Transcript Document

Role of Service Sector in the
Economy of Nepal
Presentation by
Dr. Ramesh C. Chitrakar
[email protected]
Expert 1
At
Second National Stakeholder Workshop on Services
(27th – 28th October 2009)
Co-organized by UNCTAD-Ministry of Commerce and Supplies
Kathmandu, Nepal
October 27, 2009
1
I. Importance of Service Sector to
Nepalese Economy
Emerged as major contributor to GDP in the world: more
than 70 % in developed and around 50% in developing
countries.
Investment and growth associated with services can
contribute
to
poverty
alleviation
and
human
development if the right policies are in place
The GON’s increasing emphasis in services considering
its contribution to GDP (> 51% in 2007/08), employment,
international trade and balance of payments.
CBS/ Nepal introduced a new series of National
Accounts Statistics since 2006/07 taking 2000/01 as the
base year
Follows System of SNA 1993 adopted by a number of
countries around the world. Prior to this, Nepal’s national
income statistics was based on SNA 1968.
2
Under SNA 1993: Economic activities classified into 15
sectors unlike 9 sectors in SNA 1968. The ISIC, Revision 3
has, in fact, classified the entire economy into 17 sectors.
In Nepal, the classification brought down to 15 sectors as
the contribution of workers in the private households and
from activities of foreign mission, and INGOs to the GDP is
found negligible & so these two sectors included in the
Other Community, Social and Individual Services category.
New series includes many activities not included before like microbus, cable car services under transportation;
PCO, mobile telephone, internet, cable television,
communication; renting; services of employment agencies,
cooperatives, consultancies, computer and photography,
private postal services, private sector education services,
community forestry and others.
9 Economic Sectors under service
30 new surveys and studies conducted to strengthen the
national income statistics
3
Figure 1: Sector wise contribution to GDP according to
the new classification (FY 2007/08)
Se ctorwise GDP C ontribution, 2007/08
6.0
1.3 3.4
Non-service Industry
1.8
Wholesale & retail trade
Hotels & restaurants
8.8
4.9
48.8
T ransport, storage &
communications
Financial intermediation
Real estate, renting & business
activities
Public administration & social
security
Education
9.6
1.5
13.9
Health & social work
Other community, social &
personal activities
4
Table : Sector wise GDP Composition in Percent, 200/01-2007/08
Sector
Agriculture and Forest
Fishery
Mining and Quarrying
Manufacturing
Electricity, Gas &
water
Construction
Wholesale and retail
trade
Hotels and restaurants
Transport, storage and
communications
Financial
intermediation
Real estate, renting
and business activities
Public administration
and social security
Education
Health and social work
Other community,
social and personal
activities
Sub-total (Nonservice Industry)
Sub-total (Service
Industry)
2002/01
36.15
0.43
0.43
9.03
2001/02
36.92
0.49
0.48
8.50
2002/03
36.03
0.46
0.49
8.20
2003/04
35.45
0.48
0.48
8.05
2004/05
34.71
0.47
0.49
7.92
2005/06
33.09
0.49
0.50
7.59
2006/07
32.04
0.47
0.49
7.48
2007/08
32.11
0.49
0.49
7.16
1.82
6.01
2.06
6.49
2.42
6.54
2.31
6.42
2.26
6.47
2.09
6.50
2.13
6.46
2.01
6.53
16.44
1.99
14.59
1.61
14.51
1.59
15.29
1.73
14.09
1.57
14.31
1.49
13.43
1.44
13.94
1.49
7.39
7.87
8.31
8.94
9.06
9.72
9.91
9.58
2.69
2.75
2.72
2.65
3.06
3.49
4.08
4.86
8.29
8.23
8.08
7.72
8.69
9.53
10.15
8.77
1.24
4.08
0.98
1.63
4.69
1.04
1.70
5.19
1.14
1.55
5.08
1.12
1.69
5.59
1.24
1.74
5.55
1.24
1.75
5.81
1.26
1.83
6.00
1.29
3.03
2.66
2.63
2.73
2.69
2.67
3.12
3.44
53.87
54.94
54.14
53.19
52.32
50.26
49.07
48.79
46.13
45.07
45.87
46.81
47.68
49.74
50.95
5
51.20
Table: Sectoral contribution to GDP and GDP Growth Rate
Description
Annual GDP
(constant
price) Growth
Rate
Primary Sector
Secondary
Sector
Tertiary Sector
Composition
of GDP (in
percentage)
Primary Sector
Secondary
Sector
Tertiary Sector
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08R
0.16
3.77
4.41
3.23
3.73
2.74
5.26
3.15
0.66
3.33
3.09
4.75
1.48
3.54
2.91
1.86
4.37
0.98
4.02
4.68
1.82
-1.78
3.68
6.82
3.33
5.63
4.49
7.00
37.01
16.86
37.89
17.05
36.98
17.15
36.42
16.78
35.67
16.65
34.08
16.18
33.00
16.07
33.09
15.70
46.13
45.06
45.87
46.81
47.68
49.74
50.93
51.21
Source: GON/MOF, Economic Survey, Fiscal Year 2008/09
R: Revised.
