BRI in focus as foreign minister begins work

After receiving briefings from intra-party departments, newly elected Minister for Foreign Affairs, Arzu Rana Deuba, has begun her work. Her immediate task upon taking office was to facilitate the return of Nepali students from Bangladesh, where violence erupted following nationwide protests by students demanding the abolition of the quota system in government jobs.

On Wednesday, Minister Deuba appeared before the parliamentary committee on International Relations and Tourism, where she faced a broad range of questions on foreign policy, including China’s Belt and Road Initiative (BRI). The BRI, China’s flagship program unveiled by Xi Jinping in 2018, has once again become a focal point in both domestic and foreign policy with the formation of the new government under Prime Minister KP Sharma Oli.

Minister Deuba informed the parliamentary committee that although the broad agreement on the BRI was signed in 2017, discussions on its implementation plan have only just begun. She said key details such as the project modality, loans, and specific projects are still to be finalized. She emphasized that any agreement must undergo broader discussion before signing, citing the extensive debate on the US’s Millennium Challenge Corporation (MCC) in Parliament as a precedent.

Minister Deuba further stated that the debate should not be confined to a few ministries but should include input from a wider section of stakeholders. The first phase will involve discussions within the government, with the Parliamentary committee being informed subsequently. She reassured that the broad agreement poses no threat, as it is an overarching document, and emphasized the need for collective input on how to proceed with the BRI.

This is Minister Deuba’s first statement on the BRI. China has long pressed for the signing of the BRI implementation plan. The previous government, led by CPN (Maoist Center), was prepared to sign the document, but it was canceled at the last minute by then-Prime Minister Pushpa Kamal Dahal. Although the Ministry of Foreign Affairs had sought permission to sign the document, Dahal did not grant consent.

It was widely reported that the document was not signed due to disagreements over loan terms. However, former Foreign Minister Narayan Kaji Shrestha later clarified that the implementation plan does not mention the investment modality. He added that the issues of investment would be addressed in a separate project implementation plan to be signed after the implementation plan.

Political parties are divided over China’s BRI. The CPN-UML and other communist parties advocate for progress on the BRI and are open to taking soft loans if necessary. The Nepali Congress, a key coalition partner, has officially decided to accept only grants, not loans, under the BRI. However, the BRI’s investment modality involves joint investments in specific projects, with China potentially providing some concessions.

Chinese Premier Li Qiang, in his congratulatory message to Prime Minister Oli, expressed his desire to implement the understandings reached between top leaders of the two countries and to promote collaboration under the China-Nepal Belt and Road Cooperation, as well as in other areas. While major parties have similar positions on the BRI, some adopt a softer stance for public posturing. 

 

In Nepal, the BRI is often perceived as a loan to finance development infrastructure. Recently, China has advised Nepali politicians to select smaller projects under this initiative instead of large, financially viable ones.