Thursday, 25 April, 2024

Opportunities Of Connectivity

Hira Bahadur Thapa


In today's world of increasing globalisation with movement of goods, services and people showing upward trends, the issue of connectivity occupies an important place. Countries need to be connected to each other to reap benefits of interdependence, which is an essential feature of the modern world.
Happily, Nepal is boosting her connectivity with two neighbours, which are emerging economic powers in Asia. Their potentialities prompt our policy makers to undertake measures that go to enhance our connectivity with them. The official visits of foreign ministers of India and China to Nepal have concluded recently. They have displayed the intent to enhance bonds of economic cooperation.
Interestingly, some important agreements have been signed for projects in Nepal that aim at boosting connectivity of Nepal with those countries. Nepal has a mechanism of holding ministerial consultations with India and China. These mechanisms have been in vogue for some years, holding meetings in capitals alternately.
These meetings have provided useful platform for Nepal to further explore avenues of expanding economic relationship. Our dependence on both India and China in terms of trade has been on the increase making our trade deficit bigger year after year. Comparatively Nepal's trade deficit with India is larger than that with China. Reason for this is obvious as almost two-thirds of Nepal's external trade operates with India although Chinese imports to Nepal are showing trends that are no less worrisome.
It is a fact that China has given duty-free entry of thousands of our products but our lack of production of exportable goods has deprived us of the opportunity of benefitting from easier access to the Chinese market. So has India granted us duty-free facilities to some of our products to encourage exports but our limited capacities to produce goods has been a barrier in this regard. We have failed to capitalise on this.
Looking at our own initiatives regarding our efforts to properly utilise the opportunities, some experts have opined that the ministry of foreign affairs as the lead government agency for holding ministerial mechanism meetings could have preferably completed a thorough preparatory work in close coordination with all the line ministries and presented proposals during the recently-concluded ministerial forum when the Chinese foreign minister was leading his country's delegation to Kathmandu.
Based on what came out of the above mechanism meeting one can hardly be content with the outcome though China has been looking forward to getting early response regarding our proposed projects under the Belt and Road Initiative (BRI). Since 2016 the government of China has launched a mega infrastructure project inviting countries and organisations around the world to participate through which different projects covering roads, railways, bridges etc. can be built under the schemes of loans and grants as per the agreements with the host country. About 150 countries have so far decided to join the mega project, and the number is increasing.
Nepal has already shown its commitment to be a part of BRI having signed the necessary documents but has yet to come out with necessary preparations for launching the projects of her priority, one of them being Kerung-Kathmandu rail link about which our deputy prime minister and defense minister was assuring the public in Tokha the other day that the required documents concerning that project would be signed during the upcoming visit of the Chinese president. Details of which, however, are still under consideration. Expectations about this high level visit have soared following the positive tone of the State Councillor and Foreign Minister, Mr. Wang, during whose recent visit three agreements, including the construction of a hospital in Manang, were signed.
Nepal's signing of a Protocol to the Trade and Transit Agreement with China has been hailed as a milestone achievement of Oli government. Despite a lot of work concerning building of necessary infrastructures remaining to make the above agreement operational, it has provided a huge relief to the people of Nepal, who have been forced occasionally to bear the brunt of energy and food crises once relations with our only transit neighbour get soured. Hopefully, with China's willingness to cooperate us by extending transit facilities as per our request, things will be better in coming days.
In this connection the coming into effect of a 69-km long oil pipeline between Motihari and Amlekhgunj since last week with the capacity of transporting petroleum products equivalent to 294 thousand litres every hour has to be considered a big accomplishment in the annals of traditional friendly relations between Nepal and India. Undoubtedly, operation of the pipeline project conceived about two decades ago has been one of the finest examples of economic interdependence between Nepal and India.
In the construction of this project both Nepal Oil Corporation and Indian Oil Corporation have spent 5 trillion and 18 crores Nepali rupees and more needs to be done to have the storage facilities. It is understood that two tanks with the capacity of storing 41 thousand litres are planned to be built, which is good news. Storage of petroleum products is a strategic necessity for Nepal, which geographically is a landlocked country.
Growing economic interaction between countries and, in particular among the neighbours, is always beneficial. Interdependence being a feature of present day world, countries are required to develop means to enhance connectivity so that exchange of goods and services are facilitated.
There is an ample opportunity for Nepal, India and China to embark on projects that improve road and rail connection. Such connectivity provides mutual benefits. More depends on Nepal to work out projects of common interest in order that she gets advantage of economic prosperity of her neighbours.
(Thapa was Foreign Relations Advisor to the Prime Minister from 2008 to 2009. He writes on contemporary national and international issues. He can be reached at