Note: Primary: Agri, Fisheries & Mining; Secondary: Industry, Energy & Construction.
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Service Trade FIows: Contribution
The imports and
exports of services in
the world are at about
the same levels, with
developed countries
exports being higher
than imports &
developing countries
imports higher than
exports
In case of Nepal,
exports exceeded
imports until 2004
indicating
importance of the
sector to the
economy.
Deteriorated from
2005 onwards
to Trade
Nepal’s Exports and Imports of Services (Million US$)
Year
2000
2001
2002
2003
2004
2005
2006
2007
Export
506
413
305
372
461
380
386
477
Import
200
215
237
266
385
435
493
657
Net Export
306
198
68
106
76
-55
-107
-180
Source: UNCTAD Handbook of Statistics, 2008(www.stats.unctad.org/Handbook/TableViewer/tableView.aspx
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Table: Trade in Services in Nepal by
Major Sectors (Million US$)
Year
2000
2001
2002
2003
2004
2005
2006
Export/Import
Export
Import
Net Export
Export
Import
Net Export
Export
Import
Net Export
Export
Import
Net Export
Export
Import
Net Export
Export
Import
Net Export
Export
Import
Net Export
Sectors
Total Services
Transport
Travel
Other Services
505.9
199.9
306.0
413.3
214.7
198.6
305.2
236.8
68.4
372.1
266.2
105.9
460.9
385.0
75.9
380.4
434.7
-54.3
385.7
492.8
-107.1
61.4
64.8
-3.4
47.3
71.6
-24.3
36.2
110.9
-74.7
35.9
115.0
-79.1
32.5
141.5
-109
32.6
160.8
-128.2
35.1
186.3
-151.2
157.8
73.3
84.5
143.8
79.7
64.1
103.5
69.2
34.3
199.5
81.2
118.3
230.3
153.8
76.5
131.3
163.2
-31.9
127.8
185.3
-57.5
286.8
61.9
224.9
222.2
63.3
158.9
165.5
56.7
108.8
136.7
70.0
66.7
198.2
89.8
108.4
216.4
110.7
105.7
222.7
121.2
101.5
Source: UNCTAD Handbook of Statistics, 2008
(www.stats.unctad.org/Handbook/TableViewer/tableView.aspx?ReportId=1914)
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Table : BOP Contribution (Rs. Million)
Supply of Services
2000/01
Net
9302.3
Credit
29821.7
Debit
-20519.4
Credit: Travel
11717.0
Government Services 7614.2
Other Services
10490.5
Debit: Transportation -9308.7
Travel
-5520.4
Other Services
-5690.3
Remittances
Fiscal Year
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
3938.4 7049.7 9074.9 -2034.2 -6818.3 -8377.3 -11393.4
23508.2 26518.9 34315.9 26001.9 26469.7 32078.9 42236.1
-19569.8 -19469.2 -25241.0 -28036.1 -33288.0 -40456.2 -53629.5
8654.3 11747.7 18147.4 10463.8 9555.8 10125.3 18653.1
8894.5 6624.0 7143.9 6804.9 7441.5 12336.4 13301.8
5959.4 8147.2 9024.6 8733..2 9472.4 9617.2 10281.2
-8854.4 -8618.4 -9382.1 -10602.2 -12592.3 -14557.4 -22969.2
-5731.1 -6171.5 -10021.5 -9691.9 -11960.8 -15785.0 -20862.0
-4984.3 -4679.3 -5837.4 -7742.0 -8734.9 -10113.8 -9798.3
65541.2 97688.5 100144.8 142682.7
Source: Quarterly Economic Bulletin, Various Issues, Nepal Rastra Bank
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Table: Industries
PermittedInvestment
for Foreign Investment
by Mid-March
Table: Industries Permitted
for Foreign
by Mid-March
20092009
Of 1743 total
industries
permitted for
foreign
investment by
Mid-March,
2009, the
number of
service
industries
including
tourism services
is 941 (54%).
