Nepal-China OBOR cooperation: Now is the time to plow ahead sans arrière-pensée

By Santosh Ghimire–During Foreign Minister, Dr. Prakash Sharan Mahat’s recent visit to the USA, a revealing conversation involving OBOR took place between him and a New York-based Nepali writer Dr. Anga Raj Timilsina. Minister Mahat, in very tangible terms, explained the reason behind his unwillingness to visit China in that conversation.

The writer asked, “Dear minister, why didn’t you go to China though you already paid at least five visits to India after assuming charge?”

The minister had an unusual answer outright, “China has been repeatedly asking us to sign a deal on OBOR—which we can’t do now—due to several reasons. If we become the part of the OBOR, we have to allow China to conduct trade through our territory to India. How can we agree on this point? So I and prime minister both are not visiting China.”

Dr. Timilsina, in his opinion piece for Kantipur Daily some two months ago, has explained various facets of this rather uncomfortable conversation quite in detail.

Similarly, in January second week this year, addressing a conference on OBOR in Kathmandu, the foreign minister said once again that Nepal wanted to enhance cooperation on connectivity with China but China needed to understand Nepal’s geopolitical complexities. These two references given by the minister indicated that the current ruling coalition of Nepal is under India’s immense pressure not to become the part of OBOR initiative. The prime minister and foreign minister have not paid visits to Beijing though the foreign minister paid six visits to Delhi and Prime Minister Pushpa Kamal Dahal went to India twice after coming to power in August last year, following the exit of K.P Oli-led government.

For Nepali citizens, these examples explain what the government feels vi-a-vis Nepal’s necessity to strengthen the relationship with the northern neighbor. It is an open secret that the current dispensation, gratified by New Delhi in several aspects, would not do anything with China. Prime Minister Dahal, who broached the idea of trilateral partnership, vowing to strike Nepal’s balanced relationship with China and India, is now pedaling a reverse gear. He is needlessly tilting too much towards New Delhi, mostly because his coming to power was facilitated by New Delhi itself.

This is very unfortunate for the Nepali people who aspire to have a good relationship with both neighboring countries China and India and reap benefit from their economic might. Dahal seems to have deviated too far off this reality.

His tilt toward India while ignoring smooth cooperation with China is making Nepal undo the heights of Nepal-China relations achieved during Oli-led government, which had adopted a more balanced approach in a relationship with the big neighbors, thereby sparking the possibility of Nepal’s new, independent foreign policy. Tilting either too much to Delhi or Beijing would not serve Nepal’s core interests and priorities.

Even though Nepal signed an initial framework agreement to join the China-proposed One Belt One Road Initiative in December 2014, the two governments are still holding negotiations to finalize the concrete deal for the same. There are concerns raised in Nepal from multiple quarters over the slow response of the government on OBOR.

Nepal and China in principle have agreed to work under the framework of the Belt and Road Initiative when Oli paid a historic visit to Beijing in March last year. The Transit Transport Deal with China was a landmark in history that gave landlocked Nepal the much-needed access to the sea via China. Mr. Oli, as the leader of the landlocked country, advocated Nepal’s right to access to the sea from neighboring countries, including China.

Nepal and China began a new era in 2016 in their relationship. As many as ten landmark agreements regarding transit, trade, commerce, energy, cross–border connectivity and cooperation on physical infrastructure developments were signed between the two governments, elevating the age-old bilateral ties to a new level.

These agreements were reached on the heels of a trade embargo on Nepal imposed by India that brought Nepal’s trade and transit to a near-standstill until March last year, just six months after the promulgation of the much-awaited new constitution in September 2015.

It was during Oli’s visit to China that the two countries agreed to enhance cooperation under the framework of the Belt and Road Initiative introduced by the Chinese leadership.

“Regarding Nepal-China bilateral cooperation, both sides agreed to synergize each other’s development planning, formulate appropriate bilateral cooperation programs and to carry out major projects under the framework of the Belt and Road Initiative,” part of a joint communique issued during the former prime minister’s visit to China stated.

“Both sides agreed to strengthen connectivity, further step up the land and air links and improve the land transport infrastructure,” the communique stated.

In last September, the northern neighbor sent a draft of the Memorandum of Understanding to the Nepal government asking it to become a part of the Silk Road Economic Belt and 21st Century Maritime Silk Road.

Dahal replaced Oli in August last year. Then, Foreign Minister Mahat put on hold the protocol of the agreement. However, seven months after China’s proposal, Nepal gave the first response to China via diplomatic channels recently and now the document is under negotiation between the two sides. Nepal, a landlocked Himalayan nation, has come under huge pressure particularly from the southern neighbor India not to sign any deal on the OBOR.

