The great deal of ChinaNepal finally took a decision to join China’s Belt and Road Initiative (BRI) last week, and a memorandum between the two countries was signed in Kathmandu.
Nepal finally took a decision to join China’s Belt and Road Initiative (BRI) last week, and a memorandum between the two countries was signed in Kathmandu. A few days ago, Transport Minister Ramesh Lekhak, who is in Beijing, requested the Chinese government to establish railway networks connecting China to Nepal, as well as between various towns and cities within Nepal.
The Nepali public has mostly welcomed such steps. There is a widespread belief that greater connectivity with China can help kick-start economic growth in Nepal. Some sections of the political class also believe that such connectivity will help them build leverage against Indian pressure. Ever since the 2015 border blockade, there has been a drive to develop greater connectivity with China and to diversify trade away from India. This factor played a major role in Nepal’s decision to join the BRI.
There is no doubt that greater connectivity with China can benefit Nepal. But this will not happen automatically. Nepal needs to take a strategic approach to its interests and great care in not doing anything that upsets the geopolitical equilibrium. While a degree of nationalist approach is important to drum up public support for a common goal, it’s important to not overuse the nationalism card. Both our neighbours are very big and we don’t want to turn into a geopolitical theatre of big power games. We should be careful about not being seen as playing one off against the other.
Our ties with both China and India are extremely important and both have understandable security and other far-reaching concerns in Nepal. We should explain to New Delhi that the signing of the BRI will in no way jeopardise our deep and strong ties with India. China itself might not be willing to be drawn into a conflict with India over Nepal. These are geopolitical realities we have to live with.
While BRI offers huge opportunities for Nepal, we need to carefully evaluate the types of resources that we can gain from China and their costs and benefits. There is currently a lack of information about China in Nepal. We have to thoroughly assess what China seeks from the relationship. After all, countries ultimately have their own interests at heart.
For starters, the Nepal government should commission a study about how the Chinese development projects in countries such as Pakistan, Sri Lanka and Bangladesh have fared. We should not repeat the mistakes that have been made there. There is also the danger that greater connectivity will flood the Nepali market with Chinese goods and increase our trade deficit with China. To prevent this, Nepal has to work on its own export competitiveness. It cannot afford to act like a passive recipient seeking largesse from others. Engaging with China can offer Nepal many benefits—but only if our government takes strong preparatory steps and adopts a strategic stance.