Maintaining the balance between two economic giants of the region a challenge

Kathmandu, November 13

Stakeholders have emphasised that connectivity is critical to expand trade, investment relations and broader economic cooperation in South Asia and with other allies of the region.

China’s belt and road initiative (BRI) could be an opportunity for South Asian economies to leap towards economic development by bridging the infrastructure gap, according to former foreign minister Mahendra Bahadur Pandey.

Altogether 65 countries have supported Chinese President Xi Jinping’s initiative of reviving ancient silk route as the 21st century maritime silk route. Nepal has also joined this initiative, but has not proposed any projects so far. However, the experts have said that the rail connectivity from Kyirong-Kathmandu- Pokhara-Lumbini could bring transformation to the Nepali economy.

Speaking at the programme ‘Contours of Belt and Road Initiative for South Asia’ organised by Nepal-China Friendship Forum (NCFF) here today, scholars from Nepal, China, India, Bangladesh and Pakistan discussed in detail about the opportunities and implications of BRI and concluded that all involved countries have to come up with a clear vision on how to reap benefits from this initiative.

Addressing the inaugural session, Ambassador of China to Nepal Yu Hong said that the report of 19th National Congress of Communist Party of China highlighted that the CPC would pursue the BRI as a priority. She further mentioned that the BRI was even incorporated into the Constitution of CPC that China would pursue BRI following the principle of achieving shared growth through discussions and collaboration.

“In South Asian countries, there is a huge demand for infrastructure and investment, including power supply, communication, road construction and so on. There is great potential for cooperation on project contracting between China and South Asia,” said Hong.

Also speaking in the inaugural session, Finance Secretary Shankar Prasad Adhikari apprised that Nepal and China in May signed a MoU on the BRI and informed that the government of Nepal is now reviewing possible infrastructure and connectivity projects to be pursued under this framework.

“There is wide range of areas of cooperation that could be pursued under the BRI framework,” he said. “We are open to enhancing cooperation in all of them, particularly in expanding trans-Himalayan railways and roadway projects, infrastructure development, trade and investment.”

Nepal’s former ambassador to US and vice chairman of National Planning Commission Shankar Sharma said the BRI will address prevailent inequalities of development in northern part of Nepal and southwest region of China through enhanced connectivity and infrastructure development. Sharma, also an economist, said that there is potential for Nepal to diversify its trade via China to central Asian countries in the future.

“It has opened a new door to Trans-Himalayan route to Central Asia, South East Asia and beyond.”

Professor Atiur Rahman of Dhaka University and former governor of the Central Bank of Bangladesh said that the countries of South Asia should focus on development cooperation while striking balance between two economic giants — China and India.

“While China is pushing forward the BRI among South Asian countries like Nepal, Pakistan, Sri Lanka and Bangladesh, India is bringing sub-regional concept like BBIN. Thus, maintaining a balance between the two big giant economies of the region is a challenging task for them,” he added.

Shafqat Munir, president of Pakistan-based think-tank, Journalists for Democracy and Human Rights, highlighted the benefits of the connectivity projects in Pakistan such as China-Pakistan Economic Corridor. On a separate note, he said that Pakistan is ready to host the 19th SAARC Summit as the country gives importance to the regional bloc.

Presenting his paper, Professor of International Relations at Fudan University of China, Su Changhe, underscored the importance of multitude of cooperation to be pursued under the BRI framework saying that the initiative will create win-win situation for development among the participating countries. “The BRI is a concert for all players but not a platform for single country and actor,” the professor said.

However, Indian scholar Prabir De, who is associated with Research and Information System for Developing Countries, said that the BRI would not be able to succeed in the context of rising protectionism in trade, investment and as the export of China is decelerating. He further said that investing in projects under BRI through mobilising loan assistance of China-sponsored Asian Infrastructure Investment Bank, among others, could land the poor South Asian countries in a ‘debt trap’ in the future.