Q.1 Research the reason behind failure of carpet exports from Nepal. The Nepali carpet industry used to be largest employer and foreign exchange earner in the country. Nepal carpet sector experienced its first export boom in 1976. In April 1994 after the Panorama TV news in Germany transmitted the documentary on the use of child labor in Nepali carpet production about 40% of orders were cancelled. According to child workers in Nepal 50% of the total 300000 laborers were found children while doing survey in 365 carpet factories within Kathmandu valley. Before it became internationally well known that nepali carpet factories intensively employs child labors Germany used to buy 80% of Nepali carpets, which decreased to 64%. Later on child labor free labeling were introduced which is licensed by rug mark certification system. This label became a legally binding international trademark in Germany and USA which are the largest market for Nepal carpet industries. Some of the main reason behind child labor for downfall of nepali carpet exports are listed below:
Almost every second person ventured into this sector, thus hindering the quality of output.
Entry of India and china in carpet industry , where Nepal can't compete with them in terms of price.
Environmental controversies, government indifference and interference and labor issue.
10 year bloody Maoist insurgency from 1996-2006.
Cheap labor cost in India and China.
Carpet exports from Nepal
Q.2 Are all effective organizations also efficient? Discuss. If you had to choose between being effective or being efficient , which one would you say is more important ? why ?