Bangladesh wants to connect SAARC with BRI
The BRI is a multilateral and multi-dimensional economic project. At its core is seamless and multi-model connectivity. Nepal and Bangladesh should adopt a similar multi-dimensional, multilateral approach. In South Asia, bilateralism is prevailing over multilateralism. Nepal, Bangladesh and the rest of South Asia need to emerge from this bilateral syndrome and open up to multilateral cooperation. The SAARC is a regional cooperation forum but it should now opt for open regionalism and economic cooperation.
SAARC should be connected with ASEAN, BIMSTEC and BCIM. Preferably, SAARC should also be connected with BRI. Bangladesh wants this. I request Nepal to also advocate open regionalism because it can effectively bring the whole of South Asia closer.
BRI should not be seen only as a project to utilize Chinese capital to construct infrastructures across the world. The concept emerged from China, but it has now become a global initiative to build a new international order based on enhanced development. It can be a means to end poverty—all under a more equitable world order.
Bangladesh takes the proposal positively and expects an increasing inflow of Chinese FDI, increased access to the colossal Chinese market and continuous Chinese support in infrastructure development. Bangladeshi exports to China have increased by 40 percent in five years. We South Asians need to develop a consensus on China’s role in South Asia and China needs to appreciate our contextual realities. But China will need to avoid the prospect of BRI beneficiaries falling into debt and transfer of capital from the west.
China should structure the terms for the financing of BRI projects so that recipients can sustain the debt. It would be better if China considers restructuring its BRI projects in partnership with host countries rather than push for exclusive loan investments.
The policy of a debt trap will make China an economic loser. If there is partnership, there is no question of a debt trap. In the case of Bangladesh, we have payback capacity and there is no burden on our economy. There is no issue of a debt trap. China is engaged with all South Asian countries. The challenge for China is to ensure equal benefits for other countries, and not just look after its own benefits. Conversely, the challenge for South Asian countries is to prevent China from excessively exploiting them. To that end, they need to develop their own countries and to diversify their relations.
We need to develop South Asia into an economically united region. To achieve this, countries should move beyond old paradigms, build trust and engage in meaningful and mutually beneficial ways. There is a tendency among countries here to seek and maintain extra-regional alliances to balance and contain each other. But I expect this tendency to diminish.
(Last week, experts from South Asia and Southeast Asia were in Kathmandu for the ‘Fourth international Conference on Belt and Road for the Development and Prosperity of South Asia’. This article is based on Kamal Dev Bhattarai’s discussions with senior Bangladeshi politician and former Minister of Information Hasanul Haq Inu.)
Oli wants to diversify Nepal’s relations. Is he on the right track?
Records with the Ministry of Foreign Affairs (MoFA) show that between 1960 and 1990 (i.e. during the Panchayat era), Nepal used to exchange frequent high-level visits with countries other than India and China. But such exchanges started petering out after the 1990 political change.
Data from the past two decades clearly show that Nepal’s high-level engagements have been confined to its two immediate neighbors, and that they have mostly been one way. In this period, there have been frequent high-level visits from Nepal to India and China, but fewer reciprocal visits to Nepal. High-level visits from India to Nepal have increased in the past couple of years, but such visits to Nepal from China have become rarer.
During the Panchayat regime, the kings tried to visit as many countries as possible. Such trips were aimed at garnering more development aid. The monarchy made efforts to reduce Nepal’s dependence on India and China for development needs.
Political parties agree that Nepal needs to diversify its bilateral relations beyond India and China, and that a stable government with a five-year mandate has opened a window of opportunity. The KP Oli-led government too has been trying to develop a narrative that it is diversifying its foreign relations. But there is little substance to back it up.
To meet the aspiration of graduating to a middle-income countries by 2030, Nepal has to maintain seven to eight percent annual growth. This calls for massive investment. Nepal needs an estimated $8 billion annual FDI inflow to graduate to a middle-income country in the next 10 years or so.
Money matters
One of the major factors that prompted the Oli government to diversify external relations is to bring in more foreign aid, much like what King Mahendra did in the 1960s and 70s. After the government was formed last year, Oli had expected a high volume of investment from India and China for infrastructure development. But except regular bilateral support, such investment did not materialize. During Oli’s state visits to India and China, no big economic package was announced; the focus was on completing pending projects. There was a time when its two big neighbors competed to provide more development aid to Nepal—but no more.
This led the Oli government to look beyond the immediate neighbors to the meet the country’s development needs. “We require massive investments in infrastructure development and advanced and innovative technology, for which our domestic resources are insufficient. We need the international community’s support and cooperation to fill the resource gap,” Foreign Minister Pradeep Kumar Gyawali is quoted as saying in his ministry’s website.
Foreign policy experts, however, say that while diversification is important, Nepal cannot overlook the roles of its neighbors for its economic development and prosperity. “Obviously we should broaden our foreign policy, but India and China are still the key to our economic development. Unfortunately, we haven’t been able to identify our priorities and define key national interests,” says Sundar Nath Bhattarai, Founder President of the Association of Former Career Ambassadors of Nepal.
