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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.
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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.
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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).
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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.
Nepal just dodged a bullet. Good for them.
Africa is already a big modern Chinese ‘colony’. Hopefully the list gets shorter every year, and not longer.
Cue the tankies to show up soon explaining how China had everybody’s best interests at heart, and all previous examples were taken out of context.
Cue the preemptive jab at anyone who might say some reasonable shit about America’s boogeyman.
Oh no! 2% interest on a loan, how dare they? Meanwhile wells fargo is getting away with a 33% interest credit card on me lol
Nepal wants a grant instead and China said no. So the logical conclusion is foul play?
Smells like ✨propaganda✨ to me.
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.
Oh no! We’re comparing credit card interest rates with country-level loans!
…China’s sinister plan to ensnare nations into a debt trap
Obviously it is different, but I am just pointing out how predatory the western banking system can be. Student loans at 13%, home loans going up half a percent almost every month. 1% is hardly worth calling sinister.
Sure, I guess I could have chosen my words better - foul play, bad intentions - the semantic difference in my word choice is hardly significant enough to be worth quoting lol
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?
Did you read the article?