KATHMANDU, May 12: Nepal and China signed the Memorandum of Understanding (MoU) on cooperation under the One Belt One Road (OBOR) initiative on Friday, paving the way for enhanced trade and transit connectivity, financial integration and people-to-people contacts between the two countries.
The MoU signed amidst a special function at the Ministry of Foreign Affairs (MoFA) seeks to promote mutually beneficial cooperation between Nepal and China in various fields such as economy, environment, technology and culture, it is stated.
Foreign Secretary Shanker Das Bairagi and Chinese Ambassador to Nepal Yu Hong signed the MoU on behalf of their respective governments in the presence of Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara and Foreign Minister Dr Prakash Sharan Mahat.
Foreign Minister Mahat said the MoU is an umbrella agreement that sets the ground for promoting cooperation between the two countries in various areas of interest. “Enhancing connectivity, trade, investment, and promoting cooperation in culture and capacity building are among the major components of the MoU. This lays a foundation for Nepal to negotiate sector-wise agreements in future,” he told Republica.
Nepal will start fresh negotiations on various issues including physical connectivity (rail and road), trade, investment, access to Chinese ports, and currency arrangements. Expressing some reservations, Nepal has sought flexible arrangements on the issues of free trade and use of Chinese currency.
The signing of the MoU comes after prolonged indecision and hesitation on the part of Nepal. Although Nepal agreed in principle to be a part of the Chinese initiative and even signed an initial MoU on the Silk Road Initiative, which was later renamed OBOR, in December 2014, indecision by each successive government had left Nepal’s participation uncertain.
Many in Kathmandu attribute the prolonged delay on the part of Nepal to India’s reservations as India is the only South Asian country that has chosen to stay away from this initiative so far.
The MoU seeks to strengthen cooperation in sectors including transit transport, logistic systems, transport network and related infrastructure development such as railways, roads, civil aviation, power grid, information and communications, according Foreign Secretary Bairagi.
Addressing the signing ceremony, Chinese envoy to Nepal Yu said over 100 countries and international organizations have supported OBOR and 40 countries and international organizations have signed cooperation agreements with China .
Yu said China looks forward to working with all parties concerned to take OBOR forward and lay a solid foundation for boosting the world economy.
China is hosting the first Belt and Road Forum for International Cooperation in Beijing on May 14. Nepal has decided to send a high-level delegation.