(Amount in Million Rs.)
Targeted
Total Project Total Fixed Foreign
Industry Type Numbers
Employment
Capital Investment
Cost
(Numbers)
Industrial
634
447,260.0 318,520.0 172,250.0
72,941
Products
Service Industry
482
250,330.0 205,860.0 114,970.0
25,285
Tourism
479
183,720.0 173,070.0
68,500.0
22,099
Industry
Construction
40
34,360.0
25,480.0
25,950.0
2,890
Energy
37
43,720.0
38,220.0
26,510.0
2,848
Agro-based
21
54,000.0
40,940.0
28,810.0
4,219
Mining
50
293,590
275,260
84,440.0
9,310
Total
1743 1,306,980.0 1,082,350.0 521,430.0
139,592
Source: Department of Industries, Tripureshwore
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The social contribution
Table: Employment in various services sectors, 2007
Employed Population
Poverty
reduction,
employment
including those
of women, rural
development,
and
development of
transport and
communication,
education,
health and
cultural
development.
Sector
M
F
Total
Construction
229,464
48,321
277,785
Wholesale and retail trade
441,811 182,154 623,965
Hotels and restaurants
77,991
40,565
118,556
Transport, storage and
communications
153,997
5,689
159,686
Financial intermediation
39,645
6,769
46,414
Real estate, renting and
business activities
25,398
3,433
28,831
Public administration and social
security
262,499
34,651
297,150
Education
166,814
58,151
224,965
Health and social work
43,172
17,936
61,108
Other community, social and
personal activities
60,379
9,947
70,326
1,501,170 407,616 1,908,786
Sub-total (Service Industry)
5,212,329 3,689,065 8,901,394
Total (All industry)
% of
Total (M)
4.4
8.5
1.5
% of
Total (F)
1.3
4.9
1.1
% of
Total
3.1
7.0
1.3
3.0
0.8
0.2
0.2
1.8
0.5
0.5
0.1
0.3
5.0
3.2
0.8
0.9
1.6
0.5
3.3
2.5
0.7
1.2
28.8
0.3
11.0
0.8
21.4
Source: GON/ CBS, Statistical Year Book of Nepal, 2007
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Source of Livelihood
Non-farm
livelihood
opportunities
Pro-poor growth
Jobs: employment and
empowerment
Growth and diversification
in marginal or remote areas
Revitalization of local
culture & preservation of
traditional skills
Education and Training
Tourism and
Poverty
Enterprise, development and
micro, small and mediumsized enterprises
Health care, infrastructure
and services
Reduction in isolation
`
Access to markets for
the poor
Source:
Global partnership
for development
Corporate social
responsibility
Sustainable environment
management
Modification of Sheet No 3: Tourism and Poverty Reduction Making the Links, Pro-poor
Tourism Partnership 2004, adapted from UN (2007), Study on the Role of Tourism in SocioEconomic Development.
