6 - Maheshwor Sharma Paudel Country Paper China (1)

8/8/2019 6 - Maheshwor Sharma Paudel Country Paper China (1)

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EconomicEconomic SituationSituationPopulationPopulation : : 26 26 m illionm illionPopulationPopulation GrowthGrowth raterate:: 22..22%% per per annumannum. .TheThe compositioncomposition of of NepaleseNepalese economyeconomy: :

Agriculture Agriculture sector sector 4040%%;;CommercialCommercial sector sector 1010%%;;IndustryIndustry sector sector 1010%% outout of of which,which, SmallSmall andand CottageCottage IndustriesIndustries arearenearlynearly 9090%% ..EmploymentEmployment contributioncontribution byby cottagecottage andand smallsmall industriesindustries : : 7676%%ValueValue additionaddition contributioncontribution byby SmallSmall andand CottageCottage IndustriesIndustries: : 5050%%ServiceService sector sector andand othersothers 4040%%

L iteracyL iteracy of of populationpopulation: : 6262%%PotentialPotential recourserecourse is is hydroelectricity,hydroelectricity, totaltotal capacitycapacity isis8383,,000000 megawattmegawatt. .


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Current Status of SMEs in NepalCurrent Status of SMEs in Nepal

SN Category Number

1 Agro and Forest Based 1313

2 Construction 5008

3 Energy Based 880

4 Manufacturing 43427

5 Minerals 169

5 Service 186936 Tourism 2192

Total 71682


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Number of Large Scale Industry Register byNumber of Large Scale Industry Register byCategory (Up to F.Y. 2005Category (Up to F.Y. 2005- -06)06)

Category No. of IndustryTotal Project

Cost(Rs in Million)

Total Fixed Cost(Rs in Million)

Total Number of Employment

Agro and ForestBased

159 9910.54 8413.2 24787

Construction 25 639.46 427.87 1700

Energy Based 30 27564.66 25607.15 6327

Manufacturing 1753 104477.5 71379.59 216300

Minerals 3 292.66 230.04 197

Service 823 52816.97 42824.6 65121

Tourism 509 29353.88 25792.61 24233

Total 3302 225055.7 174675.1 338665

Note: 1$(US)=74 RS (Nepalese Rupee)


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Capacity Building of SMEs in NepalCapacity Building of SMEs in Nepal

Policy SupportPolicy Support

Industrial polic y 1992 and industrial Enterprises Act Industrial polic y 1992 and industrial Enterprises Act 1992 gave priorit y and provided tax incentives to1992 gave priorit y and provided tax incentives toSMEs.SMEs.Role of Government determined as regulator, facilitator Role of Government determined as regulator, facilitator and monitor and monitor PrivatePrivate- -Sector Encouraged Sector Encouraged Foreign Investment & Technolog y Transfer Act 1992 Foreign Investment & Technolog y Transfer Act 1992 implemented 100 percent foreign investment opened implemented 100 percent foreign investment opened for industr y except traditional cottage industr y and for industr y except traditional cottage industr y and securit y securit y --concerned Industr y .concerned Industr y .IT Polic y 2002 opened the door for IT and ICT toIT Polic y 2002 opened the door for IT and ICT toforeignforeign--Investor tooInvestor too


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Institutional Support.Institutional Support.

D ept of Cottage and Small Industry ( D oCSI) providesD ept of Cottage and Small Industry ( D oCSI) providesVarious training to entrepreneursVarious training to entrepreneursInstitute of Entrepreneurship and InstitutionalInstitute of Entrepreneurship and InstitutionalD evelopment (IE D I) established.D evelopment (IE D I) established.Industrial Estate (ten) are in operation to supportIndustrial Estate (ten) are in operation to supportindustries.industries.Micro Credit fund and fund for cottage and smallMicro Credit fund and fund for cottage and smallindustry created.industry created.Many Bank and Financial Institutions establishedMany Bank and Financial Institutions establishedand started financial support.and started financial support.


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Institutional Support cont.Institutional Support cont.

Butwal Technical Institute ProvidesButwal Technical Institute Providesapprenticeshipapprenticeship- -oriented training for many yearsoriented training for many yearsIT parkIT park--establishedestablishedMore than 1000 IT and ICT institutions areMore than 1000 IT and ICT institutions areproducing IT, ICT experts.producing IT, ICT experts.One windowOne window--Committee provides incentives toCommittee provides incentives tothe industries.the industries.

