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Dr. Satoru Nagao is a fellow (nonresident) at Hudson Institute, based in Tokyo, Japan. From December 2017 through November 2020, he was a visiting fellow at Hudson Institute, based in Washington, DC. Dr. Nagao's primary research area is US-Japan-India security cooperation. He was awarded his PhD by Gakushuin University in 2011 for his thesis, "India's Military Strategy," the first such research thesis on the topic in Japan.

Dr. Nagao also holds numerous other research positions, including director at the International Security Industry Council, senior research fellow at the Japan Forum for Strategic Studies, specially-appointed research fellow at the Japan Forum on International Relations,  research fellow at the Security and Strategy Research Institute for Japan, senior fellow at the Institute of National Security Studies Sri Lanka, and senior research fellow of the Indian Military Review. In this interview with the ApEx, Dr. Nagao talks about Japan-Nepal relationship, Nepal's foreign policy, Indo-Pacific Strategy, China and more.

What is Japan's Indo Pacific outlook ?

The pioneer of the idea of Indo-Pacific instead of Asia-Pacific was former Japanese Prime Minister Shinzo Abe. In 2007, he addressed the Indian Parliament where he proposed the idea of both Indo-Pacific and QUAD. Since then, these two have been the main strategy of Japan’s foreign policy. 

The integrated concept of Indo-Pacific is better than Asia-Pacific because this region is under threat of China’s domination. Indo-Pacific is better than Asia-Pacific when people talk about counter China strategy. QUAD, meanwhile, is a group of all influential powers in the Indo-Pacific, except China. 

Viewing these original reasons that Indo-Pacific and QUAD were formed to prevent China’s domination in the rising region, Japan decided to cooperate with the Indian Ocean region, especially India. The purpose of these concepts is strategic. China’s infrastructure projects under the Belt and Road Initiatives (BRI) created huge debt for recipients and expanded China’s influence in the Indo-Pacific region. China’s project does not purely support local recipients, and it is dangerous for development in this region. A typical example was Hambantota port in Sri Lanka. China’s interest rate was too high, and Sri Lanka could not pay. As a result, Sri Lanka gave China the right to control the port for 99 years. A similar situation happened in Djibouti, and China set up a huge naval base there. There are many similar cases in the Indo-Pacific. 

Thus, Japan has focused on tackling China by suggesting alternative choices for countries. One of the examples was the Matarbari port project in Bangladesh. When China suggested the Sonadia port project, Japan suggested the Matarbari port project to Bangladesh. In this case, the Bangladesh government accepted Japan’s Matarbari port project. Thus, if there is an alternative choice, governments should be careful and avoid falling in the debt trap of China. 

How do you see Japan's engagement with South Asian countries? 

Japan’s support projects in the South Asian region are based on good motivation, which contributes to the development of locals. But at the same time, currently, Japan is taking care of many projects worldwide and cannot share enough money to support locals. Due to global free trade and China’s intended manipulation of currencies, many factories have relocated to China. As a result, factories in other countries lost competition with factories in China. 

The size of China’s contribution is bigger than Japan’s. Therefore, Japan needs to coordinate with the US, Australia, EU, and India now. Japan believes that India’s influence in this region is necessary. For example, when we check the geographical situation, the Chinese side of Nepal is mountainous and difficult to trade, but the Indian side is flat and easy to trade. In this case, the development of Nepal's economy relies on India. Thus, Japan cooperates with India, and Japanese cooperation can contribute to Nepal's economy.

What are Japan's key priorities in Nepal? 

Japan wants to develop the Indo-Pacific as a stable and peaceful region, including Japan as a regional member. Japan does not have any national interest in building the Nagdhunga Main Tunnel. It is an honor for Japan to contribute to the people of Nepal. Cooperation with India has also been strategic for Japan. In this region, India’s influence is strong. However, China has not cooperated with any foreign countries. That is why China’s projects have created conflicts with India. Japan does not want to create such conflicts. Japan’s projects are contributing to the people of Nepal without spending time and resources on conflicts.

How does Japan view China’s engagement with Nepal?

An opinion poll in Japan indicates that 90% of Japanese people have a negative image of China. The Japanese view of Chinese engagements with other countries like Nepal is also very bad. While Japan wants to develop the Indo-Pacific as a stable and peaceful region, China intends to exploit the poor conditions of developing countries for its own gain. Nepal’s cooperation with China is also breaking India's trust. In the long run, China-Nepal cooperation will not be beneficial for both Nepal and India.

What are your suggestions to Nepal in the conduct of foreign policy ?

Nepal wants to be an independent country. That is why Nepali people worry about India’s strong influence sometimes. It is understandable. But in my opinion, cooperating with China was the wrong choice. What happened in Japan can be a good example. After WWII, Japan chose the US side for about 80 years. This is why the US started to trust Japan. A long-term stable relationship can bring mutual benefits. The US decided to export 400 of the latest Tomahawk cruise missiles to Japan, whilst knowing that long-range missiles could be a threat to the US itself. This was possible because of the trustworthy relations between the two nations. 

