Nepal, which is battling rising unemployment, must look at boosting exports to push economic recovery in the post Covid 19 phase, experts said.
Unlike Bangladesh, the exports sector has not been given any priority by the country’s political leadership.
"This area must be boosted with a well-defined and well executed strategy to create jobs,” an analyst in Kathmandu told India Narrative.
Exports could be a powerful platform to boost post-pandemic recovery and enable Nepal to transition towards green, resilient, and inclusive development, the World Bank’s latest Nepal Development Update noted.
According to the multilateral agency, muted exports growth is a major challenge for Nepal. In fact, over the past two decades, Nepal’s export growth has been stagnant and Kathmandu features among the 20 countries in the world with the least dynamic exports, it said.
Contrast this to Bangladesh.
Export competitiveness has been one of the prime growth drivers in Bangladesh, which leveraged its low wage rates. Between 2011 and 2019, Bangladesh’s exports increased by 8.6 per cent every year, compared to the world average of 0.4per cent. Eurasia Review said. “This godsend is substantially due to the country’s hard-hearted focus on products, such as apparel, in which it possesses a comparative advantage,” it added.
The exports sector in any country is linked to manufacturing as well as employment generation.To push the exports sector, the Bangladesh government has been offering a host of incentives under the industrial policy and export oriented growth mechanism.
The low-income Nepal is home to about 30 million people, mostly young. The median age in Nepal is less than 30 years.
“While having a young population is a boon, it is also imperative for the government to be able to create jobs for them. But unfortunately most of the younger Nepalese have had to leave the country in search of livelihoods, the analyst said. While this has boosted remittances, a key component of the Himalayan nation’s economy, employment generation within the country is an area which needs to be prioritised by the government.
Kene Ezemenari, Senior Economist of the World Bank in a statement said that Nepal’s untapped export potential is estimated to be around $9.2 billion, 12 times its actual annual merchandise exports. “This export potential represents an opportunity to create an estimated 220,000 new jobs, with significant implications for productivity growth. Realizing that potential is not unrealistic in the medium term,” he said.