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Nepal-China relations have been rather choppy of late, particularly after the Nepali parliament’s ratification of the MCC compact. China believes the current (election-bound) Sher Bahadur Deuba government does not prioritize ties with the northern neighbor. Members of the government, meanwhile, seem wary of recent Chinese assertiveness in Kathmandu. 

When Chinese Foreign Minister Wang Yi visited Nepal in the third week of March, Beijing and Kathmandu were expected to mend fences and sign something concrete under the BRI. It was not meant to be. 

This week ApEx held a roundtable with some China experts on the current state of Nepal-China relations. Excerpts: 

(Note: Indira Adhikari and Sharada Ghimire, the two other invitees to the roundtable, had to pull out last-minute due to personal emergencies.) 

China has become a bargaining tool for power 

Pramod Jaiswal

(Research Director at Nepal Institute for International Cooperation and Engagement, with specialization in China and South Asia) 

To understand China’s Nepal policy, it is imperative to delve into its larger South Asia policy. Beijing has prioritized South Asia with the view to developing its southern and western regions, particularly Tibet, which is comparatively less developed than other parts of China.  

Xi Jinping is the first Chinese president to visit all South Asian countries, except Bhutan with which China does not have diplomatic relations. With Nepal, China is developing relations in trade, defense, and security. It is also engaging with Nepal at the political level. 

Scores of countries seem eager to enhance ties with China for their economic development, but we have been unable to do so. Even the countries that have hostile relations with Beijing are benefiting from China’s growth. But even as a neighbor, we haven’t been able to strengthen ties with China. 

Whenever our politicians feel that their positions are under threat, they try to use China as a tool to stay in power. This happened during the Panchayat regime, and this is happening today. Even when the communist government led by KP Sharma Oli was in power, there wasn’t much progress in Nepal-China relations. 

China will not engage with Nepal to the extent of offending India. What China rather wants in Nepal is a trustworthy and long-term partner to address its security and economic concerns. Before 2008, China was completely reliant on Nepali monarchy to pursue its interests here. Now, China is engaging with all political parties. 

There has been much rhetoric about MCC and BRI, but what is our official stand on these issues? We never delve into the economic aspects of these issues, only seeing them through the narrow lens of nationalism. We lack the vision and willpower to benefit from China’s rise. It’s high time that our political leadership mended its ways. 

Deuba has chosen one neighbor over another 

Gopal Khanal

(Foreign affairs advisor to KP Oli during his first term as prime minister) 

We have to understand that China is an emerging superpower. The world is becoming multipolar, and China’s foreign policy has vastly changed from the one adopted by Deng Xiaoping. Beijing is now more assertive in the international arena than ever before. 

China shares borders with 14 countries. But it wants to engage not just with its neighbors, but also with the world at large. Thus its greater presence in Nepal is to be expected. But it is crucial that Nepal adopts a balanced foreign policy with India and China. Both the neighbors are equally important to us. 

But it seems the current five-party ruling alliance undervalues China. There is a perception that this government favors Western countries. China should be Nepal’s highest foreign policy priority. There have been some departures in our bilateral engagement with China under PM Deuba. First, you see a clear anti-China prejudice. For instance, soon after its formation, the incumbent government formed a panel to look after alleged Chinese encroachments of Nepali territories, even though the two previous governments had already concluded that there was no border dispute. Second, when Chinese Foreign Minister Wang Yi visited Nepal, there were no talks on BRI projects. 

I see the current government choosing one neighbor over another. Due to serious lapses in judgment of our political leadership, we find ourselves in a difficult geopolitical spot. When Chinese President Xi Jinping visited Nepal in October 2019, he talked about turning Nepal from a landlocked country to a ‘land-linked’ country. This was a momentous announcement but there was then no follow-up from our side. We have never seen our relations with China through the lens of larger national interest. 

There have been some mistakes from the Chinese side as well. For instance, Chinese Ambassador to Nepal Hou Yanqi’s running-around to save the Nepal Communist Party from imploding did not send a good message. Likewise, China could have resolved the problems at border points to smoothen the supply of goods. On the MCC compact, too, it would have been better had Beijing refrained from making any statement. 

