Naysayers raise debt trap bogey to derail

लाेकपाटी न्यूज

Lagging neighboring countries in infrastructure development is frustrating, more so for netizens. As infrastructure has become synonymous with national pride, Nepalese have been concerned for a long time about the state of their infrastructure. Election candidates in the last vote made the term “rail” so popular that it has entered folk and film songs as a moniker of aspired prosperity in the Himalayan nation.

The recent agreement between China and Nepal to build a cross-border railway (Kerung-Kathmandu) and Indian counter-proposal to construct a similar rail link (Raxaul-Kathmandu) has whetted the “railway fantasy” of Nepalese. Nevertheless, in the intervening period, a section of the so-called scholarly community is trying hard to create an antithesis to the proposed China-Nepal railway based on the contents generated by Western and Indian media against the Belt and Road initiative (BRI). The very debate has raised questions about the intention of the polemicists.

Nepal got its first rail service almost a century ago in 1927, but ironically, there is no railway operational in the nation. After over 90 years, the plan to build a railway has become a national symbol of the development dream.

During his last China visit in June, Nepal’s Prime Minister KP Sharma Oli emphasized on rail connectivity between the countries under the Trans-Himalayan Multi-dimensional Connectivity Network and the BRI. Cross-Himalayan rail link was first discussed in 2016 during Oli’s Beijing visit, in the immediate aftermath of the series of Indian blockades.

But even before details have begun to filter out, an unusual doubt has triggered a debate and media campaign against the proposed rail connectivity with China and Chinese foreign direct investment (FDI) in Nepal. Infrastructure development expert Dr. Surya Raj Acharya finds such debate totally irrelevant. “Let’s not rush to ‘debt trap’ debate even before the project investment model is finalized. We should rather focus on the modalities to take the nation out of ‘underdevelopment trap’ resulting from donor-guided development policy,” says Acharya.

There seem to be three schools of thought in Nepal on the prospect of rail links with its northern neighbor. The first group is brazenly against the project. The second one opposes the idea because of the trade deficit with China and India. They argue that Nepal doesn’t have anything to send on the proposed train that will certainly come back loaded with imported goods. The third segment is skeptical about the nation’s ability to build a train itself, since even the roads are not good enough in the capital Kathmandu.

Ameet Dhakal, editor-in-chief of, a popular agenda-based news portal in Nepal, recently wrote an article on Nepal’s priority in infrastructure development. It was described as an attempt to pressure the communist-majority government to focus on hydro power project instead of railways. “Our priority is not to connect Kathmandu with Kerung and Raxaul with the rail made on debt and which is supposed to return without passengers,” argued Dhakal. Nonetheless, political analyst Dr. Arun Kumar Subedi says that Nepal should push for becoming a trade transit point for Indian and Chinese railway.

There is unremitting discourse against Chinese FDI in Nepal. In the past, critics would cite adverse terrain as an obstacle to connectivity with China. The “debt trap” debate against BRI is relentlessly promoted. Dr. Govinda Thapa, an economist with experience in the World Bank, considers opposition against Chinese investment strategically motivated. “Some individuals using various forums to repeat the so called ‘debt trap’ is a form of extremism,” Thapa said.

The “debt trap” debate in Nepal seems to be a part of international campaign against BRI. Recently, Indian Ministry of External Affairs had organized a close-door meeting with head of Indian missions across South Asia. According to Hindustan Times, Foreign Minister Sushsma Swaraj emphasized India’s strategy of closely watching all Chinese activities, and educate friends in the neighborhood about how a certain kind of economic engagement with Beijing can have negative consequences. Prime Minister Oli refutes any such debates on Chinese investment. “I object to the word ‘trap.’ That is a word from Indian perception,” Oli had said in Delhi.

Experts agree that Nepal is not in a position to reject FDI in infrastructure. China has become one of the largest investors in the sector across the globe. It has advantage in capital and there is space for investment in Nepal, so Kathmandu should persuade Beijing to invest in a specific project under BRI.

To reduce trade dependency on India as well, Chinese investment in Nepal’s infrastructure is a must. But at the same time, the Nepali leadership should display a trustworthy gesture as China doesn’t want finger-pointing later.

A pointless debate before accepting FDI is premature and motivated. Such debates not only discourage investors but also lead the country into an “underdevelopment trap.”