Land-linked Nepal to help in sub-regional connectivity
by Ashok B Sharma on 07 Mar 2016 6 Comments
The hiatus between India and Nepal seems to have been resolved with the recent visit of Prime Minister KP Sharma Oli to New Delhi with the latter getting assurance that it would not remain as a land-locked country but would be transformed into a land-linked country. Earlier, there was a signing of motor vehicular movement agreement amongst Bangladesh, Bhutan, India and Nepal (BBIN) and now with PM Oli’s visit there were exchanges of letters on transit routes that would simplify the modalities for traffic of goods through Kakarbhitta (Nepal)-Banglabandha (Bangladesh) Corridor via India.


Further down south, Nepali goods will get transit facility at Vishakhapatnam port. Rail transport facility through Singabad in India for Nepal’s trade with and through Bangladesh will be operationalised and the rail transport facility would extend down south to Vishakhapatnam port.


Oli was very much worried over the six-month long blockade by the agitating Madhesis along the India-Nepal border. The blockade prevented movement of essential commodities to the new Himalayan Republic. The Madhesis were agitating as they felt their interests were ignored by the new Constitution and there was a general feeling in the Nepali polity and public that Madhesi movement was being fuelled by India. The Oli administration resorted to bringing in two amendments to the Constitution to pacify the Madhesis and even assured to do more. However, the two amendments did not satisfy the agitating United Democratic Madhesi Front (UDMF). They have to wait till all their demands are met.


The Nepali Prime Minister’s visit comes after the Madhesi agitation has cooled down and the blockade was lifted. Oli knows that good neighbourly relations with India are crucial for Nepal’s development. Keeping up the tradition, he chose to begin his foreign trip by first visiting India after assuming office. He chose to celebrate both his 65th birthday and marriage anniversary in India, being accompanied by his wife Radhika Shakya.


According to him his intention was to dispel the “misunderstanding between the two countries” in which he ultimately succeeded. The fact that he attached more importance to India is demonstrated by the presence of the large delegation he led, comprising Deputy PM and Foreign Affairs Minister Kamal Thapa, Finance Minister Bishnu Poudel, Home Minister Shakti Bahadur Basnet, Chief Adviser to PM Bishnu Prasad Rimal, 13 Members of Parliament belonging to various parties, senior officials, media persons and large business delegation.


The Nepal Prime Minister also avoided staying in a 5-star hotel as is the practice by world leaders in modern times, preferring to be a guest at Rashtrapati Bhavan (Presidential Palace) as per the old practice. He was the second state guest after Bhutan’s monarch in recent times to stay in Rashtrapati Bhavan.


Nepal has plans to graduate to a middle-income economy by 2022 for which the quake devastated country needs India’s assistance. New Delhi has pledged $1 billion assistance out of a total pledged assistance of about $6 billion by the donor countries. On Oli’s visit, an MoU was signed on utilization of $250 million grant component of the assistance towards housing, health, education and cultural heritage. Another MoU has been signed for strengthening road infrastructure in Terai belt of Nepal.


Power sector is another area of cooperation. The visit saw the inauguration Muzaffarpur-Dhalkebar transmission line for initial supply of 80 MW power to be augmented to 200 MW by October 2016 and 600 MW by December 2017. The Nepal portion of the 400 KV Muzaffarpur-Dhalkebar line is being implemented under a line of credit of $ 13.5 million from India. Kathmandu needs power supply from India for its development programmes.


Two other transmission lines being laid with India’s assistance, namely Raxaul-Parwanipur and Kataiya-Kushwaha. The new Himalayan republic has potential for hydro-power generation and New Delhi is involved in some hydel projects. The transmission lines being laid down will enable India to import hydro-power. The 1997 Mahakali Treaty envisages multi-purpose nature of Pancheswar Development Project which needs to be worked out for a win-win situation for both the countries.


Prime Minister Oli visited Bhuj, Gujarat, to learn about the Indian experience in reconstruction after a disastrous earthquake. He also visited Tehri Dam to gain experience about hydel-power generation.


Nepal has plans to set up 14 Special Economic Zones (SEZs), out of which nine will be located along the borders with India and only one will be located near the Chinese border; the remaining four will be located in the middle of the country. The plan to locate SEZs close to the Indian border shows that Kathmandu needs connectivity with India more to fulfill its cherished dreams than with China. About two-thirds of Nepal’s trade consists of imports from India and New Delhi is its largest investor. Though India-Nepal border will allow free movement of people without visas, there are plans to set up two integrated check posts to facilitate trade.


The Himalayan country has plans to upgrade its Kathmandu and Nijgadh airports and develop two tourist hubs in Lumbini and Pokhara. The Nepali leaders have urged Indian investments in SEZs, power sector, particularly in hydro-power, roads, manufacturing, mining, IT, renewable energy, infrastructure and participation in value chains. 


Connectivity with Nepal will go a long way to resolve the need for sub-regional connectivity in South Asia. As progress towards regional integration of South Asia is held hostage due to political differences between India and Pakistan, it would be better to foster sub-regional integration under the SAARC Charter and activate BIMSTEC group to solve the problem and further integrate South Asia with ASEAN. Maldives which is not yet a BIMSTEC member should be allowed to join the grouping.


But peace and stability in Nepal is an important factor. The Himalayan country has just switched over from a unitary constitutional monarch to a federal republic. Different groups like Madhesis, Jan Jatis, Tharus, hill people and others feel alienated by the new Constitution. They are problems like delimitation of state boundaries and constituencies, citizenship, proportional representation, reservation quota and others.


Many groups feel that the rights assured to them by the Interim Constitution has been taken away by the new Constitution that was pushed through in haste by majority voting and not through general consensus. Madhesis who are vocal immediately resorted to agitation. But this does not mean the interests of aggrieved but silent groups should be ignored. India should not be identified as supporting any particular group or any political party. It should plead for all groups so that the problem can be resolved through a broad-based consensus, thus making the Constitution more inclusive.


It is laudable that the Nepal Government has formed a panel under the chairmanship of the Deputy Prime Minister and Foreign Affairs Minister Kamal Thapa to resolve the issue. Hopefully one can now hope for peace and stability in Nepal which is essential for sub-regional integration.

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