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Nepal joins New Silk Road

Friday, May 12th, 2017

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Foreign Secretary Shankar Das Bairagi and Chinese ambassador Yu Hong shake hands after signing the OBOR agreement. Pic: RSS

After months of dilly-dallying, Nepal has finally signed a framework agreement on China’s One Belt, One Roa d (OBOR) Initiative.

Foreign secretary Shankar Das Bairagi and China’s ambassador to Nepal Yu Hong signed the agreement in the presence of Foreign Minister Prakash Sharan Mahat in Kathmandu on Friday.

China had forwarded the draft of the agreement to Nepal last year, but the Maoist-NC coalition, widely believed to be under some pressure from New Delhi, was sitting on it despite constant follow-ups from Beijing.

But Prime Minister Pushpa Kamal Dahal had to either sign or decline the agreement ahead of the OBOR forum, which will be held in Beijing next week. He could no longer afford to irk Beijing, and decided to sign the agreement and send his deputy Krishna Bahadur Mahara to participate in the Forum.

Introduced by China’s President Xi Jinping in 2013, the OBOR is a multi-billion dollar project to connect China’s booming economy with the West through Asia and Africa.

Nepal is neither directly connected with the Silk Road nor with the Maritime Belt that are being restored under the OBOR, but is considered a strategic link between China and India. China is already expanding the Tibet railway to Nepal’s border in Rasuwa Gadi, and plans to bring it down to India’s border in Lumbini.

Analysts say the OBOR is the biggest trade investment by a country since the Marshal Plan – an American initiative to aid Western Europe after the World War II. Nearly 70 Asian, African and European countries have already joined the OBOR. But the US and India see it as China’s strategy to rise as the global super power.

Nepal initially welcomed the OBOR, and was also involved in founding China’s Asian Infrastructure Investment Bank (AIIB) in 2014. Nepal then developed cold feet, possibly fearing hostile reaction from India.

After India cut off the supply of fuel and other essential commodities to the earthquake-devastated Nepal for five months in 2015, anti-Indian sentiments have increased here and the UML government signed a trade and transit agreement with China. The call for Nepal to join the OBOR also grew louder during this period.

After the NC and Maoists forged a coalition and toppled the UML government, the coalition did not show any urgency to implement the deal with China. Dahal or his coalition partners never publicly opposed the OBOR, but reportedly tried their best to delay it. Foreign Minister Mahat of the NC was even accused of cancelling a visit to Beijing because he thought China would press him to sign the agreement.

Experts and analysts have welcomed Nepal’s decision to join the connectivity corridor project. But they say Nepal may not be able to benefit from the OBOR if it does not have its own vision.


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