How and Why DPs Should Support Implementation of NTIS 2010?

1. How and Why DPs Should Support Implementation of NTIS 2010? Chandra Ghimire Joint Secretary Ministry of Commerce & Supplies chandrakg64@yahoo.com Presented to GoN-Donor Consultation Meeting on EIF/NTIS Implementation Kathmandu, Nepal 2010 Nov 1

2. Outline of the Presentation • Objectives of today's Meeting • Why Trade is a Must? • Briefing on EIF & Nepal • NTIS 2010 in Nepal • Mainstreaming of Trade in Nepal • Implementation Approach uphold • Implementation Mechanism Placed • Commitment expected from DPs to implement NTIS

3. Objectives of Today’s Meeting • Briefing DPs about EIF and NTIS 2010 • Briefing DPs about implementation status of EIF & NTIS in Nepal • Make sure DPs mainstream trade by including trade in their Nepal assistance strategy • Obtaining DPs’ support commitments for NTIS implementation • Selection of Donor Facilitator for new phase

4. Why TRADE is a must ? • "Inclusive Growth" is a pre-requisite for alleviating poverty, • Trade is an engine of "Inclusive Growth", • Export is a triggering factor for Trade, since: • Nepal has comparative & competitive advantages in certain goods & services, • Nepal's own internal market small but huge markets available in its two giant neighbors with miracle growth • Value addition seems in certain goods to be very high • Market access available through multilateral, regional and bilateral arrangements • Being a LDC special privilege i.e. DF (zero-tariff in EC, Australia, Canada, HK, India, China, Japan, USA etc.)

5. Growing Trend of Trade Deficits

6. What Approach the Best Serving? • By increasing supply side capacity of the country • By promoting the goods & services with high value addition • By focusing on 'inclusive growth', i.e. employment & income, supporting marginalized areas & groups NTIS 2010 in effect to serve these approaches

7. Backdrop of NTIS 2010 Poor capacity to capitalize the opportunity of WTO accession and various RTAs/FTAs; Poor mainstreaming of trade; Steadily growing trade deficit over last FYs; Poor implementation of DTIS 2004 and needs of updating it as per changed contexts; Challenge of 'Inclusive Growth‘ as TYP for poverty alleviation & peace dividend; Economic agenda in shadow in the current transition;

8. What is NTIS? • National trade strategy to enhance 'supply side capacity' for Nepal's space in global market; • Prioritized strategy launched by PM himself on 24 June 2010 • An outcome of analysis & consultation with: • National stakeholders i.e. Government agencies, business organizations FNCCI, CNI, CoC, product associations, national • International experts, DPs • But led by GoN

9. Salient Features of NTIS 2010 Field surveys, National and ITC data based analysis and consultation undertaken China and India visited by experts; 19 goods & services identified as priority items; 10 potential destination markets identified; Plus 5 other goods suggested; 3-5 years period for implementation; Engaging of multiple agencies, i.e., GoN's 17 ministries/agencies as well as business organizations

10. Salient Features of NTIS 2010 • Having 4 strategies: • Strengthening trade negotiation • Strengthening NTB related domestic capacity • Strengthening supply capacity of "inclusive exports" • Strengthening capacity for managing AfT & TRTAs • Having 87 cross cutting actions and 171 product/service specific & total 268 actions to be implemented • Continued consultation process • National stakeholders: Government agencies and departments, private sector organizations etc. • Development partners (GTZ, DFID, USAID, Japan, ADB, World Bank, Finland etc.)

11. What the Goods & Services to Export?

12. What the Goods & Services to Export?

14. EIF Global Implementation Mechanism • At Global Level: • EIF Secretariat at WTO Geneva • Nepal represents LDCs in the EIF Board since 2010 • At National Level: • National Steering Committee (NSC) • Focal Point (FP) • National Implementation Unit (NIU) • TWGs as Extended NIUs in 5 ministries • Donor facilitator (DF)

15. NSC Focal Point Technical Committees (TCs) EIF Implementation Arrangement in Nepal Donor Facilitator NIU TSCs NECTRADE 2010 • Technical Committees (TC) • Agriculture, agro-industry, NTFP, and SPS • Private Sector Development (Manufacturing, SMEs, SEZ/EPZ and TBT) • Legislation and Intellectual Property Rights (IPRs) • Services and taxation • Cross-Cutting Issues and Trade-related Infrastructure Development • Technical Sub-Committees (TSC) • To be constituted by TC as required.

