Nepal Wants Development Aid From China, Not A Security Pact

(MENAFN- NewsIn.Asia) By P.K.Balachandran/CeylonToday

Colombo, October 2:During the just-concluded visit of Nepalese Prime Minister Pushpa Kamal Dahal to China, the accent was on development projects and not on a security deal that China had been keen on.

China has been pushing Nepal to join its Global Security Initiative (GSI). But Dahal has been resisting it, despite being the leader of a Maoist party.


There are two reasons for this: As Prime Minister of Nepal, Dahal has to walk the tightrope vis-à-vis China and India, both neighbours having long borders, one in the North, and the other in the South. Secondly, Dahal is running a coalition government with the Nepali Congress, an avowedly pro-India party, as one of the partners.

Dahal told the Nepali paper Kantipur in an exclusive interview in New York last week that he would not enter into any security-related agreements with China during his visit to Beijing.

He said that China had proposed a Global Security Initiative (GSI), a Global Civilizational Initiative (GCI) and a Global Development Initiative (GDI). Among these, Nepal is interested in joining the development initiative, he added.

“We cannot wade into security-related issues. It is our stated policy not to be under the umbrella of any side. Ours is a non-aligned foreign policy. We have said that the American Indo-Pacific Strategy (IPS) and the State Partnership Program (SPP) are security initiatives and that we are not taking part in them. Having said that, we cannot join others security arrangements.,” Dahal explained.

The agreements Nepalese and Chinese officials signed in Beijing on Monday in the presence of Dahal and his Chinese counterpart Li Qiang covered, among others, the economic development of the northern region of Nepal bordering
China; digital economy; green and low carbon energy and the translation and publication of ancient Buddhist texts. No security cooperation agreement was mentioned.

There was speculation about a security pact after the Chinese Foreign Ministry issued a statement quoting Dahal saying that“Nepal
supports a series of important concepts and initiatives put forward by President Xi Jinping, and is willing to work with China to promote the development of the international order in a more just and reasonable direction, safeguard the common interests of developing countries, and promote the building of a community with a shared future for mankind.”

In September 2022. the Nepalese Ministry of Foreign Affairs had advised former President Bidya Devi Bhandari not to take part in a GSI-related, even virtually.

Balancing China and India

Dahal does not want to have a security alliance with India either. There are strong military ties with India but no military alliance as such.

“We did not take part in a joint military exercise in India organised by BIMSTEC. We only took part in programmes related to development. We cannot be under the security umbrella of any country. Nepal's geo-political sensitivity does not allow us to stay under anyone's security umbrella,” he said in his interview to Kantipur.

In an interview to the Global Times of China Dahal clarified his government's relations with China and India. He said:“Nepal's relations with both China and India are guided by principles of good neighbourliness, peaceful coexistence, and a non-aligned foreign policy. Nepal deals with China and India independently. Our relationship with one neighbour will not be influenced by our relationship with the other, nor will we seek to play one against the other.”

“Both neighbours are close friends and important development partners. We will continue to develop our relationships with both the neighbours on a bilateral basis. If any differences arise with either of them, such issues will be resolved through friendly bilateral negotiations.”

“Nepal respects the interests of both China and India. We emphasize the development of a win-win cooperative model that benefits all three countries”.

Belt and Road Initiative

In the joint statement issued in Beijing, the implementation of the Chinese Belt and Road Initiative (BRI) was mentioned. Though Nepal became part of the BRI in 2017, its implementation has been very tardy.

The Joint Communique said that the two sides“agreed to finalise the text on the BRI Implementation Plan at an early date. They expressed readiness to deepen and solidify Belt and Road cooperation. They agreed to strengthen connectivity in such areas as ports, roads, railways, airways and grids in an orderly manner, jointly build the Trans-Himalayan Multi-Dimensional Connectivity Network, work together to ensure the safety of the cooperation projects and company personnel of the two countries, and contribute to Nepal's realisation of its development agenda including graduating from the least developed country status at an early date.”

Dahal had told Kantipur in New York that Nepal did not want to take loans to finance projects and that the BRI projects are loan-based.

“If we are offered grants under the BRI, we will accept them,” he said.

According to Nepalese economists, Nepal is ready for low-interest loans, preferably below that offered by the World Bank, the Asian Development Bank and other global lenders.

Pragya Ghimire, a member of the Board of Directors at the Institute of Foreign Affairs in Nepal, said in an article that the BRI has lost steam across the world because it has burdened participating countries with debt.

There are transparency and accountability issues regarding BRI loans, project contracts, and the environmental and social impact.

Following India's economic blockade of Nepal in 2015, Nepal veered to the Chinese side, signing a transport-transit agreement to access seven ports in China. Nine BRI projects were selected, including the ambitious“Trans-Himalayan Multi-Dimensional Connectivity Network”.

But none of the projects was implemented, Ghimire says.

She also points out that China tends to be more interested in its own interests rather than Nepal's.

“When the northern border was closed for an extensive period, China only cared about its own interests, disregarding the problems the Nepalis were facing. China pressured Nepal to become part of its Global Security Initiative (GSI) and even started openly marketing Xi's ideology to various Nepali political parties. Chinese Ambassador Chen Song even remarked about how India's policy towards its neighbouring countries, including Nepal, is unfriendly and not beneficial,” Ghimire wrote in Kathmandu Post recently.

According to Prashanti Poudyal, a researcher at the Centre for Social Inclusion and Federalism, the Nepalese Ministry of Industry, Commerce and Supplies had recommended that Nepal should not move on the Free Trade Agreement with China because it would lead to an exponential increase in imports, while Nepali exports would be unable to compete in the Chinese market, despite the duty waiver.

Poudyal suggested a very careful selection of infrastructure projects. Thought should be given to the loan burden as well as financial viability and return on investment, she stressed.

“It is essential to ask whether Nepal requires a trans-Himalayan Rasuwagadhi-Keyrung railway, advertised as the flagship BRI project, and if so, whether Nepal has the resources to sustain it,” Poudyal said.

Nepal also has border issues with China. But Dahal chose not to raise them during his Beijing visit.
Illegal encroachments had been noticed in the bordering districts (in Dolakha, Gorkha, Darchula, Humla, Sindhupalchowk, Sankhuwasabha and Rasuwa ).

Summing up the impact of Dahal's visit to China to Kathmandu Post, former Foreign Minister Narayan Khadka said:“The Prime Minister went to China with a long wish list. But if we go through the joint statement, most of the subjects mentioned are old pacts.”

“ During my visit to China in August 2022, and earlier bilateral exchanges, we had reached consensus and signed several agreements, understandings, and pacts. Only if these agreements are implemented can we say that there is a difference. I don't see any meaningful impact of the visit.”



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