Nepal should take up the issue directly with the Chinese government, which must show magnanimity and support to resolve it
The Nepal Rastra Bank, the central bank, must be lauded for taking a quick decision to place a ban on the use of Chinese digital wallets WeChat Pay and Alipay in Nepal, which are not registered here. The bank’s decision on the ban comes just about a month after The Himalayan Times exposed the issue on April 17. The bank has threatened to launch a criminal investigation should anyone be found using the Chinese payment applications. The illegal use of the Chinese mobile payment applications has not only deprived Nepal from recording the spendings by Chinese tourists as foreign income but also prevented it from mobilising taxes on the earnings repatriated as the money technically never entered the country’s banking channel. While appreciating the creative disruption caused by the mobile payment applications in business, it should, however, not be at the expense of Nepal’s legitimate income. It is necessary to legalise the use of the Chinese digital wallets as the Chinese account for the second largest number of tourists visiting the country, which has been growing by leaps and bounds year after year. Last year, Nepal hosted 153,602 Chinese visitors. Tourism is Nepal’s third largest source of foreign exchange, and it is necessary to register every penny spent here by a tourist.
Alipay and WeChat Pay are highly popular mobile payment applications in China, which allow Chinese users to transfer payment from one account to another within the platform. Alipay has about 700 million active monthly users there while WeChat has a billion plus. So most Chinese, or at least those who are travelling, will have an account. It has come to light that Chinese businesses, namely hotels, restaurants and travel agencies, operating in Nepal encourage their clients to pay through these applications. Since the mobile apps are not registered in Nepal, it means that the payment made for the services provided in Nepal are actually made in China.
Now that a ban has been placed on the illegal use of the Chinese digital wallets, Chinese businesses providing online payment services must duly register themselves here. Their services could also be provided by registered intermediary firms, which will route payments made using the Chinese mobile apps through Nepali banks. This will help keep track of all transactions being made by Chinese tourists in Nepal. But still there will always be ways to circumvent the intermediary if the transaction takes place between a Chinese business establishment and the customer without any evidence to prove it has taken place. The deployment of geofencing technology by the Chinese payment companies back home, which will track and block all payments by Chinese nationals who have bypassed the formal channel, has also been suggested. It is for sure that the Chinese mobile apps are widely used in other countries as well by Chinese visitors. Studying how they are coping with the issue might help Nepal find a solution. The most effective way might, however, be to take up the issue directly with the Chinese government, which must show magnanimity and support to resolve it, especially with the country expecting a quantum leap in Chinese tourists during the Visit Nepal Year 2020.
There are reasons galore as to why projects get delayed in Nepal. Land acquisition is considered to be one of the biggest problems in completing a project in time, leading to cost-overruns and inconvenience to the people due to the half-finished work. The Indian government has just shown concern over the lengthy land acquisition process in pushing ahead with some of its mega projects. One such project that has failed to gain the desired momentum is the 1,440-km-long Postal Highway that will connect 20 districts of the Tarai. Land acquisition apart, there are other hurdles it faces like removing the trees and electric poles on the road.
India is not alone in making such grievances. A Chinese company faced similar hassles while expanding the 11.5-km Koteswor-Kalanki section of the Ring Road. Land is the basis for starting any venture, and the lengthy land acquisition process, made the worse by the involvement of middle men and local politicians out to gain political mileage from the land deal, will discourage foreign investors. Hence, in the interest of the country and its people, the government must frame laws on land acquisition to speed up projects in Nepal.
A version of this article appears in print on May 22, 2019 of The Himalayan Times.