Nepal's trade performance plunges due to lack of logistic support

Lack of logistics services and investment in trade-related infrastructure and delays and unexpected problems in quality and standards inspection agencies coupled with poor customs procedures created supply chain problems pulling the overall logistics performance of a country like Nepal down, according to a World Bank report.
The Logistic Performance Index (LPI) report 2012 — Connecting to Compete — revealed that Nepal's competence in trade has taken a plunge as it ranked among the bottom five countries in the 151st rank — among 155 countries with a 2.04 score.
As the LPI measures logistics efficiency, now widely recognised as vital for trade and growth, Nepal's plunge in ranking revealed the country's inability to trade globally and eroding confidence in global trade, though efficiency of customs in Nepal remained relatively better — as Nepal ranked at 125th position — compared to other indicators, according to the report.
Singapore stood as the top performer among the 155 economies.
Countries like Chile, China, India, Morocco, South Africa, Turkey and the US too improved their performances as China ranked 26th and India occupied 46th position in the report.
“Trade logistics is key to economic competitiveness, growth and poverty reduction,” according to the World Bank.
"Unfortunately, the logistics gap between rich and poor countries continues and the convergence trend experienced between 2007 and 2010 has stalled as events like the global recession, and the European debt crisis shifted attention away from logistics reform,” World Bank vice president for Poverty Reduction and Economic Management Otaviano Canuto said.
As improvements in global logistics over the past two decades were driven by innovation and increase in global trade, the report has urged the countries to focus more on enhancing trade, logistics reforms and innovation. But due to political transition, Nepal has not been able to improve trade performance.
The report suggested governments to lay emphasis on building infrastructure, developing a regulatory regime for transport services, and designing and implementing efficient customs clearance procedures.
"Concerns with road quality are high in the two lowest LPI quintiles, in South Asia, and — surprisingly — in the Middle East and North Africa," the report said, adding that a multidimensional assessment of logistics performance, the LPI compares the trade logistics profiles of 155 countries and rates them on a scale of one (worst) to five (best).
The ratings are based on 6,000 individual country assessments by nearly 1,000 international freight forwarders,who rated the eight foreign countries their company serves most frequently. The LPI’s six components including the efficiency of the clearance process — speed, simplicity, and predictability of formalities — by border control agencies, including customs; the quality of trade- and transport-related infrastructure — ports, railroads, roads, information technology; the ease of arranging competitively priced shipments; the competence and quality of logistics services like transport operators, customs brokers; the ability to track and trace consignments.

PCA training
KATHMANDU: Department of Customs with assistance from Nepal Economic,
Agriculture, and Trade project under US Agency for International Development has completed the Post Clearance Audit (PCA) training for customs officials. The training is aimed at empowering officials at customs points across the country, economic expert Prithvi Raj Ligal said, adding that the implementation of Post Clearance Audit will facilitate the trade activities in the country. The country has to enhance effectiveness at customs points due to World Trade Organisation (WTO) compliance, Ligal said. “Modernisation of functioning at customs points including customs clearance and other activities is a must to meet the basic standards set by the WTO.”