Nepal needs to prioritize its best interests while executing projects under the China-initiated Belt and Road Initiative (BRI), experts said here on Friday.
Speaking at a seminar organized by the Center for Centre for Social Inclusion and Federalism, the panelists said that Nepal needs to do better negotiations with China while executing projects under the BRI.
Prakash Sharan Mahat, a spokesperson for the ruling Nepali Congress, argued that Nepal is not in a position to accept commercial loans with higher interest rates under the BRI.
"We simply can't accept commercial loans, be it from China, India, the United States or any other bilateral, multilateral donors including the World Bank and IMF," Mahat said. He said that the then Maoist-Congress government led by Pushpa Kamal Dahal had made enough homework before signing the Memorandum of Understanding (MoU) on the Belt and Road Initiative with China.
"We tried to our best to serve our national interests while signing the MoU on BRI," Mahat said adding that Nepal had agreed to sing the agreement with its reservations on the matters of free trade. Mahat, who negotiated with China on the MoU on BRI in 2017 in the capacity of the foreign minister, said that Nepal can only accept grants under the BRI. He also ruled out the possibility of signing the Free Trade Agreement with China in near future.
"As of now, there is no possibility of signing the FTA with China. We need carry out further studies on the matter," he said. Mahat said that Nepal is not in a position to get commercial loans from China to build cross-border railways. "If China agrees to provide grant assistance to build the railway, we will wholeheartedly welcome it," he said.
BRI offers opportunities for Nepal despite some challenges: Gyawali
During the one-day event, former Foreign Minister Pradeep Kumar Gyawali said that BRI offers opportunities to Nepal although there are a few challenges associated with it. He said that the narrative of "Chinese debt trap" is nothing but another geopolitical gimmick to hinder other countries' pursuit for prosperity.
"BRI is also about technology transfer and building people-to-people contacts. Nepal can reap benefit from the BRI by holding enough negotiations with China while receiving commercial loans. Let's not mislead people by just describing the BRI cooperation as a debt trap," he said.
Gyawali said that the proposed Nepal-China cross-border railway will be beneficial for Nepal in the long run. "We should not just think about its short-term economic gains. Cross-border railway is important for Nepal for the long run. We also must link it with our country's autonomy and sovereignty. Being a landlocked country, Nepal should diversify its trade. To achieve that goal, railway connectivity with China will be instrumental," he said.
Gyawali said that the implementation of BRI projects will help enhance cross-border connectivity and spur economic growth of Nepal. He recalled that Nepal had signed the MoU on the Belt and Road Initiative with China after forging a broad national consensus at the political level.
"Key political parties including the Nepali Congress, CPN (UML) and the CPN (Maoist Center) decided to sign the MoU on the BRI keeping our national interests at the center. Immediately after the signing of the MoU on the BRI, Nepal went into elections in 2017. After elections, the new government came and it was making homework to implement the agreement. But due to the COVID-19 pandemic, we could not execute projects under the BRI. It is now a right time to go for the implementation and parties should arrive at a consensus to do so," he said.
Gyawali, who is also a senior leader of the CPN (UML), said that Nepal should prioritize its interests while executing projects under the BRI. "We have not held discussions with China on the funding modalities of the projects under the BRI. Let's do that," he said. Gyawali said that Nepal has not entered a negotiation with China on the free trade. "We can do that only after having enough negotiations," he said.
On the occasion, speakers from Nepal, Sri Lanka, India and Bangladesh also shared their perspectives on the BRI.
China making inroads in South Asia: Kondapalli
Srikanth Kondapalli, a professor of China studies at Jawaharlal Nehru University, New Delhi, said that Nepal should learn lessons from Sri Lanka. He said that China is increasingly making inroads in South Asia through projects under the BRI.
Professor Kondapalli said that China's engagements are geo-strategically motivated across the world including South Asia. "China is trying to become a maritime power too," he said. He argued that China is coming up with the "Himalayan QUAD" involving South Asian countries Pakistan and Nepal. Kondapalli said that China is also interfering in the internal affairs of other countries while making inroads through BRI. "China’s objectives under the BRI aren’t just confined within the economic realms, but extended to political and strategic ambitions," he argued.
On the occasion, Harim Watson Peirish who belongs to Council for Public Policy said that China's loans to his country are mostly non-concessional. "China is not making investment in Sri Lanka but its lending," he said. Towfiqul Islam Khan, a Bangladesh expert at the Center for Policy Dialogue, said that China's Official Development Assistance (ODA) is sort of tied aid. “Generally, Chinese ODA is tied aid, and we have fought a long to untie it and should continue to do so," he argued.
Devendra Kumar from India's Sai Nath University said India is worried about possible security implications for it from Chinese projects in South Asia.
Executive Chairperson of the Center for Social Inclusion and Federalism, Vijay Kant Karna highlighted the objectives of the conference. "The aim of this conference is to bring together stakeholders from Nepal and South Asian countries to discuss the critical issues regarding geopolitical implications of the BRI, the strategic interests of China in South Asia and status of BRI among others," he said.
