The country must invest in primary infrastructure like roads railways

The country must invest in primary infrastructure

This preview shows page 9 - 11 out of 12 pages.

The country must invest in primary infrastructure like roads, railways, electricity generation and storage depots to improve border crossing time and transport mode switching to minimize delays at the borders. Nepalese industries need to supply a sizable part of domestic demand of household goods in the wake of strong internal demand and the rapid price rise of Chinese goods. In general, there is a great need for creating a favorable business environment in Nepal. Industrial unrest and rigid labor laws are some of the biggest obstacles to the industrialization of Nepal and its future participation in a fast globalizing economy. The following types of Nepalese product shipments represent positive net exports or a trade balance surplus. Investopedia defines net exports as the value of a country’s total exports minus the value of its total imports. In a nutshell, net exports represent the amount by which foreign spending on a home country’s goods or services exceeds or lags the home country’s spending on foreign goods or services. 1. Textile floor coverings: US$81 million (Up by 30.6% since 2017) 2. Paper yarn, woven fabric: $18.7 million (Up by 486.1%) 3. Collector items, art, antiques: $13.1 million (Up by 109.1%) 4. Miscellaneous textiles, worn clothing: $11.5 million (Down by -27.6%) 5. Raw hides, skins not furskins, leather: $6.6 million (Down by -11.2%) 6. Coffee, tea, spices: $5.9 million (Up by 1,983%) 7. Vegetable plaiting materials: $5.5 million (Down by -38.8%) 8. Wood Pulp: $5.4 million (Down by -18.9%) 9. Lead: $2 million (Up by 4,686%) 10. Beverages, spirits, vinegar: $1.8 million (Reversing a -$54.4 million deficit)
Image of page 9
RS 9 Nepal has highly positive net exports in the international trade of carpets and other textile floor coverings. In turn, these cash flows indicate Nepal’s strong competitive advantages under the textile floor coverings category. Commercial policy for Nepal through International Business: Trade & Investment (FDI Policy): Nepal does not attract much foreign direct investment (FDI) in spite of policy reforms initiated in the early 1990s to attract it. This is partly because a small, least developed, landlocked, mountainous country has little to offer to investors. Nevertheless, other similarly situated countries are receiving more investment than Nepal. Can Nepal improve its FDI performance? Yes. Nepal's advantages include privileged access to a well-disposed neighbouring country with a large market; a low wage, trainable workforce; a flourishing local entrepreneurial culture in both small and large businesses; and established international recognition thanks to tourist landmarks. Nepal’s temperate climate is also ideal for cultivating medicinal herbs, whose market has seen phenomenal expansion in recent years. These advantages can make attractive investment packages. Trade & investment control measures: The volume of FDI inflows into Nepal has been small, averaging only about $8 million annually. The inevitable consequence is that FDI has not been an important source of aggregate investment finance and its impact on economic development has also been minimal. A comparison with selected high and low performing Asian countries brings out the underperformance of Nepal in terms of FDI inflows. As Nepal has some niche sectors such as tourism and herbal products, potential exists for the country to attract FDI in such sectors. Even though
Image of page 10
Image of page 11

You've reached the end of your free preview.

Want to read all 12 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture