Promoting Export Trade
Need For Long-Term Strategy

By Uttam Maharjan

ECONOMIC development is a pre-requisite for uplifting the standard of living of the people of any country. And international trade is one of the major components that contributes to economic development. No country is self-dependent in all products and services. That is why, import and export business are resorted to by every country to fulfil one another’s requirements.

Nepal has adopted open market economy and liberalisation since the 1990s. It has opened its markets to foreign products and investment and reformed the financial sector to attract more and more foreign investment.

Being a land-locked country, Nepal faces several obstacles to international trade. It has to depend on India for most of its trade.

In the context of the world having literally shrunk to a global village and fierce competition taking place in the world market, it does not seem to be propitious to be on the part of Nepal to be complacent about its limited exports like garments, carpets, leather goods, agro-based products and handicrafts. Trade diversification is now the crying need of the hour. Limited exports to limited countries might not augur well for any country.

Though small in size and underdeveloped, Nepal does not lack indigenous labour and skills. So such indigenous labour and skills, together with original products and production prospects, should be integrated into a reliable export system, which would go a long way in developing and fostering productive sectors.

Furthermore, product and service sectors associated directly or indirectly with export should be developed and expanded so as to boost export. This would generate a positive impact on other economic activities as well.

In this age of fierce competition, a country has to produce goods and render services in accordance with the demands of the world market. Besides the global trend, the regional, national
and international specially of such
goods and products has to be explored so as to create their demand in the world market.

It would be relevant to note here that the Nepal-India Trade Treaty or 1996 has increased the prospects for Nepalese goods in the Indian market. Similarly, the Nepal-China Trade and Payment Agreement has made provision for carrying out unrestricted trade within the 30 km radius of the Nepal-China border.

Economic diplomacy has occupied an important place in Nepal’s foreign policy over the past few years. Its main thrusts are to promote export, increase the flow of foreign investment and attract more and more tourists.

The Nepalese diplomatic missions stationed in foreign countries are not only maintaining political and economic relations but also playing a major role in enhancing economic activities. This has helped maintain the positive image of the country abroad.

In fact, one of the most important aspects of economic diplomacy is to publicise in foreign countries Nepal’s commercial and investment policies and legal provisions relating to foreign investment. More importantly, the confidence of the foreign investors in the investor-friendly environment existing in the country can be won through economic diplomacy. This ensures the continuous flow of investments into the country. Hydropower tourism and agro-based sectors are some of the major areas that can attract foreign investment.

Transportation is one of the major pre-requisites for promoting export. In this regard, multi-model transport should be well-developed. A separate airport designed to handle cargo would add a new dimension to export promotion. Also, the establishment of inland container depots (ICDs) in three major commercial hubs of the country will hopefully contribute a lot to export promotion.

The government intended to establish an export processing zone (EPZ) for the purpose of promoting export during the Eighth Plan but the intention did not materialise because of a lack of necessary programmes. However, provision has been made in the current Ninth Plan for establishing an EPZ, most probably in Birgunj.

It would be germane to note that a conference on trade promotion was held in Kathmandu in March 2000 under the auspices of the Ministry of Commerce and the Federation of Nepalese Chamber of Commerce and Industry (FNCCI). The broad thrust of the conference was to promote export and attract foreign direct investment (FDI). The conference went a long way in satisfying the representatives from various countries regarding the investor-friendly environment and existing trade opportunities that may be tapped for mutual benefit.

To promote export, a long-term export strategy needs to be formulated. The professional skills of the private sector needs to be enhanced and institutional support and capacity must be enhanced. In fact, the hallmarks of a sound export policy are enhancement of institutional capacity, emphasis on international competitiveness and integration of trade policy into the national economic development agenda.

In this competitive world, it would not pay to be content with traditional exportable only; rather, avenues for new exportables need to be explored and endeavours made to diversify the export sector. Besides, steps should be taken to develop small and cottage industries. The products of these industries could make their niche in the foreign market.

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