Sector-specific disincentives bars Nepal export potential: Report

Despite high potential of exports of health, education and high-end retail services, sector-specific disincentives is suppressing the comparative advantages, said a report.

"Nepal has comparative advantage in the exports of health, education and high-end retail services but the comparative advantage is being suppressed by sector-specific disincentives" said a study conducted by the South Asia Watch on Trade, Economics & Environment (SAWTEE) with the support of the United Nations Development Programme (UNDP) and the Ministry of Industry, Commerce and Supplies.

The report said comparative advantage is derived primarily from Nepal’s natural endowments and comparative cost structure along with level of skill and human capital. However, the major disincentives to exporting these services despite the potential include lack of coordinated efforts in the public sector regarding the definition and scope of services whose nature is intangible and cross-cutting, lack of coordination between the public and private sector, poor infrastructure for trade in services, policy incoherence, lack of security and political instability, according to the report.

SAWTEE disclosed the findings at a workshop to on “Nepal’s Export Potential in Health, Education and High-end Retail Services” held in Kathmandu.