Indo-Pacific’s prominence has affected Nepal-China ties 

Rupak Sapkota

(Former Deputy Executive Director at the Institute of Foreign Affairs under foreign ministry) 

There are three ways of viewing Nepal-China relations. First is the larger geopolitical context. There has been extreme pressure on international power-balance of late due to growing rivalry among big powers. Strategic convergence between India and the US is increasing, and China and the US are headed towards confrontation. So the geopolitical center of gravity is gradually shifting to the Indo-Pacific. Such developments are likely to have some implications on Nepal’s national security and sovereignty as well—and which is also why we are seeing some stress in our relations with China. 

Our economic ties with China are stagnant. This did not happen even when there was a supposedly China-friendly government of left parties at the helm. We signed the transit and transport agreement with China, but it didn’t move ahead. Similarly, we signed several vital agreements when Xi Jinping was in Nepal, and they too remain unimplemented. 

I think there is a structural problem. Trade and connectivity with China should run parallel to our relations with other countries. We often make the mistake of seeing China as an alternative when our relationship with the other neighbor sours. Carefully balancing our neighbors should be the utmost priority of any government. 

China now sees Nepal not only from the security viewpoint but also as a strong economic partner. In recent years, Chinese investments in Nepal have increased but are still to benefit from the latest Chinese technology and knowhow. At the same time, there is growing interest among the Chinese about Nepal, which can be seen in Chinese social media platforms. 

In order to close the loopholes in the conduct of our foreign policy, including with China, we must have a sound mechanism to provide timely inputs to the government. But what we see is our policy-related institutions are not functioning well due to lack of resources, politicization and other issues.

No institutional framework to settle Nepal-China issues

Upendra Gautam

(General Secretary at China Study Center-Nepal) 

Frankly speaking, geopolitically, we are not in a comfort zone. Nepal should have a long-term view on our relations with China, which is lacking. We have policy inconsistency with China. We should stop viewing our ties with any country from the perspective of one party or government. Whenever there is a government change in Kathmandu, a new foreign policy is drafted. But why? The basic framework of foreign policy should remain unchanged. 

The problem is not just with the present government. For instance, time and again Nepal has failed to take up its issues with China in a frank and assertive manner. Our individual leaders take up important issues with China without understanding that China will not heed them until such proposals come via official channels. 

We should keep our relationship with China within a certain institutional framework. Without that, Nepal has been unable to raise its issues with China in a systematic way.  We have signed many agreements with China, but have they been incorporated into our national plans and policies? Obviously not. 

We are witnessing a sort of anarchism in our bilateral relationship with China due to a culture of indiscipline. When we talk to China, we should tell them exactly what about their policies hurt us so that they can go about addressing them. But seldom do we do enough homework to identify our issues or to present them clearly before the Chinese. 

Nepal should pursue an independent foreign policy. Geopolitical pressures and concerns are always there, but we can handle those issues with right vision and leadership.  

We should also deal with China without third-party influence. For instance, on the MCC compact, the Nepali prime minister could have held a phone conversation with the Chinese to assure them that its parliamentary endorsement would not affect Nepal-China relations. 

One thing I want to add concerns Nepal-China railway. Nepalis seem to believe that the railway can be built overnight. But we have no good plans for it. You cannot expect China to build such an expensive project and drop it in our laps. Nor have we been able to convince the Chinese that we have either the resources or the manpower to operate such a tricky rail line. 

Have Nepal-US ties undergone a sea-change following the February 27 parliamentary endorsement of the $500m MCC Nepal Compact? It certainly appears so.

Since the compact’s ratification, there have been important visits and bilateral exchanges between the two sides.

In addition to money under the compact, the US has announced a $659 million grant to Nepal under the United States Agency for International Development (USAID) for the next five years. Hot on its heels, an American Congressional delegation led by Senator Kirsten Gillibrand also visited Kathmandu on April 22-24.

Just days prior to this visit, US Deputy Assistant Secretary for South and Central Asian Affairs Kelly Keiderling had also jetted to Nepal and held talks on a range of issues with various sections of Nepali society. Earlier, she had come to Nepal just before the compact’s endorsement.

In Washington DC, newly appointed Nepali Ambassador to the US Sridhar Khatri has been holding high-level meetings with senior US officials. On March 29, he met Assistant Secretary of State, Bureau of South and Central Asian Affairs, Donald Lu, as well as Keiderling.

The recent flurry of talks and visits indicate that the otherwise tepid high-level engagement is finally getting some life.   

Anil Sigdel, founder of Washington DC-based think tank Nepal Matters for America, sees the visits as a follow-up to the recently passed compact as well as part of the American effort to drum up support against Russia. 

