“Nepal needs to create niche markets to uplift its overall economy”

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 “Nepal needs to create niche markets to uplift its overall economy”

Glenn White
Australian Ambassador 
to Nepal

Nepal and Australia embarked on their journey of friendship by establishing diplomatic relations in 1960 and the bilateral relationship between the two countries has been strongly growing ever since. The Southern Hemisphere country is one of the major donors for Nepal providing financial and technical assistance in development works, entrepreneurship building, health, education and various other social areas. The bilateral ties have further strengthened over the past few decades with Nepali citizens going to Australia to study or migration purposes and Australians visiting Nepal as tourists. Nonetheless, the growing relationship has not been able to bear fruit in terms of bilateral trade. 

Glenn White is Australia’s Ambassador to Nepal and he has been in charge since 2013. An experienced diplomat, White previously served as Australian Ambassador to Jordan and Deputy Head of Mission in Baghdad and Riyadh. In an interview with Madan Lamsal, Editor-in-Chief of New Business Age, he talked about the dimensions of the Nepal-Australia relationship, fixes to spur the trade between the two countries and Australian assistance to Nepal. Excerpts:

How do you assess the bilateral relationship between Nepal and Australia which has spanned more than 55 years? 
The relationship between Australia and Nepal has been for many years very cordial, warm and supportive. There is partnership between us in terms of development and also in the ways that we see various global issues. In other words, Australia and Nepal are mutually supportive in multilateral forums where both countries have been participating. We support each other’s candidacies and it is a very useful relationship that Australia has. 

What are the major areas of co-operation between the two countries? 
Australia has been a major donor for Nepal.  We also have good relationships in terms of assisting or supporting each other’s candidates for different multilateral forums or committees. We also trade citizens. On a good year, we have 25,000 Australians come here on trekking and holidays. Similarly, around 15,000 Nepali students are studying in Australia annually. 

What do you think are the potential areas where the cooperation could be extended?
The education sector is a very attractive one or it should be not just to encourage Nepalis to get into Australia, but also in encouraging Australian institutions to run particular programmes here as well, so that students do not have to pay education fees and live elsewhere.  We are already seeing this happening regarding the vocational training. There is a hospitality institute here in Kathmandu that has a contract with Northern Rivers TAFE which is a technical training institution of Australia. The contract allows the trainers of the institution to be trained in Australia after which they come back here and run a commercial cookery course. The people graduating from their course are accredited with an Australian certificate even though they have studied and sat the exam here in Kathmandu.  So, that sort of thing is a model for the future. We are getting some interest from the Australian universities as well about doing things along these lines. 

Despite the long-standing relationship, the bilateral trade between Nepal and Australia is seen as stagnant. What are the impediments in the way? 
Bilateral trade between the two countries has been lopsided for many years. The lopsided nature is due to the fact that we have a highly industrialised country like Australia on one side and a rather unindustrialised country like Nepal on the other side of the equation. Australia’s trade and even investment in South Asia is tended towards India than countries like Nepal. 

Nepal has been marred by stability problems politically, economically and even socially. Transparency is another factor in terms of the bureaucratic process regarding the assistance to the investors who are interested in investing here. So it is very difficult at times for commercial decision makers to look at the risks and decide whether a nation like Nepal is worth a chance. As Nepal develops, resolves its energy crisis and the population evolves from a socio-deprived group to a more middle class type, I think you will find more Australian companies start to take interest in the Nepali market. There has already been some interest among Australian investors in Nepal’s infrastructure developments regarding the contracts of projects such as roads and hydropower.

How can we ease these hurdles?
The hurdles are not an easy thing to fix. They are a combination of issues that need to be addressed concurrently than one after the other. Nepal is going through an intense political time at the moment in terms of its political evolution into a federal state. I suspect that will occupy politicians and bureaucrats for some time further. Already we are looking at three elections by 2017- local, provisional and national. That is a big task for any country and Nepal has to get this political process nailed down before the country can really start to address the other factors acting as an anchor to Nepal’s economic development. Nevertheless, the country has been gradually moving towards this end, as it wasn’t that long ago that Nepal experienced a decade of conflict. Now at least the political process has moved on to not just free and successful elections like in 2013, but the country also has the new constitution. Now you are working towards implementing the constitution.

Economic development is also tied to consistency in the government’s strategic plans. The country needs to have a strategic plan that lasts for at least five years rather than five months. I talked to some of the new ministers recently and I have to say that for the first time in the three years I have been here some of the ministers were talking about having a strategic vision and plan that can garner wider political support and can continue even when the ministers leave their offices. 

