Prosperous Nepal-China Border

Dr Balmukunda Regmi


China is a trustworthy friend of Nepal, with relations with it being as true as the Himalayas. We are poor at maintaining chronicles but some examples survive. Nepal’s daughter Bhrikuti was married with the Tibetan King Srongchen Gompo and brought Buddhism to Tibet in the seventh century. Our son Araniko introduced Nepali architecture to major parts of China in the thirteenth century. Our myths credit Manjushree from China for cutting the Chobhar hill and making Kathmandu inhabitable.

Because of the difficult topography, the Himalayan border areas are sparsely populated, and here and there crossed by trade routes. It is a source of water that supports half of the civilizations. At present, there are small settlements in both sides of the Sino-Nepal border. They are characterized by cross-border marriage, cooperation, sharing and caring and conflicts. Natural resources, climate and natural disasters do not obey the political borders. Forest fires, floods, glacial lake outbursts, famine, contagious diseases affect both sides, and collaboration is a must to solve these problems. Now is high time that both China and Nepal extend their support to these border  settlements. Through economic and social inclusion and provision of free cross-border movement and trade, we can help them feel proud of living in the border areas.

China has become the second largest economy for the first time in modern history. Nepal should lobby for cooperation with China. Increased Chinese investment in Nepal means increased economic activity and ultimate technology transfer. Due to domestic instability we could not benefit much from the “good neighbor policy” of China. Now, the Chinese have put emphasis on connectivity, “One Belt One Road”. Through participation in this initiative, Nepal should utilize this opportunity. Of course, the road alone is not enough for our economic development. We should frankly speak to China, seek her help in modernizing our agriculture, enabling our cottage industry in value addition, and reducing the trade deficit. The development in Nepal is alarmingly uneven, so we should emphasize on the domestic connectivity. And anything that leads to further trade deficit is detrimental to the stability of Nepal.


Economic zones

Ever since the establishment of diplomatic relations in 1955, China has supported Nepal in infrastructure development and training skilled human resources. Nepal has been eagerly waiting for the establishment of Chinese “industrial zone” in Panchkhal, extension of Chinese railway line up to Nepali border. In such a context, China has proposed to establish ‘Border Economic Zones’. Nothing would be more welcome. Perhaps, Chinese proposal aims at addressing our concern that the growing trade imbalance in favour of China can ultimately lead to collapse of our bilateral trade. Planned and implemented properly, utilising local resources and providing employment to locals on both sides of the border, such economic zones will enhance people-to-people friendship and cooperation, cultural exchanges, mutual benefits, and ultimately regional peace and stability.

To maximize benefits from the provision of such economic zones, we need to identify our strength, weaknesses, challenges and opportunities. We should emphasize on sustainable development, use of renewable energy, export-oriented production, environment-friendly industrialization and social harmony. We should avoid exploitation of rare, precious and non-renewable resources in our drive for industrialization. Sensitive resources like uranium, endangered animals like musk deer, plants like panch aunle (Dactylorhiza hatagirea) should be protected. If we establish a processing industry in Nepal and the raw materials come from Chinese side, we need assurance of its uninterrupted supply. In the process, Chinese side will put forward its concern; we, ours.

China has given 8,000 of Nepali products duty free access to its market. But we have been unable to benefit from the Chinese openness either for lack of our competitiveness or due to their non-tariff barriers. We should be careful to avoid such problems when establishing the border economic zones. In fact, our products should get smooth access in China.


Homework needed

First of all, Nepal should welcome the Chinese proposal. Then, we should work out what we want to get done and what we want to avoid in the process. We may seek diversity in our products and services. We should ensure that maximum employment opportunity goes to the local people. They should be educated and trained to meet the modernisation needs.

Not all border economic zones have to be industrialised. Himalayan ranges are rich in cultural diversity. They are tourist attractions. Eco-friendly tourism can preserve their cultures, help their economy and conserve our water resources. Research centres can be established to study the Himalayan history, cultures, languages, climate and environment.

Recreation and healing centres can bring a boost to the local economy. Chinese population is tilting towards elderly, who can be our clients due to cold, sunny, clean environment of Nepali settlements in the southern foot of the Himalayas. If we can provide a good hospitality sans procedural hurdles, affluent senior citizens of other countries also can choose Nepal as their destination.

We should complete the provision of integrated border and social security before any economic zone is inaugurated. Utmost priority should go to electricity generation and connection to the national grid, road and cable car connection to the national highways, basic health and education facility. Cultivation of high altitude medicinal plants, spices, fruits, flowers, related packaging and processing industries can be a priority area. Animal husbandry, dairy, wool and meat processing industries can promote local economy while protecting the environment.

Traditional knowledge and practice of our people living in border areas are our great asset. We should keep in view protecting our rights over these assets. We should also make necessary preparations so as to maximise the benefits while letting no space for controversy. Compared to China, Nepal is more fragile to slightest disturbance in the border area. As a small country we are less resilient to the environmental and social impact of the initiative. So, we should pay much attention in selecting the locations of the particular economic zones and the nature of the activities carried therein.

Also, Nepal is unique in the sense that our political parties and pro-and-con mentality of our intelligentsia always find fault in whatever a government brings up. Regarding China, there are so-called pro-Chinese, anti-Chinese, and neutral nationalistic forces in Nepal. The government should reject the pleading of former two types of forces and stick to the suggestions of the nationalistic forces. It would lead to the success and continuity of the border economic zones if the government could create national consensus regarding the joint initiative. Rather than trying to take all the credits for the economic zone initiation, our parties should discuss the issue and endorse the best possible option as our national policy. Success and continuity of the first few projects creates environment for further investments.

We have seen how the Arun Project was aborted. The anti-Arun project activists claimed themselves as “nationalists”, it is too late when everybody can understand what was the motive behind it. It is possible, interest groups in the disguise of “nationalism”, “human rights”, “environmental activism”, or “indigenous people” can mushroom to oppose the creation of border economic zones or to counter our national interests. We should scrutinise such voices, if there be, from Nepali perspective, and do what is good for us. It will ultimately bring prosperity to our border areas.

(Dr Regmi is a professor at Tribhuvan University Institute of Medicine)




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