Why loan from China under BRI could topple KP Oli government in Nepal?

Is the government led by KP Sharma Oli in Nepal in trouble?

Ahead of Oli’s visit to China, Nepal’s ruling parties are arguing over Beijing’s Belt and Road Initiative.

While Oli’s Communist Party of Nepal-United Marxist Leninist (CPN-UML) party wants to continue the loan from China, the Nepal Congress led by Sher Bahadur Deuba is strongly against it.

Oli struck an optimistic note ahead of his China visit.

“I’m going on a visit to China on December 2, and it won’t just be a tour to a foreign country,” Oli said. “When I return home you will understand for yourself how successful the visit was.”

So what do we know about the queue?

Let’s take a closer look:

Oli’s CPN-UML pushes BRI

First, let’s briefly review Oli’s upcoming trip.

according to Oppression, This will be Oli’s first foreign visit since taking office.

Nepalese foreign minister Arza Deuba is going to China today before the trip. Indian Express.

Dueba, wife of Nepali Congress leader Sher Singh Dueba, will also join Oli on the trip.

Oli’s visit marks a break from history as Nepal leaders usually visit
India This is a sign of the close ties between Kathmandu and New Delhi after he first took office.

But Oli is thought to be one
pro-China leader.

Oli had previously visited China in March 2016 after coming to power in 2015.

Oli and CPN-UML push for more loans under China loans
Belt and Road Initiative From Exim Bank, Indian Express.

The newspaper reported that Oli said he had assured China that this would happen in a meeting last week with senior Nepali officials, including Nepali Congress president Sher Bahadur Deuba, his wife, Foreign Minister Arzu Rana Deuba and NC general secretary Gagan Thapa. It’s hard for him to step back.

Oli, who attended his party’s massive rally in Kathmandu last week, claimed that the government was moving steadily towards its commitment to development, prosperity and good governance.

Oli signaled during the rally that he plans to sign several projects with China.

“As much as possible, we do not want to take loans from anywhere; We are not in a position to add more loans, but we need to increase our production. How can we increase our production? This is not something that should make us feel depressed. We should rather be hopeful and raise awareness around us that other smaller countries are not where they are right now,” Oli said.

“Improving efficiency will be my priority,” he added.

Nepali Congress opposes loan

However, the Nepali Congress was persistent in its stance against new loans.

In a meeting with senior officials last week, Oli failed to persuade his coalition partners to draft the Nepali Congress on the BRI framework. Indian Express.

The agreement signed in 2017 has not been finalized yet.

“How much credit do we get? If you have permission, get it now. “Let’s not put any more burden on him,” Deuba told Oli during the meeting. Rising Nepal Daily.

Accordingly India Times, China and Nepal are not yet negotiating a loan under the BRI, despite Beijing’s intense efforts.

Kathmandu has historically been reluctant to take out loans, given the state of its economy; instead he chose to rely on grants.

It also avoids getting into a situation
debt trap like some
other countries.

Nepali Congress leaders insisted that Oli sign the BRI framework agreement only if the projects receive 100 percent grants.

Beijing has made clear it has no interest in doing so.

Those who know told Times of India He said the Nepali Congress may have to rethink about supporting the government if Oli continues to receive loans under the BRI despite his objections.

The Nepali Congress, in its meeting at the Federal Parliament building to discuss Nepal’s current economic situation and reform measures, reiterated that it will not accept any new loans under the BRI.

Nepali Congress spokesperson and former finance minister Prakash Sharan Mahat said China should fulfill its previous commitments before talking about new loans.

“Nepal Congress is not against BRI; we are just saying that we cannot get new loans now,” he explained.

“In terms of the support we needed for the connection, we first needed grant support for road construction. “Many of the commitments made by the Chinese government on grants have not yet been fulfilled and need to be addressed first.”

Mahat further added: “What is the point of discussing loans if grant implementation is delayed? The debt burden is already increasing. Therefore, we should avoid taking loans from any government, including the Chinese government.”

While the Chinese government is expected to implement its grant commitments under the BRI, Mahat reiterated that new loans should not be followed immediately.

“Regarding the BRI framework, are we trying to incorporate other strategic security elements into this framework? “We believe that these issues should be handled carefully,” he said.

“The focus for now should be on implementing grants, especially under the BRI, and avoiding new loans,” he added.

Experts say Oli is in a difficult situation.

“Prime Minister Oli is walking a tightrope right now. In order to gain significant benefit from the China visit, the coalition needs to reassure its main ally, the NC,” an article in Rising Nepal Daily said.

“Nepal’s political leaders must demonstrate their ability to navigate geopolitical complexities. “But the real test of their leadership lies in taking bold action in the best interest of the nation while avoiding potential geopolitical pitfalls.”

Oli remains optimistic

Oli still remained optimistic

Last week he actually denied any disagreements between coalition partners.

He said the cooperation between CPN-UML and Nepali Congress was aimed at saving the country from decline.

He also rubbished the allegations made by his opponents, legitimized the alliance between the Nepali Congress and the CPN-UML to form the incumbent coalition government, and promised to take action against corruption, anarchy and law violators.

The Prime Minister said that all forms of fraud, smuggling, corruption, character assassination and obscenity are unacceptable.

Addressing what is claimed to be the party’s awareness campaign, Oli urged investors to invest with confidence as the government is on a mission to create ‘Prosperous Nepal and Happy Nepali’ by maintaining peace and security.

He said to industrialists, “You must invest, the state will arrange security and good management.”

Addressing the rally, which was seen as the first show of strength by Oli’s party CPN-UML after coming to power a year and a half ago, the prime minister claimed that the economy has improved due to the policies and plans adopted by the CPN-UML-Congress coalition.

Dismissing rumors spread by opposition parties about the fall of the government, Oli assured that the government will serve a full five-year term until the next election.

He promised to hand over power to Nepali Congress chief Sher Bahadur Deuba within a period of one and a half years, as per a power-sharing agreement between the two largest parties.

He also sought to reassure India earlier this month.

“Just because I visited China first does not mean that our relations with India are not good,” he said. Kathmandu Post.

“We took a position while India was imposing a blockade (in 2015-16), so they were not happy. “Since we will maintain friendly, balanced and good relations with both of our neighbors, there is no need for them to be dissatisfied with us (at the moment).”

With input from Agencyex