Needed:
Stitch In Time
COME 2004, the quota
system applied in the international garment trade under the Multi-Fibre Arrangement for
the Least Development Countries (LDCs) will be phased out. Many LDCs, including Nepal,
have benefited from the quota system over the years as it allowed them to export large
quantities of garments to mainly western countries. Nepal certainly gained from such quota
system that encouraged investment in it and catapulted garments into the position of one
of the top exportables and foreign exchange earners of the country. While the country
earned the much-needed foreign exchange, many Nepalese had employment opportunities in the
garment industry. There were dire warnings from the garment manufacturers and exports at
an interaction the other day that unless timely measures were taken now, this export item
could suffer heavily. Faced with the phase-out and having India and China, with
incomparable production capacity in such exportables, as its neighbours, Nepal's garment
industry confronts serious problems in the future. So, it is clear that, though the risks
are there for all LDCs, the magnitude of a quota phase-out for a country like Nepal is
even deeper.
There has been some optimism in the garment sector upon an assessment that this year's
garment exports has increased by 34 per cent compared to the last fiscal year. But all
this could be threatened unless Nepal began preparations now to face a quota-less world.
Those in the sector emphasised at the interaction that capacity building to face the
increased competition in the garment sector after 2004 was highly essential. An intense
homework was essential. Finance Minister Dr. Badri Prasad Shrestha assured the gathering
that the government would extend full support at all levels to the private sector in this
field to enable it to retain its position in the export sector. His assurance that policy
recommendations mentioned in the report of the Garment Association of Nepal would be
seriously considered and that the government had initiated measures to give immediate
relief to the industry must have come as good news to garment manufacturers and exporters.
The government and the private sector must work closely together to tide over coming
uncertainties and keep the industry at least where it is. A stitch in time now could save
the garment sector from what looks like a serious fall otherwise in a free-for-all
quota-less environment from 2004.
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