In South Asia, India-Bhutan relationship is similar. Bhutan gets much support from India because they have stable and trustworthy ties.

The government is preparing to summon the summer session of the parliament, or the budget session, from as early as next week. As per the Constitution of Nepal, 2015, the government must bring fiscal budget on May 28.

Except for some bright spots, the Nepali economy is passing through a challenging situation marked by diminishing demand and sluggish growth. Banks, which have lending capacity of over Rs 600bn, are seeing a lack of demand for loans as the private sector is not making new investments. The central bank's efforts to stimulate the economy through monetary easing have not yielded desired success. Purchasing power of consumers is dwindling due to factors such as youth outmigration and the lingering effects of previous interest rate hikes. These developments have eroded the consumption base that fuels economic activity. This has left businesses struggling with unsold inventories and underutilized production capacities. While the central bank has lowered interest rates to historic lows, this has become ineffective as there is not much improvement in consumer demand.  

It is evident that monetary measures alone cannot revive the economy. A combination of both monetary and non-monetary reforms that foster collaboration among the government, central bank, financial institutions and the private sector is what the economy needs. Non-monetary reforms should address structural issues hindering economic growth. Measures to boost employment opportunities can limit the outflow of potential consumers. Simultaneously, initiatives to improve productivity and competitiveness could bolster the private sector's confidence to invest. Furthermore, the government must play a catalytic role through targeted fiscal interventions. Expediting capital expenditure and clearing outstanding payments of construction entrepreneurs can provide an immediate boost to economic activity.

The National Statistics Office has forecast 3.87 percent GDP growth for the current fiscal year, which is more or less similar to the projections made by the World Bank and the Asian Development Bank. This shows a significant improvement compared to the previous fiscal year.  Addressing the demand-side constraints through a mix of monetary and non-monetary policies is crucial to continue this momentum.

Kathmandu, the federal capital of Nepal, has been ranked the world's most polluted city again.

According to the data of the Air Quality Index today, Kathmandu's overall AQI has reached 162 while Chiang Mai city of Thailand is in the second position and Medan of Indonesia has been identified as the world's third most polluted city.

According to the people concerned, air pollution is soaring in Kathmandu due to rising incidents of forest fire amidst the increasing temperature.

The National Disaster Risk Reduction and Management Authority, today, recorded 165 incidents of forest fire in 39 districts across the country.

According to wildfire expert Sundar Sharma, the increasing number of forest fires has contributed to air pollution in major cities of the country including the federal capital.  If there is no rainfall in the next few days, it will be challenging to contain the forest fire and reduce air pollution, according to him.

Meteorologist Govinda Jha said there are no chances of rainfall immediately despite a brief rain in some parts.

Disaster management expert Dr Dharma Raj Upreti said AQI from 0-50 is considered good for public health as it is indicated by a green signal while 51-100 is moderate and marked by yellow, but it still warns us to be careful on time.

It is unhealthy specifically for sensitive groups such as those who have respiratory and cardiac issues if measured from 101-150 and is highlighted by orange. 

Similarly, AQI from 151-200 is indicated by red to suggest that it is unhealthy for all, 201-300 is highlighted by purple and it is very unhealthy.  If it is measured 301-400, it is hazardous and 401-500 is highly hazardous and they are denoted by maroon.

Air Quality Management Action Plan for the Kathmandu Valley, 2076 BS considers the situation measuring AQI above 300 as a disaster.

China Foundation for Rural Development (CFRD), earlier known as China Foundation for Poverty Alleviation (CFPA) is the only active Chinese NGO working in Nepal. The NGO started its work in Nepal right after the earthquake of 2015 through an emergency response program. Shristi Kafle spoke with Zou Zhiqiang, director of the Nepal office of CFRD, on various aspects of poverty alleviation measures in Nepal.

Last month marked the ninth year of your organization working in Nepal. How is the experience so far?

When I first arrived in Nepal in 2015, I almost felt like it was my hometown. It was similar to any other Chinese provinces like Yunnan and Sichuan, just across the Himalayas. Before coming here, I worked in mainland China for 15 years and then in Ethiopia and Sudan. All those experiences helped me and my organization to start our journey. CFPA came to Nepal immediately after the devastating earthquake of April 2015. At least 28 people worked here in the beginning for relief and rehabilitation programs, while the international department worked together with the Nepali volunteers. Coincidentally, it was also the 60th year of establishment of diplomatic relations between Nepal and China. Besides immediate support, my job was to do research, planning and share proposals for long run support programs, as we realized that people needed us after the disaster. We didn’t work alone, but coordinated with the Chinese Embassy, over a dozen Chinese NGOs, the United Nations Nepal team, and other international donors. When the disaster emergency response team returned in June, it was only me who stayed back because there were many unfulfilled jobs. Gradually, we focused on other areas of work. There were rough roads too, but overall, with the support of our local partners and love of the general public, it has been a fulfilling experience so far. 

