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Nepal's elusive quest for export success meets LDC graduation

Author

Listed:
  • Paras Kharel

    (South Asia Watch on Trade, Economics and Environment)

Abstract

Nepal is hurtling towards graduation from the least developed country (LDC) category with a low per capita income and meagre exports. This paper analyses the implications of graduation for Nepal's exports, and suggests measures that Nepal government should take to mitigate the adverse effects. It argues that export success has eluded Nepal despite trade preferences, and graduation could make it even more elusive. The fact that the prospect of tapping the country's export potential is partly predicated on preferential tariffs implies much higher export losses than projected by standard modelling exercises. Not factoring in changes in rules of origin in preference-granting countries adds to the downward bias of existing estimates. All this underlines the urgency of building productive capacity, alleviating supply-side constraints, and strengthening factors of non-price competitiveness.

Suggested Citation

  • Paras Kharel, 2021. "Nepal's elusive quest for export success meets LDC graduation," Working Papers wp/21/01, South Asia Watch on Trade, Economics and Environment.
    • Handle: RePEc:saw:wpaper:wp/21/01
    as

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    File URL: https://sawtee.org/publications/Nepal-elusive-quest-for-export-success-meets-LDC-graduation.pdf
    File Function: First version, 2021
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    References listed on IDEAS

    as
    1. Fabrice Defever & José-Daniel Reyes & Alejandro Riaño & Gonzalo Varela, 2017. "All These Worlds Are Yours, Except India: The Effectiveness of Export Subsidies in Nepal," CESifo Working Paper Series 6418, CESifo.
    2. Ashish Narain & Gonzalo Varela, 2017. "Trade Policy Reforms for the Twenty First Century," World Bank Publications - Reports 29058, The World Bank Group.
    3. Paras Kharel, 2020. "Industrialization, input duties and revenue concerns in Nepal," Working Papers wp/20/01, South Asia Watch on Trade, Economics and Environment.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    LDC graduation; trade policy; export potential; export competitiveness; trade costs; coordination failure; policy space institutions; coordination failure;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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