Monday, January 18, 2010

Nepal slips 17 places down in efficiency in trade, thanks to government apathy

Nepal ranks nearly at the bottom in proving efficiency of trading goods around the world, according to the World Bank survey.
It has slipped 17 places down over the past four years. Among the 155 countries, Nepal ranked 147th in the global Logistics Performance Indicators (LPI) -- included in the report ‘Connecting to Compete 2010: Trade Logistics in the Global Economy -- whereas it was at 130th position in 2007.
The government apathy towards the business community has not only resulted in the fall in exports but has also started taking toll on forex reserve that according to the central bank's report for the first four months of this fiscal year has come down. The gross foreign exchange reserves stood at Rs 248.89 billion in mid November 2009 – a drop by 11.1 per cent compared to the level as at mid July 2009, said the Nepal Rastra Bank (NRB) report that has also painted the gloomy picture of the economy.
The LPI is an ‘interactive benchmarking tool’ created to help countries identify the challenges and opportunities in their performance in trade logistics, the WB report said adding that the LPI 2010 allows for comparisons across 155 countries.
The report is based on a worldwide survey of operators on the ground (global freight forwarders and express carriers), providing feedback on the logistics 'friendliness' of the countries in which they operate and those with which they trade.
In the South Asian region India tops as it is ranked 47 followed by Bangaldesh at 79. Similarly, Pakistan is ranked 110, Bhutan 128 and Sri lanka 137.
In the developing countries category per region, South Africa (28) is the top performer from Africa; China (27) from East Asia; Poland (30) from Central and Eastern Europe; Brazil (41) from Latin America; Lebanon (33) from the Middle East; and India (47) from South Asia.
According to the LPI, high income economies dominate the top logistics rankings, with most of them occupying important places in global and regional supply chains. By contrast, the ten lowest performing countries are almost all from the low and lower income groups.
By contrast, the 10 lowest performing countries are almost all from the low and lower income groups.
Although the study shows a substantial 'logistics gap' between rich countries and most developing countries, it finds positive trends in some areas essential to logistics performance and trade. Some of them include the modernisation of customs, use of information technology, and development of private logistics services.
Nine other most significant overperformers for this year are: China, Democratic Republic of Congo, India, Madagascar, the Philippines, South Africa, Thailand, Uganda, and Vietnam.
Germany is the top performer among the 155 economies followed by Singapore, Sweden and the Netherlands.
Although the study shows a substantial ‘logistics gap’ between rich countries and most developing countries, it finds positive trends in some areas essential to logistics performance and trade. Some are the modernisation of customs, use of information technology and development of private logistics services.
The LPI is the weighted average of the country scores on the six key dimensions: efficiency of the clearance process by border control agencies, including customs; quality of trade and transport related infrastructure; ease of arranging competitively priced shipments; competence and quality of logistics services; ability to track and trace consignments, and timeliness of shipments in reaching destinations within the scheduled or expected delivery time.
In the LPI index 2010, Nepal scored 2.2 where top country Germany bagged 4.11 points.
An overperformer is a country with a higher LPI score than expected -- based solely on its income level. An underperformer is a country with a lower than expected LPI scores.

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