Nepal joined the Integrated Framework (IF) in 2002 and as part of the program carried out a Diagnostic Trade Integration Study (DTIS) and received assistance with 2 projects on trade-related capacity building. Under the EIF but before the EIF Trust Fund (TF) was operational, Nepal undertook a DTIS Update (called Nepal Trade Integration Study, NTIS) funded by a consortium of donors including UNDP (the then EIF Donor Facilitator (DF) for Nepal), DFID, Finland, ITC, IFC. The NTIS was validated in 2010 and launched in June 2010 with high-level political representatives in attendance at the launch event. Implementation of NTIS update priorities has been successfully driven by the government since the launch, supported by Germany as DF (successor to UNDP). Using a capacity building workshop for project preparation in early 2011 and a Standards and Trade Development Facility (STDF) Project Preparation Grant (PPG), Nepal developed a project proposal for a project supporting the ginger value chain. The project has since been co-funded by the STDF and the EIF TF. A second Tier 2 project for funding by the EIF TF has been developed with the support of ITC supporting the pashmina value chain, and a third one developed jointly with Gesellschaft für Internationale Zusammenarbeit (GIZ, German Development Co-operation) supporting medicinal herbs exports.
Description of the projects (objectives and interventions)
Under the EIF, Nepal is implementing since April 2010 a Tier 1 project supporting Nepal's National Implementation Arrangements, the "Nepal Enhanced Capacities for Trade and Development Project (NECTRADE)" supporting trade mainstreaming, donor coordination and institutional capacity for trade capacity building. The objective of the project is to ultimately ensure faster growth of the country, alleviation of poverty through creation of jobs and enhanced sustainability of trade development efforts resulting in greater overall benefit to the Nepalese populace through enhanced global integration, trade development and proposed positioning of the country.
Since June 2012, Nepal is also implementing a Tier 2 project supporting the ginger value chain; this project is co-funded by the EIF TF and the STDF and implemented in partnership with the UN Food and Agriculture Organization (FAO).
In May 2013, a Tier 2 project supporting the pashmina value chain has been approved and implementation will start in fall 2013 in partnership with the International Trade Centre (ITC).
Main progresses to date
The EIF program has been a driver of government ownership of its Aid for Trade (AfT) agenda, including resource mobilization for projects and also a trade basket fund which would support Nepal's AfT agenda in a programmatic way.
Nepal has developed a solid institutional structure, including EIF focal points in various ministries and a close collaboration with the private sector backed by an excellent outreach and communication campaign. This enabled the country to successfully navigate changes in the important positions of DF and EIF Focal Point over the past few years.
Apart from the high degree of government ownership and stakeholder involvement, a further factor of success of Nepal's EIF program is the strong support and involvement of its Donor Facilitator (Germany).
Nepal's Tier 1 project will likely extend into Phase 2 in the third quarter of 2013 in order to continue mainstreaming trade and strengthening the human and institutional capacities of the key stakeholders engaged in the trade development agenda, public-private sector consultation and donor coordination. The second phase of the Tier 1 project will also include finalization and validation of Nepal's second DTIS Update.
The implementation of Nepal's AfT agenda will continue with the full implementation of the pashmina value chain project and the medicinal herbs project, and further out possibly under a trade basket modality, coordinating AfT donors to support Nepal's AfT strategy.
