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| Kathmandu, Thursday June 19, 2003 Ashadh 05, 2060. |
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WB-led
team completes trade study on Nepal
By Bhaskar Sharma
KATHMANDU, June 18 : A
World Bank-led Diagnostic Trade Integration Study (DTIS) assessing the competitiveness of
the Nepali economy in foreign trade has been completed recently. A draft of the final
report, which is yet to be made public, has been submitted to the government.
A steering committee
that had been formed for the purpose of the study is presently evaluating the report.
"The report will be made public early next week," said a source at the Ministry
of Industry, Commerce and Supplies talking to The Kathmandu Post today.
The source said that
the study has made broad-based policy recommendations and has prepared a road map for
future trade reforms. "The recommendations would help Nepal prepare a ‘Plan of
Action’ for future reforms," said the source.
However, he added that
the steering committee will make further suggestions to the study team for further
refinement of the report. "If the committee recommends that some critical elements
are missing in the report, it will direct the team to make the additions," the source
said.
The eight-month long
study probed Nepal’s requirements in terms of achieving an accelerated trade-led
growth. A team of local and international experts, led by Ross Chapman, an Australian
involved with the Centre for International Economics, Sydney, had carried out the study.
More simply called the
trade competitiveness study, the DTIS was initiated last October as a pilot project under
the Integrated Framework (IF), a concept that came in 1996 with an aim to assist Least
Developed Countries (LDCs) in developing a trade integration strategy.
Once the report is
finalised, Nepal’s country profile will be prepared under the IF, following which the
implementation of IF will begin to foster sustainable pro-poor growth by embedding trade
policies and priorities into the national development strategies.
The source said that
the study appraised Nepal’s constraints to effective integration into the global
trading system. "It has made policy level recommendations to capacity building,"
the source said without specifying details.
He added that the
diagnostic study has reviewed and analysed the country’s economic and export
performance from a historical and international perspective, with particular attention to
indicators of per capita income, trade and integration performance vis-à-vis those of
other countries.
Likewise, it has
appraised the macroeconomic environment and the country’s investment climate with
emphasis on customs administration, access to (and cost of) pre-shipment finance and
working capital, barriers to investment, and the behaviour of the real exchange rates.
Furthermore, the source
added that the study has also taken into consideration the international policy
environment and specific constraints that the country’s export face in international
markets. It has also analysed the key labour-intensive sectors for expansion of output,
export and employment, together with identification of internal constraints in the
expansion.
Government officials,
who are part of the steering committee, however, were critical of the study, stating that
the study has in general failed to make product-specific recommendations, which is more
important.
"The study is like
any other study that has been carried out time and again by the government as well as
international agencies," the source said. "Specific product line recommendations
were needed, which is lacking," the source said.
Concerned experts are
banking a lot on the DTIS for the much-needed technical and financial assistance for
Nepal’s integration into the global trade regime, which requires countries to be
bound by various multilateral agreements.
While the need for
technical assistance arises due to lack of technical expertise in the country over
WTO-related matters, financial assistance is largely needed to ensure compatibility of the
country’s legislative framework to the global trade regime.
A study carried out by
the WB has shown that it costs US$ 130 million (NRs 10 billion – over ten percent of
estimated budget for fiscal year 2002/03) to implement just three of the World Trade
Organisation (WTO) agreements, namely TRIPS, SPS and Customs Valuation.
Officials are upbeat
that the study, whose completion closely follows the heels of the fourth round of
bilateral negotiations for Nepal’s WTO accession, would explain the concerns that
Nepal had shown during the negotiations. Nepal had then raised ‘technical
assistance’ as a major agenda before its formal WTO entry.
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