12
Table: Rural Employment in Various Services Sectors, 2007
M
184,216
305,996
50,189
F
Total
39,949
138,231
28,206
224,165
444,227
78,395
Per Cent
of Total
(M)
4.1
6.9
1.1
104,520
24,209
3,182
3,278
107,702
27,487
2.4
0.5
0.1
0.1
1.4
0.4
15,653
1,871
17,524
0.4
0.1
0.2
177,170
132,734
30,634
20,057
37,425
11,334
197,227
170,159
41,968
4.0
3.0
0.7
0.6
1.1
0.3
2.5
2.2
0.5
43,823
1,069,144
4,443,476
6,538
290,071
3,343,113
50,361
1,359,215
7,786,589
1.0
24.1
100.0
0.2
8.7
100.0
0.6
17.5
100.0
Employed Population
Sector
Construction
Wholesale and retail trade
Hotels and restaurants
Transport, storage and
communications
Financial intermediation
Real estate, renting and
business activities
Public administration and
social security
Education
Health and social work
Other community, social and
personal activities
Sub-total (Service Industry)
Total (All industry)
Per Cent
of Total
(F)
1.2
4.1
0.8
Per
Cent of
Total
2.9
5.7
1.0
Source: GON/ CBS, Statistical Year Book of Nepal, 2007
13
Table: Urban Employment in Various Services Sectors, 2007
Construction
Wholesale and retail trade
Hotels and restaurants
Employed Population
F
Total
M
45,248
8,372
53,620
135,815
43,923
179,738
27,802
12,359
40,161
Transport, storage and communications
Financial intermediation
49,477
15,436
2,507
3,491
51,984
18,927
6.4
2.0
0.7
1.0
4.7
1.7
Real estate, renting and business activities
9,745
1,562
11,307
1.3
0.5
1.0
Public administration and social security
Education
Health and social work
Other community, social and personal
activities
Sub-total (Service Industry)
Total (All industry)
85,329
34,080
12,538
14,594
20,726
6,602
99,923
54,806
19,140
11.1
4.4
1.6
4.2
6.0
1.9
9.0
4.9
1.7
16,556
432,026
768,853
3,409
117,545
345,952
19,965
549,571
1,114,805
2.2
56.2
100.0
1.0
34.0
100.0
1.8
49.3
100.0
Sector
Per Cent of
Total (M)
5.9
17.7
3.6
Per Cent
of Total (F)
2.4
12.7
3.6
Per Cent
of Total
4.8
16.1
3.6
Source: GON/ CBS, Statistical Year Book of Nepal, 2007.
Note: 1.The employment number becomes much higher if indirect employment is
included. Also does not include the contribution made by various services
sectors in terms of trainings and capability building programmes.
2. More role played by education and transport and communication in
14
urban areas compared to rural
Institutional Overview
Sector
Construction
Institution
Ministry of Physical Planning
and Works and line agencies
Nepal Housing Finance
Company
Department of Urban
Development and Building
Construction
Ministry of Commerce and
Supplies
Handicraft Association of Nepal
Export and Trade Promotion
Centre
Wholesale
and retail
trade
Ministry of Tourism and Civil
Aviation and line agencies
Nepal Tourism Board
Hotel Association of Nepal
(HAN)
King Mahendra Trust for Nature
Conservation
Department of Wildlife and
National Parks
Nepal Academy of Tourism and
Hotel Management
Nepal Mountaineering
Association
Hotels and
restaurants
Nepal Association of Rafting
Agents
Nepal Association of Tour and
Travel Agents
Trekking Agents Association of
Nepal
Airlines Operators Association
of Nepal
Association of Helicopter
Operators Nepal
Restaurant and Bar Association
of Nepal
Tourist Guide Association of
Nepal
Freight Forwarders Association
of Nepal
Nepal Association of Tour
Operators
Nepal Entrepreneurs Association
of Tourism
Non-Star Hotel Association of
Nepal
Major Responsibilities
Policy, planning, and regulation
To provide detailed company information on Nepal housing development
To protect and promote tourist and historical places and to modernize
infrastructures
Policy, planning, and regulation
Focuses on the promotion and popularization of handicrafts locally and
abroad
Advise the Government of Nepal in formulating policies for the
development and expansion of trade and export
Policy, planning, and regulation
To promote Nepal as quality tourism destination in the international arena
with specific brand image and offers information on tourism attraction and
products
To promote hotel industry in Nepal
To preserve the natural heritage, species of animals and plants
To conserve and manage the rich and diverse biological diversity of Nepal
with much emphasis on wildlife and protected areas
To produce skilled manpower to develop the hospitality and tourism
industry
To promote the mountaineering activities in the Himalayan region: to
promote mountain tourism, climbing sports, protect mountain environments
and preserve and promote cultural heritage of mountain people.