|Outcome 1: Sufficient Institutional and management capacity built in EIF countries to formulate and implement Trade related strategies & implementation plans|
|O1.1 Tier 1 ' Support to NIAs' project completed or under implementation||No||Yes|
|O1.2 EIF Country with complete, up-to-date validated DTIS Action Matrices||No||No|
|O1.3 Level of capacity of NIU to perform fiduciary programme management for Tier 1 project||N/A||2|
|O1.4 Country with up-to date trade strategies||No||Yes|
|O1.5 Country with quality trade strategy||N/A||1|
|O1.6 Country with quality trade strategy implemented||N/A||2|
|Outcome 2: EIF countries mainstream trade into their national development strategies and plans|
|O2.1 Trade in PRSP and/or National development strategies||2||2|
|O2.2 Existence of productive sector strategies integrating the trade dimension||Yes||Yes|
|O2.3 Functioning public/private consultation mechanism||2||1|
|Outcome 3: Coordinated delivery of trade related resources (funding, TA etc.) by donors & implementing agencies to implement country priorities following adoption of DTIS Action Matrix|
|O3.1 Availability of an annual rolling implementation overview integrating all trade-related government & donor-supported activities (including gender & environment)||Yes||Yes|
|O3.2 Frequency of government and donor consultations on trade-related matters||N/A||1|
|O3.3 UN CEB Cluster activities based on DTIS Matrix priorities in EIF Countries||No||No|
|O3.4 Country with joint donor initiatives in the trade area (such as need assessment; strategy formulations; programming; pooled funding; M&E; etc.)||No||Yes|
|Outcome 4: EIF Countries secure resources in support of initiatives that address DTIS Action Matrix priorities|
|O4.1 Country with implementation plan integrating DTIS/Action Matrix priorities and indicating financing needs to be met through ODA||N/A||N/A|
|O4.2 Country where a Government budget exists for implementation of its trade strategy||No||Yes|
|O4.4 Number of projects funded by donors related to the DTIS Action Matrix||N/A||6|
|O4.4.1 Amount of projects funded by donors related to the DTIS Action Matrix (Million USD)||N/A||N/A|
The EIF has provided the institutional framework and platform for donor coordination, bringing all relevant donors together with support of the donor facilitator to support inclusive trade outcomes through export-led growth based on the NTIS roadmap.
The Nepal Business Forum was established as part of the NTIS recommendations setting the stage for public-private dialogue on trade and investment. Building on this, the EIF together with Standards and Trade Development Facility (STDF) and Food and Agriculture Organization (FAO) have further supported the linking up of public and private sector with communities and cooperatives to improve quality of, and add value to, ginger exports through helping to set up a washing and processing facility. The facility development taking into account environmental concerns is expected to serve up to 4,000 households in Eastern Nepal, 50% of who are poor women headed households. The facility aims to contribute to an increase in ginger sales for beneficiaries by 25%.
The programme in Nepal is further looking at replicating success in other priority areas like the pashmina sector as well as having plans to link up to a business school to match the economy's demand for a skilled labour force.
NIA Support (T1 Phase 1 and 2)
Ginger Competitiveness Project: Enhancing Sanitary & Phytosanitary Capacityof Nepalese Ginger Exports through PPP
Pashmina Enhancement and trade support (PETS) project
Implementing the NTIS in the Sector of Medicinal and Aromatic Plants (MAPs)
EIF Stakeholder Engagement process
Non-State Actors (NSAs) and in particular the private sector and civil society play a fundamental role in the achievement of the goals of the EIF on the ground. Yet, their participation in the EIF process needs to be strengthened to be effective. The Executive Secretariat for the EIF commissioned CUTS International to develop a specific module, with the aim to enhance the capacity of the National Implementation Arrangements (NIAs), and the National Steering Committee (NSC), to drive forward a country-owned and sustainable EIF delivery by achieving inclusive participatory engagement of NSAs, particularly the private sector.
Between January and July 2014, the module was successfully piloted in Zambia, Nepal and Burkina Faso.
The best practices collected during the piloting phase were compiled in the “EIF Guidebook on Effective Engagement of NSAs”, which is now available to all EIF countries. NIUs and NIAs that would like to run the module in their own countries are welcome to contact the Communications team at the Executive Secretariat for the EIF.
Nepal: Boosting competitiveness of the unique pashmina brand
Nepal’s second Tier 2 project, the Pashmina Enhancement and Trade Support (PETS) project was officially launched on 10 March 2014 in Kathmandu by Nepal’s Minister for Finance, H.E. Dr Ram Sharan Mahat. The PETS project was launched with the aim of promoting Nepal’s unique Chyangra Pashmina brand in the international market and stregthening the competitiveness of the domestic pashmina sector.
