Six years after signing up for BRI, Nepal still struggling to comprehend what China wants

With the projects mentioned under the framework failing to take off in Nepal, China has labelled an airport whose construction was started before Nepal signed up to BRI, under its ambit, and is pushing to employ soft power tools such as “Silk Roadster”

August 09, 2023 01:09 am | Updated 01:10 am IST - Kathmandu

Nepalese Prime Minister Pushpa Kamal Dahal, right, with  former Chinese Defense Minister Chang Wanquan during his official visit to Nepal in 2017.

Nepalese Prime Minister Pushpa Kamal Dahal, right, with former Chinese Defense Minister Chang Wanquan during his official visit to Nepal in 2017. | Photo Credit: File photo

Nepal has completed six years since it signed up to China’s Belt and Road Initiative (BRI), but it still appears to be at a loss — failing not only to acquire even a single project under the scheme but also to comprehend what exactly Beijing wants.

Confusion exacerbated after China labelled a project, which was started before Nepal signed up to the BRI, as one under the initiative.

When Pokhara International Airport, built with a Chinese EXIM Bank loan, was set to be inaugurated on January 1 this year, the Chinese Embassy in Kathmandu said in a tweet: “The Inauguration Ceremony of Pokhara International Airport will be held at 11 a.m. tomorrow. This is the flagship project of China-Nepal BRI cooperation. Warmly congratulates to Nepali Gov and Nepali people!”

It raised quite an eyebrow, as the construction of the airport started in 2016, while Nepal signed up to the BRI framework only in May 2017.

On June 21, when a Sichuan Airlines charter flight flew into Pokhara from Chengdu, the first international flight to land at the $216 million facility, Chinese Ambassador Cheng Song again tweeted: “Today, the new Chengdu-Pokhora air route marks a new achievement for the trans-Himalayan multi-dimensional connectivity network between China and Nepal, which is a priority cooperation field between China and Nepal under the BRI initiative.”

The issue was even raised at Parliament.

Amid questions from various quarters, Nepal’s Foreign Minister Narayan Prasad Saud was forced to furnish a statement. “Nepal and China are still discussing how projects under the BRI framework would be implemented,” Mr. Saud told Parliament on June 27, without mentioning the Pokhara airport. He, however, made it clear that Nepal has yet to execute any project under the initiative.

Opinions are divided over Chinese assistance under the BRI in Nepal — some warn of a debt trap risk, others say it could be an opportunity.

In 2019, at least nine projects were agreed upon for their launch in Nepal under the BRI, but there has been no progress at all, even as there have been vigorous engagements at various levels between Kathmandu and Beijing in recent years.

Mrigendra Bahadur Karki, executive director at the Center for Nepal and Asian Studies, says there seems to be confusion not only among the Nepalis about the BRI but also among the Chinese when it comes to dealing with Nepal amid a geopolitical flux. “As I understand, by repeatedly calling the Pokhara airport a project under the BRI, the Chinese want to make clear to everyone about their presence in Nepal, where big countries like the U.S. and India do not want to lag behind when it comes to exercising their influence,” said Mr. Karki. “Since Nepal signed up to the BRI in 2017, the common understanding is that the Pokhara airport cannot fall under the initiative as it was started before that. And that’s the correct understanding.”

Debt trouble

Since not even a single international flight has started operations to and from the Pokhara airport in the last eight months, there are growing fears it could turn into a white elephant. Some observers wonder if more mega projects are built with Chinese assistance and all of them are put under the BRI basket, Nepal could face serious debt trouble. But there are others who call for making use of aid programmes like the BRI and others for Nepal’s larger benefit.

“Rather than squabbling over what Beijing said, it would be better to focus on how we can utilise the airport. And this applies to any other project built with Chinese assistance,” said Anurag Acharya, director at the Policy Entrepreneurs Inc, a Nepal-based research centre. “Public opinions may differ but it’s for the policymakers and the political leadership to think how Nepal should pursue its foreign policy and economic policy.”

