18-24 March 2016 #800

No oil for oli

“Beijing can take advantage of Nepal’s increased distance from India, but is unlikely to help us at the cost of angering New Delhi.”
Om Astha Rai

Credit: Diwakar Chettri

In the 60 years since Nepal and China established diplomatic relations, 12 Nepali prime ministers, three kings and a president have visited China. On Sunday, Prime Minister K P Oli will be the 13th.

Oli is meeting Chinese President Xi Jinping and Premier Li Keqiang before heading to Hainan to attend the Boao Forum for Asia. In Beijing, he will sign new deals on trade, transit, banking and road connectivity. But the much-hyped petroleum deal under which Nepal is expecting to import one-third of its oil needs from China is not looking possible.

A highly-placed source at the Ministry of Foreign Affairs told Nepali Times: “We will discuss the memorandum of understanding that Foreign Affairs Minister Kamal Thapa signed with China to import fuel, but an agreement to this effect is not in the PM’s agenda.”

However, we have learnt that the petroleum agreement had been on the list of talking points of all meetings that Oli held to prepare for his China visit until a few days ago. “I don’t know why it is suddenly no longer on the list,” an Oli aide told us.

After India’s crippling five-month blockade, there is pressure on Oli to diversify energy imports, and reduce Nepal’s overwhelming dependence on India. Madan Regmi of the Kathmandu-based China Study Centre says: “We must strengthen our relations with China and have alternatives against future blockades.”

Oli has shown that he understands realpolitik. He visited New Delhi last month and his government has also gone out of its way to assure India that Nepal is not playing ‘the China card’. And now, he is no longer interested in a deal which he himself fervently pushed.

Coincidentally, Oli met the Indian Minister of External Affairs Sushma Swaraj and Foreign Secretary S Jaishankar in Pokhara on Wednesday at a SAARC event two days before leaving for China.

Meanwhile, Laxman Lal Karna of the Tarai Madhes Democratic Party told Nepali Times: “We are meeting the Chinese ambassador on Friday to explain why we are fighting the Nepali state.” Madhesi protesters had burnt Chinese flags to protest Beijing’s gift of 1,000 tons of petroleum during the height of the blockade last year.

Most analysts believe that the sudden suspension of the petroleum deal is less because of logistics and lack of infrastructure and more because of Indian pressure. And it looks like the bruising blockade means that Nepal’s leaders have got the message and there is little they can do.

Former ambassador Bhekh Bahadur Thapa says that although the blockade has ended, Nepal-India relations will take time to normalise. “We are at a point where it is not warm enough to take off our winter clothes and it is not cool enough to take off our summer clothes,” he quipped.

Thapa thinks it would be too much to expect a great leap forward in Nepal-China relations during the Oli visit. He added: “Beijing can take advantage of Nepal’s increased distance from India, but is unlikely to help us at the cost of angering New Delhi.”

Read more:

No oil for Oli, Editorial

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