See More on Facebook

Diplomacy, Economics, Opinion

Globalisation is losing its lustre

Nepal must learn from neighbouring countries and apply various policies and approaches to help the economy grow.


Written by

Updated: February 27, 2018

 

As Indian Prime Minister Narendra Modi was speaking against protectionism and expressing his arguments in favour of globalisation at the annual meeting of the World Economic Forum in Davos, Switzerland, in India, around 100 trucks laden with ginger were stranded at the Nepal-India border as Indian customs officials prevented the import of Nepali ginger into the Indian market. Nepali traders have long been exporting ginger to the Indian market. Nepal is a land-locked country and 80 percent of its imports come from India. In the first 10 months of fiscal year 2016/17, Nepal’s trade deficit with India reached a record high of Rs491 billion.

Indian customs officials have presented both tariff and non-tariff barriers as grounds for preventing the import of Nepali ginger into the Indian market. New tariff barriers imposed on Nepali ginger are Goods and Services Tax (GST) and quarantine charges. Additionally, currently imposed non-tariff barriers prevent the import of Nepali ginger into India because ginger comes with Nepali earth. This is not the first time that India imposed tariff and non-tariff barriers on the import of ginger and other agricultural products such as tea and coffee. Such Indian trade policy towards Nepali agricultural products against the backdrop of globalisation will have a long term impact on the latter’s economic future. Particularly since India is the major market for Nepali ginger.

Expressing major worries in Davos, Modi stated that protectionism is raising its head, tariff and non-tariff barriers are being imposed, globalisation is losing its lustre and the global supply chain is slowing down. His conclusion was that isolationism is not a solution. As he was speaking in Davos–perhaps US President Donald J Trump’s ‘America First’ policy was in his mind–because of which free global trade is expected to face a setback.

Of course, it also bears mentioning that India had imposed a new barrier on the import of electricity from neighbouring countries. The barrier demands that Indian firms have 51 percent investment in a power project in Nepal if they are to buy electricity from it. This particular policy doesn’t entirely seem to go in line with Modi’s worries on gradual losing the lustre of globalisation. Instead, it smacks of protectionism.

Lesson learned

Nepal can learn lessons from Modi’s economic policy that has helped protect Indian industries and agriculture, boosted exports, and achieved prosperity in a speedy manner. Through such examples, Nepal can boost exports to India and other countries. In the context of new Indian tax and non-tax barriers on Nepali agricultural products, approaches to boost Nepal’s export and the economy must be explored. As the country is heading towards forming its first elected government as per the 2015 constitution, Nepali farmers and potential investors, domestic and foreign alike, are anxious about how the new government will formulate its trade, investment and tax policies vis-à-vis India in order for Nepali products to get smooth access to the Indian market.

As the USA and India are gradually drifting away from the spirit of globalisation in practical terms under different pretext and slogans, it is unjustifiable for poor countries like Nepal to strictly remain on the path of globalisation. Economic nationalism is gradually spreading from the USA, and is being imitated by other countries. If Nepal continues to be a victim of tariff and non-tariff barriers imposed by countries with whom Nepal’s trade imbalance remains extremely high, there will be a need to immediately review custom policies to make Nepali industries and agriculture competitive.

Way forward

Nepal can and must formulate certain policies which will help eliminate poverty, create jobs at home and achieve industrial growth. Appropriate tax policies must be formulated that will create or eliminate barriers to promote national interests. As an economically weak country, Nepal can’t afford to and shouldn’t be a unilateral proponent of globalisation and free trade.

India and other South Asian countries have put Nepal’s agricultural products on a sensitive list which creates barriers for export. Unless Nepal is able to export its surplus electricity and agricultural products to India and other countries, the prosperity and stability envisioned by political parties will remain unfulfilled.

Diversification of trade is the first step to enhance export of ginger, tea, coffee and other agricultural products. Trade diversification reduces dependency on one or two countries. For this, Nepal needs to redouble its economic diplomacy to promote export and reduce the ever-increasing trade deficit.

We must not hesitate to learn from neighbouring countries and we must apply various policies and approaches to help the economy grow. Nepal may apply tariff and non-tariff barriers on certain goods to help farmers and the economy. A single quarantine standard needs to be established on both sides of the border between India and China as both countries export agricultural products to each other. Nepal needs to provide subsidies to the affected farmers when their products are blocked by an importing country under various pretexts and when adverse weather destroys the crops. Nepal must negotiate a settlement for fair trade deals with a view to promote its industries and agriculture.

(This article was written by Purna Silwal and appeared originally in the Kathmandu Post)



Enjoyed this story? Share it.


