– ANKUR Shrestha

Historically, women’s participation in the tech sector has been remarkably low due to the patriarchal classification of jobs. As a consequence, it led societies to believe that men automatically belong to the fields such as IT while leaving a very narrow space for women. This has caused only a few women to study and subsequently enter the tech sector.

Nevertheless, this is changing, as it rightly should. According to Deloitte Global, the tech industry is making steady progress in shrinking its gender gap. In 2019, overall female representation in large global technology firms was 30.8 percent. Deloitte estimated that women’s share in the overall global tech workforce increased by 6.9 percent from 2019 to 2022. Public commitments by large tech companies to improve gender diversity also aided this increase. Intel, for example, aims to double the number of women and underrepresented minorities in senior leadership roles by 2030. Similarly, HP pledged to reach 50 percent gender equality in roles at the director level and above by 2030.

In Nepal, we see a similar upsurge. According to Nepal’s 2011 census, only 1,117 females studied computing while the number increased to 11,078 in 2021. This shows a monumental increase of about 892 percent in female students in the tech sector during the ten-year period. It also beats the overall increase in students studying computing which amounts to more than 668 percent which is significant by itself as well.

Conversations with women professionals working in Nepal’s tech sector show that one major reason for this uptick is that IT has set itself as an industry better suited for women workers. However, our societal structure has for long had restrictions for women to work (especially after marriage), restricts economic freedom, deems late office working hours as unsafe, treats periods as taboo, considers men as primary breadwinners, and puts less value on women workers. The IT sector provides a workaround for many of these societal issues. Asmita Bajracharya, Product Manager at Innovate Tech says that work in the IT sector can usually be done from home and has flexible work timings, project-based pay, space for freelance work, and a relatively higher pay scale compared to other industries. All these, therefore, she believes make the sector one of the best for working women in Nepal. 

However, the IT sector is also rife with issues depending on which company you analyse or whom you talk to. IT startups are particularly problematic while established companies usually have stringent policies in place. However, we see such discrimination usually persist in smaller and newer companies even within the IT sector. Additionally, smaller companies generally have issues such as longer working hours, and no set leave policies. Nepal’s Labour Act 2017, Chapter 7 Section 33, also requires arrangements for transportation to and from the workplace in employing a female where the working hours begin after sunset or before sunrise. Advocate Sadikshya Maharjan says that this particular section, while well-intentioned, can also cause smaller companies to discriminate in hiring women as they are not able to provide these services.

Another area of the Labor Act, Chapter 2 Section 7, prohibits discrimination in remuneration for equal work. However, unequal pay issues continue to persist in the sector. IT companies are usually structured around payment through projects. Therefore, discrimination while assigning job responsibilities leads to a vicious cycle where companies assign lesser-paying projects to women, leading to lower performances in performance reviews. This subsequently leads to less pay and lower chances of promotion resulting in more incidences of discrimination. Ojaswi Poudel, currently a Software Engineer at Cotiviti, says that she faced such blatant discrimination in one of her previous workplaces. However, she believes having women in senior positions in the company can help break this cycle. She also sees the need for senior women mentors so that younger women have someone to look up to and gain more confidence in this field. She says she does not face such issues in her current company which is more structured, has proper mentorship, and has clear payment policies.

Sadhana Gurung shares similar advantages in her company. Gurung who works at Leapfrog Technology currently as a Software Engineer, QA has proper mentorship models, flexible timings, as well as opportunities for growth in her company. This might also be one of the reasons why it is easier to get more motivation from peers and have women-friendly policies at the office. She also notes how despite fewer women currently working in IT, even clients and senior management are happy to see women workers, are welcoming, and provide proper career guidance.

While it would be a generalisation to say that there is very less discrimination based on only three experiences, trends do point towards more inclusion and provisions of a more equitable working environment for women in tech. With more women choosing the tech sector for their studies and work, and established companies having non-discriminatory policies, the tech sector in Nepal seems to be slightly ahead of the curb than other workplaces in Nepal. A study by McKinsey research showed that the most diverse companies are 48 percent more likely to outperform the least gender-diverse companies. It is then to the benefit of everyone to create a more gender-diverse workplace. There is more to still do to achieve gender parity but the tech sector in Nepal definitely seems to be heading in the right direction.

This blog is a part of NIPoRe’s blog series on Women’s History Month 2023.

– ANKUR SHRESTHA

The opinion piece originally appeared in the February 2023 Issue of New Business Age Magazine. Please read the original article here.

