National 2 (Spotlight Weekly)

Bound By History

Nepal is gradually losing its century old trade relations with the Tibetan Autonomous Region

By KESHAB POUDEL, in Lhasa

Kesang Dhundup, a typical Tibetan farmer, grows vegetables, barley and other food grains in his farm land. Dhundup, 58, who lives in a village 50 kilometer east of Lhasa, the capital of Tibetan Autonomous Region (TAR), plows in one acre of land with and produces vegetables even during the harsh winter season.

Dhundup family also sells green vegetables to Lhasa. Following the introduction of reforms and open economic policy in late 1978, economic and social transformation continues to change the life of rural Tibetan.

A native of Tibet : Witnessing fast transformation

Till two decades ago Nepal used to export considerable quantity of rice and vegetables to many parts of TAR including Lhasa. The situation has changed now. Even Xigatze, located about 400 kilometers east of Kathmandu, produces vegetables and grains on its own as well as imports from elsewhere.

Although there are immense opportunities for Nepal to export agricultural products to Lhasa and other parts of TAR, there is a need to adopt long term strategies and plans to promote the export of such products.

“If Nepal develops a long term business strategy and planning, the massive development and modernization efforts taking place in the parts of TAR of China can turn it into a boon for the impoverished Himalayan Kingdom,” said Shankar Prasad Pandey, Royal Nepalese Consul General to Lhasa. “I believe that we can still supply seasonal vegetables and fruit to Tibet.”

One can buy grapes imported from Southeast Asian countries, rice from Vietnam and banana from Latin America in the market at the roof of the world. “If we start producing banana, grapes, other vegetables and rice, our cost of production will be much cheaper,” Pandey said. “Farmers of our low land in Panchkhal, just close to Chinese border and other similar places can be encouraged to produce the off season vegetables and fruits.”

In the past, Nepal used to export rice to TAR but Nepalese suppliers failed to match the quality of their produce with that of Vietnam, Laos and other Southeast Asian countries.

“Nepal enjoys major advantages to expand trade with the TAR since Arniko highway is the only road that links it to the outside world,” said Pandey. “ Unfortunately, we are gradually losing our centuries old goodwill and credibility in the Tibetan market.”

Lhasa city : Burgeoning market

Till 1970, Nepal enjoyed surplus trade with TAR. Since 1980s, the trade between them has gone in favor of TAR. The annual trade volume between China and Nepal is over Rs.10 billion. During the Chinese primer Zhu Rongji’s visit in 2001, Chinese government agreed to accord some preferences to Nepalese exports to TAR to reduce the widening trade deficit.

Later, Nepalese leather received preferential treatment in TAR and China. But its fate, too, was similar to that of rice.

“Since the quality of Nepalese leather were not at par, they could not compete in the market despite the preferential treatment. We want to see more Nepalese goods coming to TAR,” said a senior official with the Trade Department in Lhasa.

Political instability and growing violence are also creating problems in the expansion of trade between the two countries. “Unfortunately, we have to postpone the Trade Fair scheduled to be organized in September in Kathmandu due to political instability in Nepal,” said the Tibetan official.

Since the introduction of reforms and liberalization of economy in 1978, the region has achieved impressive progress in the economic and other sectors. Official data provided by the Central Government in Beijing showed that from 1994 to 2000, TAR’s GDP registered an annual average growth of more than 10 percent, a rate which is higher than the national average in China.

For centuries, Lhasa, the capital of TAR, remained a major trade center for the population of Kathmandu Valley. The trade was in Nepal’s favor for long time till British opened new route via-Kalimpong in the beginning of the 19th century.

For another hundred years, the monopoly trade of Kathmandu valley with Tibet ended. With the construction of Kathmandu-Lhasa road in 1970s, Nepal once again became the only country in the region to have direct road access with Lhasa. Interestingly, Nepal was unable to exploit the advantages to boost trade with the TAR.

As the Chinese government is investing huge amount of money to develop Xigatze as another main city of the Tibetan Autonomous Region, there is possibility for Nepal to increase the trade volume in the days ahead.

“We want to increase the trade volume with our southern neighbor Nepal since Xigatze Prefecture shares long border with Nepal,” said Canmugun, vice commissioner of Xigatze Prefecture. “Nepal can export many agricultural products to Xigatze and Lhasa.”

Nepalese officials in Lhasa, too, agree that Nepal has potential to increase its exports to TAR. “Nepal is still the shortest and the easiest gateway to TAR. Since the food habit in Lhasa is changing and they are consuming more rice, vegetables and fruit, Nepalese traders should explore ways to reap benefit. If Nepal starts exporting high quality rice, vegetables and banana, we can easily secure the local market,” Nepalese Consul General Pandey said.

Although the volume is too small, Nepalese rice, flour, vegetable oil, lentil and spices are very popular in Lhasa. “If we maintain the quality of product, they can overcome the competition.”

Nepal and TAR has long history of bilateral trade. Many Nepalese businessmen still own their traditional business venture in Lhasa. Unlike early 1950s, Nepalese now have to compete with local Tibetans.

According to Nepalese Consulate General Office in Lhasa, there are 300 people of Nepalese origins still active in various business areas. Nepalese are engaged in hotel and restaurant businesses as well as other sectors.

Among the population of Nepalese origin, 168 people do not have citizenship certificates but they hold the passport and 18 of them have neither.

“Tibet is our old buyer and Nepalese traders still have good reputation in Lhasa and Xigatze. What we need to do is to polish our traditional market and increase our exports,” said Pandey.

Organized and sponsored by Chinese Foreign Ministry, 10 Nepalese and 10 Sri Lankan Journalists were taken to various parts of Tibetan Autonomous Region of China to show how the TAR is embracing modernization.