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Nepal looks to diversify economic ties
The Nepalese finance secretary says Bangladesh will be the first choice among Saarc nations
Nepal has initiated a number of moves to enhance bilateral trade with Bangladesh. “We depend fully on India for our export-import trade. Now we want to diversify,” Krishna Hari Baskota, finance secretary of Nepal, told The Daily Star in an interview yesterday.
"Bangladesh will be our first choice in the Saarc region as we pursue trade diversification. The Nepalese people are particularly happy to learn that Dhaka is ready to broaden its economic ties with them."
The top bureaucrat of the landlocked Himalayan country also expressed gratitude towards the Bangladesh government for allowing it transit and access to sea.
"But we expect more routes and more transit facilities from Bangladesh," he said.
Two-way trade between the two countries averages Tk 500 crore a year, with Nepal exporting goods worth Tk 150 crore and importing Tk 350 crore.
Baskota is now in Dhaka to attend the fifth meeting of the Saarc finance ministers held in Ruposhi Bangla Hotel. Before the ministerial meeting, finance secretaries of the regional forum worked out proceedings for the ministers.
The Nepalese delegation led by its finance minister will call on Finance Minister AMA Muhith today at his office.
As part of improved bilateral relations, Baskota said his government has already initiated a treaty to avoid the double taxation on income earned in any of these countries.
“I expect the treaty will be effective in a few months,” said the bureaucrat.
Once the treaty is in place, he said Bangladeshi businesses can easily invest in Nepal and the Nepalese in Bangladesh. But this move alone cannot boost investments unless there is an investment protection agreement, he added.
“Accordingly, we have initiated to ink bilateral investment protection agreements with all members of SAARC,” said Baskota.
The finance secretary also discussed his country's economy, intra-regional trade in SAARC, non-tariff and para-tariff barriers, harmonisation of different standards and rules, transit, hydro-power potential and exchange of students.
He said both Bangladesh and Nepal have to explore the trade potential between each other.
"Bangladesh can buy construction materials like stones and cement while Nepal can buy readymade garments from Bangladesh as we are fully depend on imports for clothing items."
Nepal is not a major export destination for Bangladesh's RMG items as the country charges 15 percent duties. But Baskota said the tariff can be reduced through bilateral talks.
The Nepalese feels that the SAARC countries need to remove all tariff, non- and para-tariffs to spur economic cooperation in the region.
During the secretary-level talks on Sunday, all secretaries favoured the idea of setting up a regional development bank. "We have agreed to discuss more on the issue at an expert level," said Baskota.
Baskota said they are also discussing long-term investment in the region. "If we can have a regional agreement on protection and promotion of investment we will not need any bilateral deal."
He said an agreement could be signed on the issue at the next year's SAARC summit of head of governments in Kathmandu.
On transit, Baskota said he personally believes in regional connectivity to enhance trade and investment. "We need to establish a brotherhood among us. We have to trust each other. Once all the countries are connected to each other, trade in the region will automatically go up."
The intraregional trade among eight members of Saarc accounts for only 5 percent of their global trade.
He said Saarc could set up an inter-governmental committee where each party will put forward the problems it faces in trading with any individual country.
"We also need more effective interactions between the chambers of all the countries. When they come to know each other's problems, they will be able to sit with their respective governments and solve them."
Nepal's $20-billion economy had faced some difficulties last year. "We have fought back and transformed those challenges into opportunities."
"Now there is harmony among the political parties, industrial production has gone up and revenue growth is going up," he said.
He said his country is on the right track in bringing inflation below 7 percent from 8.2 percent at present, thanks to a number of steps taken by the central bank and government.
Nepal has a large trade deficit as it imports products worth 178 billion Nepalese rupees against an import of 30 billion rupees. But it has a 16.1 billion rupee balance of payment surplus, largely due to strong remittance inflow.
