Mainstreaming of Trade into
Sectoral Plans and Programs
with a focus on NTIS Implementation and
Next Budget
Chandra Ghimire
Joint Secretary
Ministry of Commerce and Supplies
Presented to:
An Interaction Program for Senior Planning Officials of Various Agencies
Coverage
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•
•
•
•
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Why trade so imperative for us?
What is trade mainstreaming?
How to lead trade mainstreaming?
Trade mainstreaming in Nepal?
What is NTIS 2010?
Which agencies are responsible for what?
What expectation with various agencies?
Trade is ever growing phenomena
Why trade so important for Nepal?
• Growth Pattern after shock (as per the WB's Global Economic Prospects 2010)
–
–
–
–
HI Countries 1.8%
China
9%
India
7.5%
LDCs
5.7%
• In the global GDP
– LDCs account <1%
– Growth Rate of LDCs 7% per annum (in normal period)
• As per World Trade Report 2010,
– World merchandised trade US$ 15238000 million
– LDCs’ share accounts US$ 163960 million, i.e. <1%;
• Ample rooms for expanding exports: from LDCs grew by
20% whereas total world grew by 11% during 2000-2007;
• It seems the LDCs’ potential remains under-use;
Why trade so important for Nepal?
As World Trade Statistics 2010
• Exports US$950 million.
• Imports US$5500 million.
• Share in World merchandise export 0.01% whereas
import is 0.03% as shown in the statistics.
• Annual growth in export 15.45% & in import
25% with comparing the data of 2009.
• GDP growth rate is <5%; (GDP remain same)
• The trade is growing faster than the GDP;
Why trade so important for Nepal?
• Nepal's own market so scant
• Many empirical studies illustrate: "outward-oriented
economies have higher growth rate than inwardeconomies"
• Two robust economies in the neighbor
• Big size of growth Nepal needs to meet its development
goals
• To benefit out of multilateral, regional and bilateral trade
arrangements
• Globalization intensified a 'relentless interdependency'
Why trade so important for Nepal?
• Being a LDCs special privileges, i.e. S&DTs; ZeroTariff (EBA) alone China ‘0’ tariff in 361 products
• Nepal eyes 'export-led growth' & 'inclusive growth'
• Essential infrastructures underway of rapid
development, ie banking, finances, insurance, freightforward, dry-port, custom reforms etc.
• Nepal's strong access to ITs
• Exposures with outer world
knowledge, skills
• Network of business institutions their capacity
• In global market, growing demands for services i.e.
tourism, labor, ITs, education, health etc & Nepal very potential
What is trade mainstreaming?
 Appropriate PRESCRIPTION for LDCs/Developing world
 A process for articulating trade-related priorities in the
national development plans, programs and strategies, e.g. 3Year Development Plan and sector specific policies like
Industry, Agriculture, Education and Energy) to attain the
development goals (MDGs, poverty reduction etc.).
 Translating policy statements into operational/action plans.
 Linking action plans to resources (domestic and external).
 Implementation of strategies.
 Monitoring and evaluation for better results.
How to lead trade mainstreaming process?
Mainstreaming at:
– Political level (to ensure political commitments for development of
various sectors with trade orientation)
– Policy level (to better place trade priorities in development plan and
sector development policies/strategies etc.).
– Implementation level (for coordinated efforts to develop sectors to
become more competitive)
Mainstreaming by:
 Dialogue with stakeholders (Government agencies, private sector and
development partners) to reflect trade priorities in their dev agenda.
 Institutional framework and appropriate processes for trade
mainstreaming at various level (NBF, NSC, NIU, DF, TWGs etc).
 Sensitization/awareness creation on trade and development issues.
 Resource assurance from all fronts, i.e. Govt, DPs, private sectors etc
Trade Mainstreaming in Nepal
 3 Year Development Plan (Strategy 6 and priority 2).
 Recently launched Nepal Trade Integration Strategy (NTIS
2010) provide underpinnings for trade mainstreaming.
 Identification of main constraints to effective integration of the
economy with the global market.
 Action Matrix identifies priorities for action (four objectives to address
four main challenges: ensuring proper market access; building domestic
support institutions; strengthen the supply capacity of exporters,
especially in selected sector and mobilizing Overseas Development
Assistance (ODA).
 Priorities validated through broad dialogue with stakeholders,
including private sector and development partners.
