Regional connectivity in SAARC is key to economic progress


    Kathmandu, Nov. 9: Economists and business people have stressed the need for developing regional connectivity among the South Asian Association for Regional Cooperation (SAARC) countries and suggested expanding the avenues of service sector including hydropower and tourism to reap more benefits from the South Asia Free Trade Agreement (SAFTA) and other bilateral and regional agreements ahead of 18th SAARC Summit, which is going to be held in Kathmandu from November 26-27.

    They further suggested that Nepal should demand for the rights of the Least Developed Country (LDC) and Landlocked Country (LLDC) during the Summit.

    Talking to The Rising Nepal, economist and member of the National Planning Commission (NPC) Dr. Chandra Mani Adhikari stressed the need to focus on regional connectivity.

    He further said that Nepal should benefit from the SAFTA and other regional agreements looking at its own capacity and areas of competitive advantage.

    “We have huge competitive advantage in hydropower and tourism, among other service sectors. Therefore, we should reap benefits from SAFTA and other bilateral and regional agreements in a selective way, focusing on service sector including hydropower and tourism,” he suggested.

    Stating that Nepal was grossly failed to reap benefit from SAFTA as per its objectives though many countries in the SAARC had benefited from it, he said that Nepal should enhance her capacity to increase export trade developing regional connectivity.

    He said that Nepal faced issues of non-tariff barriers such as quarantine, customs management, certificate of origin, and trade facilitation, among others, which required high level political commitment to end.

    Economist Dr. Posh Raj Pandey reiterated the need for better regional connectivity among the SAARC countries to maximize the benefits of SAFTA.

    He said that Nepal had not benefited from SAFTA so far as it could not increase the volume of export trade, using the concessional provisions of the tariff and non-tariff barriers of the SAFTA.

    “The bilateral agreement with India has already provided more benefits to Nepal than the SAFTA. We need to focus on regional connectivity to reap benefits of the third country, apart from India,” he said.

    President of the Nepal Chamber of Commerce Rajesh Kazi Shrestha stressed the need for developing integrated regional connectivity among the SAARC countries.

    “The connectivity is the major issue that Nepal should raise during the upcoming SAARC Summit. The connectivity is not only of road but also air, railway, communication and human, among others.”

    According to Ministry of Commerce and Supplies, Nepal has hardly benefited from the regional trade agreements such as SAFTA.

    Nepal has huge trade deficit. The trade deficit of the last fiscal year alone stood at Rs. 631.42 billion. Out of this, the trade deficit with India accounts for more than one-third.

    Source : The Rising Nepal