A statement issued by the US Embassy in Kathmandu on the Congressional delegation’s visit states: “Nepal has joined the majority of countries in condemning Russia’s brutal invasion of Ukraine.”

Sigdel says the key US interest right now is “to ensure that Nepal aligns with US policy against Russia’s invasion of Ukraine”.

“It also wants to guarantee that Nepal does not slide towards China’s or India’s policy vis-à-vis Ukraine,” Sigdel says.

Both Beijing and New Delhi have so far refused to condemn the Russian invasion.

Another purpose of the American visits is to create a climate for smooth implementation of the projects under the compact. Though Nepal’s parliament has approved it, there are some outstanding concerns, mainly concerning security.

The US grant was ratified amid protests in both the chambers of parliament and out in the streets. These protests were fomented by communist forces, including those in the incumbent coalition.

Some fringe communist parties are still against the compact. The US fears for the security of cross-border transmission lines and highway improvement projects to be developed with the grant.

Government officials say the American side wants to create a favorable environment for project-implementation by engaging all sections of Nepali society.

It will take a year to formally start the implementation phase, and the US wants to ensure all hurdles are cleared by that time.   

Sigdel says resistance to the compact could still dissuade its Nepali stakeholders—and the US is aware of it.

“It all depends on how Nepal-US negotiations and engagements move forward in the coming days,” he says.

The high-level visits from the US officials also coincide with the 75th anniversary of Nepal-US bilateral ties. To mark the occasion, the two countries are planning to hold a series of activities including exchange of high-level visits.

Sources at the Ministry of Foreign Affairs say there are chances of high-level visits from Nepal to the US after the May 13 local elections.

Prof Jaya Raj Acharya, a former Nepali ambassador to the US, reminds that America is one of Nepal’s oldest allies.  

“Celebrating the 75th anniversary is important. You must remember that Nepal and the US established diplomatic relations even before India was independent,” he says. Bilateral relations between Nepal and the US were established on 25 April 1947. The US was only the second country, after the UK, to do so.

Anna Richey-Allen, spokesperson at the US Embassy in Kathmandu, says in these 75 years—and through the decades of changes in both the countries—the United States and Nepal have stood with one another. 

“The recent visits by senior diplomatic leaders, high-ranking US senators, and other important officials are a reflection of this,” she tells ApEx.

Democracy-promotion has long been a key foreign priority of the US government. In recent years, the US has given more emphasis to the agenda of democracy in talks with Nepali leaders and officials, which is also reflected in bilateral documents.

Following the meeting of the US Congressional delegation with Prime Minister Sher Bahadur Deuba on April 23, the Ministry of Foreign Affairs said in a statement that the two sides had exchanged views “on institutionalizing democracy and cooperation in climate change”.

Last December, PM Deuba had also participated in the Summit for Democracy hosted by US President Joe Biden.

Sigdel says Nepal has emerged as the most liberal democratic country in South Asia, attracting the attention of the US and its western partners.

He argues that Biden’s policy is “to strengthen a club of democracy vis-à-vis China and Russia”, and the US views Nepal as a bona fide partner in this quest.

Especially in South Asia, because of the Chinese outreach and democratic decline including in India, “Nepal’s record makes it an important member of the global democratic club,” says Sigdel.

The US Embassy spokesperson says partnership with Nepal focuses on supporting its democratic values, good governance, and economic prosperity. 

“Now more than ever, we will need to tackle difficult issues like addressing the climate crisis and protecting democracy in the face of rising authoritarianism,” she says.

The $500m grant under the MCC and an additional $659m from the USAID are also seen as proof of the US at long last prioritizing Nepal.

Acharya, the former Nepali ambassador to the US, however, says America’s Nepal policy is constant, reality-based and not necessarily influenced by specific events.

The US started providing assistance to Nepal from 1951 and the amount of assistance has been increasing over the past seven decades.

“After the restoration of multiparty democracy in 1990, there was general expectation that American aid would substantially go up, but that did not happen—yet the old momentum was given continuity as well,” says Acharya.

Another reason behind growing American engagement in Nepal, he adds, is China’s rise.

“The Americans have increased their activities in the South China Sea and Taiwan, and they may want to increase their activities here,” he says. “It is crucial we make them understand our sensitivities.” 

