairs (MoFA), Bharat Raj Poudyal, said that coordination among the government agencies as well as with the private sector bodies was an original and recurrent challenge that existed for the last many decades.

He stressed on the coordination among the government agencies, specific-purpose government bodies like the Trade and Export Promotion Centre and Investment Board Nepal, and private sector companies, producers and associations.

"The MoFA has tried to make some improvements in forging greater cooperations among these agencies in the past couple of years but there were no encouraging results," he said.

Paudyal maintained that the MoFA has been working with concerned government agencies and business institutions to promote Nepali goods in the major international markets and facilitate their exports.

"We have tried to facilitate to promote our products in various countries, Nepali missions have been activated and mobilsed in this drive. Tea producers have got entry in the markets which were untapped before," he said while stating that indigenous Nepali goods with light weight and high value are being promoted and communications between the missions and private sector business associations have been intensified of late.

According to Paudyal, Nepal's international trade is suffering from supply-side constraints, high cost of doing business, less competitiveness and productivity, and poor branding and marketing.

"We are at the primitive stage in terms of the use of technology in branding, marketing and promotional activities. We failed to upgrade the capacity and technology of traditional business and lagged behind on multiple fronts," he said. Likewise, he said that Nepal's missions in foreign countries have very limited human resources and other capabilities so they are not in the position to support in economic diplomacy due to poor budget support and lack of skilled and dedicated manpower.

“We consider creating documents as the progress but very few care about the execution of the policies,” he said.

Commerce Secretary at the Ministry of Industry, Commerce and Supplies (MoICS), Toyam Raya, said that only producing goods is not enough, quality has to be maintained and promotion campaigns run in national and international markets.

"Our concerns are to maintain quality in our products, reducing trade and transportation cost and creating their markets in foreign countries. A truck bound to Birgunj from Kolkata moves just about 4 km per hour, including the times in congestion and clearance at various points. We need to improve this situation to reduce the cost of trade," he said.

 “Until we depend on revenue based on imports, reforms in the economy are less likely,” Raya maintained.

Dr. Posh Raj Pandey, Executive Director of SAWTEE, expressed concern over the decreased contribution of export to the economy. Share of export to the Gross Domestic Product is less than 3 per cent now, it was above 5 per cent some years ago, he said.

"We have for long failed to quantify our production capacity. Enhancing policy coherence and coordination among the policy making and executing agencies is necessary to increase our competitiveness," said Dr. Pandey.

Purushottam Ojha, former Commerce Secretary, said that the subnational governments in Nepal don't have an integrated trade promotion policy or export promotion strategy.

"There is low level of trust and dialogue between the provincial government and private sector. So, there is a need of a dedicated organisation to look into the issues of trade and private sector," he said. 

Published in The Rising Nepal daily on 29 December 2022. 

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