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Nepal PM Vows to Improve Ties With China, Eases Fears of BRI Debt Trap

© REUTERS / Navesh Chitrakar/File photoNepal's Prime Minister Khadga Prasad Sharma Oli, also known as K.P. Oli.
Nepal's Prime Minister Khadga Prasad Sharma Oli, also known as K.P. Oli. - Sputnik International
Nepal entered China’s Belt and Road Initiative in 2017 with great enthusiasm. The two sides have signed agreements worth $2.4 billion, involving projects ranging from infrastructure and energy to post-disaster reconstruction efforts. With the BRI, Nepal hopes to be well placed as a major transit hub for trade between China and India.

Nepal's participation in China's Belt and Road Initiative (BRI) is in line with the country's national interests, Nepalese Prime Minister Khadga Prasad Sharma Oli said on Monday, seeking to assuage fears of a debt trap.  

"Even though there are some rumours, let us be clear that we are not going to fall into debt trap. Instead, the BRI is going to be beneficial for us. We are aware of our national priorities and interests. Nobody should be worried about it at all," Prime Minister Khadga Prasad Sharma Oli said in Kathmandu on Monday, as cited by Nepalese media.

READ MORE: China Unveils 'Firefighting' Train

The Chinese government on Monday officially handed over the expanded Kalanki-Koteshwar section of the Ring Road in Kathmandu in the presence of PM Oli.

India Prime Minister Narendra Modi (L) gestures while talking with China's President Xi Jingping during the BRICS leaders' meeting with the BRICS Business Council at the Taj Exotica hotel in Goa on October 16, 2016 - Sputnik International
China's Redefinition of BRI Has Brought it Closer to India - Observer
In his address, Oli said that Nepal and China are set to identify several other projects under BRI framework besides striving to complete projects like the Kerung-Kathmandu Railway on time.

The statement comes at a time when China's BRI is reeling under a slew of criticism around the world. The latest casualty of the "debt trap" is Malaysia's East Coast Rail Link (ECRL) project. The government of Malaysia called off the $20 billion project awarded to China Communications Construction Co. (CCCC) on Saturday, citing a lack of financial capacity.

​"The cabinet has made this decision because the cost to develop the ECRL is too big and we don't have (the) financial capacity," Malaysian Economic Minister Mohamed Azmin Ali said at a media event on Saturday.

READ MORE: BRI Express: China, Belgium Sign Pact to Connect via Diamond Silk Road Railway

The interest on the project alone amounted to half a billion ringgit (circa $120 million) a year.

"We cannot afford to bear this, so this project needs to be terminated without affecting our good relationship with China," the minister added.

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