The fight for tickets for the May 13 local elections was starting to get ugly. In order to keep the ruling five-party coalition intact, it had to work out a consensual ticket-sharing formula. But none of the parties seemed ready to budge. Pushpa Kamal Dahal’s CPN (Maoist Center) was intent on retaining the mayor of Bharatpur, the country’s third most populous city (and Dahal did). Madhav Kumar Nepal’s CPN (Unified Socialist) was adamant that it should get to pick the mayoral candidate for Pokhara, the second most populous city (and Nepal did too). There was likewise a bitter dispute in the coalition over the pick of candidates for the mayor of Kathmandu, the most populous. It was the same story in Nepal’s other major settlements.

Competition is the essence of democracy. Yet political parties were fighting tooth and nail not over the competing visions or competencies of their proposed candidates. What top leaders rather wanted was to ensure that their yes-men got the top posts so that they could milk the local units for partisan benefits. Another interesting trend is of political parties trying to woo actors and entertainers to increase their mass appeal. CPN-UML, the main opposition, seems particularly keen on having recognized celebrities on board—for show if not for actual representation.

Both these trends suggest a high level of immaturity of Nepali politics. The Nepali electorate keeps voting along party lines even if the candidates in the fray are incompetent—whether or not they are pop culture celebrities. This in turn gives the parties the freedom to pick candidates as they please. This vicious cycle must be broken if we want effective and accountable governance. 

The suspension of Nepal Rastra Bank Governor Maha Prasad Adhikari threatens to further roil an economy already battered by covid-19. Adhikari had apparently refused to heed Finance Minister Janardan Sharma’s instruction to release Rs 400m of suspicious money from abroad deposited into Nepali bank accounts of one Prithvi Bahadur Shah. (The Supreme Court on April 19 overturned the governor's suspension.) 

The country’s foreign reserves have shrunk to alarming levels. Remittance and tourism—the two backbones of Nepal’s economy—aren’t doing well either. Moreover, Nepal is already in the international spotlight as a conduit of illicit money. 

Kamal Dev Bhattarai spoke to senior economist Dilli Raj Khanal on the possible implications of the government’s intervention in the central bank and its lax attitude on black money.

What are Nepal’s international commitments on combating money laundering?

Global Financial Integrity, a Washington-based think tank, maintains a record of illicit financial flows, corruption, illegal trade, and money laundering. It also tracks money laundering in Nepal.

Likewise, the Asia Pacific Group on Money Laundering, a regional anti-money laundering body, conducts a mutual evaluation of the country. Nepal actively participates in such international organizations to control money laundering. But there seems to have been little improvement. 

Money laundering is a serious business. That is why we have laws and agencies to deal with it. Nepal introduced the Money Laundering Prevention Act in 2008 and the Department of Money Laundering Investigation was established in 2011. But again there has not been expected progress. As money laundering is linked to a country’s image, Nepal should take sufficient preventive measures. We are being closely watched by international organizations. 

In 2021, the Finance Ministry amended laws such that income sources of investors in infrastructure will no longer be investigated. Won’t that promote money laundering and flow of black money? 

Obviously, it will. The provision says the government will not seek the sources of investments made in nationally important hydropower projects, international airports, and other projects that use more than 50 percent domestic raw materials. This is a wrong approach as it contributes to money laundering. Some argue it will boost investments. But I personally do not see this as a valid reason. 

What will be the implications of reports of Finance Minister Janardan Sharma trying to release money brought into Nepal from suspicious sources abroad?

This is a very serious case, which could have a big implication on the country’s economy and image. The finance ministry is mainly responsible for checking the flow of black money. It has also formulated anti-money laundering laws. 

With this incident, the ministry has sullied its image. Governor Adhikari has been suspended on charges of defying Finance Minister Sharma’s directive to give clearance to suspicious black money. This could spoil Nepal’s image abroad. Bilateral and multilateral donor agencies want a country’s central bank to be autonomous and its economy transparent. The autonomy of our central bank is vital to building trust with them. 

What is Nepal’s international reputation when it comes to combating money laundering?

Many international reports suggest Nepal has a parallel economy and facilitates illicit flow of money. Our image was already bad abroad before the governor’s dismissal. 

We are not fully implementing laws related to prevention of money laundering in order to improve our image and to earn trust of donor agencies and investors. On the institutional front, it is a complete mess. The finance ministry is mending in the business of other bodies.

If the Financial Action Task Force blacklists Nepal, what will be the consequences?

There will be multifaceted impacts. The country’s image in the international stage will further slide. Many developed countries, donor agencies and multilateral financial institutions take money laundering seriously. It will be tough for us to get loans and assistance from World Bank, International Monetary Fund, and other institutions. 

