SHASHI KANTA AGARWAL : Taking Nepal’s Economic Diplomacy to Latin America

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 SHASHI  KANTA  AGARWAL : Taking Nepal’s Economic Diplomacy to Latin America


Nepal and Ecuador established bilateral relations almost 15 years ago, on 21 June 2006. The two countries have enjoyed friendly relations and cooperation since then, exchanging cooperation at various multilateral forums while holding common positions on many international issues such as climate change and women empowerment. Similarly, both countries are members of the Non-Aligned Movement and the Group of 77 (G77), a coalition of 134 developing countries in the United Nations, and support multilateralism.

However, despite the cordial relationship, Nepal and Ecuador have yet to develop any form of economic cooperation and make noticeable progress in the areas of bilateral trade. “It is basically due to the distance between the two countries which has hindered any real progress in this respect. Still, there are areas for mutual cooperation which both nations can work on,” says Shashi Kant Agarwal, the honorary consul general of Ecuador to Nepal. After Agarwal’s appointment in 2019, the two nations situated at opposite poles of the world started to gradually engage with each other.  

According to him, there were no formal exchanges between the two governments and private sector delegations, besides the appointment of ambassadors prior to 2019. “Even Ecuador’s Ambassador to Nepal, who works from New Delhi, India, had hardly visited Nepal. Now after the appointment as Ecuador’s consul general for Nepal, I have been working to engage both countries in the area of economic cooperation,” shares Agarwal who is the vice chairman of MS Group.  

At present, the volume of trade between Nepal and the South American nation is tiny. Nepal imports raw materials like essence oils and machinery parts from Ecuador while it exports textile and felt items. Official statistics show that the bilateral trade between Nepal and Ecuador only started in 2016, a decade after the establishment of the bilateral relationship. According to the Trade and Export Promotion Centre, Nepal exported commodities worth Rs 749,959 to Ecuador from 2016 to 2019 and imported goods worth Rs 44.61 million during the period. In terms of foreign direct investment, Nepal so far has received negligible investment from Ecuador. As of July 2020, Nepal only has the record of a company operating with investment from Ecuador amounting to Rs 2.5 million.  

Like Nepal, Ecuador is a developing nation and doesn’t have a strong base for production. Ecuadorians are considered good in agriculture, particularly in the production of banana, coffee, sugar, palm oil, rice and rose. The South American nation is the largest producer of roses in the world. “But these are perishable items and it is unfeasible for both countries to engage in trade of such products due to the higher shipping costs and distance,” suggests Agarwal, adding, “The areas that we can focus on are tourism promotion, exports of handicrafts and sports.”

Before the outbreak of coronavirus, Agarwal had imported some dry roses from Ecuador to display in a trade exhibition organised in Kathmandu. He still has the roses exhibited at his hotel (Kathmandu Marriott) in Naxal. Likewise, Agarwal and his team had sent some samples of handicraft items and garments to the Ecuadorian embassy in New Delhi.

He says that Nepal has the potential to expand production of handicraft products. He sees Ecuador as a potential market for those products and has plans to promote Nepali handicraft items there. “We are planning to organise a handicraft exhibition in Ecuador after the Covid-19 situation is over. The exhibition will be held at the Ecuador Trade Centre in Quito in coordination with the Ecuadorian Embassy in New Delhi,” he informs.

According to him, the embassy had already forwarded the items to some of the potential importers in Ecuador. But his plans to kickstart Nepal’s trade with the South American nation were hampered by the Covid-19 pandemic.

Ecuador is known as the ‘Switzerland of Latin America’, and Agrawal thinks that both countries can develop good relationship through tourism activities. He talks about his plans to promote the tourism and culture of Ecuador in Nepal and vice versa. “We are planning a trip for Nepali and Asian travel agents to Ecuador and will invite some tourism entrepreneurs from there once the situation becomes normal. This will help both sides to understand each other better and explore avenues for investment and mutual cooperation,” he says.

Sports is another area where the two countries can engage in since Ecuador has one of the strongest football teams in Latin America. According to Agarwal, Nepal has not been able to do much to develop football in the country despite it being a hugely popular sport. “As a Latin American country where football is worshipped and is a lifestyle for many people, Ecuador has a solid footing in this sport,” he says, adding, “Football is an enormous business globally, and I think we can learn many things about the tricks of the trade from Ecuadorians as they are very good at it.” He suggests that Nepal can hire coaches from Ecuador to train players and also conduct athlete exchange programmes.

Agrawal is also a member of the Honorary Consul Corps - Nepal (HCC-N), an association of Nepali businesspersons representing different countries in Nepal as honorary consuls and consul generals who aim to contribute to country's development through economic diplomacy. Talking about the activities of HCC-N and his engagement with it, he shares that he is new in the fraternity and has only attended a few events. “So far I have attended two meetings with the Dean, and at HCCN, we work collectively on promoting the goodwill of the country that we represent here,” he says. According to him, HCC-N is a platform which helps its members to learn about the conducts required to play their roles effectively as economic diplomats of Nepal.

He views that HCC-N has a major obligation to promote bilateral relationship between Nepal and other countries. Agarwal thinks that the Nepali consulate and embassies abroad have done little in terms in expanding Nepal’s economic diplomacy. “The poor execution of the government’s decisions to boost bilateral economic ties across the world poses a major challenge for HCC-N when it comes to realising its objectives,” he expresses.

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