Ratnakar Adhikari is a garment specialist with UNDP in Sri Lanka who opened the Kathmandu-based South Asia Watch on Trade and Environment with which UNDP and ActionAid has begun a study on Nepal's garment industry.

Abhiyan: Nepal's garment industry is sliding down. What does this indicate?
Ratnakar Adhikari: The UNDP Research Centre recently conducted a study on the state of the garment industry of 12 Asian countries which found that garment industries in four countries (Nepal, Laos, Vietnam, Cambodia) were worse off than before. America is the main market for Nepali garments and exports began declining since 2003. Compared to 2004 exports decreased by 40 percent in 2005.

There are two main reasons for this. First, the garment quota provided by America for Nepal was abolished. At present the US is very biased in its attitude towards developing and underdeveloped countries. While the quota for Nepal, Laos and other underdeveloped countries has been removed Africa has received subsidies. This has taken the American garment market from Asia to Africa. The other reason is that we weren't able to compete internationally.

Why weren't we able to adapt and compete in the international market?
We knew the Nepali garment industry was going down. The government is mainly to blame. The infrastructure that the government should have made was not there. In many countries like Cambodia the government has given subsidies on electricity and taxes. Many have given similar subsidies on import and manufacture of raw materials. Besides giving a little discount on import of raw material the Nepal government has not provided anything else.

How about the industry itself?
The industrialists also only focused on what they were traditionally manufacturing. They failed to produce new designs according to market demand or look for new markets.