ANN Members
About the Author: Asia News Network is a regional media alliance comprising 24 media entities.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Diplomacy, Economics, Opinion

UN panel adopts resolution condemning NK human rights abuses

It is expected to pass the UN General Assembly next month for the 14th consecutive year. A United Nations committee on Thursday adopted a resolution calling for accountability for gross human rights violations in North Korea. The UN Third Committee, which oversees humanitarian issues, passed the document by consensus without a vote. The South Korean government said it joined the consensus-based decision in accordance with a policy to work together with the international community for a “substantive improvement” in the human rights of North Korean people. In a statement, the Ministry of Foreign Affairs said this year’s reso


By The Korea Herald
November 16, 2018

Diplomacy, Economics, Opinion

Rohingya refugees refuse repatriation

Repatriation postponed as Rohingyas feel return to Myanmar still not safe. The much-awaited launch of the Rohingya repatriation was cancelled at the last moment yesterday as the refugees refused to return to Rakhine for fear of fresh persecution. “The refugees don’t want to return now,” Foreign Minister AH Mahmood Ali told reporters after briefing foreign diplomats in the capital’s State Guest House Padma in the evening. He said Bangladesh sheltered the persecuted Rohingyas with an open heart when they fled Rakhine last year. “We can’t force them to go,” he said, adding that Bangladesh would now discuss with Myanmar sending a group of Rohingya leaders (majhis) to Rakhine to


By Daily Star
November 16, 2018

Diplomacy, Economics, Opinion

China says Pacific island ties no threat to any nation

Government says Xi’s visits to help improve region’s development, people’s livelihoods. China said on Tuesday its cooperation with and assistance to Pacific island countries never target a third party, and called for other countries to jointly help promote the region’s development and improve people’s livelihoods. Vice-Foreign Minister Zheng Zeguang made the remark at a news briefing on President Xi Jinping’s state visits to Papua New Guinea, Brunei and the Philippines, and his attendance at the 26th Asia-Pacific Economic Cooperation Economic Leaders’ Meeting. Xi’s visits will start on Thursday and last to Nov 21. During Xi’s stay in Papua New Guinea, he will meet with leaders of the eight Pacific island countries that have established diplomatic ties with China and deliver a speech at a group meeting with them. In the speech, Xi is expected


By China Daily
November 14, 2018

Diplomacy, Economics, Opinion

India watchful amid developments in Sri Lanka

Sri Lanka’s political crisis has a regional power closely watching developments. The return of Mr Mahinda Rajapaksa to power in Sri Lanka amid political turmoil has triggered concern in India, with analysts warning it could lead to a deterioration of ties with the island nation to its south-east and increase the influence of China, already making serious inroads into South Asia. Sri Lankan President Maithripala Sirisena sacked Prime Minister Ranil Wickremesinghe on Oct 26 and named his one-time rival as his replacement. The move plunged the country into political turmoil and a constitution


By The Straits Times
November 14, 2018

Diplomacy, Economics, Opinion

Aung San Suu Kyi wants foreign investment amid international pressure

Myanmar’s State Counsellor Aung San Suu Kyi wants the world to see her country as a business and investment opportunity waiting to be seized. Suu Kyi made the pitch that Myanmar is “the last frontier of Southeast Asia” in a keynote speech at the Asean Business and Investment Summit, on the sidelines of the main Asean Summit, which will be held from Monday to Thursday in Singapore. Suu Kyi acknowledged that Myanmar very behind in this respect, saying “this may sound old hat to you, but it’s very very new to us. We want you to know we are catching up with the rest of the world.” There is certainly a long way for Myanmar to go. Just weeks ago, in late October, the World Bank’s Doing Business 2019 report, an index that evaluates “the regulations that enha


By Quinn Libson
November 14, 2018

Diplomacy, Economics, Opinion

Report of NK’s ‘undisclosed’ missile bases not new, S. Korea says

South Korea’s presidential office on Tuesday played down a new report on North Korea’s “undisclosed” missile sites. South Korea’s government said that it’s going too far to call the North’s continued activity a “great deception” given that it has no specific agreement to dismantle or disclose the facilities mentioned in the report issued by Beyond Parallel, a group at the Center for Strategic and International Studies. The group said it has located 13 out of an estimated 20 missile operating bases undeclared by the secretive communist regime. “The dispersed deployment of these bases and distinctive tactics employed by ballistic missile units are combined with decades of extensive camouflage, concealment and deception practices to maximize the survival of its missile units from pre-emptive strikes and during wartime operations,” the report


By The Korea Herald
November 13, 2018