KATHMANDU, Nov 23: The ruling Nepali Congress (NC) and CPN-UML have reached an understanding not to implement any projects under China’s Belt and Road Initiatives (BRI) through loans.
The parties reached the understanding arguing that the country’s economic situation does not support implementing mega projects through loan. “Our party is not against BRI. But our economic condition now does not support implementing any major projects through loans. We have an understanding with the UML that our country cannot afford to execute any major projects through loans,” said NC lawmaker Ram Hari Khatiwada.
Prime Minister Oli is visiting China on December 2 at the official invitation of his Chinese counterpart. One of the main agenda, according to government sources, has been the implementation of projects under BRI, to which Nepal signed in 2017.
The ruling NC and UML were earlier at odds whether to implement BRI projects by taking concessional loans from China. While the NC has remained opposed to executing any projects under loans, the UML stood in favor of implementing the projects even if it involves taking loans.
BRI Breakthrough
Amid this difference, Prime Minister Oli on Thursday had canceled the scheduled cabinet meeting and held discussions with top NC leaders to forge consensus. The meeting, according to leaders from both the parties, reached a consensus that the country should not take additional burden of loan as the economy is not in a good financial health.
NC, according to leaders, has asked PM Oli to urge the Chinese government to waive the loan given to build Pokhara Regional International Airport and seek Chinese assistance to prepare DPR of Kerung-Kathmandu railway to expedite railway construction works. “This will help take our relations to a new high,” said lawmaker Khatiwada, who is also the chairman of the State Affairs and Good Governance Committee under the House of Representatives.
Prime Minister Oli hinted about the understanding reached between the two parties while addressing an awareness rally held by his party in Kathmandu on Friday. Oli said that Nepal is not in position to take loans from any countries now.
“We will try our best not to take loans from any country. We have neither the intention nor the condition to take out a loan. But we need to increase our production and bring prosperity on our own,” the prime minister said, while dispelling concerns that Nepal is taking huge loans from China to implement BRI projects.
With this development, Nepal is less likely to sign the draft implementation plan for the Belt and Road Initiative (BRI) during Prime Minister Oli's visit to China, although PM Oli has a particular interest in implementing some of the BRI projects.
Sources said NC and UML leaders are still exploring a middle-ground approach to resolve their differences on the BRI. While some projects can be funded through grants, others can be undertaken through concessional loans after making a thorough review of the laws related to the BRI, the leaders opined.
According to officials at the Ministry of Foreign Affairs, Prime Minister Oli's visit to China will highly likely focus more on implementing previous agreements rather than signing the BRI project implementation plan. The Chinese side has reportedly conveyed its willingness to accept whatever proposal the ruling coalition puts forward, although PM Oli has shown a particular interest in the BRI projects.
In 2019, following Chinese President Xi Jinping's visit to Nepal, China proposed a framework for the implementation of BRI projects. The assistance of Rs 56 billion announced by President Xi at the time has also not been implemented.
Earlier, during separate visits to China by former Prime Minister Pushpa Kamal Dahal and former Foreign Minister Narayan Kaji Shrestha, discussions were held in Nepal regarding the implementation of the BRI project. However, the issue did not progress in China due to the lack of a finalized modality.
When Shrestha was the foreign minister, the government had prepared a general framework for the modality. However, it was stalled because the NC, a coalition partner at the time, did not give its approval, and thus the process could not move forward.
