south asia watch on trade, economics and environment

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Project Inception Meeting

“Trade and Transport Facilitation Audit in South Asia ” and “Promoting Micro, Small and Medium Enterprises for Inclusive, Equitable and Sustainable Development in South Asia”

A two-day inception meeting of two projects supported by the Australian Agency for International Development (AusAID), namely “Trade and Transport Facilitation Audit in South Asia” lead by South Asia Watch on Trade, Economics and Environment (SAWTEE) and “Promoting Micro, Small and Medium Enterprises for Inclusive, Equitable and Sustainable Development in South Asia” lead by UNDP Asia Pacific Regional Centre (APRC), Bangkok, was organized in Kathmandu on 1-2 October 2013. The main objective of the two-day inception meeting was to present the relevance and the objectives of the two projects, and more importantly to gather expert opinions and suggestions in order to efficiently implement and increase the effectiveness of the projects for maximum impact.

In the inaugural session, Honourable Shanker Prasad Koirala, Minister of Finance, Industry and Commerce and Supplies, Government of Nepal, who was the Chief Guest, stated that intra-regional trade in South Asia has remained modest mainly due to trade and transport facilitation-related bottlenecks, but expressed hope that the two projects will create a momentum in South Asia and contribute to transforming the region into an international trading hub. Meanwhile, H. E. Ambassador Glenn White, Australian Ambassador to Nepal, highlighted that the current initiatives taken by SAWTEE, UNDP APRC and their regional partners would be extremely beneficial in advancing regional economic integration in South Asia. The Chair of the inaugural session, Dr. Posh Raj Pandey, Executive Chairman, SAWTEE, mentioned that trade facilitation in South Asia is necessary since high trade and transit costs have promoted informal trade in South Asia and forced exporters, businesses and consumers to bear additional cost burden.

Ms. Shoko Noda, Country Director of UNDP Nepal, pointed out that South Asian countries hold immense potential in advancing MSMEs, particularly women-led MSMEs, which will not only contribute to increasing economic growth but also empower women. Similarly, Mr. Iqbal Tabish, Secretary General of the SAARC Chamber of Commerce and Industry, reported that 75 percent of MSMEs in South Asia are operating informally and argued that bringing informal MSMEs within the legal purview of the state can lead to higher growth of the sector. Dr. Ratnakar Adhikari, Chief Executive Director, SAWTEE, highlighted the main features of the two projects and their objectives.

More than 50 participants, including researchers, policy makers, private sector representatives and media, among others, from different South and Southeast Asian countries, participated in the inception meeting. Relevant issues such as analysis of import and export processes, methodologies for understanding trade and transport bottlenecks, methodology for trade and trade facilitation audit in South Asia, empirical model for trade flows and trade costs, constraints faced by MSMEs in participating in value chains, relevant MSME development projects in South Asia, promoting MSMEs for inclusive economic growth, among others, were thoroughly discussed in the meeting.

Specifically, with regard to the Trade Facilitation Audit study project, participants stressed that inclusion of transit costs and problems of policy synchronization in the project methodology would be extremely useful. They also called for the harmonization of the project with similar projects being implemented in South Asia to create synergy. Additionally, suggestions were put forward for the need to realize the difference between protocol and practice, and to be cautious when establishing regional trade facilitation benchmarks.

Similarly, for the promoting of MSMEs, there was general agreement that lack of affordable finance and access to regional value chains were the two most important constraints faced by skilled as well as unskilled women entrepreneurs in South Asia. It was remarked that the project should focus not only on women led MSMEs (WMSMEs), but also women intensive MSMEs. Similarly, the participants pointed out that the project should look into problems related to the formalization of WMSMEs, certificate of origin and high transportation costs. In order to expand the market for WMSMEs, participants suggested pursuing innovative regional marketing mechanisms such as “border haats”, which could bypass the problems related to poor trade facilitation infrastructures at the borders.

The valuable suggestions received from the inception meeting will be taken into consideration while implementing the projects.

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