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The
release of Nepal Living Standard Survey (NLSS),
2004/05 had ignited a public debate in the country.
The survey had reported that over a period of ten
years, there was a decline in poverty level from
42 percent in 1994/95 to 31 percent in 2004/05.
Interestingly, these ten years were the periods
of displacements of people, homelessness, quitting
from economic activities, closure of factories,
and many more because of conflict. Then how was
poverty reduced? The report asserts that it was
because of the huge remittances from the Nepali
workers working abroad. The share of remittance
in GDP in Nepal is about 12 percent. These remittances
mainly come from the Middle East countries where
a large number of Nepali workers are living temporarily
as low and semi-skilled workers.
Remittances have been playing an important role
in the economy of not only Nepal, but other South
Asian countries as well. It was estimated that the
total remittances to the South Asia region in 2005
would be US $32 billion, a 67 percent increase from
what was received in 2001. India received US $21.7
billion as remittance in 2004. Similarly, Pakistan
received US $3.9 billion and Bangladesh US $3.4
billion. In Sri Lanka, remittance receipts are larger
than tea exports. Thus it can be seen that remittances
are an important means to lift a large number of
poor out of extreme poverty.
Prior to the establishment of the World Trade Organization
(WTO), there was the multilateral agreement named
General Agreement on Tariffs and Trade (GATT) that
covered only trade in goods. When the GATT was concluded
after the completion of the Uruguay Round in 1995
to give birth to the WTO, trade in services and
intellectual property were also included as parts
of the agreement.
Trade in services in the WTO is governed by the
General Agreement on Trade in Services (GATS), which
has categorized services trade into four modes of
supply. Of these four modes, Nepal's major interest
is in mode 4, which deals with the movement of natural
persons, and even in such movement of natural persons,
Nepal's interest is particularly in the movement
of unskilled and semi-skilled work force.
One of the objectives of the WTO is enhancing welfare
of the people. In the case of developing countries,
and more importantly the least developed countries
(LDCs), this particular objective can be achieved
by creating more jobs. Hence, liberalization of
services under mode 4 can be a useful instrument
in realizing this objective. Unfortunately, in WTO
negotiations, this aspect of service trade is often
not given importance. The developed countries have
their interest in the export of capital intensive
services to the developing countries and the LDCs.
Therefore, negotiations under GATS in the WTO are
always dominated by the other three modes.
However, even in the absence of negotiation under
mode 4 in the WTO, long queues of Nepali youth at
the airport, bound for various destinations in search
of jobs, are regular sights and the number has been
increasing with time. But almost everyday, there
are stories in the newspapers about the plight of
these workers mainly in the Middle East countries,
which are the major destinations for most of them.
Negotiations on mode 4 of GATS would ensure rules
based system of movement of people. That would help
in generating more employment, equitable treatment
and thus enhancing welfare.
Nepal has bilateral agreements on labor issues with
most of the countries where the Nepali workers are
migrating temporarily. Putting in place a multilateral
system of such agreement, the problems associated
with bilateral agreements would not remain. At the
same time the workers can have their choice of destination
and like the most favored nation (MFN) treatment
under other agreements of the WTO, such clause under
this mode would ensure non discrimination of foreign
workers from the local ones.
At the end of the Sixth WTO Ministerial Conference
in Hong Kong, the developed countries agreed to
provide duty and quota free market access to 97
percent of the products originating in the LDCs.
This can be taken as a major achievement for Nepal,
although we need to be more cautious in further
negotiations that the remaining three percent does
not include products of our export interest, like
textiles and clothing.
However, to make the Doha Round truly a development
round, it was necessary that the developed countries
agreed to provide better market access to unskilled
and semi skilled labor force under mode 4. The developed
countries should realize that the developing countries
and the LDCs have their interest in the export of
abundant unskilled and semi skilled work force in
the same way as the developed countries have their
interest in the export of their abundant capital
and technology. When it has been universally agreed
that trade should benefit all people, whether of
the developed countries or the developing and the
least developed countries, the interests of the
latter should not be ignored. |
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