The Belt and Road Initiative as a Gateway to the Sea for Land-Locked Countries: With Reference to Nepal

March 28, 2022

Mukunda Adhikari and Zhiguo Ma zhiguoma

Abstract

This article explores the Belt and Road Initiative (BRI) and its role as an agent to bind the relationship between the sea and landlocked countries, while pointing out the necessity of alternative sea access to the land-locked countries especially during situations like blockade. The BRI is a Chinese development project with five main objectives: connectivity of infrastructure, policy coordination, unimpeded trade, financial integration, and people-to-people bonds. The objective of connectivity of infrastructure is pivotal to land-locked countries and their access to the sea. The study establishes that the BRI’s proposed six corridors and one maritime route are useful for land-locked countries. Nepal is one of the landlocked countries and many times suffering from blockade from its neighboring country especially India. Therefore, this study aimed to identify whether the BRI is necessary or not to avoid the potential blockade from its neighboring countries. The study is mainly focused on the secondary data of import and export, and the impact of blockade on import and export in Nepal. Situations like blockade seriously impact countries’ export-import activities, and especially those of land-locked countries. The BRI and the Nepal-China Transit Transport Agreement have secured sea rights to Nepal via Chinese territory. The BRI provides a solution for land-locked countries against the continuing threat and problems created by blockade. Therefore, this study strongly recommend to Nepal Government to work seriously through BRI for further Nepal’s developmental process and country’s rapid economy growth in the future.

Introduction

In 2013, the Chinese President Xi Jinping announced “Silk Road Economic Belt and 21st Century Maritime Silk Road,” in his talk at Kazakhstan as a regional cooperation model (Huang, 2016Shang, 2019). In the speech, the president Xi declared the overland Silk Road that connected China with Central Asia and Europe an economic belt (Murphy, 2016). Immediately, the Indonesia Parliament declared the New Maritime Silk Road in October 2013 as a part of Xi Jinping’s state visit to Indonesia (Haggai, 2016). The Chinese President Xi again announced to establish an Asian Infrastructure Development Bank (AIIB) and building the 21st Century Maritime Silk Road. These plans are formally known as “One Belt & One Road” (OBOR) or the “Belt & Road Initiative” (BRI; Huang, 2016). In the third plenary session of the Communist Party of China’s (CPC’s) 18th central committee on 12th November 2013, the CPC approved the improvements concerned with financial bodies to accelerate the construction of infrastructure linking China with bordering countries and regions, as well as work on the Silk Road Economic Belt and a Maritime Silk Road to create a new design of global connection (Hatef & Luqiu, 2018). The Silk Road Economic Belt plan and the 21st Century Maritime Silk Road policy constitutes the Belt and Road plan. This Belt and Road Combined Development Proposal was launched in March 2015. China revealed its vision for recovering the old Silk Road through huge infrastructure plans and adding value to ports around the Silk Road. Its Chinese name is yidaiyilu (一带一路), which means “One Belt One Road” (Dunford & Liu, 2019Gu, 2018). In broad terms, it is an extensive plan with the strength to initiate financial revolution around the world.

The BRI’s five objectives are equally imperative and are interrelated (Figure 1). Among these objectives the connectivity of infrastructure and facilities is with great importance to access to land-locked countries. The BRI is an open collaboration with six main corridors and one maritime coastal route that cover costal and landlocked countries including Nepal. Nepal (26.22°–30.27°N, 80.04°–88.12°E) comprises 1,47,516 km2, and is a landlocked country (Sharma & Bhattarai, 2019), which is bordered by India on three sites east, west, and south, and China to the north (Atique, 2017). In 1950, Nepal and India signed a treaty of trade and commerce, which was implemented in 1960 (Sarup, 1972), and a trade and transit treaty in 1971 (Glassner, 1978). Nepal and China signed for Transit Transport Agreement (TTA) in 2016 (Murton & Lord, 2020) that bound the two countries to freedom of transit between them. In addition to TTA, Nepal and China signed 10 other contracts related to Nepal’s construction and economic development plans. As a groundwork of TTA agreement, Nepal agreed and signed the BRI with China in 2017 (Adhikari et al., 2019).

Figure 1. The Belt and Road Initiative’s five main objectives modified from Shang (2019).

OPEN IN VIEWER

Nepal has no direct connection to the sea. International legal instruments, especially the United Nations Convention on the Law of the Sea (UNCLOS-1982), have also recognized Nepal as a landlocked country. This Convention gave exclusive rights of freedom to transit and transport through the territory of transit countries to the land-locked countries (Martín, 2010). It defined a “land-locked State” as a State that has “no sea-coast” (Bayeh, 2015). Similarly, it described a “transit State” (Parks et al., 2019) and “traffic in transit” (Mangone, 1995). The UNCLOS-1982 states that land-locked countries and transit countries should agree to transport (Truth et al., 2011). Article 125 allows land-locked countries to enjoy freedom of transit and transport through the territory of transit countries (Martín, 2010). Exercising freedom of transportation should be agreed among the land-locked countries and transit countries concerned (Nyman, 2017). Under international sea law, land-locked States retain their full sovereignty in transit territories (Martín, 2010) as an international legal right for land-locked countries.

