New Delhi: Nepal Prime Minister Khadga Prasad Oli walked the diplomatic tightrope, dealt with geopolitical tensions, addressed multiple constituencies – internal and external – and walked out of Beijing with a satisfactory agreement after his December 2-5 visit to China. Came out. After several weeks of speculation, Nepal and China signed the framework for Belt and Road Initiative (BRI) cooperation, leaving room for case-by-case negotiations rather than agreeing on a comprehensive BRI implementation plan.
Although it is a small step, this blueprint could create a larger blueprint for how Nepal balances its small-state concerns, taking Beijing into confidence without alienating Delhi and Washington (and vice versa). And also manages to deal with deeply tumultuous domestic politics. It is never easy for any government in Kathmandu to strike a good balance between domestic economic imperatives and geopolitical tensions. Nepal Foreign Minister Arzoo Rana Deuba is likely to visit New Delhi on December 19 and his team may propose a possible date of mid-January for Oli’s visit to Delhi.
Despite the hurdles he faced, Oli’s visit was enough to garner appreciation from both Beijing and Kathmandu. Importantly, the 12-point joint statement contained a lot of ground – a quiet recognition that the bilateral relationship is very important to both, but that there is still much to be done.
Nepal’s communist parties have historically had close political ties with Beijing, but Oli has avoided signing bilateral agreements that could harm him politically. Instead the BRI framework agreement was drafted by a four-member joint task force that included representatives of both the PM’s CPN-UML (Communist Party of Nepal-Unified Marxist Leninist) and the centrist Nepali Congress, the largest party in the ruling coalition.
geopolitical balance
Read here.The Nepali side reiterated that “Xizang matters are China’s internal affairs,” and that it will never allow any separatist activities against China on Nepalese soil. The joint statement specifically used the term Xizang rather than Tibet, as has been Chinese political practice in recent times. Equally noteworthy is the fact that Nepal also “strongly supports China’s efforts to achieve its national unification” and “opposes Taiwan independence.” Chinese opposition to “Taiwan independence” in joint statements is a recent phenomenon. Also, both sides appreciated the initiative taken to implement the Memorandum of Understanding on Translation and Publication of the Classics – with an emphasis on deepening cultural partnership.
The most notable – and potentially also the most unsettling – feature is cleverly stated: “Both sides are committed to strengthening the coordination of their development strategies and pursuing deeper and even more concrete high-quality Belt and Road cooperation.” But agreed.” It has avoided binding Kathmandu with any conditions on BRI agreements. In any case, the terms of any BRI project will be negotiated on a case-by-case basis.
The two sides agreed to accelerate the development of 10 projects but will have to finalize project-specific agreements. He expressed commitment to strengthen connectivity in sectors such as ports, roads, railways, aviation, power grids and telecommunications “so as to help transform Nepal from a land-locked country to a land-locked country.”
Here are some concrete project proposals: Take forward the China-backed Araniko Highway Maintenance Project and the Hilsa-Simikot Road Project – both important border crossings connecting Tibet with Nepal. In Kathmandu, work on the second phase of the much-delayed Ring Road Improvement Project and feasibility study on the Tokha-Chhare Tunnel will begin.
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Following the commitment made during President Xi Jinping’s visit to Nepal in 2019, the two sides also agreed to accelerate work on three important North-South Economic Corridors – the Kosi Economic Corridor in eastern Nepal, the Gandaki Economic Corridor in western Nepal and the Karnali Economic corridor. Far western Nepal.
After being closed for years due to Beijing’s zero-Covid policy, both sides looked to “fully reopen” 14 traditional border trading points, which will boost bilateral trade and help residents on both sides of the border. Have been important in making the livelihood of people easier. Nepal has requested China to consider the possibility of opening more bilateral and international ports. The Chinese side will facilitate the construction of a China-assisted Inland Clearance Depot (ICD) and Integrated Check Post (ICP) at Korala in Mustang. Korala is expected to be the most important border crossing with China in Nepal after Tatopani and Kerung, both of which are close to Kathmandu and are gateways to central Nepal.