16. Implementation Approach of NTIS • NSC: as the APEX BODY for overall guidance & inter agency coordination • Focal Point: as LEADING the initiatives of MoCS • NIU at MoCS: as NTIS EXECUTING, RESOURCE MOBILIZING& FACILITATING • 5 Extended NIUs (TWGs): as FORMULATING & IMPLEMENTING projects • Sectoral ministries/agencies: As IMPLEMENTING PARTNERS • Business associations: as STAKEHOLDERS involved in the NSC & various implementation activities • M&E mechanism: • Via existing national M&E system • Objective based M&E indicators yet to develop

17. Implementation Status • Tier 1 Project placed in to address capacity issue of MoCS and relevant ministries/agencies • Developing of project proposals underway for Tier 2 • TORs for NIU/Extended NIUs & their staffing done (govt officials appointed for NIU/Extended NIUs) • Consultation workshops/meeting held with concerned stakeholders

18. Additional Strength Acquired • Matching budget from MoF • National driven: GoN at steering seat • NIU rich with vibrant staff team • Inter agency coordination through NSC & NPC • M&E as per national M&E mechanism • Accountability as per its national system • Implementing role of concerned ministries well respected

19. Mainstreaming of Trade in Nepal • 2nd TYP has included TRADE as one of its 6 pillars • One of the focuses in the coming budget: addressing trade deficit • A clear budget line for NTIS implementation being considered • Mainstreaming of trade in sectoral plans, e.g., underway the process of Agriculture • To intensify the mainstreaming, senior officials of concerned ministries are being re-orientated Q is What about mainstreaming of trade in DPs' priority?

20. What Commitments from DPs required? 1. DPs' engagement in Nepal’s trade development A. Those who already involved in the formulation: – Urged strong & continued commitments for the NTIS implementation B. Those who not yet: • Urged to include trade in their Nepal Assistance Strategy and support the NTIS implementation

21. What Commitments from DPs required? 2. What we need? • TRTAs • Aid for Trade • Ideas & experiences sharing • Coordinated delivery of the inputs from DPs 3. Why we need that supports? • DCs are committed in global forums to provide LDCs with AfT & TRTAs • Nepal in its politico-socio-economic transformation

22. What Commitments from DPs required? • DPs support to meet resource gap, since: • Nepal already mainstreamed trade into its national development agenda • The NTIS is in place and GoN highly committed priority-wise and resource-wise to implement it • But resource-wise Nepal alone is unable to afford to implement it • Selection of DF to support the process of the NTIS implementation

23. Functions of the DF • To Assist GoN/MoCs and coordinate donor responses to the NTIS Action Matrix, • To harmonize required interventions, including exploring out funding for NTIS implementation, • To support the NIU and the FP, including formulation and appraisal of Tier 2 projects, • To facilitate GoN in linking with DPs,

24. Functions of the DF • To provide DPs with regular updates on the progress on the EIF and NTIS implementation, • To assist NIU in creating knowledge and understanding on the EIF & NTIS process, • To support GoN in strengthening institutional mechanism arranged for EIF/NTIS implementation, i.e. NSC, FP, NIU and TWGs, • To assist NIU in managing ODA as for effective implementation of the EIF/NTIS,

25. Suggested Criteria for DF • The DF should be actively engaged in the field of TRADE, • The DF should sufficiently allocate financial resources & HRs to undertake the role, • The DF should be resident in the country, • As the functions grow, a LEAD DF and additional DFs (e.g. strategy wise) may be required, • Such additional DFs could be arranged upon joint consultation with GoN and local DPs,

26. Who Says Nepal can’t set an example?

27. Thanks for Your Kind Attention!