Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Role of Service Sector in the Economy of Nepal Presentation by Dr. Ramesh C. Chitrakar [email protected] Expert 1 At Second National Stakeholder Workshop on Services (27th – 28th October 2009) Co-organized by UNCTAD-Ministry of Commerce and Supplies Kathmandu, Nepal October 27, 2009 1 I. Importance of Service Sector to Nepalese Economy Emerged as major contributor to GDP in the world: more than 70 % in developed and around 50% in developing countries. Investment and growth associated with services can contribute to poverty alleviation and human development if the right policies are in place The GON’s increasing emphasis in services considering its contribution to GDP (> 51% in 2007/08), employment, international trade and balance of payments. CBS/ Nepal introduced a new series of National Accounts Statistics since 2006/07 taking 2000/01 as the base year Follows System of SNA 1993 adopted by a number of countries around the world. Prior to this, Nepal’s national income statistics was based on SNA 1968. 2 Under SNA 1993: Economic activities classified into 15 sectors unlike 9 sectors in SNA 1968. The ISIC, Revision 3 has, in fact, classified the entire economy into 17 sectors. In Nepal, the classification brought down to 15 sectors as the contribution of workers in the private households and from activities of foreign mission, and INGOs to the GDP is found negligible & so these two sectors included in the Other Community, Social and Individual Services category. New series includes many activities not included before like microbus, cable car services under transportation; PCO, mobile telephone, internet, cable television, communication; renting; services of employment agencies, cooperatives, consultancies, computer and photography, private postal services, private sector education services, community forestry and others. 9 Economic Sectors under service 30 new surveys and studies conducted to strengthen the national income statistics 3 Figure 1: Sector wise contribution to GDP according to the new classification (FY 2007/08) Se ctorwise GDP C ontribution, 2007/08 6.0 1.3 3.4 Non-service Industry 1.8 Wholesale & retail trade Hotels & restaurants 8.8 4.9 48.8 T ransport, storage & communications Financial intermediation Real estate, renting & business activities Public administration & social security Education 9.6 1.5 13.9 Health & social work Other community, social & personal activities 4 Table : Sector wise GDP Composition in Percent, 200/01-2007/08 Sector Agriculture and Forest Fishery Mining and Quarrying Manufacturing Electricity, Gas & water Construction Wholesale and retail trade Hotels and restaurants Transport, storage and communications Financial intermediation Real estate, renting and business activities Public administration and social security Education Health and social work Other community, social and personal activities Sub-total (Nonservice Industry) Sub-total (Service Industry) 2002/01 36.15 0.43 0.43 9.03 2001/02 36.92 0.49 0.48 8.50 2002/03 36.03 0.46 0.49 8.20 2003/04 35.45 0.48 0.48 8.05 2004/05 34.71 0.47 0.49 7.92 2005/06 33.09 0.49 0.50 7.59 2006/07 32.04 0.47 0.49 7.48 2007/08 32.11 0.49 0.49 7.16 1.82 6.01 2.06 6.49 2.42 6.54 2.31 6.42 2.26 6.47 2.09 6.50 2.13 6.46 2.01 6.53 16.44 1.99 14.59 1.61 14.51 1.59 15.29 1.73 14.09 1.57 14.31 1.49 13.43 1.44 13.94 1.49 7.39 7.87 8.31 8.94 9.06 9.72 9.91 9.58 2.69 2.75 2.72 2.65 3.06 3.49 4.08 4.86 8.29 8.23 8.08 7.72 8.69 9.53 10.15 8.77 1.24 4.08 0.98 1.63 4.69 1.04 1.70 5.19 1.14 1.55 5.08 1.12 1.69 5.59 1.24 1.74 5.55 1.24 1.75 5.81 1.26 1.83 6.00 1.29 3.03 2.66 2.63 2.73 2.69 2.67 3.12 3.44 53.87 54.94 54.14 53.19 52.32 50.26 49.07 48.79 46.13 45.07 45.87 46.81 47.68 49.74 50.95 5 51.20 Table: Sectoral contribution to GDP and GDP Growth Rate Description Annual GDP (constant price) Growth Rate Primary Sector Secondary Sector