Saturday, April 18, 2009

Crazy Nepali policymakers

How on earth is Nepal supposed to increase exports by 50% in five years? Never mind, this is another criticism of the Maoist government’s hi-fi but shallow strategy!

Few days after presenting a very unrealistic and bombastic development strategy paper, the policymakers in Nepal think they can link trade and poverty (the benefits of trade have gone to corrupt officials and few industrialists in the past) and increase exports by 50% in the next five years!

The government has set an ambitious target of increasing exports of goods and services by 50 percent in the next five years, at an average of 10 percentage points per annum. It has also set a plan of reducing country’s trade deficit by 15 percent in the same period.

“In order to boost exports, we are now trying to identify at least 15-20 potential products and services that have demand in the international market,” Commerce Secretary Purushottam Ojha told the consultation meeting of Nepal Development Forum in Kathmandu on Friday. “In this regard, the government is soon conducting Nepal Export Potential Study.”

The Study is not only expected to identify products and services of competitive and comparative advantage but also determine the impact export of those products and services can have on poverty reduction – the overarching goal of the country.

I doubt this will happen because of this analysis of Nepal’s product space and this condition of export dynamics. Aiming high is good but realistically, living within one’s reach and means is the best way to not build unnecessary expectations that cannot be met.

Crazy policymakers! Anyway, good luck to those who are tasked to come up with a paper to fulfill this purpose. The funny thing is that this claim has been made without first studying the potential of attaining this goal! It is like stating that a hypothesis is correct, and then proceeding to prove it assuming that it is right!!