 Country ownership (endorsed by the Council of Ministers).
Trade Mainstreaming in Nepal 2
Institutional framework
 National Implementation Arrangement at place, i.e.
National Steering Committee led by the Chief Secretary, Focal Point, 5 Technical
Committees and National Implementation Unit (NIU)/Extended NIU.
 EIF support (Tier 1 Project) for inter-governmental and
public-private coordination on trade and AfT issues.
 Strengthening links with line ministries related with trade
(planning, finance, agriculture, industry, tourism, etc).
 Strengthening relations with the private sector and DPs.
Financial framework
 Budgetary support from MoF, project identification,
formulation and implementation – Tier 2
 “Let the respective agencies implement” Approach
Trade Mainstreaming in Nepal 3
Donor coordination
 Donor coordination via NIU of MoCS and via DF
 Mainstreaming of trade in DPs’ agenda
Others
 Addressing capacity gaps: Build and sustain capacity to mainstream
trade (Train NIU and Extended NIU team in trade mainstreaming
issues).
 Tier 1 funding is available to address human resources and
institutional support needs.
 Strengthening consultative processes:
 Advocacy/dissemination of analytical findings and trade-related
information.
 Consultation with the stakeholders.
Role of Line Ministries/Agencies
 MoCS alone can’t drive it. Many factors, sectors and actors required.
– Products development
• Agriculture – tea, cardamom, lentils, ginger, honey, food standards etc.
• Forest – herbals, essential oils
• Industry – pasmina, handmade paper, wool products and gems & silver
jewelry, technical standards, IPRs, iron & steels etc.
• Services (Tourism, Health, Education, ICT, Hydropower and Labour etc.)
– Trade related Infrastructure and TF
• Transport and transit facilities (Roads, railways, airports etc)
• ICDs/Dry ports
• Customs modernization (ICPs)
– Other cross-cutting issues
• SEZ/EPZ, FDI, SME development package
• Incentives to export oriented industries
• Legal enactments, institutional building, HRs
Involve Line Ministries/Agencies/Bus associations & others
Status of Nepal's Foreign Trade
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56=7
216=6
57=5
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125=9
43=3
159=9
42=5
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291=0
100=0
376=5
100=0
Status of Nepal's Foreign Trade 2
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25=1
36=6
21=1
34=6
s"n lgof{t
68=6
100=0
61=0
100=0
Status of Nepal's Foreign Trade 3
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-?= cj{df_
cf=j= )^^.^&
-?= cj{df_
ef/t
221=6
176=7
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100=8
138=8
s'n Jofkf/
3f6f
222=4
315=5
s}lkmot
Jofkf/
3f6f j[l4
$@Ü
Status of Nepal's Foreign Trade 4
qm=;+
lgof{t ePsf] j:t'
d"No ?=cj{df
=
!
Woolen Carpet
4=2
@ Lentils
# Readymade Garments
3=7
$ Pashmina and Woolen Shawl
% Handicrafts
1=2
3=5
0=5
Status of Nepal's Foreign Trade 5
qm=;
+=
Import ePsf] j:t'
d"No
-?= cj{df_
!
Petroleum products
51.3%
@
Gold
41.5%
#
Vehicle & Parts
25.7%
$
MS Billet
13.8%
%
Telecommunication Equipments
12.3%
Status of Nepal's Foreign Trade 7
qm=
;+=
lgof{t ePsf] j:t'
! Iron and Steel Products
@ Yarns
d"No -?=cj{df_
7=5
4=5
# Textiles
$ Copper and Articles
4=1
% Large Cardamom
1=2
1=6
Trade Deficit of Nepal
Nepal became WTO Member
500
400
200
100
20
09
/1
0
20
08
/0
9
20
07
/0
8
20
06
/0
7
20
05
/0
6
20
04
/0
5
20
03
/0
4
20
02
/0
3
20
01
/0
2
-100
20
00
/0
1
0
19
99
/0
0
NRs. in billion
300
-200
-300
Fiscal Year
-400
Exports
Import
Trade Balance
Trade of Goods in the First 7th Month of the Current FY (In NRs)
Indicators
FY 066/67
Change in %
FY 067/68
Change in %
Total Trade Deficit
57.3%
180 Billion
-1.4%
Export/Import Ratio
17.3%
Total Export
35.57 Billion
Export to India
Export to Others
Total Import
Total Import from India
Total Import from Others
218 Billion
-10.4%
16.3%
37.91 Billion
+
6.6%
-5%
+10.8%
-18.5%
-0.8%
40.1%
218 Billion
0.1%
35.5%
24.7%
46%
29.6%
Factors in growth & downfalls
Export Increased due to "+" in:
Yarn, Jute, Iron stripes, MS pipe,
Plastics etc
Export Decreased due to "–" in:
Handicrafts, Garments, Nepali papers, Herbals,
Silver etc.