Since the third generation of the Nepal Trade Integration Strategy (NTIS 2016) was introduced, Nepal and its trade policies have undergone significant changes. First, from 2017 onwards, the country formally adopted a federal structure with seven provinces. Second, for two years in a row (2020-2021), Nepal put all of its efforts into managing the COVID-19 pandemic. The pandemic disrupted Nepal’s domestic and international trade in major ways.

Third, Nepal has seen massive fluctuations in the country’s balance of payments in recent years. One of our regional neighbours, Sri Lanka, declared bankruptcy, igniting policy debates in Nepal as to whether we would run aground into the same problems. Despite this, Nepal’s foreign reserves are growing and will last for at least ten months. However, what is worrying is that our trade deficits are also rising to the same levels as during the pre-pandemic phase of 2020.

Nepal suffers from a considerable trade deficit with its biggest trade partners. For example, in the last fiscal year (FY) 2021/22, with India, our largest trade partner, Nepal’s import-export ratio stood at 8:1. With China, our second largest partner, it stood at a massive 327:1. This trend is worrying and shows the need for Nepal to improve its trade balance with its immediate trade partners. Despite opening up more border points with China, if Nepal does not take significant steps to promote exports, it is very likely that Nepal’s current trade deficit with China would further widen in the years to come. Nepal is also graduating to a developing country from a Least Developing Country (LDC) by 2026, and its trade advantages will decrease even further. As a result, bilateral trade treaties will also become essential for Nepal to retain its trade advantages.

Therefore, the Ministry of Industry, Commerce, and Supplies and the Ministry of Finance, together with other related ministries and departments, have been working tirelessly to create a new trade strategy and related industrial policies to promote trade. Examining where the country missed out with the NTIS and what impact it had on the country’s trade situation is necessary. Furthermore, it is also essential to understand the consumer benefits that trade provides and move towards decreasing the tariff and non-tariff barriers of trade. Policies that increase tariffs and implement protectionist measures to promote non-competitive industries will only burden consumers through higher costs of goods.

Nepal Trade Integration Strategy
The Nepal Trade Integration Strategy 2016 (NTIS 2016) was an updated version of NTIS 2010 and its predecessor, Nepal Trade and Competitiveness Study (NTCS) 2004. It was developed together with the complementary Trade Policy 2015. The NTIS 2016 recognized potential for product and value chain development in three priority export sectors: Agro and forest products, Craft and manufacturing products, and the Services sector. Under these, it identified 12 potential export sectors which are: 1. Large Cardamom, 2. Ginger, 3. Tea, 4. Medicinal and Aromatic Plants (MAPs), 5. Fabrics, Textiles, Yarn, and Rope, 6. Leather, 7. Footwear, 8. Chyangra Pashmina, 9. Knotted Carpets, 10. Skilled and Semi-Skilled Professionals at Various Categories (Remittance-Generating Sectors), 11. IT Services and Business Process Outsourcing, and 12. Tourism.

Export of NTIS goods
Data across the years since the fiscal year (FY) 2015/16 shows that Nepal has seen a slight increase in the identified export goods under the NTIS 2016, however, their percentage contributions to total exports have decreased significantly. For example, in FY 2015/16, NTIS goods made up 47.26% of the total exports, but it significantly reduced to 23.39% as of FY 2021/22. While the values of NTIS exports have increased slightly from Rs 33.2 billion to Rs 46.79 billion across this period, total exports reached Rs 200 billion from Rs 70 billion.

Specifically, in the last FY 2021/22, the list of goods identified under NTIS 2016 only made up less than 25% of the country’s total exports. Focusing on FY 2021/22, out of the total export value of Rs 200 billion, soya bean was the top export with Rs 48.12 billion of exports, this makes up 24.06% of our total exports. Products in the NTIS list, such as carpets, came in fifth contributing Rs 9.57 billion, while woven fabrics and cardamom came in sixth and seventh contributing Rs 5.66 billion and Rs 4.81 billion respectively. Other NTIS goods came further down the list. Even after adding all the NTIS goods exports, it falls short by Rs 1.33 billion. This provides evidence of either our incapability to understand the changes throughout the years in Nepal’s export capabilities or the mindset of Nepal’s traders.

– ANKUR SHRESTHA

Introduction

Nepal, since time immemorial, has been regarded as an agricultural country. From most politicians’ speeches to our class textbooks, our idea of the Nepali economy has revolved around agriculture. Historically, that was true; in the late 1980s, it was the livelihood for more than 90 percent of the population – although only approximately 20 percent of the total land area was cultivable – and accounted for, on average, about 60 percent of the GDP and approximately 75 percent of exports – the numbers of drastically reduced as of today.

