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  • Nepal has shied away from signing a plan to implement China’s ambitious Belt & Road Initiative (BRI) in the Himalayan nation. Resisting immense pressure from Beijing, Nepal’s Prime Minister Pushpa Kamal Dahal refused to greenlight the signing that would have paved the way for the implementation of nine mega and more than a dozen major BRI projects in Nepal.

  • That’s because soon after Nepal signed the BRI framework agreement in May 2017, India launched a massive but silent campaign to educate and explain Nepal’s political leadership, economists, bureaucrats, diplomats, academia, media and civil society leaders the pitfalls of China’s BRI to them, making Nepal’s top politicians and others fully aware of China’s sinister plan to ensnare nations into a debt trap through the BRI.

  • PM Deuba eventually told China that Nepal would only agree to a small component of the cost of BRI projects in the form of loans. However, the interest on such loans should not be more than what multilateral lending agencies like the World Bank and Asian Development Bank (ADB) charge for their loans (one per cent per annum).

  • This was not acceptable to China which charges more than two per cent on the loans it gives to other countries to finance BRI projects. Also, China insists on the contracts for these projects being awarded only to Chinese companies and refuses to do away with or water down penalty clauses (in case of failure to repay the loans on time).

What also worked against China was Nepal’s experience with the Pokhara International Airport which cost US $ 305 million. China’s Exim Bank provided a loan of about US $ 215 million at 2 per cent interest. Chinese firms were awarded contracts for construction and technical works.

Allegations of shoddy construction, inflated costs and mismanagement by the Chinese have fuelled public anger against China in Nepal. The airport has turned into a huge liability (read this) since no commercial and scheduled flights are operating from there.

  • AwesomeLowlander@lemmy.dbzer0.com
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    5 months ago

    Oh no! We’re comparing credit card interest rates with country-level loans! And they’re higher! Gosh! Never mind that the IMF interest rate is half of that. 🙄

    the logical conclusion is foul play

    Nobody but you claimed foul play, only bad intentions.

      • AwesomeLowlander@lemmy.dbzer0.com
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        4 months ago

        western banking system

        Are you implying the rest of the world uses a different, more socially friendly banking system? For that matter, when’s the last time China sent out a multi-billion dollar aid package?

        1% is hardly worth calling sinister.

        Yeah, it’s only a few billion dollars. What’s that between buddies?

        semantic difference in my word choice is hardly significant enough to be worth quoting lol

        It’s only significant when it’s in your favour, eh?