CESIF organizes seminar on “Navigating Strategic Implications of BRI for Nepal”

The Centre for Social Innovation and Foreign Policy (CESIF) organized a national seminar on “Navigating Strategic Implications of BRI for Nepal.”

The seminar aimed to discuss the strategic opportunities and challenges posed by China’s Belt and Road Initiative (BRI) for Nepal.

Focusing on BRI’s geopolitical significance for the country, the seminar sought to generate consensus on Nepal’s priorities to maximize the Initiative’s benefits while safeguarding Nepal’s national interests.

The seminar began with welcoming remarks by CESIF’s Executive Chairperson, Vijay Kant Karna, who also set the context for the speeches, presentation, and discussions to follow.

Noting that the Nepal-China relations currently stand at a crucial juncture, Karna stressed that the BRI is a strategic tool for China to advance its vision for an alternative world order, and the Implementation Plan mimics a comprehensive agreement with long-term strategic implications for Nepal. “Instead of signing a separate Implementation Plan, Nepal should negotiate on specific projects under the Initiative,” argued Karna, reads a statement issued by CESIF.

Following the welcome speech, CESIF’s Research Director Ajaya Bhadra Khanal delivered opening remarks. His speech also highlighted the geopolitical complexities and long-term implications of BRI as China’s comprehensive vision for a new world order. “The BRI Implementation Plan is not just an infrastructure development plan but a comprehensive strategic framework, negotiating which must involve a detailed assessment of their social, political, economic, and strategic consequences for Nepal,” emphasized Mr. Khanal.

Pawan Adhikari, Research Fellow at CESIF, presented on “BRI in Nepal: Status, Challenges, and Way Forward,” shedding light on the regional and global BRI experiences, the current state of Nepal’s engagement with BRI, and potential paths for negotiation and project implementation. He stated that Nepal should prioritize feasible “small but beautiful” pilot projects before implementing “mega projects.”

The seminar featured three keynote speeches by Prakash Sharan Mahat, Former Minister for Finance / Foreign Affairs of Nepal, Pradeep Gyawali, Former Minister for Foreign Affairs of Nepal, and Raj Kishore Yadav, Chairperson, International Relations and Tourism Committee, House of Representatives, Nepal.

Mahat echoed the observation that BRI is China’s strategic tool to globalize its engagement and increase its presence and influence to achieve its national interests and broader visions. He also highlighted his party Nepali Congress (NC)’s stance, “there should be a common yardstick for Nepal’s engagement with all partners, which must prioritize the country’s national interests.” However, Nepal has had “the tendency to lack preparations and make last-minute decisions, due to which we face problems eventually,” he added, “therefore, we must take as long as it takes to reach a consensus based on Nepal’s own national interests and priorities, and not sign the Implementation Plan in haste.” Irrespective of all other dimensions, in summary, Nepal should not accept loans under the Initiative, especially when China is yet to deliver on its several grant commitments to Nepal.

Similaly, Gyawali also emphasized the need for sufficient discussions on important bilateral and multilateral agreements, especially in its dealings with the neighboring countries and superpowers, before committing to agreements with long-term consequences. “Instead of assessing where Nepal’s interests and priorities align with the Chinese Initiative and how to benefit from it, our discussions and debates have been limited to a loan versus grant narrative,” he stated, “nevertheless, Nepal should not accept loans to advance any large infrastructure project under current circumstances.”

Citing the example of Pokhara International Airport, Yadav warned that Nepal must consider some serious concerns, such as debt-sustainability, lack of transparency, and geopolitical implications of the BRI-funded projects. “Transparent discussions on major foreign policy choices constitute a fundamental aspect of democracy, but neither the MoU nor the Implementation Plan of the BRI has been discussed in the parliament and civil society platforms,” Hon. Yadav stressed, “Nepal should not sign the Implementation Plan without proper and transparent discussions.”

CESIF brought together experts and practitioners to discuss various dimensions of BRI in two different panels. The first panel included speakers Govinda Raj Pokharel, Former Vice Chairperson of the National Planning Commission of Nepal, Madhuraman Acharya, Former Foreign Secretary and Foreign Policy Expert, and Bishnu Rijal, Central Committee Member, CPN-UML, and was moderated by Vijay Kant Karna.

The discussion centered on BRI’s negotiations and their strategic implications for Nepal. Acharya characterized BRI in Nepal as a “classic case of how not to negotiate,” as it featured negotiation under duress, top-down negotiations, and politicization. “BRI Implementation Plan is essentially an explanation or formalization of the ‘strategic partnership’ between Nepal and China, agreed during Xi Jinping’s Nepal visit in 2019,” he contended, “such a comprehensive agreement should not be signed in haste, without negotiating on Nepal’s national interests.”

Pokharel emphasized that Nepal’s top priority should be on securing a trade route with China, which is “one of the most important national priorities but is often overlooked in negotiations.” He underscored the importance of identifying national priorities well in advance, because a failure to do so “significantly undermines our ability to negotiate effectively.” Bishnu Rijal discussed the necessity of external borrowing for Nepal to meet its growth targets because “Nepal cannot sustain major projects with internal resources alone.” However, Pokharel argued that Nepal can take loans only for projects with high debt-sustainability and rate of return. Mr. Rijal also highlighted the historical ties between Nepali and Chinese communists and dispelled concerns about potential policy infiltrations, arguing that these relationships do not compromise Nepal’s policy making autonomy.

The second panel discussion on “Navigating BRI: Debt, Diplomacy, and Development,” hosted experts who explored different aspects of BRI’s implementation in Nepal. Moderated by Mr. Ajaya Bhadra Khanal, the panel included speakers Kewal Prasad Bhandari, Secretary (Retd.), Government of Nepal, Prof. Bishwambhar Pyakurel Senior Economist Mr. Anil Giri, Senior Journalist, The Kathmandu Post.

Arpan Gelal, Research and Program Coordinator at CESIF, wrapped up the event by summarizing the key issues raised and the consensus reached on the seminar.

More than a hundred participants including policymakers, politicians, national and international experts, analysts, academics, diplomats, bureaucrats, and journalists attended the event.