Reality check for Nepal as China turns back on BRI promises

With hopes to tide over development and connectivity problems hindering its goal of becoming a middle income country by 2030, Nepal had signed up for China led Belt and Road Initiative (BRI) in 2017. However, an absence of on-ground progress after passage of five years indicates the futility of relying on Chinese promises. The superfluous promises included improving institutional capacity of the Himalayan nation to enable its transition from being a land-locked to ‘land-linked’ one. Falling for the assurances, Nepal even risked its historic relations with India for Chinese assistance in various fields.

However, after five years, the promises are falling apart one by one. Moreover, Beijing’s sole interest in advancing hefty loans to Nepal is becoming clearer due to ever increasing Chinese preconditions for starting various infrastructure projects. These strangulating terms have led to a general feeling of being let down by Beijing, particularly due to delays in project funding and implementation.

Analysts examining various Chinese proposals of recent years have started marking Nepal as the next Chinese debt trap target after Sri Lanka. Chinese designs for securing the status of sole development partner for Nepal were exposed by its brazen targetting of United States sponsored Millennium Challenge Corporation (MCC) programme for Nepal. The agreement had to go through months of persistent opposition tacitly encouraged by Beijing. Finally, ignoring the motivated campaign, the Nepalese Parliament endorsed the MCC on February 27, 2022. The unease between the two countries over BRI progress was visible during a recent visit (March 25-27) of Chinese foreign minister Wang Yi to Nepal. Notably, no BRI related discussion took place during the visit while Nepalese authorities made their preference for only “soft or concessional loan” explicit.

The Chinese desire of promoting its vicious debt cycle is evident in its ignoring or suspending several capacity building and knowledge sharing agreements with Nepal under BRI. In December 2018, China had offered technical know how help to Nepal in the form of China-Nepal Agricultural Technology Cooperation Agreement. A visit by Chinese technical team to the Northern areas of Nepal in 2019 had followed the signing of the agreement. The Chinese researchers collaborated with their Nepalese counterparts for about one year in various areas of agricultural and bovine development.

However, the advent of Covid pandemic the next year created several road blocks for the joint-activities. Citing the significant disruption and wastage of time, Nepal requested China for an extension in duration of the programme for one year. The Nepalese side also provided a list of activities which had been left midway because of the Covid problem. Nepal further conveyed the great utility of the programme for its agricultural sector in the long run provided the China agreed to an extension.

Meanwhile, dismissing all Nepalese concerns, Beijing forwarded a termination notice for the programme. The development is disheartening for Nepalese researchers who had been working against all odds for two years for the betterment of poor farmers. Given that no significant costs were involved, the choice of terminating the project was strange for a country as large as China. The notice served no purpose other than bringing to fore the Chinese desire of blocking development of its smaller neighbours except for engulfing them in its rapidly spreading debt trap.