KATHMANDU: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has welcomed the decision of the United Nations General Assembly to extend the preparatory period for the process of upgrading Nepal from the list of least developed countries (LDCs) to November 24, 2029.

The 81st General Assembly of the United Nations on Thursday decided to extend the preparatory period for the upgradation of Nepal and Bangladesh. The decision has provided an important opportunity for three more years for Nepal to carry out the necessary economic, structural and institutional reforms before the upgrading.

The FNCCI had been urging for a long time to extend the preparatory period considering the impact of the changes in international trade facilities, concessional market access and technical and financial assistance on Nepal’s production and exports. The FNCCI had been drawing the attention of the Chief of the Permanent Mission of Nepal to the United Nations and the concerned agencies of the Government of Nepal in this regard.

In particular, the FNCCI had been raising the main challenges of the situation where the facilities such as duty-free and quota-free market access of Nepali goods could be affected after the upgrade, the cost of production is high, the industrial base is weak and the export goods and market are limited. The federation has been concerned that the upgrading of Nepali industries, exports and employment without adequate improvement in production capacity, industrial infrastructure, technology, productivity and quality would have an adverse impact on Nepali industries, exports and employment.

“The decision of the United Nations provides an important opportunity for Nepal to prepare for its upgrading by strengthening its economic base,” said Anjan Shrestha, president of the FNCCI.

“Graduation from LDC is an important achievement in Nepal’s development journey. But the real success of the upgrade will then determine how much our economy can compete in the international market, how much it can increase production and exports, and how much sustainable employment it can create. Therefore, the federation has been raising the need for adequate preparation for a long time,” said Shrestha.

Stating that effective collaboration between the government and the private sector was necessary to utilize the extended period in an effective manner, he stressed on implementing programmes for production capacity, productivity, quality, and export competitiveness with clear action plan, deadline and responsibility.

The FNCCI has been of the view that priority should be given to industrial production and infrastructure development, reduction of production cost, export promotion, protection of international market access, technology transfer, upgradation of quarantine facilities, establishment of non-customs barriers, removal of non-customs barriers and capacity building of small and medium enterprises and women entrepreneurs.

The FNCCI believes that the preparation of the upgrade should be completed through the joint efforts of the government, private sector, development partners and the international community. The federation has pledged to collaborate with the government for necessary policy reforms in the extended period, to make the industrialists aware of the situation after the upgrade, to study the sectoral impact, to enhance the capacity of exporters and to take initiatives for the expansion of the international market of Nepali products.

Stating that the upgrading from LDC was not only a matter of classification change but also an opportunity to make Nepal’s economy production-oriented, competitive and sustainable, the FNCCI stressed the need for result-oriented collaboration between the government and private sector for effective utilization of the added time.