Tertiary Sector Composition of GDP (in percentage) Primary Sector Secondary Sector Tertiary Sector 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08R 0.16 3.77 4.41 3.23 3.73 2.74 5.26 3.15 0.66 3.33 3.09 4.75 1.48 3.54 2.91 1.86 4.37 0.98 4.02 4.68 1.82 -1.78 3.68 6.82 3.33 5.63 4.49 7.00 37.01 16.86 37.89 17.05 36.98 17.15 36.42 16.78 35.67 16.65 34.08 16.18 33.00 16.07 33.09 15.70 46.13 45.06 45.87 46.81 47.68 49.74 50.93 51.21 Source: GON/MOF, Economic Survey, Fiscal Year 2008/09 R: Revised. Note: Primary: Agri, Fisheries & Mining; Secondary: Industry, Energy & Construction. 6 Service Trade FIows: Contribution The imports and exports of services in the world are at about the same levels, with developed countries exports being higher than imports & developing countries imports higher than exports In case of Nepal, exports exceeded imports until 2004 indicating importance of the sector to the economy. Deteriorated from 2005 onwards to Trade Nepal’s Exports and Imports of Services (Million US$) Year 2000 2001 2002 2003 2004 2005 2006 2007 Export 506 413 305 372 461 380 386 477 Import 200 215 237 266 385 435 493 657 Net Export 306 198 68 106 76 -55 -107 -180 Source: UNCTAD Handbook of Statistics, 2008(www.stats.unctad.org/Handbook/TableViewer/tableView.aspx 7 Table: Trade in Services in Nepal by Major Sectors (Million US$) Year 2000 2001 2002 2003 2004 2005 2006 Export/Import Export Import Net Export Export Import Net Export Export Import Net Export Export Import Net Export Export Import Net Export Export Import Net Export Export Import Net Export Sectors Total Services Transport Travel Other Services 505.9 199.9 306.0 413.3 214.7 198.6 305.2 236.8 68.4 372.1 266.2 105.9 460.9 385.0 75.9 380.4 434.7 -54.3 385.7 492.8 -107.1 61.4 64.8 -3.4 47.3 71.6 -24.3 36.2 110.9 -74.7 35.9 115.0 -79.1 32.5 141.5 -109 32.6 160.8 -128.2 35.1 186.3 -151.2 157.8 73.3 84.5 143.8 79.7 64.1 103.5 69.2 34.3 199.5 81.2 118.3 230.3 153.8 76.5 131.3 163.2 -31.9 127.8 185.3 -57.5 286.8 61.9 224.9 222.2 63.3 158.9 165.5 56.7 108.8 136.7 70.0 66.7 198.2 89.8 108.4 216.4 110.7 105.7 222.7 121.2 101.5 Source: UNCTAD Handbook of Statistics, 2008 (www.stats.unctad.org/Handbook/TableViewer/tableView.aspx?ReportId=1914) 8 Table : BOP Contribution (Rs. Million) Supply of Services 2000/01 Net 9302.3 Credit 29821.7 Debit -20519.4 Credit: Travel 11717.0 Government Services 7614.2 Other Services 10490.5 Debit: Transportation -9308.7 Travel -5520.4 Other Services -5690.3 Remittances Fiscal Year 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 3938.4 7049.7 9074.9 -2034.2 -6818.3 -8377.3 -11393.4 23508.2 26518.9 34315.9 26001.9 26469.7 32078.9 42236.1 -19569.8 -19469.2 -25241.0 -28036.1 -33288.0 -40456.2 -53629.5 8654.3 11747.7 18147.4 10463.8 9555.8 10125.3 18653.1 8894.5 6624.0 7143.9 6804.9 7441.5 12336.4 13301.8 5959.4 8147.2 9024.6 8733..2 9472.4 9617.2 10281.2 -8854.4 -8618.4 -9382.1 -10602.2 -12592.3 -14557.4 -22969.2 -5731.1 -6171.5 -10021.5 -9691.9 -11960.8 -15785.0 -20862.0 -4984.3 -4679.3 -5837.4 -7742.0 -8734.9 -10113.8 -9798.3 65541.2 97688.5 100144.8 142682.7 Source: Quarterly Economic Bulletin, Various Issues, Nepal Rastra Bank 9 Table: Industries PermittedInvestment for Foreign Investment by Mid-March Table: Industries Permitted for Foreign by Mid-March 20092009 Of 1743 total industries permitted for foreign investment by Mid-March, 2009, the number of service industries including tourism services is 941 (54%). (Amount in Million Rs.) Targeted Total Project Total Fixed Foreign Industry Type Numbers Employment Capital Investment Cost (Numbers) Industrial 634 447,260.0 318,520.0 172,250.0 72,941 Products Service Industry 482 250,330.0 205,860.0 114,970.0 25,285 Tourism 479 183,720.0 173,070.0 68,500.0 22,099 Industry Construction 40 34,360.0 25,480.0 25,950.0 2,890 Energy 37 43,720.0 38,220.0 26,510.0 2,848 Agro-based 21 54,000.0 40,940.0 28,810.0 4,219 Mining 