Other foreign policy observers also think the new government has tried to diversify foreign relations, but without serious homework and without identifying priority areas. Visiting a plethora of countries without a substantial agenda, they stress, does not serve the country’s interest.
After taking charge of office, Oli has gone on eight foreign visits (see box). Attracting foreign investment is always a top priority of these visits. But the prime minister has not been able to draw investment from the countries he has visited in this period. “We should assess success on the basis of outcomes, not the number of visits,” says Bhattarai.
PM Oli’s foreign visits
- Europe: June 8-16, 2019
- India: May 30-31, 2019
- Cambodia and Vietnam: May 9-15, 2019
- Switzerland (Davos): 20-26 Jan, 2019
- Costa Rica: 27 September, 2018
- UNGA (New York): 22 Sept-3 Oct, 2018
- China: June 19-25, 2018
- India: April 6-8, 2018
Eggs in many baskets
Besides PM Oli, Foreign Minister Gyawali has also visited a number of countries and attended several bilateral and multilateral forums. In December last year, he visited the United States and held bilateral talks with US Secretary of State Michael R. Pompeo. Earlier, in November, Gyawali had visited Japan. In a gesture of reciprocity, Japanese Foreign Minister Taro Kono visited Nepal the following month. These visits carried some weight as such visits had not taken place for a long time.
Europe was a good choice in terms of economic diplomacy, but PM Oli’s visits to the continent have come under scrutiny for a number of reasons. First, every visit of a head of government or state is either a ‘state’ or an ‘official’ visit. But PM Oli’s visits to the UK and France were designated as ‘formal’, in violation of established diplomatic practice.
Second, no bilateral agreements were signed during Oli’s visits to the UK and France. After India, the European Union is Nepal’s second largest trade partner, and Nepal has old ties with Britain and France. But Oli’s visits were marred by a lack of preparation. He could not meet the British monarch and no formal ceremony was organized for him. (Oli did meet Theresa May, but she had already resigned as prime minister.) In France also, Oli could not get an audience with President Emmanuel Macron. Nor was any substantial agreement signed to bring in investments. “In terms of investment and economic cooperation, European countries matter a lot for us, but merely visiting them would not yield the desired benefits,”
says Bhattarai.
That a Nepali prime minister visited Britain after 17 years was possibly the only positive feature of Oli’s trip. Prime Minister Sher Bahadur Deuba had officially visited the UK in 1996 and 2002, while Prime Minister Girija Prasad Koirala had visited France in 2001. In 1994, King Birendra had paid a state visit to France while he undertook an unofficial visit to the same country in 1989.
Earlier, PM Oli had visited Vietnam and Cambodia, which also drew flak on the grounds that Nepal does not have strong economic and diplomatic ties with them. “Foreign policy is not an area for adventures... In fact, diversification is a wrong word in international relations. Foreign policy is not an arena where you look to ‘diversify’, but to promote your national interests,” said former Foreign Minister Ramesh Nath Pandey in a recent interview with APEX.
Constantino Xavier, a fellow at Brookings India, a think tank in Delhi, is more sympathetic to the Oli government’s attempts at diversification. “Post-Wuhan, with China and India cooperating again, Nepal’s scope to play off its two neighbors has reduced,” he told APEX. “Diversification of relations under PM Oli in recent months is giving Nepal more options, especially beyond the great power competition between China, India and even the US
and Japan.
Xavier thinks that with political stability at home, and new ambassadors finally in place, the Oli government has greater incentives to expand relations with more countries, especially in Europe, Central and Southeast Asia. “The EU and multilateral organizations like the Asian Development Bank can play an important role in diversifying Nepal’s development options,” he says.
China needs to understand its partner countries
Unlike the previous Najib administration, the ‘new’ Malaysia under Mahathir Mohamad shows some reservation towards Chinese investments under the BRI umbrella. It has suspended some projects under BRI while others have been revived after re-negotiation with China.
Three factors have been identified while dealing with China. The first concerns the issue of trust between China and its smaller neighbors, including Malaysia. It is true that China’s charm diplomacy such as the introduction of its ‘New Type of Major Power Relations in the 21st Century’, Periphery Diplomacy and BRI have resulted in Beijing’s considerable collaboration with its neighbors. But its increasingly “assertive” maritime activities in the South China Sea since 2009 have deepened anxieties among regional states, as it gave an impression that Beijing is pursuing a contradictory strategy. Such distrust derives not only from Malaysia’s problematic past with China, but also due to differences over political values and uncertainties around China’s strategic vision.
The second factor is directly related to BRI. As BRI could offer multiple opportunities for Malaysia, for example in accelerating growth in infrastructure, construction, property and tourism, the initiative also poses risks: potential risk to our labor market due to high dependence on foreign workers, and the risk of our inability to meet loan repayments.
