20 June 2020, NIICE Commentary 5387
Jelvin Jose
Nepal got into the trillion-dollar Belt and Road Initiative (BRI), a pet project of Chinese President Xi Jinping that seeks to revamp the ancient Silk Route through colossal infrastructure investments by partaking in the Second Belt and Road Forum held at Beijing in April 2019. The Himalayan country’s then President, Bidhya Devi Bhandari became one of the 36 other conferees of the high-level meeting, except the host China. Surrounded by India on three sides and China on the North, Kathmandu aims to end the Indian monopoly in its trade affairs, registering its presence in Beijing’s new connectivity drive. The Nepali leadership also aspires to benefit from the Chinese economic growth and its massive investment potential.
The BRI enterprise aimed at bringing the regional connectivity campaigns under one umbrella has a long history. The Southern Silk route had been operational in ancient times, starting from the Yunan province of China, linking Nepal, India, and Myanmar, finally ending where it was commenced. The ancient silk route which was most prosperous under the 13th century Mongol Dynasty later lost its prominence during the era of Ming rule. For Kathmandu, appertaining itself with this grand plan means to be an exploration of the possibilities of a transit economy along with an attempt to revitalize its former constructive role being the bridge between two civilizations. Most importantly, the Nepalese leadership has been desperate over its overwhelming dependence on New Delhi for trade and commerce as it could avail of it to exert weight on the Himalayan state.
The Beijing, in April 2019, announced the China-Nepal Multidimensional Transport Network in the joint statement after the BRI Forum. However, large scale ambiguity persists concerning the projects those to be set in motion under the BRI framework. The Foreign Secretary of the Himalayan State, Shankar Bairagi, and Beijing’s envoy to Nepal, Yu Hong on 12 May 2017, inked an MOU on the Belt and Road Initiative. Later, Kathmandu has brought down the number of projects to nine from the initial thirty-five, following Beijing’s instruction. The final list waiting for approval incorporates the Kimathanka-Hile Road connectivity plan, the Tokha-Bidur Road, Keyrung-Kathmandu Rail line, The Tamor-Hydroelectric construction plan, the Galchhi- Rasuwagadhi-Kerung 400kv Transmission Project, and the proposed up-gradation of Rasuwagadhi-Kathmandu road. The practicability of the Kerung-kathmandu railway project was assessed by a twenty-three-member Chinese unit employed by the National Railway Administration of China last year. The team after a four-day field survey estimated the overall cost to be around USD 2.75 billion.
Way to BRI
The Katmandu’s BRI dive has been prompted by two major reasons. This includes the country’s prolonged search for economic prosperity and its dire need to scale down the trade dependence on New Delhi. Nepalese leadership has a long dream of bringing economic progress at home by transforming itself into a land bridge that connects central Asia to the South-East and South Asian region. The then King Gyanendra, in 2005, put forth this concept at the second south-south summit hosted by Qatar. The Maoist PM of the Himalayan country, Pushpa Kamal Dahal, in 2005, introduced the vision of molding a trilateral strategic relationship between New Delhi, Beijing, and Kathmandu in a way that would serve the interests of his country. After two years he initiated USD 3 billion Asia Pacific Exchange and Cooperation (APEC) agreement with the PRC to modernize Lumbini to a leading global tourist destination. The Pushpa Kamal Dahal in 2011, explained the country’s policy alignment in the parliament, with the notion, ‘yam between two stones’, referring to Nepal’s geographical positioning in between India and China.
Although Kathmandu relies on India for a lion’s share of third-country trade and the import of essential commodities, the terrestrial challenges create checks on the nation’s autonomous foreign policy articulations. The Nepalese leadership, markedly the one led by the present PM KP Sharma Oli, increasingly sense being compelled to concede its sovereignty before New Delhi as it could take advantage of its geographical shortcomings. India in October 2016 granted Nepal access to Visakhapatnam port as well as the right to continue the usage of traditional Kolkata facility.
The Indo-Nepal relations have undergone bitter circumstances following the closedown of trade points by New Delhi over divergent opinions. King Birendra’s decision to declare the country as a ‘Zone of Peace’ was discarded by India. New Delhi in 1989, turned down access to Kolkata port for thirteen months in response to Nepal’s move to acquire an anti-aircraft gun from China. Yet another discord was broken out in 2015, regarding the newly adopted Constitution of Nepal. New Delhi’s leadership under Modi intervened when a new draft was found to curtail the rights of ethnic Tharu and Madhesi groups, residing mainly in Southern and Western Nepal, owing to some cultural and historical ties with India. India imposed an unofficial blockade at the border points for around 135 days triggering both financial and humanitarian catastrophe in the neighborhood in the aftermath of a devastating earthquake.
In 2016, the Nepalese Prime Minister K P Sharma Oli who visited Beijing in the backdrop of months-long trade blockade discussed the possibility of entering into a bilateral trade and transit agreement with the Chinese leadership. Both countries signed a historic ‘Nepal-China Transit Protocol’ when the Nepalese President Bidhya Devi Bhandari paid a visit to China in April 2019 to take part in the BRI summit. The new protocol has come into effect from February 2020 onwards, equipping the landlocked nation with access to three dry ports (Lhasa, Lanzhou, Xigatse) and four seaports (Shenzen, Tianjin, Zhanjiang, Lianyungang) in China.
Challenges Ahead
The access to Chinese ports anyway could not easily emerge as a viable alternative to Indian ports or trade points. Katmandu’s ambition to scale up its trade engagement with Beijing needs to overcome many economic and geographic hurdles. The distance from Nepal’s Birgunj to the nearest Chinese seaport, Tianjin is more than thrice its distance to India’s Kolkata. The distance to Tianjin is around 3,300 km while the same from Birgunj to Kolkata is only 750 km. On the other hand, Nepal’s connectivity to China remains pathetic due to the vulnerability of landslips, and rugged terrains. Several projects which were supposed to be taken up under the BRI framework have already reached an impasse concerning its operability and economic viability if initiated.
Chinese language comes as another barrier in the China-Nepal commercial ties. The inadequacy of proficiency in Mandarin could raise operational hurdles between both. People’s Republic of China has already taken steps to popularize ‘Mandarin’ in Nepal which many analysts believe could make serious lasting socio-cultural implications.
Although, the Himalayan state deserves better treatment from India, shifting the core focus to Beijing would not work for the country keeping its long-term socio-economic objectives in mind. Beijing, albeit of its investment potential and infrastructural advancement, could not prove to be a viable alternative for New Delhi, due to multifaceted historical and geographical reasons. Apart from this, the leadership at Kathmandu should not fail to pay heed to the geopolitical developments and the financial liabilities which the already materialized BRI projects have paved way for in countries like Sri Lanka, Pakistan, and the Maldives. The policy changes which China could ask to comply with return to the financial assistance, similar to the demand to drop India and the US aid and the extradition treaty which it pushes for, would drag Kathmandu to undesirable policy complexities in future.
