Ms. Prem Kumari Pant

Senior journalist, nepal

The Nepali economy has long been marred by the menace of trade deficit.

The growing mismatch between import and export is triggering an alarming level of such deficit. Over the years, the volume of export has been going down what that of import swelling fast. In fact, Nepal’s import is 9 times bigger than export and the trade deficit stands at a staggering Rs 5 billion every year.

The total export, which used to be 9.4% of the Gross Domestic Product (GDP) a decade ago, has shrunk to 5,2% Likewise, the total import has swelled to almost 40 percent of the GDP which was 35 percent in the fiscal year 2004/05.

During the last decade, import increased by 4.8 fold to a staggering Rs. 775 billion whereas export went.

Consequently, trade deficit swelled by 6 times in the one decade to reach an alarming Rs. 689 billion.

Export of most of the 19 NTIS-listed goods and services over the last four years has also been pretty gloomy.

According to the Trade and Export Promotion Centre (TEPC), exports of the NTIS products rose by a mere 2.

08 percent to Rs 27.41 billion in the last fiscal year.

The ballooning trading has deleterious impacts on the country’s socio-economic health. It drains money from country’s economy, lowers wages and forces the country to witness lower standard of living.

It is primarily the lack of adequate domestic production causing the country to reel under such a severe economic anomaly.

Though an agricultural country, Nepal imports raw and processed agro commodities worth more than Rs 75 billion every year.

Over the past couple of years, the imports of agro commodities, mainly rice, maize, wheat, vegetables and fruits are increasing rapidly.

The country is a member of multilateral and regional trade blocs but it simply has also not been able to exploit such status.

The market access and tariff concessions offered by trading partners are not being leveraged by the Nepali authorities. This is primarily due to the crippling supply-Side constraints.

The poor trade and other related infrastructures is also battering the countrY export.

Energy shortage, lack of reliable road network, poor access of finance etc have only hampered the competitiveness of Nepalese products in the global markets.

Moreover, the export potentials are being inhibited by the lack of adequate facilities for warehouses, handling equipment, scanning machines, and testing laboratories

Poor business doing environment, the non- recognition of Nepal’s quarantine certificates by the importers and lack of export incentives are also constricting the export base.

Notably, the overdependence on India in term of foreign trade is also an equally vexing problem. This is hamstriflgiflg the country from diversifying its trade with other countries.

The most crucial need of the hour, therefore, is to come up with a long-term vision to mitigate the tame the wild trade deficit.

Most of the plans and policies launched by successive governments for promoting exports over the period have turned into a fiasco.

Well realizing this fact, the concerned government authorities must do the needful without further ado.

Thanks the author: ED.