High dependence on foreign workers had been a hot debate much before the introduction of BRI. However, after Chinese companies chose to import skilled workers for their operations in Malaysia, a new debate has been sparked. For the locals, Chinese investments must fulfill three basic criteria: First, it must utilize local materials because importing foreign materials for these mega projects that do not benefit local enterprises does not make sense. Second, Chinese investment must stimulate domestic employment. Importing Chinese workforce for projects in Malaysia by arguing that Malaysia has no skilled workers is unfair. Chinese firms need to assess the capacity and ability of the local workforce because unlike some underdeveloped countries, Malaysia certainly has much to offer. Lastly, what Malaysia really needs from China is technology and knowledge transfer for the benefit of local industries.
This shift in attitude in Malaysia is connected to regime legitimation, whereby leaders try to boost economic growth while trying to reduce the burden on people at the same time. Despite Mahathir’s tough rhetoric about Chinese investment prior to winning the general election, the importance of Sino-Malaysia trade relations and Chinese investments in Malaysia is a fact that the new government cannot overlook.
China has been Malaysia’s largest trading partner since 2009. In addition, total Chinese Foreign Direct Investment (FDI) in Malaysia has also grown at a remarkable rate, from RM4.79 billion in 2013 to nearly RM21 billion by late 2016. And bilateral trade shows steady increment year-on-year.
There is also room to further enhance cooperation between Malaysia and China. For successful economic cooperation it is vital for China to build strong trust with its smaller neighbors. This can be done through emphasis on one of the least-discussed, but the most fundamental aspect of BRI, namely, efforts to improve people-to-people or cultural ties between nations.
Recognizing that friendship derives from close contact between peoples is the key to sound relations between China and BRI participant states. The Chinese government has taken a series of initiatives to portray BRI as a positive, intercultural exchange where great civilizations and religions share their wisdom via the Silk Road. For instance, Special Silk Road Scholarships have been set up to encourage international cultural and educational exchanges.
At the same time, various other people-to-people cooperation projects such as Silk Road cultural year, tourism year, art festivals and think-tank dialogues have also been introduced. However, having policies and initiatives is not enough. We need to make sure these policies are communicated to different layers of society, under the mantra of “engage the people and not the political elites”.
That is the essence in cultivating people-to-people ties and the best and fastest way to gain trust.
We must also ensure such partnerships are mutually beneficial. We need to recognize that every country is unique. Therefore, a single standard cooperation model cannot be applied to all BRI states. For example, Malaysia is politically, economically and socially different than Cambodia or some African state. China needs to understand what its partner countries really need and what they are capable of giving back.
(Last week, experts from South Asia and Southeast Asia were in Kathmandu for the ‘Fourth international Conference on Belt and Road for the Development and Prosperity of South Asia’. This article is based on Kamal Dev Bhattarai’s discussions with Malaysian scholar Nur Shahadah Jamil who has a Phd in International Relations from the National University of Malaysia.)
NGOs get fat while Musahars left high and dry
Despite the many political transformations Nepal has recently witnessed, the lives of the Musahars, a Dalit community from the Tarai, have barely changed.
Musahars have been living in 24 districts of Nepal for generations and work mainly as manual laborers. They are deprived of education, healthcare and jobs, as well as government services and facilities.
Among the 22 castes Nepal lists as Dalits, five are from the hills while the remaining 17 are from the plains. The government spends millions of rupees every year in the name of improving the Dalit communities’ living standards. But many Dalits have not benefitted.
Musahars are treated as untouchables and insulted. Many allege that international NGOs such as UK Aid, Department for International Development (DFID) and Street Child have not been transparent in their financial transactions and suspect irregularities.
Nepal National Musahar Association (NNMA) says that due to irregularities, the centers established for the purpose of improving the lives of Musahars have been unable to function properly. DFID has been running a project called ‘Break the Bond’ at the centers in partnership with various local
organizations.
Even though the centers have been giving training on literacy, life skills, income generation and women’s awareness, a local Musahar leader Pacchu Majhi claims that they have been ineffective. “INGOs have been cheating us. They call us for a day, offer us food, and then ask us to sign an attendance sheet for the whole month. But they do not care about improving our lives or about educating us. NGOs are getting fatter while we get poorer,” he laments.
At an NNMA press conference in Janakpur on June 23, General Secretary Ram Sworup Sada accused the dozens of Musahar centers across several districts of being an easy source of money for their officials. Currently, there are 17 Musahar centers in Mahottari, 24 in Dhanusa and 21 in Siraha. “There is hardly any Musahar participation at such centers,” alleged Sada.
NNMA has issued a press release demanding that 60 percent of the employees of the Musahar centers be Musahars, that the age group eligible for enrollment at the centers be changed, and that the budget and activities of the centers be made public.
Other demands include making Musahars in-charge of monitoring the centers, and giving Musahar girls
Rs 30,000 to Rs 50,000 for running a business. The release warned that failure to meet the demands would lead to street protests and a boycott of the center’s activities.