While Beijing and New Delhi have always jostled for expanding their sphere of influence in Kathmandu, Washington has emerged as the third leg in Nepal’s diplomatic stool.

An incident last year may serve as a sparkling example. In 2022, China and the U.S. appeared to be in a state of proxy battle for influence over Nepal — as Washington was pushing Kathmandu for parliamentary ratification of the Millennium Challenge Corporation (MCC), Beijing was warning of consequences. Nepal and the U.S. signed the $500 million MCC agreement in 2017, the same year it signed up to BRI.

Mr. Karki says China started to pursue a proactive foreign policy in Nepal only after Xi Jinping came to power. “Amid China’s emergence as the second largest economy and its active and aggressive engagements in Nepal, there are chances the U.S. and India would consider rethinking their ways of viewing and dealing with Nepal,” said Mr. Karki. “Failing to maintain a balance would harm only Nepal, not others.”

Nepal’s geopolitical risks have snowballed amid growing India-China and U.S.-China rivalry, and observers say Kathmandu’s failure to keep pace could put it into a quandary. New Delhi has traditionally enjoyed its clout in Kathmandu, while Washington has renewed its engagements in Nepal in recent years. Both India and the U.S. continue to stick to their position on BRI, with American officials during their visits to Kathmandu in the past warning Nepal of the possibility of falling into debt trap, offering Sri Lanka as an example.

Just last month, India made its stance clear once again, as it stood in opposition to the BRI at the Shanghai Cooperation Organisation virtual summit. It has maintained a silence though on Nepal signing up to MCC or BRI.

Soft power tools

With projects particularly mentioned under the BRI framework failing to take off in Nepal, China appears to be in a bid to employ soft power tools as well. Last month, Beijing launched what it calls “Silk Roadster” in Nepal as a platform under the BRI.

“The International Department of the [Chinese Communist Party] Central Committee has set up the ‘Silk Roadster’, a new platform for practical cooperation and people-to-people exchanges between China and Southeast and South Asian countries,” reads a document named ‘Introduction of Silk Roadster and Its Five Signature Projects’.

According to the document, seen by The Hindu, the five signature projects are — Silk Road Embarkment, Silk Road Empowerment, Silk Road Enjoyment, Silk Road Enlightenment and Silk Road Enhancement.

Small-scale projects and programmes like technical skill training, overseas studies, and cultural as well as people-to-people exchanges, among others, have been included in the document, which it says will be carried out in coordination with political parties and social organisations.

Mr. Acharya, the director of Policy Entrepreneurs Inc, believes China is in a bid to expand its presence through various means by using soft power along with investments in mega projects. “Take, for example, the Nepal-China Dragon Boat Race Festival in Pokhara in June organised by the Chinese Embassy in Nepal,” said Mr. Acharya. “This is part of Beijing’s aim to enhance cultural ties with Nepal. And also, there are clear indications that it wants to work with provincial and local governments besides the federal government.”

According to Mr. Acharya, just like there was no need of fear-mongering over MCC, there is no need to do the same over BRI.

Lingering concerns

Concern, some say, is not that China asserted Pokhara airport is part of BRI, concern is what if Beijing continues to make unilateral announcements like this in the future.

“Our politicians and policymakers need to step up to the plate,” says Mr. Karki. “Nepali politicians should stop their never-ending game of clinging to power and should rather redefine and strengthen Nepal’s own foreign and economic policies.”

Semanta Dahal, a lawyer who has written extensively on foreign aids like the MCC and the BRI, says as the initiator of the BRI, China is the one that defines it and that drives it as well. “Since it’s their foreign policy tool, on their part, there seems to be nothing wrong on their part to call any project under the BRI,” said Mr. Dahal. “Nepal should rather focus on the possible consequences rather than China’s pronouncement that a certain project is under BRI.”

(Sanjeev Satgainya is an independent journalist based in Kathmandu.)

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