What is trade loss. Write any five ways to reduce trade loss in Nepal
Answers
Answer:
Trading losses are the amount of principal losses in an account. Because of the secretive nature of many hedge funds and fund managers, some notable losses may never be reported to the public. The list is ordered by the real amount lost, starting with the greatest.
There are several problems with Nepal’s foreign trade: It is a land-locked country competes with India in high imports and low exports, it produces low quality goods with a high cost of production, capital formation is inefficient and government policy is antiquated.
Land-locked
Geography is not in favor of Nepal. As a land-locked country it has to import/export through India which by itself raises the cost of commercial transactions not only in transportation costs, but on merchandise shifting from one mode of transportation to another, also, border crossing fees and transit time among other issues.
Open Border:
Nepal is bordered by India from three different sides that include an open border policy. As a result, there is a large flow of Indian goods at low prices. At borders, Indian goods are smuggled in and imported foreign goods trafficked into India through unofficial routes. Smugglers are the only beneficiaries of the illegal practices while the country has little to gain from these activities.
Balance of trade in Nepal is negative as it imports more than it exports both in terms of volume and value. Most exports are agricultural products, handcrafts and raw materials, which are all of low commercial value resources which bring little foreign currency to its treasury.
Nepal does not have a well-developed industrial base, therefore, production is of low quality and it cost more to produce which makes its products non-competitive for the international market place.
Low capital formation is another major problem for Nepal’s foreign trade by depriving the country with limited economic activity. It also lacks modern infrastructure for developing an industrial base while it lacks a favorable environment for private and foreign investment. This leaves the country dependent on domestic finances with little capital formation to grow and expand its productive base.
As more countries enter global trade Nepal is being left behind as it is becoming less and less competitive. Many countries are now exporting good quality manufactures at a lower price that Nepal can produce. Additionally, Nepal does not have the skill resources, educational base and modern production technologies to compete with international trade markets.
Modern trade policy is a major standing problem for Nepal’s efficiency in foreign trade. Since the 1990’s Nepal adopted a liberal trade policy of open borders. This permits the flow of foreign goods into Nepal unrestricted and with no effective policy to police its borders by poorly trained human resources. The combination of issues is causing large trade deficits with no trade policy in place because of either political will, corruption, or a combination of both.
What are the solutions?
Enhance industrial bases
Promote export-oriented goods
Give appropriate incentives to exports
Improve quality of goods
Adopt proper trade policies
Enhance training and skills
Answer:
Explanation:
Enhance industrial bases.
Promote export-oriented goods.
Give appropriate incentives to exports.
Improve quality of goods.
Adopt proper trade policies.
Enhance training and skills.