The Belt and Road Initiative signed between Nepal and China has crossed the 5-year mark.
Kathmandu:
As reported by The Kathmandu Post, the Belt and Road Initiative agreement signed between Nepal and China has crossed the 5-year mark, though even after all these years, BRI projects are nowhere to be seen on the horizon.
According to Pradeep Gyawali, who served as Nepal’s foreign minister, the reasons for the failure of the BRI project in Nepal are, “We had a slow start. It took time to select the projects and then we reduced the number of selected ones. 35 to nine projects.”
“As we were working on the project implementation plan and its modalities, the pandemic hit, and the entire priority was shifted,” he said.
In addition, some political and ideological reasons have hindered the BRI’s progress in Nepal, The Kathmandu Post has reported. Since projects under the BRI were mostly funded by loans taken by Nepal, Kathmandu reduced the number of projects from forty-nine to nine.
“Nepal has long experience in taking loans from multilateral agencies like the World Bank and Asian Development Bank, where interest rates are low and repayment tenures are long,” said Mrigendra Bahadur Karki, an associate professor at Tribhuvan University. Nepal.
“Nepal cannot give commercial loans at high interest rates,” he said. While multilateral agencies provide loans at a maximum of 1.5 per cent, the interest rates for commercial loans cross 2 per cent.
The Trans-Himalayan Multi-Dimensional Connectivity Network, which is a cross-border railway, was one of the primary components of the BRI, The Kathmandu Post reported. However, the Ministry of Physical Infrastructure and the China Railway Administration, in a meeting with Chinese officials, said that 42 months are required to complete the feasibility study of the railway project.
According to the Kathmandu Post report, the complex geological terrain and labor-intensive engineering workload will be the biggest hurdle in the construction of the cross-border railroad. Furthermore, an official of Nepal’s Ministry of Finance said that the Nepal side dropped the idea of taking commercial loans from Chinese banks and financial institutions as a result of the high interest rates.
Nepal’s former envoy to China, Rajeshwar Acharya, blamed frequent changes in the Kathmandu government and lack of proper diplomacy for hindering the development of the BRI project. The former Nepalese envoy also highlighted that the changes in government also affect cooperation efforts between China and Nepal.
According to Acharya, Nepal should consult with the Chinese authorities to find a different funding method. Kathmandu Post reported. “It may take some time but talks are the only way to get a better deal,” he said.
However, it is unlikely that both Nepal and China will resume talks before the next general election in Nepal, and also because Nepal’s current Sher Bahadur Deuba government is indifferent to debt. I do not see any possibility of going ahead with the BRI projects at least till the general elections.” concluded Acharya