Chandan Sapkota’s Blog

Here is demand-duty-free treatment of carpet made in Nepal for the sake of poverty reduction. Again, a demand inefficiency! Nepal needs duty-free treatment of carpets and shirts in India, China, Europe, and the united states. It ought to be noted that almost 98% of the garment and textile companies have eliminated out of business, following the end of MFA in 2005 especially. And, over 80% of the jobs are already lost.

Because Nepali exporters never learnt how competition works and were always smug with responsibility-free access in the West. Neither the government nor the entrepreneurs looked into enhancing our industry’s capacity, competitiveness, quality, and market-gain access to. In the end-quota limitations were eliminated in 2005, big makers, who enjoy large agglomeration economies and provide cheaper products of the same quality, from China, India, Cambodia, and Vietnam overran the Nepali market pie in the West.

Given this fact, why would Nepal need duty-free treatment in the Western world still? Nepal is not going to recoup the market pie lost its international competitors already. Also, the dream of poverty reduction through duty-free treatment is simply a myth because already over 80% of the employees are out of jobs! Just forget about aiding this sector. It is high time Nepal prioritized other sectors like hydropower and tourism.

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