Evolving Trends

While some reports still claim that more than 66 percent of the total population is still engaged in agriculture, the contribution to GDP is declining each year compared to other key non-agriculture sectors. In the last ten years alone, it has declined from 32.7 percent of the total GDP to 23.9 percent in the previous fiscal year, FY 2021/22. Meanwhile, the contribution of the service sector has increased immensely, reaching 61.8 percent in the last fiscal year.

If one travels across Nepal’s villages, this decline in agricultural sector becomes even obvious. Most arable lands in the country remain empty, with workers traveling to foreign countries in search of better employment opportunities. The annual increase in remittances sent back reinforces this new economic reality. The villages are left chiefly with young kids and the older people who depend on remittances to sustain their livelihoods. Meanwhile, agriculture is still being done largely for sustenance rather than for commercial purposes, painting a bleak picture of the country’s agricultural endeavors. It is not remiss that out of our top five exports in the last fiscal year, namely soybean oil, palm oil, carpets, woven fabrics, and cardamom, only cardamom is commercially farmed, with other top exports being imported and exported again, with little value-added within Nepal. Interestingly, cardamom only contributes 2.4 percent of our total export value, while our top export, soybean oil, contributes 24.1 percent.

Some Experiences from the Field

This is not to say that efforts are not being made or commercial farming is not being done. Local levels were primarily found to be proactive in this regard as well. In particular, our interviews (done as a part of NIPoRe-ALIGN research collaboration) with the local government chairs and mayors showed that many local levels had focused on agriculture to raise its population’s economic standards. In the Sisne Rural Municipality of Salyan, for example, the local government had made efforts to separate different zones of the municipality into various agricultural sectors. The local government assigned different zones to plant different types of vegetables and fruits depending on land conditions and weather to increase productivity. The lands were found to be productive for fruits such as kiwi and oranges. Similarly, in Ichhyakamana Municipality of Chitwan, the local government brought a provision to distribute NPR 5 for each plant planted by the locals to encourage farming. Additionally, the local government also offered subsidies for buying cows or buffalos. Similar efforts by local governments can be seen throughout the country. Development partners and the federal government have also encouraged farming by regularly training farmers and distributing much-needed seeds and fertilizers.

However, efforts many times look to be wasted. Various issues come to light in conversations with agricultural experts who have worked as consultants in this field for decades. Experts whom we met during our field visits (of NIPoRe-ALIGN research collaboration works) claim that distributing only seeds without proper technical know-how of crop cycles, crop placements, and timely fertilizer inputs has led to smaller harvests with less domestic consumption and export market potential. The distributed seeds are of high quality, but inadequate understanding of timely fertilizing techniques leads to low-quality outputs that are not marketable. Farmers who have contributed many years to grow oranges, for example, then can harvest it only for two-three cycles before the trees stop bearing fruits. This leads to frustrations among the farmers, who then move on to look for better alternative opportunities in other sectors or migrate to foreign countries, as is the case in Nepal. Training for farmers also seems to be provided most of the time to fill quota numbers. Any attendee of most trainings gets monetary incentives to join in. This causes training recipients to join just because of the incentives rather than actually learning the necessary techniques helpful for them. 

Rooms for Improvements

What, then, must be done to change this? At the policy level, the government has been proactive in giving out subsidies and creating tariffs to promote Nepali agricultural products. However, in reality, an assessment seems necessary to analyze who the subsidies are going to and who benefits from these tariffs. Additionally, the government needs to proactively work with local farmers in breaking the syndicate systems that have been established to get farming output to the markets. Nepali news platforms are rife with intermediaries cheating farmers of their hard-earned money and paying them drops compared to what the goods are sold in the market for. Strict quality control mechanisms are also needed if we want to be export-oriented. Quality testing facilities must be made available in major production centers so farmers can access them easily. This will serve to ensure quality goods come to domestic as well as foreign consumers. Nepal also needs to identify what products are viable to be grown in different parts of the country and determine which products have a competitive advantage. Focusing on specific products and actively working on ensuring storage facilities, testing mechanisms, and meeting international standards for those will be easier for a developing country like Nepal. The government can expand the list of identified goods as we develop our agricultural ecosystem and set better product standards. The Nepal Trade Integration Strategy 2016 was a good idea in regard to this. However, it needs to be immediately and regularly updated, keeping in mind our international export market, the value of our products, and the capabilities of upscaling our farmers.