Is there anything the Nepali private sector can do to increase business with Australia? 
Nepali businesses could certainly look at the option of travelling to Australia more often and promoting Nepal not just as a tourist destination but as a producer and consumer of certain items. There are some Australian companies that not only just export commodities but also manufacture goods here though the size of the trade is not big. Nepal also needs to explore more on what its niche markets are. The main problem that Nepal has is the lack of infrastructure development regarding the exports. Roads are atrocious and there is no rail transport system in place. So the Nepali exports have to rely on trucks to get through India and then finally onto ships. It is a very expensive operation to do. Until Nepal has some cheaper and reliable transport system, I think increasing the exports will always be an uphill task. 

However, I have talked to entrepreneurs here who are in the agricultural business of exporting seeds to the EU countries. Now these seeds are expensive yet easy to produce. That is the sort of niche market Nepal needs to look at initially. Similarly, there are other products which are not so much exportable but can be tourist and trekkers related and can be produced by micro-enterprises. Many people don’t focus enough on the role of micro-enterprise in Nepal. Australia has been supporting microenterprise through the Micro-Enterprise Development Programme (MEDEP) for some years now and we have provided over 75,000 Nepalis with opportunities in their own businesses. These entrepreneurs are producing for the foreign visitor.  The more foreign visitors come here, the more these products will be travelling throughout the world which starts creating demand. There are a wide range of merchandise products such as ‘Pashminas’ to ‘Khukuri’ knives that Nepali micro-enterprises can produce. 

As a large number of Nepalis are calling Australia their home now, there could also be opportunities for producers of Nepali food items to find a market. As Australia is a very multi cultural society and it is always happy to embrace new foods and new ways of doing things, Nepali entrepreneurs can grasp the opportunity. 

I suggest a private-public-partnership (PPP) approach to capitalise on the opportunities in the tourism sector.  One such PPP initiative is a programme of ecotourism venture in Nepal where the Australian Department of Foreign Affairs and Trade (DFAT) has recently announced a partnership with the travels and tours company Intrepid Group and the World Wildlife Fund (WWF) to develop homestays in the Madi area of Chitwan. The DFAT will provide the funds to train the communities to attract tourists and maintain homestays. The programme aims to create very viable homestay tourism in the area. 

Nepal’s government can do something similar with the private sector. We know that the Federation of Nepalese Chambers of Commerce and Industries (FNCCI) provides training to emerging entrepreneurs. This is another example of what can be done. The FNCCI has been asking the government from time to time to introduce proper policies. Clearly what is needed in Nepal is the government to create an encouraging environment to the private sector, not one that puts up barriers, but the one that assists to pass the barriers. 

Nonetheless, Doing Business reports indicate that Nepal is not that much of a difficult place to do business compared to other South Asian nations. In your opinion, why has Nepal not been able to capitalise on its business potential?
It depends on what type of business you are trying to attract. Firstly, the Australian businesses generally perceive India as a much bigger market than other South Asian countries. The size of population and rapidly growing middle class with increasing disposable income make them feel that. 

Nepal is a country with 28 million people not so dissimilar to Australia with a 23 million population. However, the purchasing capacity of the population here is still low when compared to India.  Consumers here do not have adequate disposable incomes to buy the products Australian producers are able to sell. Australian goods and services tend to be more expensive than the ones you would find around your neighbourhood. So, it is a little bit vexed in that way because the market here is not the same as in India. Countries like Bangladesh and Bhutan are doing extremely well in some key areas. Bangladesh is significantly earning from garment exports. Similarly, Bhutan is generating money from hydropower trading with India and also making an impact in its tourism sector. Nepal has not yet created such niche markets that can uplift its overall economy. Tourism is a sector of immense potential for Nepal. There are not so many countries in the world where you can observe wildlife in the lowlands and see exotic mountains in a single day. 

Australia has remained a top study destination for Nepali students over the years. What do you think are the contributing elements to this? 
Nepali youths now-a-days do their own research and look around for options around the world and Australia comes up often on the top of that list. It is may be because of the multicultural society we have. It may also be due to the informal society that Australia has which is similar perhaps in some ways to Nepal. We are a society that welcomes new people to the country as does Nepal. And maybe it is because over the years, all those Australian trekkers and holidaymakers who have come to Nepal actually have had an impact on people here. It might also be due to the good weather, as Australia does not suffer from the problems of snowy winters and has very nice beaches. 

We have a very well developed higher education infrastructure with several world class universities. The education system, alongside factors related to expenses, lifestyle and security are excellent in Australia. At this time we have around 15,000 Nepalis studying in Australia yearly. Nepal is the 8th largest student source country for Australia. The increasing numbers of Nepali students in Australian educational institutions are also attributed by the word of mouth thing. When more students go to Australia and come back with very useful stories, more people start to think about Australia as a proposition. 

