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NEPAL LAUNCHES NEW COMMERCE POLICY. EXPORTS TO BE PROMOTED


In the midst of abysmal economic conditions, the Ministry of Commerce and Supplies (MoCS) has launched a new commerce policy targeting the reduction of poverty and the promotion of exports. The new policy aims at alleviating poverty by economic development through contribution from commerce.


In the midst of abysmal economic conditions, the Ministry of Commerce and Supplies (MoCS) has launched a new commerce policy targeting the reduction of poverty and the promotion of exports. The new policy aims at alleviating poverty by economic development through contribution from commerce.

The Commerce Policy-2009 replaced the previous out-of-date policy formulated in 1992.

According to The Rising Nepal newspaper, after a series of consultations with concerned stakeholders, the MoCS has decided that the update was necessary to meet the needs of changing times and Nepal’s obligations as a member of the international community.

The new policy has been launched to synchronize Nepal’s trade policy provisions of World Trade Organization, South Asian Free Trade Agreement, and BIMSTEC-EC.

Despite the BoCS’ attempt to win over manufacturers and traders, many believed the policy will fail to fulfill its intended purpose. The goal of the new commerce policy was to boost export trade while reducing the widening trade deficit, but the policy failed to address the issues of labor and duty concessions. Without addressing these issues, the very goals of the policy would unlikely be achieved.

Nepal’s export-oriented industries have been demanding reform to the rigid labor law which was adding up to their cost of production. In addition, high income taxes as well as the hire-and-fire policy previously enacted have been the major focal point of the vulnerability of the export industry.

Vice President of Garment Association of Nepal, Uday Raj Pandey was quoted, “Had the government addressed these two issues, it would have instantly boosted our morale and confidence, and helped to give impetus to overseas trade”.

Pandey, one of the influential garment exporters, who is in the business for 25 years, but has currently shut down his industry, said he would have restarted his factory and resumed productions within two months had the policy addressed those issues.

Construction of infrastructure demanded by investors and an establishment of Commerce Desk in Nepali missions abroad were some additional programs added to the new policy. Industrial development will be improved, as well as exports with the additional programs.

It is expected that the policy would make transit facility convenient and cost effective. The policy will also encourage export industries by setting up a trade board led by a commerce minister. The board will include a commerce secretary ,Nepal Rastra Bank governor, and prepresentatives of private sector and exports. To show further support for the export industry, it will establish a Trade Promotion Institute with the involvement of the private sector. This institute will help identify new exportables with comparative advantages and integrate export industries with local markets.

However, Pandey and the rest of the private sector has serious doubts on the implementation of the new programs, due to the immense monetary investment needed to start these programs.

“Given the resource constraints and government apathy in the past, there is no ground to believe that these programs will come into implementation”, Pandey said.

Source: www.AsiaEcon.org
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Source: www.asiaecon.org |


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