It could also affect our international trade. If we fail to curb money laundering and flow of illicit money, it could in the long run create a serious economic crisis. Our politicians are taking this issue lightly, which is a grave mistake. Financial integrity is a vital pillar of any economy. If that is lost, it will affect every aspect of the economy, including resource mobilization, banking, and other sectors.

Age-old India-Pakistan tensions are often blamed for undercutting the effectiveness of the South Asian Association of Regional Cooperation (SAARC). 

A good rapport between these countries, the two largest in the region in terms of population and military might, is imperative to give momentum to the SAARC process. But owing to bad blood between them the group’s biennial summit-level meeting has not been held after 2014. 

International relations experts say the main reason behind the body’s sluggish progress is its failure to embrace the core principles of regional organizations. 

For instance, the internalization of the notions of collective security, prosperity, and dignity by member states contributed to the success of the United Nations after the Second World War. 

Shambhu Ram Simkhada, former diplomat and professor at Tribhuvan University, says international relations theorists had initially thought that a similar calculus would work at the regional level.  

They argued that countries cannot conduct their foreign policy based only on narrow national interests and called for harmonization of national interests.

“Each country in a grouping has to understand that national interests will be harmonized so that individual country’s national interests are also served in a group-setting. That, at least, was the idea behind regional cooperation. But it could not take root in South Asia,” says Simkhada.

Over the past three-and-a-half-decades, SAARC, the regional bloc of eight South Asian countries, has largely failed to achieve its goal of economic and regional integration. 

While the strained Indo-Pak relations could be the main reason behind it, there are other stumbling blocks as well.  

Good organizations invariably have good leadership, something SAARC has long been missing. As its largest member with strong influence over its neighbors, India can (and should) take such a leadership role. But it has not been ready to do so. 

With India unenthused about regional cooperation under SAARC, other member states have also not come forward to take leadership. Smaller countries can certainly take the lead to revive the stalled SAARC process. This was demonstrated by Nepal and Bangladesh in the 1980s when they played proactive roles in the regional body’s formation. They had convinced both India and Pakistan, which  were initially unwilling to join, to come on board. 

Amit Ranjan, research fellow at the National University of Singapore, says a regional body needs a leader who can lead through consensus. 

“But India-Pakistan tensions and several other issues hinder such consensus,” he adds.

Stability is also a prerequisite for a vibrant and functioning regional cooperation. But political upheavals in member countries have constantly affected the SAARC process. 

The SAARC summit could not be held from 1999 to 2002 following a military coup in Pakistan. Similarly, India withdrew from the 2005 Dhaka summit due to its differences with Bangladesh and King Gyanendra’s coup in Nepal.   

Right now, barring India and Bhutan, all other South Asian countries are battling some sort of political instability. 

In Afghanistan, the Taliban has regained power and the international community is yet to recognize it. Whether other member SAARC countries are ready to share the platform with Taliban representatives remains unclear. 

Democracy-deficit in member countries has created hurdles for regional cooperation, say international relations experts. 

Another factor hobbling the regional body is the tendency of member countries to engage bilaterally instead of prioritizing regional cooperation. On trade, connectivity, and environmental issues, India mostly engages with individual member countries bilaterally. SAARC has great scope in water and energy cooperation, but India is again dealing with these issues bilaterally, mainly with Nepal, Bhutan, and Bangladesh.

India is also signing bilateral free trade agreements with the countries in the region rather than taking steps to operationalize the South Asian Free Trade Agreement (SAFTA). 

“India is giving more attention to bilateral relations instead of working collectively through common platforms,” says Ranjan. 

In her 2018 research paper ‘SAARC vs BIMSTEC: The Search for the Ideal Platform for Regional Cooperation’, Joyeeta Bhattacharjee, a senior fellow at Observer Research Foundation, a New Delhi-based think-tank, says bilateralism decreases the countries’ dependence on SAARC to achieve their objectives, making them less interested in pursuing region-level initiatives.

Bilateralism is easier as it entails dealing between only two countries, whereas SAARC—at a regional level—requires one country to deal with seven, she argues in her paper. 

Preference for extra-regional trade and the general environment of distrust among member states have also diminished the scope of regional cooperation. Not only with Pakistan, India also has contentious issues with Nepal, Bangladesh and Sri Lanka.