Deficit factors in Trade
Import from India "+":
Petroleum, MS Billet, Cold equipments,
Chemical fertilizers, Other machinery
parts
Import from Others "-":
Gold, Garments, Other machinery & parts,
Iron & Steel, Yarn, Supari
• A national trade strategy to largely respond to
'supply side constraint' of Nepal;
• Formulated during 2009-2010;
• Participated in its formulation almost all
business associations & stakeholders, i.e. FNCCI,
CNI, CoC, commodity associations, national & international
experts etc;
• GoN approved & launched it on 24.06.2010;
• 19 goods & services identified - services for the
first time;
• Based on recent analysis with support of experts &
global data base, i.e. ITC;
• Top 10 potential destination markets for each
goods or service identified;
• Coverage of SWOT of each of the goods &
services;
• Wider & deeper consultations with all
stakeholders from formulation to finalization;
• China and India visited and consulted;
• On top of the 19, plus 5 other goods
suggested;
• 3-5 years period for implementation;
• Positive parts of DTIS carried on & nonrelevant things discarded;
Export Potential and Socio-Economic Impact of 19 Sectors
#
Sector
Nepali
exports,
2008 (US$
1,000)
Index 1:
Export
performance
Index 2:
World market
conditions
Index 3:
Domestic
supply
conditions
Overall export
potential
Socio-economic
impact
21,329
8,130
500
22,258
16,805
10,390
11,000
high
medium
low
medium
high
high
low
low
low
medium
high
low
medium
medium
high
medium
medium
high
medium
high
high
high
medium
medium
high
medium
high
medium
medium
medium
medium
medium
high
low
high
4,000
9,519
149,394
22,074
16,450
low
low
high
medium
medium
low
high
high
medium
high
high
medium
high
high
medium
low
medium
high
medium
medium
high
medium
medium
medium
high
352,000
2,448,000
10,000
n/a
10,000
n/a
0
high
high
medium
low
medium
low
low
high
high
medium
medium
low
medium
high
high
medium
medium
low
low
medium
medium
high
high
medium
low
low
medium
medium
high
high
medium
low
low
low
medium
Agro-Food
1
2
3
4
5
6
7
Large cardamom
Ginger
Honey
Lentils
Tea
8
9
10
11
12
Handmade paper
Silver jewelry
Iron & steel products
Pashmina products
Wool products
Services
Tourism
Labor services
IT & BPO services
Health services
Education services
Engineering services
Hydro-electricity
13
14
15
16
17
18
19
Instant noodles
Medicinal herbs / oils
Craft and Industrial Goods
Craft and Industrial
Goods
19 Priority Export Potentials
Agro-Food
1 Cardamom
8
Handmade Paper
9
Silver Jewelry
2 Ginger
3 Honey
4 Lentils
10 Iron and Steel
5 Tea
6 Noodles
7 Medicinal & Essential Oils
11 Pashmina
12 Wool Products
Services
13
Tourism
14
Labor Services
Others Potential
Exports
20
Transit Trade
Services
21
Sugar
15
IT & BPO Services
16
Health Services
22
Cement
17
Education
23
Dairy Products
18
Engineering
19
Hydro-electricity
24
Transformers
10 Most Attractive Markets for 16 Goods and Services
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
Agro-food
Cardamo
m
Pakistan
Saudi
Arabia
UAE
UK
USA
Malaysia
Japan
South
Africa
Kuwait
Oman
Ginger
India
Pakistan
Banglade
sh
USA
Netherla
nds
UK
Malaysia
Germany
Yemen
Vietnam
Honey
UK
France
Japan
USA
Germany
Belgium
Poland
Australia
Saudi
Arabia
Slovakia
Lentils
Turkey
UAE
Sri
Lanka
Algeria
Iran
Egypt
Saudi
Arabia
Spain
UK
