Chandra Ghimire Joint Secretary Ministry of Commerce and Supplies Presented to:

1. Mainstreaming of Trade into Sectoral Plans and Programswith 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

2. Coverage • 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?

3. Trade is ever growing phenomena

4. Why trade so important for Nepal? • Growth Patternafter 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;

5. 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;

6. Why trade so important for Nepal? Nepal's own market so scant Many empirical studies illustrate: "outward-oriented economies have higher growth rate than inward-economies" 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'

7. Why trade so important for Nepal? Being a LDCs special privileges, i.e. S&DTs; Zero-Tariff (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, freight-forward, 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

8. 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. 3-Year 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.

9. 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

10. 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).

11. 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

12. 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.

13. 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

14. Status of Nepal's Foreign Trade

15. Status of Nepal's Foreign Trade 2

16. Status of Nepal's Foreign Trade 3

17. Status of Nepal's Foreign Trade 4

18. Status of Nepal's Foreign Trade 5

19. Status of Nepal's Foreign Trade 7

21. Trade of Goods in the First 7th Month of the Current FY (In NRs) + 6.6%

22. What is NTIS? • 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;

23. Salient features of the NTIS 2010...TBC 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;

24. Salient features of the NTIS 2010...TBC 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 & non-relevant things discarded;

26. What the Niche Products/Items?

27. What the Niche Products/Items?...

31. The Work in-progress

32. How many are the activities to undertake? • Activities under 4 strategic objectives: • Product/service wise 171 • Cross cutting 87 • Total 258 activities

33. 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

34. MoCS MoI MoAC MoF/DoC MoLT MoE MoST MoST MoH MoFSC MoCA MoPP&PW NPC MoFA PMO NRB Who are responsible for Implementation?

35. 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

36. What do we expect in next budget from all? Such A Coordination • 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

37. What do we expect in next budget from all? Such A Commitment • 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

38. Public Private VentureA COMMULATIVE EFFECT of A Joint Responsibility

39. Who Says Nepal can’t set an example?