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Kathmandu Friday January 18, 2002 Magh 05, 2058.
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Garment entrepreneurs happy over
Powell’s visit
Post Report
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.
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