The asymmetry between India and other member countries in terms of population, geography, and economy has made regional cooperation difficult. Smaller countries often see the projects forwarded by India as tools to cement its regional hegemony. This became evident in 2015 when Bhutan, Bangladesh, India, and Nepal agreed to a vehicle agreement, known as BBIN, only for Bhutan to later opt out stating that it cannot regulate the flow of people and goods. Pakistan had refused to join the initiative outright as it came from India. 

Simkhada suggests boosting the status and widening the mandate of the SAARC Secretariat to create a more functional regional body. Right now, “SAARC is being treated as no more than a minor administrative body.” 

The position of the SAARC secretary-general, he says, is lower than that of an ambassador or a joint secretary of any of its member states. 

Insufficient economic resources have further hobbled the regional organization. Member countries are not ready to contribute large funds to finance big connectivity projects. At the same time, some member countries are opposed to receiving financial assistance from SAARC observer states like the US, China, and Japan or from other multi-national donor agencies. 

For long, Nepal has been proposing active engagement with observer members to raise funds for big regional projects, to no avail.

A senior Nepali foreign minister official who has long been involved in the SAARC process and who spoke to ApEx on the condition of anonymity, says member countries, particularly India, Pakistan, and Bangladesh are against taking international support. They fear big powers or multilateral institutions could otherwise “impose their own agenda” in the region.

While member countries have divergent and disparate views on regional issues, there is no permanent mechanism to discuss them and bridge the differences. 

“Disputes among member countries often hamper consensus building, thus slowing decision-making,” says Bhattacharjee. “SAARC’s inability in this regard has been detrimental for its growth.” 

Over the past decade, China’s influence in the SAARC process and as well as in its member states has increased. China was brought in as an observer state at the request of member countries, including Nepal, Bangladesh and Sri Lanka. This did not go down well with India. 

Indian policy-makers fear China could use the regional body to make further inroads into its backyard. Experts say this is one reason India has shown little interest in SAARC’s revival. 

A former Nepali diplomat who has closely worked with the Kathmandu-based SAARC Secretariat says Nepal, Bangladesh and Pakistan are for China’s greater role in the SAARC process, much to India’s chagrin.

“China itself has shown  interest in playing a greater role within SAARC, and India most certainly does not want that,” he says. “This is one reason behind SAARC’s slow progress.”

Chinese Ambassador to Nepal Hou Yanqi has said that BRI has never been a "geopolitical strategy" but a road to development. 

Speaking at a virtual press conference on April 21, the Chinese Ambassador stated that BRI helps countries to achieve the 2030 Agenda for Sustainable Development and promote common development and prosperity. Speaking at the length, the Chinese diplomat clearly spelled out China's position on numerous bilateral issues that are in the public domain. 

She began her speech by highlighting the geopolitical conflicts that are surging across the world. 

At present, the COVID-19 pandemic drags on, geopolitical conflicts are resurging and the recovery of the economy remains sluggish and depressed. The peace, security, and development in the world are facing grave challenges, she said. 

"Despite the complex international and regional situation, the China-Nepal relationship led and cared by the two heads of state, has maintained steady growth." 

In recent years, the connotation and extension of China-Nepal’s BRI cooperation have been continuously deepened and expanded, the Chinese envoy added, a multi-dimensional promotion pattern featuring “hard connection”, “soft communication” and “heart exchange” and the all-around participation of the government, market and society is taking shape. 

“The Trans-Himalayan Multi-dimensional Connectivity Network has gradually moved from a blueprint to reality. Since last year, the two sides have worked hard to overcome the huge difficulties caused by the pandemic and promoted the construction of BRI cooperation in various fields to achieve new progress,” she said.  

Asked about the lack of progress in selecting specific projects under BRI, the Chinese diplomat made it clear that there are various types of cooperation under the broader framework of BRI which is moving ahead. 

 She was of the view that some already completed and under-construction projects are also under the broader vision of BRI. BRI cooperation between China and Nepal has not gotten bogged down because of COVID-19; on the contrary, it has become a road of hope that bolsters resilience and boosts confidence, she said. 

When selecting and implementing specific projects, both governments and enterprises are required to follow the principles of openness, transparency, and friendly consultation with each other, she added. In recent years, China has paid more attention to the high-quality, green, and sustainable joint construction of BRI.

The Chinese Ambassador highlight the assistance provided by China to Nepal to fight Covid-19. Until now, China has provided around 20 million vaccines through grant assistance, commercial purchase, and other channels, making China the biggest supplier of the Covid-19 vaccine to Nepal.

