The NIAS Neighbourhood Reader Daily Brief, 31 May 2023, Wednesday

By Immaculine Joy Paul C, Melvin George, Lakshmi Parimala H

NEPAL

From Murrah buffaloes to Hydropower projects, Dahal’s visit is likely to cover a wide range of agreements

On 31 May, PM Dahal began his four-day visit to India, at the invitation of his Indian counterpart, PM Narendra Modi. The preparations and discussions on what should be included in his agenda have been going on for several days in Nepal. In accordance to the discussions and several statements by the Prime Minister and several other ministers, the following issues are likely to be taken up:

1. Energy: Energy is one of the main foci of the visit. This includes agreements on hydropower projects and cross-border energy cooperation, including transmission lines. Nepal is likely to bring up talks on the export of electricity to Bangladesh through the Indian grid. Several new and pending hydropower projects, such as the Lower Arun and Phukot projects at Karnali in western Nepal, are expected to be discussed. There would also be discussions on India’s Line of Credit for the construction of transmission lines, including the possible agreement on the construction of the transmission line between Butwal and Gorakhpur. Further, there will be agreements on the construction of a new petroleum pipeline from Siliguri to Jhapa and the extension of the present Motihari-Amlekhgunj petroleum pipeline to Lothar. Additionally, Dahal stated that he would try to obtain a stable and reliable market for Nepal’s electricity in India.

2. Infrastructure: Multiple agreements on infrastructure projects, including railway lines, check posts and bridges are likely to take place. Both the Prime Ministers will inaugurate, through a remote control system, a canal built on the Mahakali River; a railway yard in Biratnagar and the Jaynagar-Janakpur rail link and integrated check posts in Biratnagar and Nepalgunj. In addition, agreements on new bridges across the Mahakali River in Chandani-Dodhara and the Jhulaghat areas and construction of integrated check posts in Bhairahawa, Chandani-Dodhara, and Nepalgunj are likely to be signed. Further, an agreement on digital payment modes to ease cross-border payments is expected.

3. Trade, commerce, and transit: The Foreign Minister of Nepal, NP Saud, speaking on the issues to be raised during the PM’s visit, stated that Nepal has a huge trade deficit with India and therefore, to reduce the gap, they would like to seek concession in customs duty on exports to India. Additionally, he underlined the need for the removal of the anti-dumping provision on its agricultural products, including jute, for them to reach Indian markets. Moreover, he said that the two countries will also discuss the renewal of the transit treaty, which expired in 2019. Dahal is likely to request India to open three more points along the border from which airlines can move to and from Nepal.

4. The boundary disputes: Although relatively less preference is given to the border disputes, the opposition has insisted that Dahal take them up. Advising the Prime Minister not to be ‘cowardly and cold-hearted’, KP Oli emphasized reiterating Nepal’s stance on Kalapani, Lipulekh, and Limpiyadhura as part of Nepal. On 30 May, Dahal assured a parliamentary committee that he would not sign any controversial agreements, further assuring the parliament that he will take up the territorial disputes along the Nepal-Uttarakhand border.

5. The EPG Report: The report by the Eminent Persons Group on Nepal-India relations, which was drafted in 2018, has not yet been signed or discussed by the two countries. However, the discussions on the report came into the limelight after the announcement of Dahal’s visit to India. Some sections in the political sphere of Nepal, including the opposition, have demanded that Dahal should take up this in his talks with India. Therefore, the report, which has been sidelined for five years, is likely to be taken up in the talks.

6. The mural painting in India’s new parliament building: Recently, a new issue was added to the list, which is on a mural in the new Parliament building of India, which depicts some of the Nepali territories, including Lumbini and Kapilavastu, inside India. Nepal’s opposition parties and former PM KP Oli has demanded talks with the Indian officials and the removal of the mural. In response, Dahal assured to raise this issue with the Indian officials.

In addition to the issues mentioned above, the visit is expected to cover agreements related to biodiversity, and the supply of chemical fertilizer by India and Murrah buffalos. He will also address the Nepal-India Business Summit, interacting with businessmen from both countries and will further interact with the Nepali community in India. While collaborative issues will be a part of the dialogue, few conflictual concerns could be raised. On 20 May, during an interaction with the media, Dahal, stated that he is “confident that history will be created”, however, much depends on the issues he opts during the visit.

THAILAND

Same old promises repackaged with an enthusiastic spin, says Kavi Chingokittavorn

On 31 May The Irrawaddy reported an analysis by Kavi Chongkittavorn on the proposed foreign policy of the newly elected Move Forward Party (MFP). The article says that the transition from a half-baked democracy to a liberal democratic society would be pleasing for the US and its allies. From a military rule that was highly polarized and deeply rooted in the patronage system to a government with young leaders on board elected through free and fair elections is seen as a successful transition.

The following are the main points from the article:

1. Chongkittavorn says that Pita Limjaroenrat’s proposed liberal foreign policy is not a new idea. It was Surin Pitsuan, the former ASEAN secretary-general and former Thai foreign minister under PM Chuan Leekpai who brought liberal foreign policy on the backdrop of the 1997 Tom Yum Kung crisis which collapsed the Asian economy. It was done in order to attract economic and political support from the international community. Thailand maintained cordial ties with big powers like China, India, and Russia and scored well in all the human rights and democratic indexes in the US and Europe. But even when Surin showed the new face of Thailand to the world and gathered foreign assistance, the reality on the ground was different which eroded this approach. But since 2014, Thailand showed a trend of shaking off its autocracy.

2. The strategic location of Thailand in the heart of the Indo-Pacific and the pro-west policies would attract the interest of the US and its allies in the country amidst the increasing US-China rivalry. This raises concerns within Thailand that it would make China, its immediate neighbour, an enemy with its liberal policies siding with the US. It is yet to be seen whether Thailand can attain democracy when the rest of the Southeast Asian countries are struggling to remain open and independent.

3. Pita Limjaroenrat believes that Thailand should play a proactive role in the international arena, promoting human rights and rule-based order. He outlined foreign policy ideas based on the three R’s - revival, rebalancing, and recalibration. Leaving the brand of quiet diplomacy, he envisions a foreign policy that would make Thailand a middle power that can shape the new world order. It talks about balancing the ties with big powers and deepening the ties with ASEAN. According to Limjaroenrat, his objective is to see Thailand up the ante in external relations. The article opines that these are some old promises repackasged with an enthusiastic spin.

4. The author writes that, until the new government is formed, it is rather premature to envisage the new contours of Thai foreign policy. Hence, it is likely the current foreign policy as outlined under the 20-year National Strategy will continue as it has served the national interest well given the day-to-day circumstances and constraints. (Kavi Chingokittavorn, “Imagining Thai Diplomacy Under the Move Forward Party,” Bangkok Post, 31 May 2023)

BHUTAN

Lower literacy rate among the females

On 22 May, the Center for Bhutan and Gross National Happiness (GNH) studies published the GNH survey for 2022. It brought light onto the education domain, which saw low self-sufficiency levels. It was found that 49 per cent of household heads lack formal education. The bigger concern, as Kuensel reports, is the gender disparity in literacy. According to the study, the literacy rate for females was 63.6 per cent, while it was 77.1 per cent for males. In addition, it mentioned that 40.4 per cent of females had no formal education, compared to 30.3 per cent of males. The study further proposed a few measures to improve education and address the gender disparities. It suggested capacity building to combat low literacy rates among rural females. Further, it recommended a mobile literacy programme, where a mobile classroom reaches remote villages, and peer-to-peer learning, assisting older women to teach one another. Additionally, it proposed advocacy and awareness campaigns to increase female students' school completion rates. (Jigmi Wangdi, “GNH study shows alarming gender disparity in literacy,” Kuensel, 30 May 2023)

BANGLADESH

Dhaka’s AQI reaches 166, ranking as the second most polluted city

On 31 May, the AQI index of Dhaka scored 166 at 8:41 am, ranking as the second most polluted city. Jakarta ranked first, and Santiago, third, with AQI of 173 and 157 respectively. The Air Quality Index (AQI) measures the air pollution levels. In Bangladesh, the AQI considers five criteria of pollutants- particulate matter, nitrogen dioxide, carbon monoxide, sulfur dioxide, and ozone. The AQI ranges from 0-500. A greater AQI value indicated a higher level of pollution. It is divided into six categories, each corresponding to different levels of health concern. The 151-200 range is marked as ‘unhealthy’, where Dhaka’s AQI stands. (“Dhaka’s air 2nd most polluted in the world this morning,” The Daily Star, 31 May 2023)

“Coordination among fiscal, monetary and trade policies of Bangladesh will yield improved stabilisation outcomes,” says economist Debapriya Bhattacharya

On 31 May, The Daily Star reported on its interview with Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue. He spoke on tackling inflation and preserving the forex reserves. It was stated that tariff rationalization must be taken up to manage the price rise, thus tackling inflation. In addition, with respect to the forex reserves, Bhattacharya suggested aligning multiple exchange rates to taka in order to stabilize foreign currency flow, along with the rationing of forex reserves. Speaking on the revenue collection and expenditures, he stated that the fiscal deficit is going to increase in FY23 by about 1 per cent of the GDP. He further stated that the collection of property taxes has to be strengthened and introduce inheritance and rationalize gift tax, along with making the tax system fair and transparent. (Md Fazlur Rahman, “Policy coordination to yield better budgetary outcomes,” The Daily Star, 31 May 2023)

Rise in consumer prices despite relative fall in inflation

On 31 May, The Daily Star reported on the significant rise in prices in Bangladesh. In April, the inflation rate slightly fell to 9.24 per cent. However, it remains at a high level compared to historic trends. The consumer prices averaged 8.64 per cent in April, as opposed to the estimated target of 7 per cent. The price rise has led to an increase in fuel prices, pushing up commodity prices, transport costs, medical expenses, and education expenditures.

The prices of several import-based essential commodities have declined over the years but were not reflected in the local markets. The reason behind this was that the importers did not cut the prices due to the higher import cost, amid the US dollar shortage, and higher production costs. The Centre for Policy Dialogue says that the high prices are not a fully external phenomenon and stated that the lack of a competitive environment, market syndication, absence of necessary monitoring, and lax enforcement of existing laws by concerned institutions are a few of the reasons. (Sukanta Halder, Md Abu Talha Sarker, “FY23: A year of price shocks,” The Daily Star, 31 May 2023)

NEPAL

CPC leader visit to Nepal before Dahal’s visit to India

On 30 May, Wang Xiaohui, the Communist Party of China (CPC) Secretary of the Sichuan province, arrived in Kathmandu. He was invited by the ruling CPN (Maoist Centre) Party. According to a Maoist Centre leader, one reason for the visit could be the Chinese exploration of the possibility of unity among leftist parties in Nepal. Meanwhile, a 20-member Maoist Centre delegation is still in China, meeting senior CPC leaders. As The Kathmandu Post reported, according to some Nepali communist leaders, the Chinese are concerned about the future of the ruling coalition. Additionally, the growing Indian and American presence in Nepal, having a possible effect on Nepal-China ties, is another concern. (“CPC leader in Kathmandu on eve of Dahal’s Delhi trip,” The Kathmandu Post, 31 May 2023)

SRI LANKA

ADB approves USD 350 million loan; Sri Lanka welcomes the move

On 30 May, State Minister of Finance Shehan Semasinghe welcomed the Asian Development Bank’s approval of USD 350 million loan to Sri Lanka for the stabilization of its economy. The loan which was approved on 29 May, is a part of a broader package provided by the International Monetary Fund’s (IMF) Extended Fund Facility (EFF). He said, “We greatly value the emergency assistance provided by the ADB to support basic services and sustain livelihoods during the crisis,” and further pointed out that the country would stay committed to both internal and external reform measures to better the debt situation. (“Sri Lanka welcomes US$ 350mn ADB loan to stabilise economy,” Daily Mirror, 31 May 2023)

China will provide continued economic assistance to Sri Lanka, says Foreign Affairs Vice Minister

On 30 May, in a visit between Chinese Vice Minister of Foreign Affairs, Sun Weidong, and Prime Minister Dinesh Gunawardena at the Temple Trees, the former mentioned that China will invest more in areas such as agriculture, trade and commerce, ports and infrastructure development in Sri Lanka. He further stated that his country would provide continuous economic assistance and also aid to the debt-restructuring programme. (“China will increase investments in agriculture, trade and commerce, ports and infrastructure development in Sri Lanka – Chinese Vice Minister of Foreign Affairs,” The Island, 31 May 2023)

India’s credit facility extended for one more year

On 30 May, as per Sri Lanka’s request, the State Bank of India (SBI) extended the tenure of the Credit Facility USD one billion till March 2024. The facility was provided in March 2022 for urgent procurement of fuel, medicines, food items, and industrial raw materials, as per the requirements and priorities of the Government of Sri Lanka. The amendment agreement which brings the extension into effect was signed in the presence of the State Minister of Finance, Shehan Semasinghe, senior officials from the Ministry of Finance of Sri Lanka, and officials from the High Commission of India, Colombo. (“USD 1 bn Indian credit facility extended till March next year,” The Island, 31 May 2023)

THE MALDIVES

Resolutions from Nasheed supporters rejected in the parliament

On 30 May, the resolutions submitted by Thoddoo MP Hassan Shiyan and Madaveli MP Hussain Firushan who are notably supporters of the Parliament speaker Mohamed Nasheed, failed in the parliament. Both the resolution was related to the electoral promises made by MDP in the 2018 election campaign. Shiyan’s resolution laid the restoration of the subsidy to farmers provided during the first MDP administration. Firushan’s resolution was related to the implementation of the fisheries policies. Both the resolution received only seven votes in favour out of 49 MPs who were present. (“Parliament rejects Nasheed faction’s resolutions accusing govt of failure to fulfil pledges,” sun.mv, 30 May 2023)

Parliamentary system is the way to hold ministers accountable, says Nasheed

On 30 May, Thimarafushi MP Abdulla Riyaz in the parliamentary sitting, raised concerns over the lack of timely response from the cabinet ministers and how it would hinder the parliamentary process. He further noted that the cabinet ministers take more than three months to respond to the queries while the mandated period is only 14 days. Responding to it, Speaker Nasheed stated that until there is a shift from the presidential system to a parliamentary system of governance, such unaccountability will prevail. (“A parliamentary system would enhance accountability of minister,” Avas, 30 May 2023)

Priority bills are not set on the agenda; Fayyaz raises concerns

On 30 May, Economic Minister and MDP Chairman Fayyaz Ismail resented the parliament’s delay in taking forward the Occupational Safety and Health Bill and the Industrial Relations Bill. He highlighted that both bills are part of the government’s priority bills and carried significant importance toward the protection of workers' rights and the economy. Speaker Nasheed, who has the power to set agenda mentioned that he would not carry out parliament work as per government agendas. (“Fayyaz expresses discontent over delays in advancing priority bills,” Avas, 30 May 2023)

IRAN

Afghan and Iranian guards clash over water disputes

On 27 May, clashes broke out between Afghan and Iranian guards on the border killing at least one Afghan and two Iranian soldiers. It comes in the backdrop of accusation by Iranian President Ebrahim Raisi on Afghanistan for restricting the flow of Helmand River water to Iran’s eastern regions based on the 1973 treaty. However, Taliban has refuted the accusations. According to Sina Toossi, a senior non-resident fellow at the US-based think tank Center for International Policy (CIP), the Taliban fighters do not have clear demarcation and an understanding of the boundaries and rules. He further added that the treaty is not kept by the latter as only half of the agreed amount of water is shared. The water dispute seems to rising owing to the worsening drought conditions. (“What caused deadly Afghan-Iran border clashes? What happens next?,” Al Jazeera, 30 May 2023)