50 293,590 275,260 84,440.0 9,310 Total 1743 1,306,980.0 1,082,350.0 521,430.0 139,592 Source: Department of Industries, Tripureshwore 10 The social contribution Table: Employment in various services sectors, 2007 Employed Population Poverty reduction, employment including those of women, rural development, and development of transport and communication, education, health and cultural development. Sector M F Total Construction 229,464 48,321 277,785 Wholesale and retail trade 441,811 182,154 623,965 Hotels and restaurants 77,991 40,565 118,556 Transport, storage and communications 153,997 5,689 159,686 Financial intermediation 39,645 6,769 46,414 Real estate, renting and business activities 25,398 3,433 28,831 Public administration and social security 262,499 34,651 297,150 Education 166,814 58,151 224,965 Health and social work 43,172 17,936 61,108 Other community, social and personal activities 60,379 9,947 70,326 1,501,170 407,616 1,908,786 Sub-total (Service Industry) 5,212,329 3,689,065 8,901,394 Total (All industry) % of Total (M) 4.4 8.5 1.5 % of Total (F) 1.3 4.9 1.1 % of Total 3.1 7.0 1.3 3.0 0.8 0.2 0.2 1.8 0.5 0.5 0.1 0.3 5.0 3.2 0.8 0.9 1.6 0.5 3.3 2.5 0.7 1.2 28.8 0.3 11.0 0.8 21.4 Source: GON/ CBS, Statistical Year Book of Nepal, 2007 11 Source of Livelihood Non-farm livelihood opportunities Pro-poor growth Jobs: employment and empowerment Growth and diversification in marginal or remote areas Revitalization of local culture & preservation of traditional skills Education and Training Tourism and Poverty Enterprise, development and micro, small and mediumsized enterprises Health care, infrastructure and services Reduction in isolation ` Access to markets for the poor Source: Global partnership for development Corporate social responsibility Sustainable environment management Modification of Sheet No 3: Tourism and Poverty Reduction Making the Links, Pro-poor Tourism Partnership 2004, adapted from UN (2007), Study on the Role of Tourism in SocioEconomic Development. 12 Table: Rural Employment in Various Services Sectors, 2007 M 184,216 305,996 50,189 F Total 39,949 138,231 28,206 224,165 444,227 78,395 Per Cent of Total (M) 4.1 6.9 1.1 104,520 24,209 3,182 3,278 107,702 27,487 2.4 0.5 0.1 0.1 1.4 0.4 15,653 1,871 17,524 0.4 0.1 0.2 177,170 132,734 30,634 20,057 37,425 11,334 197,227 170,159 41,968 4.0 3.0 0.7 0.6 1.1 0.3 2.5 2.2 0.5 43,823 1,069,144 4,443,476 6,538 290,071 3,343,113 50,361 1,359,215 7,786,589 1.0 24.1 100.0 0.2 8.7 100.0 0.6 17.5 100.0 Employed Population Sector Construction Wholesale and retail trade Hotels and restaurants Transport, storage and communications Financial intermediation Real estate, renting and business activities Public administration and social security Education Health and social work Other community, social and personal activities Sub-total (Service Industry) Total (All industry) Per Cent of Total (F) 1.2 4.1 0.8 Per Cent of Total 2.9 5.7 1.0 Source: GON/ CBS, Statistical Year Book of Nepal, 2007 13 Table: Urban Employment in Various Services Sectors, 2007 Construction Wholesale and retail trade Hotels and restaurants Employed Population F Total M 45,248 8,372 53,620 135,815 43,923 179,738 27,802 12,359 40,161 Transport, storage and communications Financial intermediation 49,477 15,436 2,507 3,491 51,984 18,927 6.4 2.0 0.7 1.0 4.7 1.7 Real estate, renting and business activities 9,745 1,562 11,307 1.3 0.5 1.0 Public administration and social security Education Health and social work Other community, social and personal activities Sub-total (Service Industry) Total (All industry) 85,329 34,080 12,538 14,594 20,726 6,602 99,923 54,806 19,140 11.1 4.4 1.6 4.2 6.0 1.9 9.0 4.9 1.7 16,556 432,026 768,853 3,409 117,545 345,952 19,965 549,571 1,114,805 2.2 56.2 100.0 1.0 34.0 100.0 1.8 49.3 100.0 Sector Per Cent of Total (M) 5.9 17.7 3.6 Per Cent of Total (F) 2.4 12.7 3.6 Per Cent of Total 4.8 16.1 3.6 Source: GON/ CBS, Statistical Year Book of Nepal, 2007. Note: 1.The employment number becomes much higher if indirect employment is included. Also does not include the contribution made by various services sectors in terms of trainings and capability building programmes. 