What are the major working areas of CFRD at the moment?

 After 2020, our major focus is on rural development. We changed from CFPA to CFRD. We work on health, education, drinking water and WASH, skill development of youth, women and microfinance, school meal and warm kits distribution, among others. We completed reconstruction of three school buildings destroyed by the earthquake in the Kathmandu valley. Last year, we focused our support to earthquake-affected communities in Jajarkot and Rukum West. Recently, we kicked off the first tea project in Nuwakot for value chain enhancement through Chinese machineries and equipment. We have continued serving nutritious meals to around 10,000 students in 52 schools of Dang, Kathmandu and Lalitpur. These are just a few activities. 

From 2015 to 2023, we have spent $10,350,000 in Nepal, and almost 650,000 people have benefited. As the biggest foundation of its type in China, we focus on agricultural industry development, creation of an internet platform to sell agro products and items to cities, tourist villages, and training the local farmers. All these programs were  successful in China. So we are blending these experiences in Nepal as well. 

How is the Chinese NGO different from other NGOs working in Nepal? 

As an NGO, we do not want people to be dependent upon us. Instead, we believe in providing skills and techniques to locals after which they can support themselves. I see that so many I/NGOs talk about rights, but care less about ground reality and livelihood. For instance, when we talk about women’s rights, it means women should be economically independent. We provide them with practical training, we want women to learn, and make money and live a confident and comfortable life. If they are engaged in any agricultural or skill related product, we provide them training on research, marketing, and how to brand their goods and sell at a higher price. For those who do not have any access to financial institutions, we have supported them with basic things like how to use and save money, and open bank accounts. We work closely with the community. I myself spend more than 120 days a year in the field. This is the major difference. We have partnered with over 20 Chinese donor institutions so far. Besides, we have come up with two books as guidelines for other Chinese NGOs who want to work in Nepal. CFRD doesn’t just work alone, we all want to work together to help more Nepali people.

How is the coordination with the local governments and agencies? What are the challenges?

I would say the major challenge here is geography, which is very uneven and even dangerous in some places. It’s easy to work around Kathmandu and other major cities, but to reach far flung areas, the transportation cost is high. And half a year, works are halted by monsoon and monsoon induced disasters. Besides geography and weather, the bureaucratic process is also difficult. Whenever we submit a proposal, it has to go through many channels, and most of our time is wasted just in waiting. The government keeps changing in Nepal, as do the officials in many departments. 

Sometimes, even a single permit could take three years. It’s comparatively getting better in recent times, as I feel the Social Welfare Council is working efficiently. In terms of working with the local governments, it’s quite easy as they are quick in response and management. Local government is more active than the center. Local representatives are from communities, so they come up with important proposals, which are related to the real needs of people, and the implementation part is satisfactory. But the central system is often changing. In terms of other partners, we worked with some 20 NGOS across the country, and we believe their capacity building is also important. So, we are also assisting in capacity building of local NGOs and staff.

You have visited many districts of Nepal. How do you find the living situation and poverty status of people outside Kathmandu? Is it similar to Chinese society?

I have visited at least 66 districts of Nepal, covering mountain, hill and Tarai region. Based on my experience of working in Nepal for nine years, I find that Nepal’s poverty status is better than China's. Decades ago, when I started work in this program, Chinese people were really poor. There was a lack of arable land and the weather was not favorable. There was a problem with the drinking water facility too. Resettlement was a huge challenge. In Nepal, I find comparatively a better situation. When someone has fertile land, and is provided with seeds, at least he will not sleep hungry. The problem in China was more serious. It’s a different kind of opportunity here. There are new concepts and ideas in agriculture and production, and immediately you can reap benefits out of something. This gives me hope. Last time, under the agro support project, we invited an expert team to conduct soil tests and water tests in some places, and found that everything was organic. In China, it would have been filled with chemicals. Thus, organic products in Nepal have a huge market, and they can be sold at higher rates. In Nepal, everyone has at least something to eat. People do not get nutritious food, enough meat or protein, but they do not sleep hungry. It should be counted as a blessing. 

What are the similarities between the Chinese and Nepali way of working for poverty alleviation and rural development?

Poverty is not just about food and housing, but it also incorporates many other components like safe drinking water, education, and basic health care. Thus, the poverty alleviation measure should be multi-dimensional. There should be a solid long-term strategy. Since 1989 till now, we have worked under the robust guidelines. In terms of the Chinese way of working, there is a strong collaboration from the top to the bottom. For instance, the east team of the country works together with the west team and share their experiences and expertise. There was also a provision that the officers needed to work in another province for three years in order to get their promotion. This is how the teams were mobilized to work in backward regions and at the grassroots level. Each country has its own distinctive national conditions, and the policies should be made accordingly. Nepal might have its own strategy, but it can definitely learn from Chinese anti-poverty experiences.