The recently appointed finance minister, Prakash Sharan Mahat, voiced grave concerns on Wednesday in the House of Representatives on Nepal’s prospective signing of the Belt and Road Initiative (BRI) implementation plan with China.
There are strong indications that the plan, which details the funding modality and project clusters, will be a major topic of discussion during Deputy Prime Minister and Minister for Foreign Affairs Narayan Kaji Shreshta’s visit to China beginning on Sunday, even though the government has not yet decided to officially sign it. Major parties have apparently not been consulted by the government on the BRI implementation plan.
At the invitation of his Chinese counterpart, Wang Yi, Shrestha is leaving for Beijing on Sunday, Suresh Kaji Shrestha, a member of the Shrestha’s private secretariat told the Post. “It is a goodwill visit,” he added. Shrestha is scheduled to meet some leaders of the Chinese Communist Party during the visit, which will be his first foreign trip after the reorganisation of the Pushpa Kamal Dahal-led Cabinet. Shrestha is scheduled to meet Wang on Monday in Beijing and will also visit three other Chinese cities. He will not attend the Boao Forum for Asia, said Shrestha.
The government has yet to decide who will represent Nepal at the Boao event. “We signed the umbrella agreement of the BRI in May 2017 when I was the foreign minister, but our concerns on the implementation plan are crucial,” Mahat told the Post. “We cannot afford the expensive loans so we keep on telling the Chinese to increase the grant component if they want to invest in any projects under the BRI.” Although signed in 2017, the text of the agreement of the BRI has neither been made public, nor has the government tabled the BRI framework agreement in Parliament for discussion.
Further, none of the countries that are parties to the BRI has signed the BRI implementation plan, which was first proposed by China at the end of 2019. “It was the KP Oli government which first received the first draft of the BRI implementation plan in 2019 and several texts were exchanged,” a senior foreign ministry official said. “If that was useful or necessary, Oli would have definitely signed it, but he did not because selection of the projects and finalising the funding modality do not require the BRI implementation plan.”
“That is why the Oli government initially proposed 35 projects, which was later trimmed down to nine at Chinese request,” the official said. “If the BRI implementation plan was needed, why did the Chinese push to cut the number of projects from 35 to nine? The execution, financing and investment modality does not require the BRI implementation plan as the plan alone does not guarantee effective implementation and financing modality.”
After strong reservations from senior officials, the Nepali Congress, and a few members of the ruling partners, select ministers are quietly giving final touches to the draft of the plan, an official at the Prime Minister’s Office told the Post requesting anonymity. Lawmaker Swarnim Wagle of the Rastriya Swatantra Party (RSP) told the Post that he and his party are not aware of the latest development, but they intend to raise the issue of signing of the BRI implementation plan from inside the government.
“We will raise the issue in the government as Rabi ji [RSP chair Rabi Lamichhane] is in the government and if required, we will raise it in Parliament as well.” A section of the Nepali political leaders including CK Raut of Janamat Party and Nepali Congress leaders have publicly accused that as BRI was not progressing despite Beijing’s strong push, Prime Minister Dahal, under Beijing’s influence, replaced Congress ministers in order to address Chinese concerns. However, CPN-UML chair KP Oli denied Beijing’ hands behind the change in the federal coalition. “The credit goes to us, not Beijing,” he said at a party meeting last week.
A senior cabinet minister who is familiar with Shrestha’s visit schedule told the Post that signing the BRI implementation plan would not make any difference. According to the minister, it is essentially an advanced version of the BRI agreement that paves the way for project negotiations, but it will be impossible to execute projects with high-interest loans from China.
“I don’t think the BRI implementation plan will be signed during Deputy PM Shrestha’s visit. The main issue is whether to take a high-interest loan from China to execute the projects. But we cannot afford such loans now. Our preference is grant and concessional loan. After signing the BRI implementation plan, we will enter the project selection phase, which is crucial for us. Without grants for certain projects, we cannot consider high-interest loans,” said the minister.
Also, there is strong pressure from the bureaucratic level to opt for grant or concessional loan if Nepal decides to implement projects under the BRI, a government secretary said. “Pokhara International Airport is a good example of how difficult it will be to repay the loan to the Chinese. One of the major agenda of DPM Shrestha’s visit is to negotiate the conversion of the loan of the Pokhara International Airport into a grant during his meeting with his counterpart, Wang Yi.”
Source: Here