Nepalese living abroad sent home 250 billion rupees in 2011, up 35 percent over the previous year, said Baskota, adding that the country is expected to receive 300 billion rupees in the current fiscal year ending in June 15. It has a foreign currency reserve worth 369 billion rupees.
http://www.thedailystar.net/newDesign/news-details.php?nid=220500
The Nepalese finance secretary says Bangladesh will be the first choice among Saarc nations
Nepal has initiated a number of moves to enhance bilateral trade with Bangladesh. “We depend fully on India for our export-import trade. Now we want to diversify,” Krishna Hari Baskota, finance secretary of Nepal, told The Daily Star in an interview yesterday.
"Bangladesh will be our first choice in the Saarc region as we pursue trade diversification. The Nepalese people are particularly happy to learn that Dhaka is ready to broaden its economic ties with them."
The top bureaucrat of the landlocked Himalayan country also expressed gratitude towards the Bangladesh government for allowing it transit and access to sea.
"But we expect more routes and more transit facilities from Bangladesh," he said.
Two-way trade between the two countries averages Tk 500 crore a year, with Nepal exporting goods worth Tk 150 crore and importing Tk 350 crore.
Baskota is now in Dhaka to attend the fifth meeting of the Saarc finance ministers held in Ruposhi Bangla Hotel. Before the ministerial meeting, finance secretaries of the regional forum worked out proceedings for the ministers.
The Nepalese delegation led by its finance minister will call on Finance Minister AMA Muhith today at his office.
As part of improved bilateral relations, Baskota said his government has already initiated a treaty to avoid the double taxation on income earned in any of these countries.
“I expect the treaty will be effective in a few months,” said the bureaucrat.
Once the treaty is in place, he said Bangladeshi businesses can easily invest in Nepal and the Nepalese in Bangladesh. But this move alone cannot boost investments unless there is an investment protection agreement, he added.
“Accordingly, we have initiated to ink bilateral investment protection agreements with all members of SAARC,” said Baskota.
The finance secretary also discussed his country's economy, intra-regional trade in SAARC, non-tariff and para-tariff barriers, harmonisation of different standards and rules, transit, hydro-power potential and exchange of students.
He said both Bangladesh and Nepal have to explore the trade potential between each other.
"Bangladesh can buy construction materials like stones and cement while Nepal can buy readymade garments from Bangladesh as we are fully depend on imports for clothing items."
Nepal is not a major export destination for Bangladesh's RMG items as the country charges 15 percent duties. But Baskota said the tariff can be reduced through bilateral talks.
The Nepalese feels that the SAARC countries need to remove all tariff, non- and para-tariffs to spur economic cooperation in the region.
During the secretary-level talks on Sunday, all secretaries favoured the idea of setting up a regional development bank. "We have agreed to discuss more on the issue at an expert level," said Baskota.
Baskota said they are also discussing long-term investment in the region. "If we can have a regional agreement on protection and promotion of investment we will not need any bilateral deal."
He said an agreement could be signed on the issue at the next year's SAARC summit of head of governments in Kathmandu.
On transit, Baskota said he personally believes in regional connectivity to enhance trade and investment. "We need to establish a brotherhood among us. We have to trust each other. Once all the countries are connected to each other, trade in the region will automatically go up."
The intraregional trade among eight members of Saarc accounts for only 5 percent of their global trade.
He said Saarc could set up an inter-governmental committee where each party will put forward the problems it faces in trading with any individual country.
"We also need more effective interactions between the chambers of all the countries. When they come to know each other's problems, they will be able to sit with their respective governments and solve them."
Nepal's $20-billion economy had faced some difficulties last year. "We have fought back and transformed those challenges into opportunities."
"Now there is harmony among the political parties, industrial production has gone up and revenue growth is going up," he said.
He said his country is on the right track in bringing inflation below 7 percent from 8.2 percent at present, thanks to a number of steps taken by the central bank and government.
Nepal has a large trade deficit as it imports products worth 178 billion Nepalese rupees against an import of 30 billion rupees. But it has a 16.1 billion rupee balance of payment surplus, largely due to strong remittance inflow.
Nepalese living abroad sent home 250 billion rupees in 2011, up 35 percent over the previous year, said Baskota, adding that the country is expected to receive 300 billion rupees in the current fiscal year ending in June 15. It has a foreign currency reserve worth 369 billion rupees.
http://www.thedailystar.net/newDesign/news-details.php?nid=220500
