Nepal in OBOR plan
Addressing a seminar in Kathmandu on Chinese President Xi Jinping’s signature One-Belt-One-Road (OBOR) initiative, Deputy Prime Minister Krishna Bahadur Mahara last week expressed his government’s commitment to signing up for the initiative. Nepal believes the OBOR is a “very good initiative that helps the region boost economic and technical cooperation”, Mahara said, adding that the country was in the “final stages” of preparations so that it could sign the deal at the upcoming OBOR Summit in Beijing starting on May 14. Nepal has confirmed a high-level delegation under Mahara will attend the meet. Yet despite DPM Mahara’s soothing words there are lingering doubts about Nepal’s commitment. Nepal apparently has some reservations that it wants China to address. Among these are doubts over prospective economic benefits to Nepal of joining.
Given the poor state of Nepali economy, won’t making it easier to trade with China only add to the country’s mountain of trade deficit, which, at Rs 352 billion, is already troubling? In the first five months of the current fiscal, the country’s imports climbed up by nearly 80 percent. Even though India accounted for most of the trade deficit, Nepal’s deficit with China in this time also rose by 43 percent.
Nepali policymakers are right to be concerned. The good news is that the Chinese are said to be positive about addressing Nepal’s concerns, for instance with assurance of market access for certain Nepali products. Yet it also seems that one reason behind the delay in Nepal’s commitment to OBOR is that Nepali Congress, the chief coalition partner, is not sold on the idea. Congress President Sher Bahadur Deuba apparently wants to remain in the good books of New Delhi when he becomes the prime minister after the local election, and hence the delay. It is interesting that Congress and Deuba should be so concerned about India’s possible ire if Nepal signs up, when, even in India, there is a growing consensus that it could be unwise for India to opt out of the modern-day revival of the vast ancient Silk Road. For instance, India’s former National Security Advisor Shiv Shankar Menon thinks that while India is rightly concerned about certain aspects of OBOR, “prudence demands we prepare for the changed landscape we will face one way or another in the next few years.”
Menon is bang on when he hints that greater connectivity in Asia is inevitable and there is no point in continuing to resist it. The same rule applies in Nepal’s case. It is clear that Nepal’s interests will be best served if it can act as a dynamic bridge between India and China. Even if this cannot be achieved, largely due to the geostrategic competition between India and China, Nepal has no option but to improve its relation with China and thereby try to maintain some kind of a balance between the influence of India and China in Nepal. Having already witnessed three border blockades, Nepal has understood the folly of over-reliance on any one of its two neighbors. Improving relations with China should also not be equated with damaging age-old ties with India. This is not a zero-sum game.
Nepal, India and China can all gain by greater cooperation and connectivity in the region. And this is why Nepal should not hesitate to ink the deal on May 14.