IndustrialIndustrial--Promotion Board looks on everyPromotion Board looks on everyproblem of industry.problem of industry.In this year, government with privates sector In this year, government with privates sector partnership established the fund of 2000 Millionpartnership established the fund of 2000 MillionRs (28.3 m U S$) particularly to revive sickRs (28.3 m U S$) particularly to revive sickindustriesindustries


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Challenges and Problem SMEsChallenges and Problem SMEs

D ueD ue toto liberalizationliberalization andand globalization,globalization, SMEsSMEs havehavetoto faceface globalglobal competitioncompetition. .LargeLarge--IndustriesIndustries of of MassMass productionproduction areare ininneighboringneighboring countriescountries ChinaChina andand IndiaIndia.. ItIt isisdifficultdifficult toto competecompete withwith themthem..N epalN epal isis sufferingsuffering byby insurgencyinsurgency for for 1212 years,years, itithashas deeplydeeply strickenstricken toto allall thethe economiceconomic activitiesactivities..


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Challenges and Problem SMEsChallenges and Problem SMEscont..cont..

N epal being a least developed country, There isdifficulty of technology skilled manpower,financial resources etc.Infrastructures of development are poor such aselectricity-power, transportation facility are notsufficient.Capacity of entrepreneur's is low. They can notdevelop relationship in international sectors.

They are confined within boarder.Political Instability has created crisis of confidence in policy regime


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O pportunity for SMEsO pportunity for SMEs

D ue to globalization and liberalization the world inD ue to globalization and liberalization the world inopen, SMEs can take help according to their choice.open, SMEs can take help according to their choice.They can enter the globalThey can enter the global- -market.market.There is great chance for developing countries toThere is great chance for developing countries toadopt new technology from developed countries withadopt new technology from developed countries with

appropriate means of technology transfer.appropriate means of technology transfer.N epal become member of WTO, SMEs can beN epal become member of WTO, SMEs can bebenefited by WTO regime.benefited by WTO regime.ForeignForeign--investment is open and there are manyinvestment is open and there are manyincentives in technologyincentives in technology- -transfer.transfer.Government is playing a role of catalyst for privateGovernment is playing a role of catalyst for private- -sector. All the areas except securitysector. All the areas except security- -sector are opensector are openfor private sector.for private sector.Bank and financial companies are many. They areBank and financial companies are many. They aresearching the areas of investment.searching the areas of investment.


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O pportunity for SMEs contO pportunity for SMEs cont

There is rapid growth of telecom, IT and ICTThere is rapid growth of telecom, IT and ICTsector.sector.The natural scene of the country is incomparable.The natural scene of the country is incomparable.1000 km long Himalaya1000 km long Himalaya- -range, 8 highest peaks of range, 8 highest peaks of

the world including the Mt. Everest are in N epalthe world including the Mt. Everest are in N epalThe topographical mismatch is there.The topographical mismatch is there.Lumbini the birth place of Lord Sidhartha Gautam,Lumbini the birth place of Lord Sidhartha Gautam,BuddhismBuddhism--holistic place of the world is in N epal.holistic place of the world is in N epal.

Tourism Sector can flourish here.Tourism Sector can flourish here.Life saving natural herbs such as yarshabgumgaLife saving natural herbs such as yarshabgumga(Cordyceps Sinensis), Pachamle(five(Cordyceps Sinensis), Pachamle(five- -finger) etcfinger) etcare the products of high mountain area.are the products of high mountain area.


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A reas of ImprovementA reas of Improvement

Solution of insurgency and political stabilitySolution of insurgency and political stabilityPolicyPolicy--stability and create confidence in investor stability and create confidence in investor

Adopt appropriate technology and use of IT and Adopt appropriate technology and use of IT andICT.ICT.

Focus on institutionalFocus on institutional- -development such as ITdevelopment such as ITparks, Institutes of Technology, Technical Schools.parks, Institutes of Technology, Technical Schools.Provide infrastructure such as electricityProvide infrastructure such as electricitytransportation, telecom etc.transportation, telecom etc.Financial support, Create Venture Capital Fund.Financial support, Create Venture Capital Fund.Strengthen Marketing N etwork inside and out sideStrengthen Marketing N etwork inside and out sideof the country.of the country.D evelopment R& D aspects.D evelopment R& D aspects.Incentives need to be provide for R& D .Incentives need to be provide for R& D .


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ConclusionConclusion

LeastLeast developeddeveloped countriescountries areare facingfacing variousvariousproblemsproblems. . ToTo getget outout fromfrom thethe viciousvicious circlecircle of of poverty,poverty, theythey havehave toto bebe innovativeinnovative andand useuse newnewmethodsmethods andand technologytechnology for for thethe developmentdevelopment. .

TheThe rolerole of of SMEsSMEs isis veryvery importantimportant inin thesethesecountriescountries becausebecause theythey areare thethe major major partpart of of economyeconomy. . SoSo itit isis importantimportant toto buildbuild thethe capacitycapacityof of SMEsSMEs byby adoptingadopting newnew ITIT andand ICTICT techniquestechniquesandand byby technologytechnology transfer transfer. .


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Thank y ouThank y ou

6 - Maheshwor Sharma Paudel Country Paper China (1)

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