OBOR: Road To Prosperity

Dr. Dinesh C.Devkota

THE One Belt One Road (OBOR) is a principle based on the combination of two outward-facing concepts introduced in late 2013 in order to promote economic engagement and investment along with the two main routes. This is a long-term plan that will involve the current and future generations to propel Chinese and global economic growth. Under the "OBOR" plan, China is remaking global trade and nurturing geopolitical ties.

The reports suggest that the first route, the New Silk Road Economic Belt, will run westward overland through Central Asia and onward to Europe. The second route, the 21st-Century Maritime Silk Road, will possibly circle the south and west by sea towards Europe, with proposed stops in South-East Asia, South Asia and Africa.

This is a long-term plan that will involve the current and future generations to propel Chinese and global economic growth. Under the "OBOR" plan, China is in the process of reinvigorating global trade and nurturing geopolitical ties.

The audacious plan promises more than one trillion dollars in infrastructure investments that span 60-plus countries across Europe, Asia and Africa. Thus, its significance equally lies with countries other than China that eventually benefits the territories of Asia.

This initiative will not only strengthen Chinese economy, but also have a greater prospect of economic advancement in many countries in different continents. More importantly, this will help lift the economy of less developed countries including Nepal, if the Nepalese experts and diplomats can tackle smartly. As an immediate neighbour, Nepal can reap a huge benefit by promoting her trade and industries with modern technology that will help develop Nepal’s competitive strength in a viable way. This will have a great significance in transforming the remittance based economy into a sustainable economy in the long run.

Impact on Nepal

Nepal and China have strong socio-economic ties for many centuries and the relations between two nations have been remarkable for many years. To be more precise China has played a key role in Nepal’s overall economic development. In this context, China’s ‘One Belt, One Road’ mission can be taken as a catalyst for promoting the shared benefit among its neighbors.

Further, “‘One Belt, One Road apparently is an opportunity for Nepal to shift its position from a land-locked to land-linked nation.” We need to develop our transport and infrastructure to reapthe benefits despite the poor infrastructure and impending power shortage as our major bottlenecks for development.

The concept of the One Belt, One Road is a plan of creating regional network for infrastructure development, which definitely will support the countries in the region to enter into the global economy with enhanced exchanges in terms of cultural diversification, information and technology applications. It will also foster people-to people relations in the region and this concept will support to bolstering economy of the region with improved connectivity.

This initiative will help coordinate the development strategies of the countries, boost the market potential in the region, will also increase FDI, create demands and job opportunities, support to continue and develop people-to-people relation and cultural exchanges among the countries. OBOR will not only develop connectivity, but it will also help share knowledge and experience of different regions.

How could Nepal reap benefits from OBOR and how are LDCs getting market access to China? These are some crucial issues to be taken into consideration. The widening trade deficit is a big challenge for many developing and less developed countries including Nepal. It is the reality that in most of the cases, the South Asian LDCs are producing more labor intensive products. OBOR, in this context, can easily shift their position from labour intensive to capital intensive producers and export modern products mainly IT products across the world. All we need now is a new trade regime.

The belt and road is focusing essentially the development of infrastructures such as highways, ports andspecial economic zones (SEZ) which involve cooperation mainly looking forward to the commitments between people to people, institutions to institutions and government to government from country to country. If commitments come into fruition, we have a great prospect from the initiative, particularly in the countries where there are tremendous amount of infrastructural deficits. A recent study suggests a “total of 3 trillion dollars infrastructural investment is required for Asia to realise this initiative.

In my opinion, The ‘One Belt One Road’ initiative can be a new opening for cooperation. It is inviting all countries, national, international or regional organisations for engagements. In case of Nepal, improved transportation can give rise to a lot of transit trades which will add value to the goods produced by Nepal mainly harnessing of available natural resources. Given Nepal’s position at the centre of the trade routes, the country can benefit a lot. Once Nepal’s major cities are connected through OBOR, Nepal can benefit by reducing transportation costs significantly.

From the point of view of ‘new economic geography’, the need for improvement of traffic condition in Nepal is instrumental that will definitely help promote economic development. The Chinese companies have advanced technology and efficiency to build high-speed railway and high-grade highways in plateau and mountainous terrains.

Nepal is the only viable route to connect two main lands of China and India. Almost a span of 200 kilometres can join the two large economies. In this context, Thori-Keirung-Lhasa could be a potential route for further study keeping in mind that it will help bring two largest populations closer. On top of that it will be an attractive alternative route for Buddhist pilgrims to visit Lumbini, the birthplace of Buddha.

To make Asia the major economic hub, we have to give more emphasis on the development of belt and road. Connecting China to South-Asia through Nepal can contribute to Nepal’s economic development.

Fresh momentum

This initiative can trigger a fresh momentum to the establishment of the Bangladesh-China-India-Myanmar (BCIM) economic corridor. It will be a great opportunity for Nepalese economy to get closely linked with BCIM, where diplomatic initiative is required.

In this context, OBOR has some strategic importance for Nepal. This is indeed a win-win situation if we strategically move to realise ‘One Belt One Road’ to lift the nation to new height of economic prosperity. Connectivity is important for building one belt one road, which not only brings the physical infrastructures together, but also supports trade network among the countries in the region.

(Dr.Devkota is former Vice Chair of National Planning Commission and Chair of Nepal Intellectual Council)

 

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