Statement by ITC Executive Director at the Launching Ceremony of the National Export Strategies and NTM Report
13 October 2017 - Kathmandu, Nepal
Ladies and Gentlemen,
It is a great pleasure for me to be back in Nepal. I admire your determination and resilience. I am here to tell you that ITC is committed to keep supporting you in your drive to become a middle income country by 2030.
Your objective requires a transformation of your economy at the service of your society. And trade has an important role to play. Leveraging the trade opportunities you already have would make a major contribution to driving transformative change, sustainable and inclusive growth and ultimately, poverty reduction.
When seeking to use trade to stimulate growth, governments everywhere face a myriad of demands and business needs. Complex questions arise, such as:
• How do we set priorities?
• How do we balance commercial with developmental objectives?
• How do we allocate limited resources?
• Who does what?
Today is about beginning to answer these questions.
To understand the challenges faced by Nepali enterprises, and what interventions might help, we talked to over 570 companies from Ilam, Dhankuta, Jhapa Gulmi and Baglung, to name just a few places. We consulted with producers, exporters, and technical agencies, among them the Trade Export Promotion Centre and representatives from the ministries of commerce and agricultural development. Their answers are captured in the Non-Tariff measures survey in front of you. And I want to thank the U.K-DFID for their support to ITC's programme on NTMs.
One out of every two Nepali exporters face some sort of non-tariff measure. Product quality and food safety requirements are frequently cited as challenging. Part of the challenge lies outside Nepal's borders including on transit issues, but that large part of the solution lies within. Identifying and changing burdensome regulations, red tape and complex trade facilitation procedures can have a transformative impact on the ability of your small and medium sized enterprises to increase productivity and trade beyond your borders.
Nepal has taken steps to mainstream trade more firmly in its national agenda. The Nepal Trade Integration Strategy (NTIS 2016) identified sectors that offered high potential for increased exports and job creation. At Nepal's request ITC has developed detailed strategies for four sectors: handmade paper, tea, coffee and large-cardamom- Alaichi.
These sectors are deeply rooted in Nepali traditions and culture. The Lokta plant, for instance, can only be grown in Nepal’s Himalayan forests, and has been processed for generations in the country’s mountainous regions. Large cardamom is one of Nepal’s oldest traded products, and is a major cash earner for thousands of farmers, notably in the Eastern districts. The tea sector employs about 70,000 people in rural and urban areas, a majority of whom are women. Coffee, though an emerging sector, is already a source of income to more than thirty thousand farmers and their families. And from the large number of coffee shops I see emerging in Nepal, it is becoming increasingly popular with consumers.
All four have in common significant growth prospect and, more importantly, their ability to contribute to inclusive growth and sustainable development.
Despite being large employers in aggregate, the micro, small and medium-sized enterprises that make up the bulk of these sectors are themselves vulnerable to the changing dynamics of international trade.
The four sector strategies seek to bolster competitiveness and innovation. Accordingly, there are some common themes that run through all four: the need to improve productivity and quality, to improve technical and vocational skills, to improve market reach and diversification. These are not unique challenges; all countries continuously strive to achieve progress in these areas. What these four Sector Export Strategies present is a roadmap with a series of actions designed by Nepalis to respond to the country’s unique challenges. Implementing the strategies promises to enable businesses in the four sectors to reduce vulnerabilities, capitalise on strengths and boost exports.
Market opportunities exist. Each of these products is characterised by distinctive features that are valued by buyers – the coffee that is sought by specialty coffee traders for its Himalayan origin; the superior quality of the large cardamom; the uniqueness that makes handmade Lokta paper products desirable to upmarket retailers; and the quality black teas which are rated highly by tea connoisseurs.
What is essential is to add value to these products and the related services. Improve productivity, quality, branding, packaging and distribution around these four sectors to ensure that the greater part of the value is captured in Nepal by Nepal. Build a 'brand Nepal', develop intellectual property rights around the origin of these products and have these four sectors be part of this national identity.
Nepal conjures images of vast mountains, beautiful temples, and a rich heritage- leverage this to get your products to a consumer that is increasingly demanding quality and authentic goods. ITC has already worked with Nepal to do this in the pashmina sector through creating the Chyangra pashmina brand which in a short period of time led to export revenues of supported companies increasing by over 20%.
There are other areas such as in traditional medicinal plants, or carpets where more can be done. And tapping into the opportunities of e-commerce can help reach new markets. At the heart of much of this is the growing and vibrant youth population in Nepal. Harness this energy, this innovation and these new ideas which these youth have. Coupled with the export potential that you have in these various sectors, you have a mix for success.
Just earlier this week I had the pleasure to visit a handmade paper producer. To see this value chain from the harvesting of the material to final product was a revelation. The production process employs many men, women and youth across the value chain, thousands of families in the hills and is an important part of the Nepalese cultural footprint. The strategy before you aims to make this both a scalable and a potential luxury product for markets in Asia and beyond. You certainly have one of your first lokta hand-made paper brand Ambassadors with me!
We must be proud of this first step. But our job, and I mean everyone in this room, is far from done. If we want the strategies to work, then we must work on the strategies. We must move the strategies from words to action. We must see all national actors-public and private- and international partners change gear.
I have offered to the Minister of Commerce ITC's support to create a monitoring and tracking system of the implementation and progress of these four sector strategies. Today, be assured of ITC’s continued support to Nepal in its pursuit of prosperity.