The way ahead for BRI in Nepal

Zhou Shengping

Zhou Shengping

The way ahead for BRI in Nepal

In a broader sense, the BRI has been a success in Nepal. Encouraged by the initiative, Chinese investors have thronged to Nepal. China has topped other countries in FDI commitments for six successive years

It’s hard to view the progress of the Belt and Road Initiative happily since Nepal signed the agreement with China on 12 May 2017. Out of the limelight, the initiative has now been covered with snows of skepticism and the ice of pessimism in this Himalayan nation.

Part of the blame goes to Nepal’s rollercoaster politics: Will the Deuba-led coalition government continue to play it down like what KP Sharma Oli had done at the end of his premiership? There is too much cant from politicians, who are apt to take seesaw policy. Part goes to the knowledge gap between what’s written on the official paper and what’s happening on the ground. There are too many distorted stories in the media.

Close examination

The Memorandum of Understanding (MoU) on BRI will expire in 2023 after being automatically renewed in May 2020 for another three years. Nine projects for potential funding under the BRI had been identified by Nepali side in January 2019 after Chinese side advised them to trim down the list from the earlier 35 projects to a single digit.

Among them, the Madan Bhandari Technical University may reach a dead end due to its strong partisan background; the Kerung-Kathmandu railway will live in a fool’s paradise for another 10 years or more, thanks to its complexity.

Except for these two wet blankets, according to government officials, some progress has been made in the Tamor hydroelectricity project (756MW), the Phukot Karnali Hydro Electric Project (426MW), and the Galchhi-Rasuwagadhi-Kerung 400kv transmission line.

On the Kimathanka-Hile road, track opening on most part of the 168km long road from Khandbari, headquarter of Sankhuwasabha district, to Kimathanka border point with China, has been completed. Only 14 kilometers are left to be worked upon. Construction has also started on the road from Dipayal to the Chinese border, without Chinese involvement, according to the Department of Road.

For the two remaining projects aimed at strengthening connectivity with China’s Tibet—upgrading of the Rasuwagadhi-Kathmandu road and Tokha-Bidur road—it is mainly the Covid-19 pandemic that is to be blamed as Chinese contractors can’t enter Nepal to start their jobs. 

Though the report card fails to satisfy, it tells the BRI hasn’t sunk into oblivion either.

Constructive lessons

It’s prejudiced to blindly criticize only politicians like former PM KP Sharma Oli as dishonest. Opportunism and lack of overall political will to implement projects under the BRI are other notable obstacles. The China-Nepal Friendship Industrial Park located in Jhapa district, Oli’s constituency, can be cited as a glaring example.

This writer was told before the foundation-laying ceremony of the park in February 2021 (a BRI project with full support from the local government of Tibet) that Oli hosted many cabinet meetings for what was going to be the country’s largest industrial park. With a jaundiced eye, one could ridicule Oli, as every miller draws water to his own mill.  

But a participant at the inauguration ceremony of the industrial park this February informed that no representatives from other political parties appeared on the stage, allowing Oli to take all the credit. After all, the project was to bring into Nepal around $100 million of Chinese investment in three years (Phase 1), creating around 100,000 jobs, according to the Investment Board of Nepal.

All projects under the BRI are joint ventures between Nepal and China, and both have the duty to see them through on schedule. But why are those projects being driven from pillar to post? In a narrow sense, China began at the wrong end.

There is no royal road to mega projects. BRI projects or national pride projects: which came first? What’s the performance of those 21 national pride projects of strategic importance for Nepal’s overall development? A fair assessment will make the matter clear.

According to a report presented by the National Development Action Committee in 2016, the year the two countries first agreed to board the same boat named BRI during Oli’s visit to Beijing, most of those vital projects were moving at a snail’s pace, with almost half failing to meet the target.

Their poor performance provided a cautionary tale for China, which might be the main reason none of these nine projects had been officially declared by both the parties as coming under the BRI. The Chinese side might have sensed uncertainty of these hit-or-miss projects in a slow-footed Nepal under huge geo-political pressure.

If Chinese professional technicians could be designated to work together with Nepali side, perhaps they would work out three to five feasible projects that could be completed in two or three years. But the former PM Oli seemed intent on doing everything at once.

As a Chinese saying goes, “A tower is composed of many grains of sand, and a river is formed by several streams.” China hopes principles of extensive consultation, joint contribution and shared benefits guide the Belt and Road cooperation. But unfortunately, this cooperation in Nepal seemed to be about establishing an exclusive bloc of UML or “Oli club.” The case of industrial park again being the perfect example.

People say he who pays the piper calls the tune, but instead of calling the shots, China let things drift, without any supervision. Thus its ambitions had been submerged by good intentions and passive observation.

New momentum

In a broader sense, however, the BRI has been a success in Nepal. Encouraged by the initiative, Chinese investors have thronged to Nepal. As a result, China has topped other countries in FDI commitments to Nepal for six successive years.

Pushed by the grand plan of Nepal-China Trans-Himalayan Multi-Dimensional Connectivity Network, India has been strengthening connectivity with its northern neighbor, too, in a betrayal of its long-cherished dog-in-the-manger-policy.

To match China’s landmark infrastructure scheme, the G-7 nations led by the US unveiled, in June, Build Back Better World (B3W), to provide infrastructure to low- and middle-income countries. How it moves ahead is anybody’s guess.

Nevertheless, these initiatives and endeavors echo the deep wish of people for a decent and happy life. The pith and marrow of Belt and Road cooperation is putting development first, as a core agenda for people. Those countries where politicians are addicted to playing politics will miss the golden opportunities and further lag behind.

It is known to everyone that a perception of weakness and failure of the Oli-led government paved the way for the Deuba-led government, which is in its first few weeks. What is expected of the new government is initiative and courage to carry out the BRI to better serve the people.

As things stand, the cooperation is gaining new momentum with the mobilization of the private sector, a surefire measure of success.

The transit protocol is a case in point. A chief complaint on BRI is Nepal’s failure to utilize four Chinese seaports and three land ports for third-country trade after the related protocol came into effect on 1 February 2020. During the visit of President Bidya Devi Bhandari to China, the two countries had signed the Protocol on Implementing the Agreement on Transit and Transportation in Beijing on 29 April 2018.

An early breakthrough is expected. Nepal Mingda Group Company, a China-Nepal joint venture based in Kathmandu, is preparing for the export of the first consignment of frozen buffalo meat to Kazakhstan via China’s landport at Shigatse or by its seaport at Lianyungang.

Wu Xiaoda, the Chinese investor on this project, told this writer the agreement signed with Kazakhstan is worth $100 million, which means his company will export 30,000 tons of buffalo meat in 1,060 consignments via China in a year.

An old campaigner, Wu has been working in Nepal for more than 14 years and there are a few hundred Nepali workers under him.

“This deal would have been impossible without the support of the Ministry of Industry,” he shared, adding that the young generation officers from this ministry are positive and helpful, a stark contrast to the fitful enthusiasm of old-generation bureaucrats.

The author is former chief of Xinhua News Agency Kathmandu Bureau