Garment entrepreneurs happy over Powell’s visit

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KATHMANDU, Jan 17 - Garment entrepreneurs are hopeful that the visit of the US Secretary of State Colin Powell would help Nepal to obtain duty-free and quota-free access market access to Nepali garments in the United States.

The entrepreneurs have urged the government to put forth the issue as the major economic
agenda of the country during the talks. They are convinced that the government has taken their
concern in a positive light.

"Duty free access of Nepali garment to the US market is necessary to ensure that the garment
industry in the country survives," says Kiran Saakha, First Vice President of the Garment
Association of Nepal.

"As the US imports of garments from Nepal constitute just 0.1 percent of her total garment
imports, the US can provide duty-free facility to Nepal without any adversity," says Saakha.
"Being a country that has been assisting Nepal in her development efforts, US should take the
issue seriously and positively," he opines.

The pressure for acquisition of duty-free access to the US markets has been mounting in the
wake of the US flexibility towards Sub-Saharan and Caribbean countries whose garments enjoy
duty-free and quota-free access in the US markets.

And this has threatened Nepal’s garment industry, as more and more US importers are diverting
towards these countries for orders. "The government has to take up the issue this time,
especially in the wake of a whopping double-digit decline in the garment exports recorded during
2001," said Uday Raj Pandey, General Secretary of GAN

Data compiled by GAN show that garment exports to the US, the single largest buyer of Nepali
garments, which absorbs 85 per cent of the total Nepali garment exports, went down by over 16
per cent in 2001.

Value wise, the export figures to the US in 2001 was recorded at US$ 137.03 million. This is a
decline by US$ 27.19 million from the previous year’s export valued at US$ 164.22 million. The
total garment exports to the American market in 1998 and 1999 had stood at US$ 106 and 126
million respectively.

Gloom had set into the garment export from the very first month of 2001, as the export registered
a slump by 22 percent in January against the soaring export of 62 percent recorded just the
previous month, December 2000.

Decline by over 45 percent recorded in October was the largest single month decline during the
year even as slump in November and December was 40.28 per cent and 41.05 per cent
respectively.

The current slump and decline in volume of orders clearly indicate that the garment export will
further go down in 2002 and this is feared to affect the economy adversely.

"If the situation like this persist for the next two months, the garment industry that absorbed more
than 80 thousand people and earned over Rs 14 billion foreign currency during the last year would
shut down," Pandey said.

Concerned entrepreneurs claim that more than 85 per cent of the garment industries have already
closed down and rest of the units are running far below their normal capacity.

The cause of the latest export dwindle, entrepreneurs say, is many, including the slowdown in the
American economy, especially in the aftermath of the September 11 terrorists attacks.

Furthermore, the high cost of production of Nepali garments owing to the lack of access to the
sea has been another major factor for sliding competitiveness in the American market. The cost
of production of Nepali garments is around 15 per cent higher than its neighboring competitors.

Tourism package comes into force

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KATHMANDU, Jan 17: The comprehensive tourism package that was announced by the government last week to revive the dwindling tourism industry has come into implementation. The government had introduced the incentive package with an aim to attract tourists, particularly the Indians that accounts over one-third of the total tourist arrivals.

The package that was finalized with the active participation of the private sector, among others,
offers free accommodation and sightseeing programmes for the Indian tourists after they pay the
airfare through Royal Nepal Airlines Corporation (RNAC).

However, as per the newly announced package, the location for the sightseeing and numbers of
days of the free accommodation would depend on the hotels they reside in ranging from three to
thirteen days. But, the facility would be offered only to those Indian tourists, who visit the country
in a group exceeding 6 members. Mountain flights, however, have been put forth as an alternate
choice.

The tourism promotion package has been implemented to curb the declining tourists inflow at the
joint initiatives of Hotel Association Nepal (HAN), Nepal Association of Travel Agents (NATA),
Nepal Association of Tours Operators (NATO) and RNAC.

"The package has already been introduced to those Indian tourist tourists coming from
Bangalore-Kathmandu flight," said Joy Dewan, President NATA. He also added that similar
packages would be announced for visitors from Mumbai. Initially, all the packages would be
applicable for three months.

As a part of the package, the RNAC would be issuing seven tickets at the price of six, which is
equivalent to a discount of 16 percent. The overall contribution of RNAC for the package would be
25 percent discount per ticket, which includes 9 percent commission given to the travel agencies
against per ticket.

Concerned experts said that free stay and sightseeing has been offered out of RNAC’s
contribution and the profits of the tourism entrepreneurs. According to Narendra Bajracharya,
President of the HAN, the Indian tourists have shown their willingness to visit Nepal in the wake of
the package announcement.

"The package is expected to attract a considerable number of Indian tourists," Bajracharya said.
The program has been announced as per the tourism entrepreneurs’ policy to adopt an aggressive
marketing strategy to safeguard the sliding tourism industry, he added.

It may be recalled that the tourist arrivals during the year 2001 declined by about 20 percent even
as the Indian tourist arrivals slid by 42 percent.

Aruga stresses on trade promotion

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KATHMANDU, Jan 17: Tadashi Aruga, Mayor of the Japanese City of Matsumoto, has stressed upon the need for further expansion of industries and promotion of trade in Nepal to ensure a high rate of economic growth.Aruga was speaking at a programme organised by Nepal Chamber of Commerce (NCC) in the capital Thursday.

He even urged the NCC to establish relationship with the Matsumoto Chamber of Commerce and
Industry to jointly work for the promotion of trade between the two friendly countries.

Earlier, Rajesh Kaji Shrestha, President of NCC, stressed that Japan should invest in the Nepali
agricultural sector since it has the largest potential for enhancing the rate of economic
development in Nepal.

"Application of modern technology in Nepali agriculture, which so far is carried out traditionally,
will speed up the productivity and aid in national growth," he said.

He even highlighted that Nepal can export commodities other than carpets, pashmina and
traditional handicrafts, currently exported to Japan. He even sought cooperation in fields like
tourism and hydropower.