How is the student visa situation after streamlining visa procedures?
Our Department of Immigration and Board of Protection are always streamlining their procedures. And as much as they need to control immigration and migration flows to Australia, they are also working hard to streamline the procedures for the customers, which of course are the individuals applying for visas. They work in order to make the visa process easier and efficient for everybody. This is a fact that doesn’t get spoken too often. Australian visa processes are done through the High Commission at New Delhi. But the High Commission doesn’t obviously redo things and quite recently student visas went online. So, you needed to apply online rather than paper. And the whole objective of doing that is to speed up the visa processing and make it easier for the applicants. They still need to go through proper health checks, demonstrate their financial support and get their biometrics done through the office. But at the end of the day, an online system is more efficient and quicker than a piece of paper floating around in hard copy.  

Australia is home to a large Nepali diaspora. So, what demographic changes are happening due to the migration of Nepalis? How is the Nepali culture impacting the Australian social structure?
I did not know about this before my appointment as the Ambassador here. But just before I came here three years ago, I started thinking about Nepal and I was surprised to find two Nepali restaurants in old places of Canberra. The same is true in other life centres in Australia where Nepali restaurants are starting to spring up. Australians like to try cuisines from across the world such as Chinese, Thai, Indian and now Nepali. Also, Nepalis going to Australian educational institutions are mixing with students from across the world as well as Australia. 

I would also like to add that the Australian government several years ago introduced a student exchange programme. This programme enables Australians to travel to places like Nepal to study here for several months or years at a time. We have a group of students from Australia already and another one coming in December. These students come here are under our new Colombo Plan which is all about Australians getting to know about the regions across the world. Australian students travelling under Australian government support to study in different countries get better understanding to build networks between our country and yours. 

The polymer note printing scandal has badly shaken the Reserve Bank of Australia in recent years. Some Nepalis are also said to be under investigation for their alleged involvement in the scam. What role will the Australian embassy in Nepal take to facilitate the investigation?
Securency was a commercial arm of the Australian Reserve bank some years ago. Unfortunately, what appeared to have happened is in the zeal to create a market for Australian polymer note printing, some Australians might have allegedly attempted to bribe foreign officials, which is against our laws. The scandal following the note printing for Nepal is the Rs 10 note printing contract. Nepal is not the only country which appeared to have been targeted by these particular Australians in Australia, to get the contracts. So, the whole purpose is to basically retrieve evidence from Nepal that can be used in the court case in Australia against those Australians who are alleged to have perpetuated this particular crime. Australia has requested Nepal to assist in gathering the evidence for use in the court case in Australia, which has been going on for several years now. 

Have you tried to help in this case, on behalf of your government, by contacting the concerned authorities here?
We are in touch with several authorities here in the law sphere. We have seen some media reports recently, regarding the decision by the Supreme Court of Nepal lifting a particular stay on the central bank and other concerned authorities and institutions to provide financial evidence regarding the case to Australia. So, we are expecting that the evidence will flow shortly to the Australian court. 

As an ambassador, you have been here for more than three and half years now. Can you mention some of the outcomes regarding the strengthening of bilateral relations between Nepal and Australia in this period?
2015 was a terrible year for Nepal as the country faced two large earthquakes and the blockade in trade. Clearly, Australia could not do anything on the blockade issue. However, Australia provided a lot of relief to Nepal immediately after the earthquake. Meanwhile, we have been also providing support for the reconstruction. 

We identified that 12,000 people operating small and micro-enterprises completely lost their businesses in between June 2015 to June 2016 in the areas worst hit by the earthquakes. In that 12 month period, we helped those 12,000 people to restart their business in addition to 2,000 more individuals. Altogether we provided 14,000 entrepreneurial opportunities and jobs. We have also been active in improving the education sector here. We have engineers and architects regarding the designing of new classrooms of public schools. They are working in Nepal to provide support to the Ministry of Education. This is over and above our normal development assistance. We have also been providing AUD 600,000 annually under the Direct Aid Program which directly helps NGOs or community groups to work on different things. 

There is a list of different activities we are engaged in here in Nepal. Our activities this year include workshops for medical professionals to identify Obstetric Fistula, organizing Cervical Cancer camps and heart checkup camps for school students, support for eye hospitals, assistance to the groups working on the welfare of hearing and vision impaired individuals and also training for journalists in areas like human rights in relation to the conflict era. Many people can benefit if we provide financial and other support in these areas. These are some of the successful and perhaps hidden parts of the activities that the Australian Embassy in Nepal does.

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