Nepal's capacity to support int'l trade eroding: Report
KATHMANDU, May 17: Nepal has dropped 21 places in global logistics performance ranking over the past five years, which indicates the country´s capacity to facilitate international trade has taken a nosedive due to inefficient infrastructure, incompetent transportation services and inept customs clearance producers.
The Logistics Performance Index (LPI) report, which the World Bank (WB) unveiled on Wednesday, ranks Nepal at 151th position out of 155 countries for 2012. In 2007, it was ranked 130 and had fast slid to 147th position in 2010.
“Nepal is among the bottom 10 performer countries,” mentions the report.
As LPI measures logistics efficiency, now widely recognized as vital for trade and growth, such drop in rank indicates that the country´s ability to trade globally, which depends on its traders´ access to global freight and logistics networks, has dwindled badly.
Globally, logistics is regarded as backbone of international trade and growth, but the report says Nepal ranked third last country (that is 153rd) across the globe in terms of its capacity to arrange timely logistics.
Moreover the LPI report, which was prepared based on survey of freight forwarders and express carriers, has ranked Nepal at 151th position on the indicator of ´efficiency of international shipments´.
In terms of tracking and tracing of shipments and infrastructure, the other two crucial indicators of logistics efficiency, Nepal ranked 149 - sixth worst among LPI participating countries.
Compared to those indicators, efficiency of customs in Nepal remained relatively better, as the country ranked at 125th position, according to the report.
The report says that progress in trade logistics performance has slowed down not just in Nepal but across the globe over the last two years due to the global recession. But it adds countries that pursued aggressive reforms continued to improve their performance.
Singapore stood as the top performer among the 155 economies included in the LPI report. Countries like Chile, China, India, Morocco, South Africa, Turkey, and the US too improved their performances.
China is ranked at 26th position while India occupies 46th position in the report.
“Trade logistics is key to economic competitiveness, growth, and poverty reduction,” reads a WB statement. “Unfortunately, the logistics gap between rich and poor countries continues and the convergence trend experienced between 2007 and 2010 has stalled as events like the global recession, and the European debt crisis shifted attention away from logistics reform,” the statement quoted Otaviano Canuto, WB Vice President for Poverty Reduction and Economic Management, as saying.
As improvements in global logistics over the past two decades were driven by innovation and increase in global trade, the report has urged the countries to focus more on enhancing trade, logistics reforms and innovation.
It has also suggested government to give emphasis on building infrastructure, developing a regulatory regime for transport services, and designing and implementing efficient customs clearance procedures.