OPINION (Spotlight Weekly)

IT And E-commerce In Nepal

By MANOHAR K. BHATTARAI

Since rapid expansion of electronic transactions constitute a major opportunity for trade and development, information and communication technologies and electronic commerce can be expected to drive the trade component of economic growth for many years to come. Trade transactions conducted through the Internet and World Wide Web will have enormous implications over the next few years for Asia's international competitiveness and Nepal cannot possibly afford to be left out.

Nepal needs to seriously evaluate its position vis-a-vis emergence of information economy world-wide in general and e-commerce in particular.

Actual statistics are scarce, but application of IT in Nepal had been particularly slow until the late eighties. Even though recent years have seen remarkable growth in terms of awareness and application of IT resources in a number of activities, Nepal as a whole is yet to see satisfactory pace of application of It in education, government and corporate sectors. Private businesses, banks and financial institutions, NGO, INGOs and international agencies operating within Nepal are on the forefront of using IT resources compared to the government and small business sector. The prevailing socio-economic realities coupled with human resources limitations have, to a great extent, stunted the growth of this sector in Nepal.

Things are, however, changing at a relatively faster pace. There has been a remarkable rise in the number of personal computers and related equipment sold and installed in Nepal especially after 1992. Of late, Nepal has seen an emergence of Internet service providers (ISPs) which resulted in increased use of Internet and World Wide Web. There are altogether seven licensed ISPs, including two V-SAT private operations in Nepal. Recently, National Telecommunications Corporation has also joined the ISP bandwagon and announced provision of Internet-related services.

Internet connectivity, though increasing at a faster pace, is far from being at a satisfactory level. The number of Internet accounts in Nepal is estimated to be around 10,000 and the majority of the users are within Kathmandu valley. Since the potential for electronic commerce within and outside Nepal will also depend on the number of users. But this alone will not be sufficient to guarantee the government of e-commerce in the country.

E-commerce development is dependent upon factors like the number of Internet users internationally who could have a prima facie interest on Nepal, quality and types of products and services offered by Nepalese companies, the skills and creativity employed in designing web sites and bandwidth available for users and service providers. One should thus be aware of potential pitfalls resulting from lopsided view of treating e-commerce issues solely from the information and communication technology perspective. These technologies no doubt enable e-commerce but there are hosts of other issues, mostly non-technical, that must be taken into account while trying to formulate policies conducive to the growth of e-commerce.

Even though there have been some limited initiatives on the front of e-commerce in Nepal, the country has yet to see an organized and concerted effort towards this direction. This is mainly because e-commerce issues cut across a broad range of technical, legal, economic and institutional questions for which we are yet to come up with appropriate responses.

Apart from isolated efforts undertaken by a few Pashmina traders, the Handicraft Association of Nepal has the beginning of a vertical portal at www.nepalhandicraft.com.np. This site has links to twelve member home pages and an email ombudsman service to match suppliers with foreign distributors. But the site leaves a lot of room for improvement, as it is characterized by incomplete information and poor user interface. Issues like payment mechanism and export formalities also have not been addressed adequately in these sites.

With conventional economies signs of age especially in Asia, study of potential developmental aspect of e-commerce in the Nepalese context demands serious attention. Along these lines, it will be worthwhile first to examine as to what will be the potential benefits to Nepal obtainable through e-commerce and also how can Nepal create and enabling and conducive environment for e-commerce.

(Excerpts from a paper presented at the round table on IT and e-commerce for development organized by Centre for Development and Governance. Bhattarai is an IT expert)