Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010 Nepalese educational institutions lack sufficient infrastructure. They lack well-maintained lecture halls,laboratories, libraries, dormitories, and information centres. Among the five education sectors identified by the WTO (primary education, secondary education,higher education, adult education, and other education), Nepal has made commitment under GATSto liberalize trade in the latter three. However, there is poor implementation of this commitment sothat the cost of doing business in this sector remains high. According to Karmacharya and Maskay, thefailure to liberalize FDI and the high incidence of corruption are primary causes of decreasing foreigninvestment in this sector. 10Health ServicesThere are many variables to consider in analysing Nepal’s export potential in health services. Still, the specificsof the country’s national healthcare system, regulatory environment, and government policies are mostimportant.As indicated in the SAWTEE 2008 study cited earlier, export of health services via Mode 2 remains the dominanttype of exports (foreign patients travelling to a Nepalese medical institution for treatment).Environment for Nepalese Export of Health ServicesWhile international trade in health services in Nepal is limited, particularly when compared to other tradeservices, the accession to the WTO and the ensuing commitments in the health sector have led to a gradualincrease in export of health services. 11From a policy perspective, Nepal’s accession to the WTO and its commitment to liberalize trade in healthservices have created opportunities for health service export. There are no major specific limitations in thissub-sector, except in market access in Mode 3, where foreign services providers must be incorporated inNepal with a maximum foreign equity capital of 51 per cent.Nepal’s TYIP recognizes the potential for health service trade and incorporates strategies like establishing,promoting, and expanding telemedicine, developing and expanding ayurvedic and other alternative healthservice systems, providing computers and internet access to facilitate telemedicine, collecting informationregarding herbs and intellectual property, and enhancing research activities. However, no concrete strategieshave been identified to promote such developments.From a trade perspective, a good physical environment, the lower cost of human resources, the lower costof living, and the provision of ayurvedic practices are the major factors that make Nepal’s health servicesattractive. Furthermore, the liberal policies adopted by the GoN has encouraged the involvement of theprivate sector and enhanced the overall competitiveness of the sector.At present, however, Nepal remains a net importer of health services and, despite attractive policies, attractinginvestment in the health services sector remains a challenge. 1210Karmacharya, Binod Kumar and Nephil Matangi Maskay. 2006. Economic Cooperation between East Asia and South Asia: Nepal Country Study.Report Submitted to ADB.11NRB (2005) Nepal’s WTO Service Sector Commitments and Its Impact on Balance of Payment Situation. Kathmandu: Nepal Rastra Bank.,quoted from SAWTEE (2008).222NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT