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Guest Column
Railway in Kathmandu?

By Kamal Raj Dhungel

We are fortunate in the sense that we are living in between two of the most emerging countries of the world -India and China. Both China and India are getting prosperous over the years with annual average economic growth rate of near the double digit. And we are fortunate because we have no option but to get with the flow and grow. The most pressing impact of their achievement, a combined economic growth rate over nine percent a year, limits the number of persons below poverty line at minimum. And because we are so very close to them in terms of physical proximity, the impact of the growth in all four sides of our nation will definitely touch the borders and thus creep in.

Beginning with Bihar, a poor northern state of India is our neighbor. A few years ago Bihar was plagued with rampant corruption, mass unemployment and poverty, criminal cases like murder, rapes, kidnappings and robbery. However lately it has been making amazing progress in social, political and economic fronts. The most notorious state of India for poor maintenance of law and order that had paralyzed the development activities is now under control. Surprisingly, it has been able to achieve double digit economic growth rate, above the national average within a period of less than a decade. Today it invests its resources in the construction of basic infrastructure such as road, railway, power, airports, schools, colleges and health. This obviously has increased employment opportunity to the poor. Now its status is rising touching the statuses of other well civilized and developed states of India. This is the story of our neighbor whose fate was not seen as bright as other Indian states a decade ago.

Similar is the case of China, the second largest economy of the world with double digit annual economic growth for the last three decades. Within this period China has reduced the large number of poor people of about 64 percent of the population in 1981 to 2.8 percent today. This is the outcome of the continuous investment in basic infrastructure such as railway, power, road, airports and other social services. As a part of it, China has proposed a plan to invest in the extension of railway line in Tibet. As a result it has a plan to extend railway lines from i) Lhasa to Nyingchi bordering Meghalaya of India ii) Shigatse to Nyalam, bordering Nepal and iii) Shigatse to Dromo bordering Bhutan and Sikkim.

Can we take decisions on matters of the nation’s development? Nepal is very dependent so it cannot take any decisions in its interests without foreign counseling. The nation is making policies to achieve development targets independently whose implementation depends primarily on the expected aid inflows from the multilateral and bilateral sources. Approximately, for one and half decade, Nepal neither has a political stability nor has a leader with development vision to push the country to the economic standards of its neighbor. Thus Nepal lost its credibility for the same and is on the verge of being tagged as failed state.

When neighbors have started to invest in an economy to sustain and achieve high economic growth, Nepal has also started to trace its development programs. For instance, when Bihar started to repair, construct and extend railway line in the bordering areas, Nepal set a plan to build railway line from Raxual to Kathmandu. This proposal was put forward repeatedly when the railway line from Raxual to Amelekhganj was constructed. When India proposed to build a gas pipe line from Myanmar to Calcutta via Bangladesh, Nepal has made a policy agenda for constructing gas pipeline from Bangladesh to Nepal via India. Now, Nepal is dreaming to construct railway line from Nyalam to Kathmandu. These all are possible only when our neighbors get favorable space to invest in the development of infrastructure in Nepal. However we are chewing up our resources without doing concrete things. These projects need huge amount so that their implementation depends on the wish of our laborious neighbors. Now, China has enough money. It has a keen interest to invest in the global development projects. The construction of railway line from Nyalam to Kathmandu would promote trade between Nepal and China. Chinese goods will dominate the Nepalese market. Given such reality it is possible to construct this railway line only if China sees it profitable. If this project succeeds in the near future it will have the chain effect to construct another such project from Raxual to Kathmandu with the Indian investment because of the India’s interest to keep Nepal under its influence. I think it will happen in course of time so long as India and China remain rivals with respect to the influence on trade with Nepal. However, it all depends on how Nepal maintains its relation with both the countries and how much Nepal can extract from this rivalry between them.

(Dhungel is Associate Professor Economics at Tribhuvan University. Email:kamal.raj.dhungel@gmail.com)

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