The Nepal domestic pashmina sector had been struggling to make its presence felt in the international market, with exports dropping to Rs 2.17 billion (approx. US$22.5 million) in 2013 as against Rs 3.92 billion (approx. US$40.5 million) recorded in 2000-01.
In the 2010 Nepal Trade Integration Strategy (NTIS), pashmina is recorded as one of the 19 prioritized products having high export potential, and the PETS Project is one of the efforts initiated by the Ministry of Commerce and Supplies (MoCS) with the support of the EIF. The pashmina project will be implemented by the International Trade Centre (ITC), under the coordination of MoCS, and support from the Nepal Pashmina Industries Association (NPIA). To ensure efficient delivery to project beneficiaries, the PETS project will be located at the NPIA premises.
H.E. Dr Ram Sharan Mahat appreciated the involvement of development partners in the area of product development and pointed out that such projects would ultimately benefit the farmers and local stakeholders associated with the industry. “Nepal has lots of products, like pashmina, with export potential. And it is high time the Government support initiatives taken to market such products abroad by providing incentives,” Dr Mahat said, urging development partners to continue extending ‘generous support’ to Nepal as the country has ‘limited resources to provide incentives’.
The major aim of the three-year project funded by the EIF is to enhance the capacity of the people engaged in production and marketing of Chyangra Pashmina, by focusing on quality improvement and promotion of pashmina products in various global markets. The EIF is providing US$1,861,603 to advance the fine Nepalese tradition of producing and weaving pashmina, complimented by Government’s in-kind contribution of US$200,000.
Among the goals of the PETS project is to generate awareness about the Chyangra Pashmina brand and trademark in international markets. At present, the trademark has been registered in 41 countries and the process of registering the trademark in five more countries is underway. Eventually, the trademark would be registered in other priority markets as well, according to the NPIA.
To protect the trademark registered in various countries, the ITC will work with the World Intellectual Property Organisation. Moreover, the ITC will also support Chyangra Pashmina manufacturers to increase exports in target markets. “We intend to do this by strengthening the product and design development capacities of pashmina manufacturers at institutional and enterprise level,” ITC Executive Director, Ms Arancha González said, adding, “The intention is also to help shop owners in Kathmandu to transform their existing retail spaces into modern attractive shops, which provide an authentic shopping experience.”
Another major aim of the project is to enhance the competitiveness of the Chyangra Pashmina sector by strengthening the capacity of the NPIA, the umbrella body of pashmina manufacturing units. In this regard, the ITC will support the NPIA in analyzing backward linkages, such as pashmina fibre supply situation in goat farming areas in the upper mountains.
The Executive Director of the Executive Secretariat for the EIF, Mr Ratnakar Adhikari, stated that the successful implementation of the PETS Project would be instrumental to position Nepalese Chyangra Pashmina products among the niche consumers as one of the luxurious products from the Himalayan country. He added, “The private sector and other stakeholders should make whatever contribution to make the project a success, as the financial support extended by the EIF is only catalytic.” He also launched the national EIF Nepal website, www.eifnepal.gov.np/, developed under the EIF Tier 1 project.
Similar export product development initiatives of the MoCS in collaboration with support from the EIF and other donors include ginger, tea, herbal and medicinal products and coffee, among others.
Trading Stories, the Book, accompanies the film series to show just how trade is about acting local to go global in eight of the poorest countries worldwide.
Trading Stories, the Book, accompanies the film series to show just how trade is about acting local to go global in eight of the poorest countries worldwide. It’s a journey that tracks how, with the support of the Enhanced Integrated Framework (EIF) and Aid for Trade, realities are changing on the ground. Stronger trade roadmaps are being developed, partners are coming together to build the trade agenda and projects to overcome trade barriers are being rolled out. Now, it’s over to you to share the stories, get engaged in the debate and be part of the next chapter that’s still to be written on our global trade connections.
Click here to access the Book
Written by Elena Immambocus and Justine Namara
Photographs © Elena Immambocus and Justine Namara