PM Oli made history, again

When Prime Minister KP Sharma Oli was embarking on an official visit to China, skepticism was swirling in Nepal’s political circles. Particularly, Pushpa Kamal Dahal tried to label the visit as a ‘China card’, a characterization that was both insensitive and unjustified. Despite adversarial rhetoric and conspiracy theories, Oli’s visit proved to be a landmark, underlining his ability to advance Nepal’s national interests on the global stage.

This marked Oli’s third official visit to China as Prime Minister, and like his previous visits, it carried a profound significance. Oli’s diplomatic engagements with China have consistently focused on diversifying Nepal’s economic and development partnerships. Oli’s three visits to China as prime minister have been a grand success in protecting national interest.  

During his maiden visit to China in March 2016, Oli witnessed the signing of the Transport and Transit Agreement (TTA). This historic agreement sought to break Nepal’s dependence on India for trade and transit, symbolizing Nepal’s aspiration to evolve from a landlocked nation into a land-linked one. It laid the foundation for a more independent trade regime by granting Nepal access to Chinese seaports and overland transport routes. 

However, turning this vision into reality has proven to be a formidable task. Nepal faces significant infrastructural challenges and logistical hurdles that must be addressed to fully operationalize the agreement. Still, the signing of the pact marked a decisive step toward diversifying Nepal’s trade partners and reducing its economic vulnerability. We should understand each step of execution of every project begins with the signing of the document.  

Oli’s second visit to China in June 2018 added another layer of substance to Nepal-China relations, with the signing of a memorandum of understanding (MoU) to explore the feasibility of a trans-Himalayan railway linking Kerung in Tibet to Kathmandu. Though there have been other significant decisions, the feasibility study of railway is one that will have a momentous impact in connectivity if it materializes. 

While this ambitious project will take more than a decade to complete, it represents a transformative vision for Nepal’s connectivity. Feasibility studies have been conducted in two phases in this regard. This time too, both the governments have iterated cross-border railway. The railway is more than just an infrastructural project as it embodies the potential to establish Nepal as a critical transit hub between China and India. Because Raxaul-Kathmandu railway is also in the line sooner than northern railway.  By connecting the two Asian giants through Nepal, the project could redefine regional trade dynamics and offer Nepal unprecedented economic opportunities. 

Oli’s third visit to China in 2024 cemented his legacy as a leader committed to deepening bilateral ties. The highlight of the visit was the signing of an implementation plan for the Belt and Road Initiative (BRI), identifying 10 key projects for collaboration. This milestone marked a significant step forward in Nepal’s engagement with the BRI, which had been mired in delays and political debates since its signing in 2017. Under the projects of the BRI, both the sides have agreed ‘aid financing’ model that incorporates both the grant and concessional loan. But as the Prime Minister has clarified, Nepal will only take grants from China. Minister for Foreign Affairs Arzu Deuba Rana has shared the same statement. She further explained that there was nothing mentioned about the loans. 

By finalizing the implementation plan, Oli’s government demonstrated its ability to pilot the complexities of global geopolitics. The move cleared lingering uncertainties surrounding Nepal’s participation in the BRI and reaffirmed the country’s commitment to fostering mutually beneficial partnerships with China. However, it also underscored the need for Nepal to manage its foreign relations prudently, avoiding potential entanglements in geopolitical rivalries. Nepal has been able to convey a message to the global community that it will collaborate with all countries for development and prosperity without allowing foreign intervention in domestic affairs. 

Nepal’s foreign policy has often been characterized by a delicate balancing act between major global powers. This dynamic was evident in the interplay between the BRI and the Millennium Challenge Corporation (MCC) compact with the United States. While the implementation of MCC has already begun, focusing on transmission lines and roads, the BRI has faced prolonged uncertainty.  Nepal will leave no stone unturned for receiving support of neighbors and great powers if they are genuinely offered.  The MCC, a $500m grant from the US supplemented by a $200m contribution from Nepal, has been a subject of intense political debate. The successful initiation of the BRI implementation plan during Oli’s visit signals Nepal’s intent to work with India, China, the US and other great powers on building infrastructure. Nepali leaders philosophically agreed that India and China are first priority and they should be openly called for supporting Nepal’s development. 

One of the most notable aspects of Oli’s recent visit was the unified stance adopted by Nepal’s major political parties on foreign policy matters. This consensus reflects a growing maturity among Nepali leaders in addressing international issues. By setting aside partisan differences, the political establishment demonstrated its commitment to prioritizing national interests in the realm of foreign policy. This collaborative approach has significant implications for Nepal’s diplomatic strategy. It enhances the country’s credibility as a stable partner and strengthens its bargaining position in negotiations with neighbors. Moreover, it underscores the importance of institutional continuity in foreign relations, ensuring that Nepal’s engagements with global partners are driven by long-term strategic considerations rather than short-term political calculations.

While Oli’s achievements in fostering Nepal-China relations are commendable, challenges remain. The successful implementation of agreements such as the Transport and Transit Agreement, the railway connectivity MoU and the BRI projects requires substantial financial resources, technical expertise and continued political will. Nepal must also address domestic constraints, including bureaucratic inefficiencies and infrastructural deficits, to fully capitalize on these initiatives. At the same time, opportunities are immense.  Oli has set the stage for a more confident and assertive Nepal. His efforts underscore the importance of strategic foresight and proactive diplomacy in a changing global order. After the China visit, the Prime Minister will also visit our southern neighbor. I believe, PM’s upcoming India visit would be equally fruitful.