And lastly, a provincial agriculture and trade policy seems instantly necessary to coordinate local efforts. Unfortunately, the trade data of our country still has not been able to shift to the provinces levels. With us not knowing the origin of our export products, we only have a disaggregated idea of which province is better at growing which products. Historically, some products have been raised in certain areas of the country, like tea in the eastern region, but focusing on different products means production data at local levels is a must. This will help direct our limited resources to build specific infrastructure and facilities for particular regions to increase the country’s overall export. Negotiations and identification of export markets, meanwhile, are also vital. Nepal has two large markets as its neighbors that have relatively fewer quality controls than, for example, the European Union. This means our diplomatic focus on export negotiations can be with these two large markets while we continue to improve the quality of our products and look toward other markets.

– ANKUR Shrestha

The opinion piece originally appeared in the 2022 September Issue of New Business Age Magazine. Please read the original article here.

The shift towards online businesses has not been new in Nepal. The COVID-19 pandemic especially helped increase this movement while social media marketing had already been a common thing even before the pandemic. The pandemic has forced even traditional businesses to go online as they searched for new ways to reach consumers. Moreover, online businesses can be set up at a relatively low or no cost, and it is easier to market using social media. Therefore, online businesses became attractive to new entrepreneurs using social media to sell retail goods or services. Most of these new businesses, however, were not registered.

The problems in business registration are, however, not new. According to the latest available National Economic Census 2018, almost half the business establishments are unregistered. Two out of three businesses operated by a single person are not registered.

Then why are we seeing a large number of unregulated establishments, especially small-scale ones? There are various reasons. First, it is a strenuous task to register a business in Nepal. The World Bank ranks Nepal at 94th overall in its Doing Business Rankings in 2020, but 135th in starting a business and 151st in enforcing contracts. These are critical for small businesses.

Secondly, the government has not been able to offer substantial benefits (or impose costs) to warrant registering a business. Regular processes that need to be easy and fast, such as registering a business and paying taxes, come with cumbersome bureaucratic hassles without offering any particular benefits. Additionally, the government’s ability to impose contracts in case of any issues between contracting parties is slow. The people then see no reason to seek help from the government. On the flip side, most unregistered businesses do not face any consequences for not registering.

The third reason is that government regulation is slow to catch up, especially for online businesses. For example, when ride-sharing services like Tootle and Pathao started their services in Nepal, they had no exact regulations to operate under. Riders were arrested by the police as existing laws did not allow private vehicles to provide ride services. But, protests from consumers as well as service providers have forced the government to allow ride-sharing even in the absence of legal provision even though it has been more than five years since these services came into operation.

Even registered small businesses have been known to avoid paying taxes by showing a negative balance sheet. Customers have also contributed to the informal economy by not necessarily demanding VAT or PAN bills from the businesses. This has encouraged newly formed online businesses to operate without staying registered.

A glimpse of a genuinely free market economy in the country can, however, be seen. Albeit informal, the online market has been known to be relatively easier to purchase from, allowing consumers to compare prices across different sellers and choose one that suits them while paying relatively lower costs, all from the comfort of their homes. Sellers are compelled to sell better goods as setting up shops becomes easier through online mediums, and comments and ratings (reviews) in online mediums are viewed by a large number of potential future consumers. These act as incentives for sellers to improve customer service, sell better goods, try and create their niche, and perform better overall.

The government has remained a mute spectator, allowing sellers to provide goods cheaper to consumers while maximising profits. This type of informal arrangement is not covered by the government protection mechanisms for consumer safety. Of late, however, the government has tried to rectify this and drafted an E-commerce Bill intending to create, regulate, and facilitate online trade in Nepal. The first of its kind bill dedicated to e-commerce focuses on consumer protection. The question of allowing a truly free market without government intervention remains. The government needs to do more for both online businesses and consumers to remove the hassles in business registrations and taxes. While the E-commerce Bill is a step in the right direction, it has still not gone through the parliament.

The government’s slow and unresponsive nature, procedural challenges to reduce steps in business registration, and the high tax slabs will always hinder businesses from entering the formal fold of the economy. Questions of the role of government in only acting as an insurer of contracts rather than directly intervening in the market will also remain. Regardless of the arguments, the registration of businesses (online or otherwise) will help the government plan better and invest in easier access to resources for both sellers and consumers.