Those vaccines have helped Nepal to fight against the pandemic and restored Nepali people’s life and work back to normal, she said. The Ambassador further stated that China will continue to provide vaccines and material support according to the demand of the Nepali side so as to help Nepal completely defeat the pandemic.

Over the past few years, there are criticisms that China is not cooperating with the smooth passage of Nepali cargo trucks at the border points, affecting the supply of goods. The Chinese envoy, however, dismissed such reports stating that trade between countries has not been much affected. 

“According to the Chinese side’s statistics, the total volume of trade between China and Nepal increased 67% and reached $1.977 bn in 2021, of which Nepal’s export to China increased 63%. Those data proved that the so-call “soft block” on Nepal is totally baseless,” she said.

There are reports that Nepal's trade deficit is increasing and facing difficulties to export goods to China. She further stated that China has provided duty-free treatment to the goods of Nepali origin covering 98 percent tariff lines. 

“Those are the efforts made by the Chinese side to increase Nepal’s export to China and will help relieve Nepal’s trade imbalance problem. We also welcome Nepal to attend China International Import Expo and actively promote the products that meet the demands of the Chinese market,” she remarked.

She elaborated in detail about the progress made so far in China-funded development projects.  Stating that the two sides have signed the technical assistance plan for the feasibility study project of the China-Nepal Cross-border Railway Project, she said that it will further advance the projects. Similarly, she pledged to support Nepal in the promotion of the power grid interconnection, and build a new channel for Nepal’s power export.  

She also shed light on the challenges of some development projects.  “It must be pointed out that these projects will come across many difficulties such as complex geological conditions, frequent natural disasters, and high construction costs. This requires both sides to formulate practical plans on technical standards, funding sources, and so on in the spirit of seeking truth from facts,” she said. 

About the early return of Nepali students and resumption of flights between the two countries, the Chinese Ambassador said that relevant authorities of both countries are working on it, and there will be positive progress soon. The Chinese envoy also raised the issues faced by Chinese enterprises in Nepal. Similarly, she raised concerns about the policy inconsistency in Nepal and its effects on bilateral cooperation. 

“I also hope that the Nepali side could provide a fair and transparent business environment, fully protect the legitimate rights and interests of the Chinese enterprises, and help to solve their practical problems.” According to the envoy, currently, Chinese businessmen and enterprises in Nepal are facing many practical problems to carry out their work.

As China enters a new stage of development, we are actively implementing the new development philosophy and building the new development dynamic, she added, this will provide more development opportunities for countries around the world including Nepal.

China's development is also a contribution to the progress of all mankind. This is a common consensus of the international community and is supported and appreciated by the vast majority of countries, the envoy said.

On April 6, actor Bhuwan KC announced that he would be standing for mayor of Kathmandu in the May 13 local elections, only to withdraw his candidacy days later. It has been over a decade since KC first expressed his interest in politics. He had also toyed with the idea of contesting the Constituent Assembly elections from CPN-UML in 2013. 

KC tells ApEx he changed his mind about running for the mayor’s race this time after the Unnat Loktantra Party publicized his name as a candidate without his consent. But KC says he does plan on joining politics someday. Currently, he is not associated with any political party.

“Parties are using politics as a tool to either serve their own agendas or the interests of small groups. I want to join politics to address the problems of ordinary people,” KC says. 

In the view of sociologist Ramesh Parajuli, unlike Nepal, India has a long history of celebrities winning elections, even holding ministerial posts. 

In India, there are scores of celebrities—from actors like Amitabh Bachchan and Hema Malini to cricketers like Gautam Gambhir and Kirti Azad—who have joined politics to various degrees of success. This trend seems to be catching on in Nepal as well. Karishma Manandhar, Rekha Thapa, and Komal Oli are among the Nepali celebrities who have joined politics.

Some Nepali political parties have started actively courting celebrities. But whether they can transform their charms into votes is an open question.

In 2017, celebrated BBC journalist Rabindra Mishra contested parliamentary elections from Kathmandu Constituency-1. He lost to Nepali Congress candidate Prakash Man Singh by a narrow margin of 819 votes. But he comfortably came second, way ahead of candidates from CPN-UML, Maoist Center, and other more established parties.

Currently, no party seems as interested in bringing celebrities on board as UML.  