India feels China’s OBOR is a grand strategy to encircle it by breaking away India’s traditional backyards like Nepal in South Asia. The current administration in Nepal seems reluctant to sign the deal on OBOR with China, particularly due to India’s pressure. This is very unfortunate for Nepal.

What is the benefit for Nepal?

Nepal’s participation in the OBOR will bring several opportunities in its socio-economic development.

The country is expected to move towards achieving economic progress and needs huge investment from China for carrying out development works. Nepal has planned to graduate to the ‘developing country’ status by 2022 from the current “least developed” status. To meet this target, Nepal must seek more foreign investments and also enhance domestic economic output. More industries need be established through foreign investment which undoubtedly increases Nepal’s domestic capacity. Nepal has a competitive advantage in the agricultural sector. More investment in this sector makes it possible for Nepal to produce goods to export to other countries via China or India.

Cross-border rail and road, as well as air connectivity, can be enhanced under the initiative that benefits the people of the two countries. Nepal can act as the bridge between China and India under the OBOR framework. This will equally benefit India and entire South Asia as Nepal could be the shortest route for India to carry out an overland trade with China.

As China has announced connecting its railway to Kerung in Tibet last year which has now arrived at Shigatse. Nepal, which is only 35 kilometers away from Kerung, should chalk out a plan to be connected with the Trans-Himalayan railways for its long-term interests. It realizes the dream of Nepali people to turn the country to land-linked from the current landlocked position.

The Chinese railways can be connected to Kathmandu via Rasuwagadhi border point which could be a lifeline for Nepal-China trade and eventually a vibrant trading route between China and South Asia. Later on, the same railway can be linked to Buddha’s birthplace Lumbini. It will help promote Nepal’s tourism industry. Nepal can seek more investment from China in different fields such as infrastructure development, developing highways, transmission lines, and hydropower projects among others.

The milestone deals signed last year including the Transit Transport Agreement have not gone into implementation yet though the two countries held the first round of negotiation on the protocols of the TTA. The Chinese side has been indirectly asking the Nepal behind the delay in holding another round of negotiation on the TTA. If the government was sincere for implementation, there should have been more intense negotiations between the two sides to materialize these deals. Where are these deals gathering dust? The government must give the right answer to the people.

The question is: How long should Nepal remain landlocked and heavily dependent on trade with India? This is high time Nepal’s political leadership seriously thought about it.

Nepal, as an independent sovereign nation, has every right to sign any agreements or deals with China for the sake of national interest.

Dahal, who claims to maintain a balanced relationship with China and India, lately changed his position and extremely tilted towards India for his vested interest. Nepal, sandwiched between the two emerging giants of the world, should recognize the benefits being part of OBOR initiative.

Nepal and China have been enjoying excellent relations since the establishment of bilateral relations in 1955. China is Nepal’s second largest trading partner and the friendliest neighboring country. It has never intervened in Nepal’s internal affairs. Respecting sovereignty and territorial integrity of Nepal has remained the mainstay of Nepal-China relations. Also, China has extended generous support to Nepal during difficult times if we go through the history.

The Nepalese side of border infrastructure has remained poor for years. A collaborative effort between Nepal and China to improve infrastructures such as advanced dry ports, customs clearance points at the border is essential. Given the difficult terrain, Nepal and China should work jointly to face geographical challenges while carrying out projects under OBOR.

What is OBOR? 

The OBOR initiative announced by Chinese President Xi Jinping in 2013 has brought a new hope around the world. After three years of development, the Belt and Road Initiative proposed by Chinese President Xi Jinping in 2013 has gradually and steadily brought change to people and countries along the ancient Silk Route.

As many as 100 countries have expressed willingness to join the One Belt One Road Initiative while 40 have signed the concrete deals. OBOR is considered as a master plan to integrate 65 countries from East Asia to Western Europe. The OBOR is poised to improve the living standards of 4.4 billion people, more than half of the world’s total population. Infrastructure, an important aspect of cooperation under the initiative, not only brings faster transportation to the countries along the Belt and Road but also offers them a chance to improve their technology.

What should the Nepalese leadership do? 

The 21st century is considered as Asian Century with the emergence of China and India as economic powers. With the rise of China, the International world order has become multi-polar. Nepal must realize and make a strategy to ensure its national interests and reap benefits from the rise of China and India.

It is a high time for the Nepalese leadership to think about how Nepal can take maximum benefit from China’s rising economic might. China is going to hold the first ever Belt and Road Summit in May 2017, in which Nepal’s prime minister and four ministers have been invited. Nepal should make a high-level representation in the Summit. Political will is very much crucial for enhancing cooperation with China under the OBOR framework. And needless to say, it serves Nepal’s vital interests.

 (This article was originally published in on March 14, 2017. The author is a senior correspondent with Annapurna Post. He writes on foreign affairs).  

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