Wednesday, April 4, 2012

Nepal fails to attract investment in service sector

Nepal could not take any advantage despite the country's commitment under the General Agreement on Trade in Services (GATS) of global trade regime being the most liberal in the South Asia.
"Nepal should table its initial offer under SAARC Agreement on Trade in Services (SATIS) with GATS schedule of commitments," South Asia Watch on Trade, Economics and Environment's (SAWTEE) research director Puspa Acharya said, adding that Nepal could show flexibility in relaxing conditions on the share of foreign equity participation in the offered sectors during the negotiations.
Similarly, the country can request other members of SAARC to open up their services sector in which Nepal has high growth potential, comparative advantages and policy direction to develop the particular sector, he added.
After years of realisation on the need for regional cooperation in other areas like services trade, besides trade in goods, the SAARC member countries have brought the SATIS, but they still need to identify the services sectors that they would offer to liberalise.
Recently during the Eighth meeting of Expert Group on SAARC Agreement on Trade Service that concluded in Kathmandu Nepal had selected its five service sectors to open for the SAARC member countries.
The service sectors within Nepal Trade Integration Strategy (NTIS-2010), the country offered to open trade, tourism, Information Technology, health and education for the SAARC member countries to invest in Nepal.
Nepal Trade Integration Strategy 2010 has identified 19 products that includes seven services — tourism, labour, health, education, IT and BPO, engineering and hydro-electricity — having maximum potentials.
Earlier, the South Asian regional block’s member states have already made their initial offer to open over 170 sub-sectors of service for foreign investments under the WTO norms. The 16th SAARC summit in Bhutan in 2010 had decided to introduce service sector in the SAFTA, which would incorporate only goods for regional preferential trade.

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