Pm on Trade
Hon. Mr. Rajendra Mahto, Minister for Commerce & Supply,
Representative of Royal Government of Cambodia,
Senior Government Officials,
EIF and UNDP Representatives,
Ladies and Gentlemen !
I am extremely pleased to launch the ‘Nepal Trade Integration Strategy-2010’ that provides a vision for the sustainable development of trade sector in Nepal. I thank the organizers for inviting me and giving me an opportunity to share ideas with the distinguished participants.
The rapid pace of economic liberalization and globalization has truly opened enormous opportunities for unprecedented economic growth and trade in many parts of the world. The most important consequence of this process is that the flow of goods, services and ideas across the countries has become an unavoidable phenomenon. At the same time, this global trend has posed challenges to many countries. The challenges are more pronounced and pressing to the developing countries particularly the Least Developed Countries (LDCs) like ours, in the wake of increased competition in the international markets and the lack of productive capacity and competitiveness of the products at large.
Trade and investment in general can contribute to human development through enhancement of productivity, employment, government revenue and ultimately the economic growth of a country consequently raising living standard of the people. However, the links between trade and human development are always complex and the benefit of trade do not automatically percolate down to the masses in terms of poverty reduction, social equity and justice. At the same time, there is a pressing need to strike a fair degree of policy coherence between manufacturing, agriculture, and small and medium enterprises at one end of the scale and service sectors like tourism, health, education, etc. on the other.
Despite the fact that trade is rightly taken as an engine of growth, LDCs are largely unable to utilize it to accelerate their growth process because of the challenges faced for enhancing the supply side capacity and competitiveness of their products and competence of human capital. The additional challenges faced by landlocked countries like Nepal are unique basically due to remoteness from the sea and inadequacy of the transport infrastructures, and high transit transportation costs along with cumbersome administrative procedures and hassles that all add up to high trade transaction costs. A combination of these factors has ultimately resulted in considerable erosion of competitive edge of Nepalese products and services in the global market.
The Government of Nepal attaches great importance to the notion of trade for inclusive growth. In course of the Government’s approach for aligning and integrating our economic policies with global trading system, we joined WTO and two regional trading arrangements, SAFTA and BIMSTEC. These associations explicitly express our commitments to the process of economic reform and liberalization and goes along with the international trade rules.
Prior to our formal accession, we pinned high hopes on WTO membership that would enhance our efficiency and result in the expansion of trade base leading to a higher level of growth and quality of life to Nepalese people. However, the post-accession period has not remained encouraging as we lost the export of some major commodities in the traditional destination markets due to erosion in the margin of preferences and increased competitiveness of goods and services. The worsening scenario of our international trade was the combined result of the exigencies of international markets, and business and investment climate in the country due to internal conflict and political transition.
The advent of historic political changes triggered by the Historic People’s Movement in 2006 has ushered our country into a new paradigm of political, social and economic landscapes. In this backdrop, our people have naturally aspired for a justifiable dividend of the ongoing peace process. We are conscious of the fact that economic growth and trade could be the only viable instruments to fulfill their aspirations and sustain the peace process on a durable basis. In this pursuit, achieving inclusive economic growth has remained the priority agenda that could be achieved through the development of export sector to a larger extent.
Nepal, with a variety of agro-climatic conditions, rich natural resources and ancient cultural heritage, possesses huge export potentials of goods and services. These export potentials should be optimally harnessed for increasing the welfare of the people. The Government is keen to accord due priority to export business for achieving inclusive economic growth. Mainstreaming of trade into the national development strategies should be followed in right earnest with a view to orienting our export towards development of various sectors and sub-sectors. I do understand that Nepal Trade Integration Strategy (NTIS) 2010 provides such a unique framework to ensure greater degree of competitiveness and better conditions for inclusive growth. The Government of Nepal is, therefore, committed to accord high priority to the inclusion of recommended actions of NTIS into national development plans encompassing various sectors and cross-cutting policies and programs.
As Nepal has weak economy with narrow resource and export base, we seek enhanced engagement of our development partners to fully realize the goals set out by this strategy. I am confident that such a collaborated effort will help us in building a 'New Nepal' that envisions shared prosperity and well-being of all Nepalese citizens.
Finally, I thank you all and wish your meeting a success.
(Keynote Speech delivered by the Rt. Hon. Prime Minister Madhav Kumar Nepal at NTIS Launching Programme in Kathmandu on June 24, 2010)