From Evidence to Policy Supporting Nepal’s Trade Integration Strategy : Assessment of the Impact of the Cash Incentive to Promote Export Diversification in Nepal
In 2010 or 2011, Nepal set up a cash incentive scheme for exporters aimed at reducing its trade deficit and vulnerability to external shocks, by promoting export growth and diversification for its firms. The Trade and Competitiveness Global Practic...
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/07/26564533/evidence-policy-supporting-nepal’s-trade-integration-strategy-assessment-impact-cash-incentive-promote-export-diversification-nepal-policy-note-4 http://hdl.handle.net/10986/24934 |
| Summary: | In 2010 or 2011, Nepal set up a cash
incentive scheme for exporters aimed at reducing its trade
deficit and vulnerability to external shocks, by promoting
export growth and diversification for its firms. The Trade
and Competitiveness Global Practice has been partnering with
the Government of Nepal to assess the impact of the cash
incentive program on export growth and diversification. This
note presents the main results of the analysis. Making the
support to firms’ internationalization a policy priority is
commendable Countries around the world, and many countries
in the South Asia region have incentives in place to help
firms become exporters and succeed in diversifying their
export markets.But not all interventions designed to support
firms’ internationalization work, so, evaluating impact is
crucial.Some of the planned changes in the scheme introduced
in 2013 revealed public-private dialogue. However, many of
these changes have not been fully implemented. The
fast-track system introduced in 2013, and by which, firms
exporting priority products would not need to certify
domestic value addition reflect the systematic feedback of
the private sector on the complexity of proving value added
content.At the firm level there is no evidence showing a
clear link between the effective incentive rates received
and export performance, or the changes in the export
incentive scheme and performance. The main policy
conclusion that emerges from this analysis is that the
current incentive scheme needs to be revised. The rest of
the note is structured as follows. Section two discusses
aspects of the design of the allocation mechanism of the
incentive. Section three shows the impact of the incentive
program from the aggregate level, at the product level and
at the firm level. |
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