Pakistan
Tea
Egypt
UAE
Russia
USA
UK
Iran
Pakistan
Germany
Kazakhst
an
Australia
Instant
Noodles
China
Indonesi
a
Japan
USA
Vietnam
South
Korea
Philippin
es
Thailand
Russia
India
Medicinal
herbs
USA
France
Germany
Vietnam
Singapor
e
Japan
Italy
Russia
Belgium
South
Korea
Essential
oils
Singapor
e
Switzerla
nd
India
France
Germany
USA
UK
Japan
China
Mexico
#1
#2
#3
#4
#5
#6
#7
#8
#9
#10
Craft and Industrial Goods
Handmad
e Paper
Denmark
Canada
Netherla
nds
Saudi
Arabia
Nigeria
India
Quatar
Egypt
Japan
Malta
Silver
Jewelry
Hong
Kong
USA
Germany
UK
France
Denmark
Australia
Spain
Netherla
nds
Canada
Iron/steel
Germany
Belgium
Poland
India
UAE
UK
Thailand
France
Italy
Sweden
Pashmina
UK
Germany
Spain
France
Hong
Kong
USA
Italy
Japan
China
Switzerla
nd
WoolProd
ucts
Germany
France
UK
Italy
Spain
Japan
Canada
Belgium
USA
Hong
Kong
Services
Labour
USA
Russia
Switzerl
and
Saudi
Arabia
Spain
Germa
ny
Italy
Luxem
burg
Netherl
ands
Malaysi
a
Labour
China
UK
France
Oman
Japan
Norway
Kazakh
stan
Kuwait
South
Korea
Belgiu
m
Tourism
Germa
ny
Saudi
Arabia
USA
UK
France
Iran
China
Russia
Italy
Ukraine
Educatio
n
China
India
South
Korea
Uzbekis
tan
Germa
ny
Bolivia
Vietna
m
Nepal
Lao
PDR
Belarus
Enginee
ring
UAE
China
India
Brazil
Quatar
USA
Nigeria
UK
Turkey
Saudi
Arabia
The Work in-progress
How many are the activities to
undertake?
• Activities under 4
strategic objectives:
– Product/service wise 171
– Cross cutting 87
– Total 258 activities
Involvement of Government & other
Stakeholders
• A single ministry (MoCS) alone can not drive the agenda
of trade promotion. Many factors, sectors and actors are
directly or indirectly associated with the trade.
– Products development
• Agriculture – tea, cardamom, lentils etc.
• Industry – pasmina, handmade paper, wool products and silver jewelry etc.
• Services (Tourism, Health, Education, ICT, Hydropower and Labour etc.)
– Trade related Infrastructure and TF
• Transport and transit facilities (Roads, railways, airports etc)
• ICDs/Dry ports
• Customs modernization (ICPs)
– Other cross-cutting issues
• SEZ/EPZ, FDI, SME development package
• Incentives to export oriented industries
Involve line Ministries/agencies, private sector and other
stakeholders in the process
Who are responsible for Implementation?
•
•
•
•
•
•
•
•
MoCS
MoI
MoAC
MoF/DoC
MoLT
MoE
MoST
MoST
•
•
•
•
•
•
•
•
MoH
MoFSC
MoCA
MoPP&PW
NPC
MoFA
PMO
NRB
What do we expect in next budget from all?
• From all Ministries/Dept:
– Inclusion of their parts of
activities as annual
programs
– Inclusion of NTIS in
respective sectoral
policy/strategy
• From MoF:
– Allocation of budget for
NTIS with a separate
heading
– Implementation of its own
part of NTIS, e.g. DoC
What do we expect in next budget from all?
• From NPC:
– Making sure the
inclusion of the
activities in the budget
– M&E of NTIS related
activities
– Putting trade in priority
– Incorporating TRADE
in sectoral
policy/strategy
Such A Coordination
What do we expect in next budget from all?
• From Bus
Associations & others:
– Inclusion of NTIS
suggested activities in
forthcoming budget
– Ready for PPP with
governmental agencies
• From DPs:
– Greater investment on trade
& dev esp. for hard-wares
– Stronger coordination with
NIU, MoCS
Such A Commitment
Who Says Nepal can’t set an example?