How Nepal can take the advantage of the Global Economics Crisis

Unlike many other countries,The worst economic and financial crisis after the great depression has not significantly affected Nepal's economy compared to those in Western hemisphere.Nepal's capital market is to small,this is one of the reason why Nepal's economy is insulated from the crisis,However,there are few sector which have been effect,namely inflow of remittances and tourism industry.


I was reading an article in Harvard business review,and I came across a very interesting line in the article.The writer writes "The longer the recession linger in the developed world the more the trade between developing will grow"

This line made me analyze the possible opportunities for Nepal.Asian economics specially our immediate neighbors are trying hard to decouple them self from the American economy. The foundation of the new economic model for these two giants are base on one main idea,which is boosting domestic consumption and relying less on export for economic growth.To bolster private spending,government of India and China has started to build extensive social-welfare programs like those that long have existed in the West, a move they hope will encourage their people to save less, spend more and help put the region and the world on a stronger economic footing in the years ahead.

If things work out according to the plan then appetite to consume will grow in both India and China.Which means trade between India and China is going to grow more then every before .Nepal has a prefect opportunity to the take the advantage.There are many ways from which Nepal can reap the benefit .To list few :

1. Transit for goods trading between India and China
2. Market for Nepalese primary goods ( With all the "Go Green" fever going on the world. Products like Jute,Herbs,bamboo furniture have potential )

All we need is a better infrastructure , less red tapes in the customs ,controlled inflation and credit market access to the poor.

Rising Stars of Nepal's Exports

	2003/04	2004/05	2005/06	2006/07	2007/08
Pulses
Overseas	294554	103939	191,705	454,189	13,10,055
India	579100	667100	643,200	306900	314800
	873654	771039	834905	761,089	1,624,855
Jute goods
Overseas	4162	38383	85188	209754	154226
India	1882600	2693500	2636800	2556800	2582500
	1886762	2731883	2721988	2766554	2736726
Cardamom
Overseas	228963	205212	114333	114792	57736
India	451000	607000	608100	848100	1034800
	679963	812212	722433	962892	1092536
Noodles
Overseas	111049	109744	111563	79750	314157
India	259,700	369,300	414,700	237,400	532,900
	370,749	479,044	526,263	317,150	847,057
Medicinal Herbs
Overseas	13,478	23078	21147	47066	82,589
India	91,500	132,400	133,500	105,600	147,400

Source: Trade And Export Promotion Centre

The analysis above was about exporting AND NEPAL being a postman for India and China ,now I would like to talk little bit about Nepal as potential market for foreign companies.
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When I hear people talking about base of the pyramid,I only here stories about Bangladesh or India .I don't understand why management gurus leave Nepal behind .Rural Nepal also has lot of potential .I personally believe without consulting any numbers Rural Nepal has more potential then Urban Nepal.Rural Nepal share the same social and cultural characteristics of RURAL India or Banglesh .Gross domestice saving of Neplese savings in FY 2008/09 was estimated to be 20% compare to 30 % India