On March 22, actor Manandhar joined the party amid fanfare. UML Chairman KP Sharma Oli himself welcomed her. In her remark, the actor said she was not going to bargain for any post in the party, and would be happy to serve as an ordinary cadre. UML hopes her stardom will help it pull some votes.

Since joining the party, Manandhar has attended quite a few events with Oli.

Popular folk singer Komal Oli is arguably the most successful celebrity-turned-politician in Nepal. She too joined the UML a few years ago and went on to become a National Assembly member.  

After serving as a member of the upper house of federal parliament, she is now preparing to contest parliamentary elections from Dang Constituency-3. 

Prakash Chandra Pariyar of Sajha Bibeksheel Party says there is certainly added charm when celebrities run for elections.   

“Our old mainstream political parties have failed to deliver, so people gravitate towards new faces. And with celebrities, people can connect,” he says. “Celebrities with new vision and vigor could bring about some much-needed social changes. People want change.” 

Celebrities’ embrace of politics could also help change common public opinion that politics is no more than a dirty game.

“If more celebrities join politics, we can minimize such a mentality, creating a positive atmosphere for all politicians,” says singer Oli.

Still, Nepal has a long way to go before a celebrity here can be a successful politician. It is still hard to imagine celebrities winning direct parliamentary elections. But why?

“What you see in India is that some of its celebrities represent language and cultural politics—that is not so in Nepal,” says social commentator Hari Sharma. With India’s gargantuan population, they invariably attract large followings. You don’t see the same kind of mass fan-base in Nepal.

“Usually, celebrities who want to succeed politically should have a solid social and cultural foundation but our celebrities lack such a foundation,” Sharma adds. “So I do not see our celebrities turning into successful politicians.”

Sociologist Parajuli says it is relatively easier for celebrities to join UML because it is a cadre-based party, and there is also some possibility in Madhes. “In the case of other hill- and mountain-based parties, it is not easy to contest and win elections,” he argues.

Echoing Sharma, Prof Ram Krishna Tiwari, head of the Central Department of Political Science, agrees that it is difficult for Nepali celebrities to establish themselves in politics.

“Ours is a highly politicized society, from the center to the grassroots,” says Tiwari, “and as such people tend to follow established politicians instead of new celebrity candidates.” 

Tiwari adds that Nepali celebrities who are currently in politics also have no good vision.  

Speaking on behalf of celebrities, both actor KC and singer Oli are skeptical about the commitment of political parties to ensure greater representation of celebrities in their ranks.

“As the election season draws close, politicians approach us and seek our help in their campaigns. But we are forgotten soon as the elections are over,” KC says. Arguing that Nepali political parties discourage the entry of celebrities into politics, KC laments the lack of realization on the part of political parties that “we are known and established faces who have won the hearts and minds of millions.” 

‘Is Nepal on its way to becoming another Sri Lanka?’ This question is being repeatedly asked, in the media and out on the street, as Nepal’s economic woes deepen. Many economists say the comparison between the two countries is misguided: the problems they face are different. Big foreign loans are Sri Lanka’s primary concern while for Nepal the big worry is a mix of high fuel import cost and erratic remittance. Nepal’s foreign loan-repayments (around $400m due by the end of this fiscal) are peanuts compared to Sri Lanka’s (around $4bn due). But if Nepal does not take drastic steps, it could well go Lanka’s way.

Senior economist Chandra Mani Adhikari says Nepal needs to learn the right lessons. Sri Lanka shows how small and emerging economies can plunge into a deep crisis despite their good economic indicators, he says. That will be the case especially “if their economic policies are flawed and their resources are haphazardly mobilized.” Comparing the economy to a traffic-light system, he says Nepal’s economy right now is in the ‘yellow’ zone and inching toward the dreaded ‘red’ zone.

One big problem in Nepal is lack of coordination on economic policies between concerned agencies. For instance, in the words of Bishwarmbhar Pyakurel, another senior economist, there is little coordination between the National Planning Commission, the Ministry of Finance, and the Nepal Rastra Bank. “These three agencies have competing visions and often encroach on each other’s jurisdictions,” he adds.

So besides drastically cutting the country’s fuel imports and adopting other fuel-saving measures, there is a need to harmonize economic policy-making. What we see instead is the government taking reckless measures like dismissing the sitting central bank governor. This is playing with fire. Hopefully our policymakers realize the folly of doing so before the flares lap up the whole country.

More details, Fixing Nepal’s broken economy and Editorial: Central folly