The two sides also agreed to “attach importance to the development of civil aviation relations” and open flights between Chinese and Nepali cities such as Pokhara and Lumbini in the light of market demand, so as to facilitate bilateral economic and trade relations and two- road trip. This is significant because both Pokhara (built on Chinese loans) and Lumbini airports have struggled to receive international flights, making them white elephants. However, the joint statement is notably silent about Nepal’s long-standing request to China to convert the China Exim Bank loan (Rs 25.88 billion) into a grant for the construction of Pokhara International Airport.
Nepal has expressed its support for the Global Development Initiative (GDI) proposed by China, but has refrained from becoming part of its Global Security Initiative (GSI), an international security arrangement launched in April 2022 that would be supported by Beijing. Promotes a set of security concepts and principles reflecting international Standard preferences.
The stakes of the visit were high because Oli had made a significant political departure: his first visit after assuming office in July was to Beijing, not Delhi. Additionally, the Nepali Congress, the largest party in the ruling coalition, had openly expressed its reservations about accepting loans from China under Xi’s key foreign-policy architecture, the BRI framework. Although Nepal signed the BRI agreement in 2017, there has been little progress on its project implementation.
Former Prime Minister Sher Bahadur Deuba, who is also the President of the Nepali Congress, has clearly told the visiting Chinese leaders that Nepal is in no position to finance BRI projects through loans. In 2022, Deuba’s then government had insisted on three conditions on BRI financing: first, Nepal gives priority to grants rather than loans; Secondly, the interest rate in the case of loans should not exceed one percent and the repayment terms on concessional loans should be similar to those of the World Bank, Asian Development Bank and other multilateral lenders; Third, there should be a competitive bidding process. In recent years, the Nepali Congress’s stance on BRI has largely remained prominent across the political spectrum.
On the eve of Oli’s visit, both he and Deuba were well aware that they could not be seen going back on promises made in the past. This could prove especially costly for Congress.
Nepal’s communist parties, on the other hand, have cordial relations with the Communist Party of China and Beijing, best evidenced in their regular party-to-party exchanges, even though Oli’s party, the CPN-UML (Communist Party of Nepal Party-unified Marxist). The Leninist, or Communist Party of Nepal (Maoist Centre) headed by Pushpa Kamal Dahal, also a former Prime Minister, is in office.
Nepalese stakeholders, including those outside political parties, welcome stronger ties with Beijing, but remain extremely wary of Nepal turning into a site of geopolitical competition. From Nepal’s perspective, the political logic of engagement with China is simple: it helps balance relations with Delhi, the US and the West, and the world’s second-largest economy has access to cheap technology for manufacturing as well. Has the economic capacity to provide concessional loans and grants. Nepal’s infrastructure.
joint task force a masterstroke
The NC-UML taskforce was a win-win formula not only for the ruling parties. In the much-awaited internal political theater in Nepal, Beijing also wanted to see an agreement that was supported by broad consensus. The Congress was represented by general secretary Gagan Thapa and advocate Semanta Dahal, who have international experience on infrastructure financing and BRI negotiations. The UML was represented by two of Oli’s close aides – his political advisor Bishnu Rimal and his economic advisor Yubaraj Khatiwada. Given the differences between the Nepali Congress and the CPN-UML on the BRI implementation plan, the task force conducted a comprehensive review of the BRI implementation plan proposed by China in early 2020, with the Nepali Congress specifically suggesting that Nepal be exempted from the debt-based BRI. Refrain from. Projects.
When Arzoo Rana Deuba and Ollie (possibly soon) Next time we visit Delhi, the balancing act and all the groundwork in finalizing the joint statement in Beijing may offer an easier foreign-policy guideline for Nepal.
