Monday, April 22, 2019

Debt trap warnings over BRI projects motivated by bias: FM Gyawali

Foreign minister today dismissed the notion that Nepal could fall into a Chinese debt trap, if it chose to be part of the Belt and Road Initiatives (BRI).
The argument that Nepal could fall into a Chinese debt trap, if it chose to take loans under the BRI is motivated by bias," said foreign minister Pradeep Kumar Gyawali, addressing a press meet today.
There are some concerns from various quarters that BRI loans could possibly push Nepal into a serious debt trap like some of the countries in the world. "Nepal is aware what it should do and what it should not do in its national interests," he said, adding that Nepal is free to decide on its development initiatives. "Nepal will decide independently on Chinese loans and the selection of projects under BRI."
Arguing that Chinese debt was not behind the serious economic crises in many Latin American countries including in Argentina back in the 1990s and 2000s, he said that they were not under the Chinese debt trap. "Greece is still struggling with a serious economic crisis and many other countries have also fallen into debt traps,” he added.
He also explained that there is no rule that a country will fall into a debt trap through taking loans from any particular country and not fall into it when taking loans from another country. "The issue is whether Nepal selects a project on the basis of possible returns and what is the pay back plan," he added, though his government's selection of projects till date – since it came to the power with almost two-third majority – has not seen any suitable and economically viable projects.
Since Nepal is currently holding discussions with China on the projects to be incorporated into BRI, there are a couple of projects under consideration.
Gyawali also said that Nepal and China will sign the protocol of the Nepal-China Transit Transport Agreement during visit of President Bidya Devi Bhandari beginning from tomorrow. The protocol paves the way for the implementation of the agreement and allows Nepal third country transit facilities via Chinese ports. The first state level visit of a head of the state since the establishment of a federal republic is expected to connect Nepal's development endeavors with Chinese development success through the signing of protocol in the presence of the heads of the states.
Secretary at the Ministry of Industry, Commerce and Supplies Kedar Bahadur Adhikari will sign the protocol with his Chinese counterpart during the forum in the presence of President Bhandari. Though the protocol is said to allow more flexible terms for trade and transit – compared to India – and might be feasible for trading with South East Asian countries also, the cost of doing business through the new route is yet to be calculated.
The agreement allows open utilisation of either inland waterways or roads for transit and transport to sea ports for third country trade.
Nepal signed the Transit Transport Agreement with China in 2016 after trade blockade by India.
Likewise, President Bhandari is scheduled to take part in a roundtable to be hosted by her Chinese counterpart Xi Jinping and hold bilateral talks with Xi on April 29. Transport minister Raghubir Mahaseth will deliver a speech on 'Infrastructure and Connectivity' during the forum.

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