The Nepali government has decided to decline a long-awaited economic and technical package from the Chinese government, originally promised nine years ago, which was intended for upgrading the Araniko Highway.

Instead, Nepal will utilise its own resources for the project, citing delays in the disbursement of funds.

During then-President Ram Baran Yadav's visit to China, Chinese President Xi Jinping announced a 900 million RMB (over Rs 16 billion) aid package on March 28, 2015, at the Boao Forum in Hainan province. According to news reports, the assistance was intended to help upgrade the 115 km Araniko Highway, which connects Nepal with China, and to develop transport infrastructure.

“This particular Chinese aid was renewed every year by the International Economic Cooperation Coordination Division of the Ministry of Finance, but despite numerous calls, requests and meetings, we haven’t received the fund,” said Madhav Sapkota, a Maoist Centre lawmaker from Sindhupalchok district on Tuesday.

“Since the Chinese government won’t release the amount in the foreseeable future, we have allocated Rs 3.6 billion from our own budget to carry out maintenance along a 26-km section of the highway and manage landslides based on the detailed project report prepared by the Department of Roads,” Sapkota said during an event organised by the Centre for Social Inclusion and Federalism (CESIF) in Kathmandu.

Sapkota highlighted the efforts made to secure the funds, including appeals to Chinese authorities and engagements with Nepal’s Ministry of Finance and the Chinese Embassy, all of which yielded no progress.

“I met then Prime Minister Pushpa Kamal Dahal, and he telephoned Chinese President Xi twice, and I also approached the Ministry of Finance and the Chinese Embassy, but still there was no progress on the aid that could transform the lives of the people of Sindhupalchok and Kavrepalanchok districts.

“The Chinese were also not updated on this issue. The Ministry of Finance, besides renewing the aid every year, did nothing. After concluding that the Chinese aid was not coming, we requested the Ministry of Physical infrastructure to allocate a budget for the upgrade of the road section. They have allocated Rs3.6 billion to upgrade the 26-kilometre section of the highway,” said Sapkota.

Despite initiating the Long-Term Maintenance Project for the highway following the damage caused by the 2015 earthquakes, the comprehensive upgrade promised by China did not arrive in time, prompting Nepal to proceed independently.

Sapkota stated that he has spent much of his parliamentary tenure pushing for the full reopening of the Tatopani border and easing the cross-border movement of goods and people. “Over the past few months, China appears to have realised that the Tatopani border point is better for trade than Keyrung,” he said. “Once the highway leading up to the border point is repaired to avoid occasional flooding and landslides, the true potential of the Tatopani border will be realised.”

He also added that, following the COVID-19 pandemic, automation by four large Chinese companies operating in Nepal, along with the use of loaders and machinery, has caused significant job losses for Nepalis.

During a CESIF-hosted seminar on “Mainstreaming Borderland Voices in Nepal’s Foreign Policy Discourse,” Anish Tiwari from Sindhupalchowk highlighted the stark contrast between the bustling trade on the Chinese side of the Tatopani border and the quiet on the Nepali side. He specifically highlighted China’s tightened restrictions on Nepali goods and people, attributing this to suspicions related to followers of the Dalai Lama.

During the panel discussion, experts underscored the need for more parliamentary attention to borderland issues, which involve complex people-to-people relations beyond state interactions.

The plight of Olangchunggola’s residents was poignantly addressed in the presentation titled “Changing Cross-Border Ties Among Borderland Residents at Olangchunggola, Taplejung” by Ananda Gautam. He noted that cross-border marital ties have significantly declined in recent years due to the irregular border, the lack of basic services and infrastructure such as communication and health, and difficulties in obtaining Nepali citizenship.

Parwat Portel, in his presentation “Status and Prospects of Trilateral Trade at the Eastern Border of Nepal - Jhapa,” discussed the strategic importance and developmental potential of the border connecting Nepal with India and Bangladesh.

Manoj Badu discussed the “Implications of India-China Geopolitics in Darchula,” highlighting how the residents of Darchula are caught in the geopolitical tensions between India and China due to the strategically significant tri-junction in the area. Badu noted that both India and China maintain a heavy security presence along the border, with India having an SSB outpost every three kilometres from Darchula’s Lali to Vyas Rural Municipality’s Chhangru, and China deploying thousands of security forces along its side of the border.

In contrast, Nepal’s security presence along the border is almost negligible compared to that of India and China.

Ram Bikas Chaudhary from Rupandehi discussed the “Implications of the Sarayu Canal Project for Nepal-India Borderland,” which poses environmental and existential threats to borderland communities, particularly in the Rupandehi, Kapilvastu, Dang, Banke, Bardiya, and Kailali districts.

During the panel discussion, experts said that although Nepal-India and Nepal-Tibet relations go beyond state-to-state interactions, involving more complex people-to-people relations, borderland issues are not raised in the parliament sufficiently.

Raj Kishor Yadav, Chairman of the House of Representatives International Relations and Tourism Committee, pointed out a “fear psychosis” among Nepali representatives, as they are “immediately termed anti-national, pro-India, or Indian agents” even when they raise genuine.

Meanwhile, the Indian government, through its union budget for the fiscal year 2024-25, has allocated a Rs 11.2 billion grant to Nepal.

India allocated Rs 8.8 billion to Nepal for the fiscal year 2023-24. In 2022-23, the southern neighbour initially pledged Rs 12 billion in grants, which was later revised down to Rs 6.8 billion. In 2021-22, India provided Rs 7.13 billion in grants to Nepal.

The grant pledged to Nepal is the second highest among South Asian countries, following Bhutan. Bhutan has received pledges amounting to Rs 20.6 billion.

Image source: The Kathmandu Post