By Prem Sagar Poudel
More than eight years have passed since Nepal and China signed the Memorandum of Understanding on the Belt and Road Initiative, or BRI, on May 12, 2017. Yet the state of BRI implementation in Nepal remains largely silent. This silence is not merely the result of administrative delay. It is the outcome of a complex interaction among Nepal’s geopolitical constraints, internal political polarization, weak institutional capacity, and the influence of external powers.
When Nepal signed the BRI memorandum, it was viewed as a historic opportunity to reduce one-sided dependence on India. The Indian blockade of 2015 had left a deep wound in the Nepali psyche, and the signing of the BRI two years later was not merely a coincidence. However, even after a long period since the memorandum was signed, no concrete project has been able to enter the implementation phase. This silence has pushed Nepal’s development aspirations into a kind of whirlpool of uncertainty.
The first and foremost reason behind this silence is Nepal’s internal political polarization. There is no consensus among Nepali political parties regarding the BRI. Some parties and sections of the intellectual community portray it as a “debt trap,” while another side views it as an “unprecedented opportunity for development.” This lack of consensus has made it difficult for the government to take any concrete decision. In particular, a national consensus has not yet been reached even on whether to accept loans or grants under the BRI. Nepal’s position that it cannot take loans and will accept only grants, while China proposes loan-based investment, has become the biggest obstacle.
The second reason is Nepal’s weak institutional capacity and lack of negotiation skills. To participate in a vast initiative such as the BRI, Nepal does not possess adequate technical, legal, and diplomatic capacity. From project selection to financial management, Nepal’s preparation appears extremely weak. Nepal has not been able to present a clear framework outlining which projects it needs, how much investment is required, and what the expected returns would be. As a result, Nepal remains in a weak position in negotiations with China.
The third and most sensitive reason is the influence of external powers, especially the strategic concerns of India and the United States. The belief that Nepal lies within India’s “strategic courtyard” has existed for a long time. When Nepal moves forward with large infrastructure projects with China, India views them through the lens of its own security concerns. The United States has also been viewing the BRI as a competitor to its Indo-Pacific strategy. Thus, as Nepal finds itself at the center of strategic competition between major powers, BRI implementation has become a victim of geopolitical pressure. An important point here is that China, which showed considerable diplomatic activism in bringing Nepal into the BRI, also needs to show similar activism and flexibility in project implementation. China must be able to understand Nepal’s internal political sensitivities, economic capacity, and geopolitical compulsions, and adopt a more flexible and practical approach.
The silent state of BRI implementation itself represents a major opportunity cost for Nepal. Under the BRI, Nepal had the opportunity to upgrade northern border points such as Korala, Kimathanka, Yari, and Tatopani, to build cross-border railways, to attract investment in hydropower, and to transform itself from a landlocked country into a land linked nation. Had these projects been implemented on time, Nepal’s infrastructure landscape would have looked entirely different today.
The impact of this situation is multidimensional. The first is economic impact: with every year of delay, Nepal is losing billions in potential investment. The second is diplomatic impact: delays in BRI implementation have created uncertainty in relations with China. The third is developmental impact: the slow pace of infrastructure development has affected overall economic growth. The fourth is psychological impact: citizens’ confidence that large projects can actually be implemented has weakened.
To break this silence and deadlock, Nepal must undertake at least five strategic initiatives. First, the government must hold serious dialogue with all political parties to build national consensus on BRI implementation. Second, it must prepare a clear framework for project selection, investment modality, and financial management. Third, Nepal must engage in transparent diplomatic dialogue with India and the United States, convincing them of Nepal’s development needs and the complementary role of the BRI. Fourth, Nepal must inform China of its internal political sensitivities and economic capacity while proposing a flexible model of cooperation. Fifth, a strong institutional mechanism must be created to ensure transparency and accountability in BRI projects.
Some analysts argue that the delay in BRI implementation is not due only to Nepal. According to them, even after Nepal signed the BRI, China has made only one high-level state visit to Nepal, namely President Xi Jinping’s visit in 2019. After that, due to the COVID pandemic and other factors, high level dialogue did not continue with the necessary regularity. As a result, although the memorandum was signed, its implementation framework could not be developed. In this context, active engagement and commitment from both sides are equally necessary to accelerate BRI implementation.
The question before Nepal now is this: can we transform the BRI into reality? The answer depends on Nepal’s political will, diplomatic skill, and institutional capacity. One thing is clear: silence and the status quo are damaging Nepal’s long term interests. The time for paying the price of delay is over. The moment has come to take decisive steps. This is because the issue itself is the backbone of Nepal’s long term development, regional stability, peace, and prosperity. Its successful implementation can open the door not only to Nepal’s development, but also to the economic transformation of the entire South Asian region.
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