2. More role played by education and transport and communication in 14 urban areas compared to rural Institutional Overview Sector Construction Institution Ministry of Physical Planning and Works and line agencies Nepal Housing Finance Company Department of Urban Development and Building Construction Ministry of Commerce and Supplies Handicraft Association of Nepal Export and Trade Promotion Centre Wholesale and retail trade Ministry of Tourism and Civil Aviation and line agencies Nepal Tourism Board Hotel Association of Nepal (HAN) King Mahendra Trust for Nature Conservation Department of Wildlife and National Parks Nepal Academy of Tourism and Hotel Management Nepal Mountaineering Association Hotels and restaurants Nepal Association of Rafting Agents Nepal Association of Tour and Travel Agents Trekking Agents Association of Nepal Airlines Operators Association of Nepal Association of Helicopter Operators Nepal Restaurant and Bar Association of Nepal Tourist Guide Association of Nepal Freight Forwarders Association of Nepal Nepal Association of Tour Operators Nepal Entrepreneurs Association of Tourism Non-Star Hotel Association of Nepal Major Responsibilities Policy, planning, and regulation To provide detailed company information on Nepal housing development To protect and promote tourist and historical places and to modernize infrastructures Policy, planning, and regulation Focuses on the promotion and popularization of handicrafts locally and abroad Advise the Government of Nepal in formulating policies for the development and expansion of trade and export Policy, planning, and regulation To promote Nepal as quality tourism destination in the international arena with specific brand image and offers information on tourism attraction and products To promote hotel industry in Nepal To preserve the natural heritage, species of animals and plants To conserve and manage the rich and diverse biological diversity of Nepal with much emphasis on wildlife and protected areas To produce skilled manpower to develop the hospitality and tourism industry To promote the mountaineering activities in the Himalayan region: to promote mountain tourism, climbing sports, protect mountain environments and preserve and promote cultural heritage of mountain people. To assist the government and private sector in enhancing Nepal's river tourism industry Conduct various activities to promote Nepal’s tourism To assist the government by providing suggestions to make trekking business to generate revenue and also to provide employment opportunity to the locals To promote remote corners of national heritage easily accessible To promote the tradition of providing almost every kind of food for tourists To assist the government in promotion of tourism industry To facilitate of export and import trade, in Nepal and all over the world. It caters information, gives consultation, produces ports through work shop, seminars, interactions, trainings etc To make major tour operators such as hotel, airlines, golf course or the cable cars to promote tourism industry To promote entrepreneurship in tourism industry 15 To assist the government in promotion of tourism industry Contd… Transport, storage and communications Financial intermediation Real estate, renting and business activities Ministry of Information & Communication and line agencies Policy, planning, and regulation Ministry of Labour & Transport Management Policy, planning, and regulation Nepal Telecommunication Corporation To provide communication services for the promotion of service sector Radio Nepal, NTV To provide comprehensive information about Nepal for