Silk Road, here we come

  • The One Belt, One Road Initiative will expand Nepal’s trade horizons tremendously

Apr 7, 2017-

“Nepal is eager to become a partner in the One Belt, One Road Initiative,” said Prime Minister Pushpa Kamal Dahal after his meeting with visiting Chinese Defence Minister General Chang Wanquan before leaving for China last month. The brainchild of Chinese President Xi Jinping, the One Belt, One Road (OBOR) Initiative is a revival of the traditional trade route connecting China and Europe known as the Silk Road. 

Historic ties

The Silk Road was a web of trade routes extending from China through India, Central Asia and Asia Minor to the Roman Empire. China sent silk to Europe and received wool, gold and silver in return. Buddhism and Christianity were introduced into China from India in an early form of globalisation. The Silk Road, in its modern avatar as OBOR, consists of three tiers. The first tier is Xian-Mongolia-Europe, the second tier is Xian-Central Asia-Moscow-Europe and the third tier is Southeast Asia-South Asia-Persian Gulf-Europe. The maritime version starts in Fuzhou and runs through the South China Sea to Kolkata, Kenya and Europe. 

Ties between Nepal and Tibet go back to historical times. Since the Malla era, Newar merchants had been travelling to Lhasa to get gold from Mongolia which they would sell in Kolkata. This trade behaviour of Nepali merchants was tri-polar, and it gives us a sense of globalisation and the international trade conducted by Nepal at that time. OBOR is something new for Nepal too. Because of its location between India and China, gaining full advantage may be tricky. Relations between Nepal’s internal political circle with South Block, New Delhi’s relations with Beijing and Beijing’s relations with various political parties (both leftist and rightist) in Nepal are the components from where a possible OBOR-Nepal connection should be drawn. 

No doubt, OBOR opens a new door for Nepal, and it can jump to the international market across the northern border. It is definitely good for expanding our buffer zone status to a new level. Meanwhile, the UN Security Council has also endorsed OBOR. The possible OBOR connection for Nepal is the Lhasa-Shigatse-Kyirong-Kodari rail-road corridor. Shigatse lies 496km from Kathmandu while the distance from Kathmandu to Lhasa is 800km. But is the journey for Nepal to connect with OBOR easy? The answer is definitely no. 

21st century context

The diversified nationalism pattern which Nepal is currently witnessing is making its foreign policy a ‘jaw breaking’ game. Foreign policy is a reflection of national consensus, and consensus is a reflection of mutual understanding of various ethnicities and cultures within the country. How sensitive Nepal’s foreign policy is can be judged from the statement given by the then Indian prime minister Nehru in the Indian Parliament on December 6, 1950. “Frankly, we do not like and shall not brook any foreign interference in Nepal. We recognise Nepal as an independent country and wish her well, but even a child knows that one cannot go to Nepal without passing through India.”

Nehru’s statement clearly explains Nepal’s landlocked dynamic, and any attempt to shift this dynamic will be costly for India. But will OBOR be compatible with Nehru’s bold statement about Nepal in the context of the 21st century? More than that, China’s security concerns in Nepal after OBOR will increase, leading to a brawl between two giants, India and China, in the Himalaya. Any far-reaching development project in Nepal concerns India and China due to strategic and security matters. Underlining such facts, king Mahendra had said while opening the Kathmandu-Kodari highway in the mid-1960s, “Communism does not travel in a taxi.” This witty statement highlights the possible effect of development projects in Nepal on India and China. Mahendra wanted to keep Nepal’s relations with India and China in an equidistant manner. 

This puts the ball in the court of Nepali leaders and they have to decide how to act tactically, diplomatically and strategically to get full advantage of OBOR. OBOR is a second milestone for Nepal after the construction of the Kodari highway in the 1960s which led Nepal to get closer to the northern neighbour. High-altitude railways and new technological infrastructure such as tunnels that will be built as part of the OBOR Initiative will be highly beneficial to Nepal in the long run. 

Abundant opportunities

The opening of the Kodari highway which launched the Khasa business has pulled thousands of Nepalis out of poverty. No doubt, OBOR will also create abundant business opportunities for Nepal. Jobs and an economic boom are fundamental components of prosperity and the only possible tools to avoid war and conflict in the country. The government should also speed up the process to sign a Bilateral Investment Promotion and Protection Agreement (Bippa) with China to promote and protect Chinese investments in Nepal. The OBOR Initiative will also create possibilities to transfer Chinese technology to sustain our industries. It could also be helpful in balancing the trade deficit with India. 

Nepali international trade experts point to the risk of changes in geo-strategic and geo-political dynamics in the region after Nepal’s entry into the OBOR route. But such changes can be minimised when Nepali traders have the opportunity to access China’s international markets. OBOR will add strong value to Nepal’s international trade liberalisation and economic globalisation. Till now, Nepal has rail-road transit to access the Bangladeshi port of Banglabandha over the Kakarbhitta- Singhabad-Rohanpur route and access to India’s Vishakhapatnam port. 

OBOR and access to Vishakhapatnam and Banglabandha could be revolutionary opportunities for Nepal to expand its economy. Nepal’s exports total $909 million while its imports amount to $6.6 billion. Globalisation cannot be stopped nor will it have to be stopped. It has been in operation since the time of Kautilya in India and the Han dynasty in China. Retreating from such a global historical phenomena will be suicidal for Nepal. 


- Roy is an international relations student at Tribhuvan University; Pant is a 

development consultant 

Published: 07-04-2017 08:06

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