To assist the government and private sector in enhancing Nepal's river
tourism industry
Conduct various activities to promote Nepal’s tourism
To assist the government by providing suggestions to make trekking
business to generate revenue and also to provide employment opportunity
to the locals
To promote remote corners of national heritage easily accessible
To promote the tradition of providing almost every kind of food for tourists
To assist the government in promotion of tourism industry
To facilitate of export and import trade, in Nepal and all over the world. It
caters information, gives consultation, produces ports through work shop,
seminars, interactions, trainings etc
To make major tour operators such as hotel, airlines, golf course or the
cable cars to promote tourism industry
To promote entrepreneurship in tourism industry
15
To assist the government in promotion of tourism industry
Contd…
Transport, storage and
communications
Financial intermediation
Real estate, renting and
business activities
Ministry of Information &
Communication and line agencies
Policy, planning, and regulation
Ministry of Labour & Transport
Management
Policy, planning, and regulation
Nepal Telecommunication
Corporation
To provide communication services for the promotion of service sector
Radio Nepal, NTV
To provide comprehensive information about Nepal for the promotion of service sector
Ministry of Finance
Policy, planning, and regulation
Nepal Rastra Bank
Central banking responsibilities including guiding the development of the embryonic domestic financial sector
Commercial Banks
To provide various banking services like accepting deposits and providing loans
Financial Institutions
To provide financial services including micro finances
Cooperatives
To provide micro finances
Insurance Companies
To provide various types insurance facilities
Security Board
Apex regulator of Securities Markets in Nepal to offer advice to the Government on matters connected with the
development of the capital market
Nepal Stock Exchange
To impart free marketability and liquidity to the government and corporate securities by facilitating transactions in its
trading floor through member, market intermediaries, such as broker, market makers etc
Citizen Investment Fund
Operation of retirement schemes, unit trust schemes and the capital market services
Employee Provident Fund
To manage the provident fund of the government, public and private sector employees and to help them financially on
retirement or separation from their jobs
FNCCI
An umbrella organisation of the Nepalese private sector. Its aims at socio-economic development of the country
through the promotion of business and industry by protecting the rights and interests of business and industrial
communities.
Nepal Chamber of Commerce
To assist in the development of national economy through the promotion and protection of commerce and industries,
both at the private and public sector
Nepal Housing Finance Company
To provide detailed company information on Nepal housing development
16
Contd….
Public
administration and
social security
Ministry of General
Administration and line
agencies
Ministry of Education
University Grants
Commission
Universities
Higher Secondary Education
Board
CTEVT
IGOs, NGOs
Education
Ministry of Health and
Population and line agencies
Hospitals and Nursing
Homes
Health Institutions
IGOs, NGOs
Health and social
work
Ministry of Physical
Planning and Works and line
agencies
Ministry of Local
Development and line
agencies
Ministry of Women,
Children and Social Welfare
Social Welfare Council
Central Children Welfare
Committee
Association of International
NGOs in Nepal
Other community,
social and
personal activities
Association of NGOs
Policy, planning, and regulation
Policy, planning, and regulation
To advice the government, to formulate policies, to
coordinate among universities, allocate and disburse
government grants to universities and higher educational
institutions and take appropriate steps for the promotion
and maintenance of standards of higher education
To produce skilled manpower essential for the overall
development of Nepal
To produce the middle level manpower and imparting
necessary knowledge and skills to the students pursuing
further education
National autonomous body for the development of
human resources concerned with basic and middle level
technical education and vocational training
To assist the government organizations in implementing
education programmes
Policy, planning, and regulation
To provide medical, nursing and surgical treatments
To provide medical academic training programs and to
render medical care and services
To assist the government organizations in implementing
the programmes
Policy, planning, and regulation
Policy, planning, and regulation
Policy, planning, and regulation
Promotion, facilitation, coordination, monitoring and
evaluation of the activities of the NGOs in Nepal
To assist the government in building capacity of child
rights and protection
To promote mutual understanding, exchange information
and share experiences and learning of work among
INGOs in Nepal for more effective collaboration
To promote mutual understanding, exchange information
17
and share experiences and learning among NGOs in
Nepal