the promotion of service sector Ministry of Finance Policy, planning, and regulation Nepal Rastra Bank Central banking responsibilities including guiding the development of the embryonic domestic financial sector Commercial Banks To provide various banking services like accepting deposits and providing loans Financial Institutions To provide financial services including micro finances Cooperatives To provide micro finances Insurance Companies To provide various types insurance facilities Security Board Apex regulator of Securities Markets in Nepal to offer advice to the Government on matters connected with the development of the capital market Nepal Stock Exchange To impart free marketability and liquidity to the government and corporate securities by facilitating transactions in its trading floor through member, market intermediaries, such as broker, market makers etc Citizen Investment Fund Operation of retirement schemes, unit trust schemes and the capital market services Employee Provident Fund To manage the provident fund of the government, public and private sector employees and to help them financially on retirement or separation from their jobs FNCCI An umbrella organisation of the Nepalese private sector. Its aims at socio-economic development of the country through the promotion of business and industry by protecting the rights and interests of business and industrial communities. Nepal Chamber of Commerce To assist in the development of national economy through the promotion and protection of commerce and industries, both at the private and public sector Nepal Housing Finance Company To provide detailed company information on Nepal housing development 16 Contd…. Public administration and social security Ministry of General Administration and line agencies Ministry of Education University Grants Commission Universities Higher Secondary Education Board CTEVT IGOs, NGOs Education Ministry of Health and Population and line agencies Hospitals and Nursing Homes Health Institutions IGOs, NGOs Health and social work Ministry of Physical Planning and Works and line agencies Ministry of Local Development and line agencies Ministry of Women, Children and Social Welfare Social Welfare Council Central Children Welfare Committee Association of International NGOs in Nepal Other community, social and personal activities Association of NGOs Policy, planning, and regulation Policy, planning, and regulation To advice the government, to formulate policies, to coordinate among universities, allocate and disburse government grants to universities and higher educational institutions and take appropriate steps for the promotion and maintenance of standards of higher education To produce skilled manpower essential for the overall development of Nepal To produce the middle level manpower and imparting necessary knowledge and skills to the students pursuing further education National autonomous body for the development of human resources concerned with basic and middle level technical education and vocational training To assist the government organizations in implementing education programmes Policy, planning, and regulation To provide medical, nursing and surgical treatments To provide medical academic training programs and to render medical care and services To assist the government organizations in implementing the programmes Policy, planning, and regulation Policy, planning, and regulation Policy, planning, and regulation Promotion, facilitation, coordination, monitoring and evaluation of the activities of the NGOs in Nepal To assist the government in building capacity of child rights and protection To promote mutual understanding, exchange information and share experiences and learning of work among INGOs in Nepal for more effective collaboration To promote mutual understanding, exchange information 17 and share experiences and learning among NGOs in Nepal