Boost Export Trade

Although Nepal has embraced economic diplomacy in her foreign policy in order to boost exports and tourism, attract foreign investments and ease technology transfer, the country has not been able to fully materialise this concept.

The nation has been grappling with various economic, social and development-related challenges. A widening trade deficit is one of the key issues facing the country as it is heavily dependent on import of numerous goods ranging from petroleum products and garments to food and construction materials. The situation has become worse from bad following the outbreak of COVID-19. With the resurgence of different variants of coronavirus, the national economy has continued to suffer a setback.

As soon as restrictions were imposed to deal with the global public health crisis, all the industries were closed down. The tourism sector that contributes to earning foreign exchanges, creating jobs and supporting other sources of livelihood has also not recovered fully. In view of a rapid depletion of foreign exchange reserves, the previous government had also to put a ban on the import of several luxury goods for a couple of months.   

As the lingering contagion and the war in Ukraine have hit the global economy, it has become quite difficult for many nations, including Nepal, to bring in foreign direct investment (FDI). When there is a lack of investment, major economic activities such as production of goods and creation of jobs remain adversely affected.

This may also lead to an economic slump. It needs no mention that Nepal is now reeling from a liquidity crisis. Banks and Financial Institutions (BFIs) have failed to provide necessary loans to investors. The rate of bank interest has also gone up startlingly.  Thus, the private sector, which is known as an ‘engine of growth’, is not in a position to invest.

This naturally causes negative effects on the whole economy. Amidst this situation, it is necessary for the nation to focus on promoting economic diplomacy and facilitate export trade. A proper coordination among different agencies could be vital for enhancing the country’s exports. 

According to a news report carried by this daily on Thursday, high-level government officials and private sector experts have called for better collaboration among various agencies in order to increase foreign trade and promote Nepali goods in the international market.

Secretary of the Ministry of Foreign Affairs (MoFA) Bharat Raj Poudyal underlined the need for public agencies such as Trade and Export Promotion Centre and Investment Board Nepal, and private companies, producers and associations to work in coordination with one another in order to help increase foreign trade. However, building coordination among the government agencies and the private sector bodies has been a recurrent challenge for decades. 

Speaking at a talk programme on 'Trade policy and economic diplomacy in Federal Nepal' organised in the capital on Wednesday, Poudel said that the MoFA was attempting to make some improvements in forging greater cooperation among those agencies in the past. He, however, conceded the fact that there were no encouraging outcomes from those efforts. 

He added that the MoFA tried to facilitate the promotion of Nepali products in many nations by mobilising Nepali diplomatic missions. At the initiative of the ministry, Nepali tea producers had got an entry into the markets which were untapped previously. Several indigenous Nepali goods with light weight and high value have lately been promoted in the international markets. The country needs to formulate an integrated trade promotion policy and export promotion strategies in order to enhance export trade.