Nepal is surrounded by two big neighbors, therefore TTA is important to these countries to get seaports facilities for export-import. Nepal has signed a TTA with India 1950 and, more recently, with China in 2016. Nepal and China range more than 1,414 km through the Himalayan mountains (Murton, 2019). Nepal need sea access without barriers toward borders with China and India for international trade for more economy contribution at national and global level.

Against this backdrop, this research is focused on answering three questions:

➢ Is alternative transit a necessity for Nepal?

➢ Can the BRI provide alternative transit to Nepal?

➢ Can the BRI help to solve problems created by scenarios like blockades in Nepal?

Literature Review

After BRI introduced by China in 2013, numerous literatures on the project are available. Xi Jinping announced that he wanted to resurrect the legendary Silk Road and proposed a titanic project to build hundreds of roads, bridges, and railroads to connect China and Europe (Chaisse & Matsushita, 2018). A total of 57 countries, including Australia, France, Germany, India, South Korea, and the United Kingdom, signed up as founding members of the AIIB (Iida, 2018). China and other Asian countries have actively participated in the formulation of the United Nation Commission in International trade law (UNCITRAL) Conciliation Rules, as conciliation is deeply rooted in the Eastern culture (Wang, 2017). The UNCITRAL includes the possibility of BRI and trans-Himalayan power corridors (Murton & Lord, 2020) and highlights the alternative connection through Lanzhou to Kathmandu and Kolka (Lee et al., 2018). The BRI project is a 21st-century redefinition of the 19th-century land-based Silk Road Economic Belt to include a maritime aspect, the 21st Century Maritime Silk Road (Gekara & Nguyen, 2020). The Association of South East Asian Nations (ASEAN) aims to enhance regional cooperation under the three pillars of security, socio-cultural integration, and economic integration (Lee et al., 2016). The maritime sector helps to move more than 90% of world trade by volume (Kanrak et al., 2019). The shipping demand from Afghanistan is separate from those to and from Bhutan and Nepal based on exported and imported shares in terms of the trade amount (on a value basis), as acquired from the United Nations database (Shibasaki et al., 2019). An agreement between Germany and Poland was signed in 1921, and Germany, Poland, and the Free City of Danzig signed a convention regarding transit freedom between Eastern Prussia and the rest of Germany. An agreement signed in 1921 between Czechoslovakia and Italy facilitated transit between the two states, and Czechoslovakia obtained the right to install its own customs office in the port of Trieste. UNCOLS gives the localized bilateral, sub-regional, and regional agreements made between landlocked states and transit coastal states theoretical support (Hutchinson, 2014). Although several studies describe the BRI and the TTAs, they do not fill the gap in research on land-locked countries’ situation and transit connection through the BRI. This article intends to fill these gaps.

Research Methodology

A combination of descriptive and explorative research design is employed in this study, which is mainly based on secondary data. This study uses the 12-years petroleum product import records (data) from Nepal Oil Corporation Limited, the Government of Nepal’s department of customs’ 8-years country-wise export-import records (data), the Memorandum of Understanding signed between China and Nepal as the China-Nepal TTA, the India-Nepal TTA, and related literatures. It is based on a country case study using the qualitative method.

While collecting the data, we verified and rechecked the available data to confirm the complete and accurate. During this process we also consulted to respective officials to verify the data. In addition, we collected the Nepal blockade data. We finally, verified these blockade time and import and export during that time. We analyzed the import and export data and monetary records mainly for India, China, and other countries. The data were transformed to Excel data sheet and interpreted through graphs and figures.

International Legal Agreements on Transit Rights

In 1926, a draft agreement provided for a Commission of Specialists of the League of Nations and enclosed “Coastal sea” territorial waters for the 1930 Hague Conference Codified International Law (Kraska, 2014). In 1948, the International Law Commission was established with a single agenda: the law of the sea (Sen, 1977). The 1958 and 1960 UN Conferences on the Law of the Sea organized in Geneva adopted sea law and transit rights for landlocked countries (Roach, 2014). The first meeting of the UN Conference on Trade and Development (UNCTAD) in 1964 established eight Principles Relating to Transit Trade of Land-locked Countries (Glassner, 1978). Finally, the United Nations Law of Sea was passed in 1982. The UNLOC-1982, Article 69, states the sea rights of land-locked states (Mangone, 1995) and provides freedom of the high seas through Article 87 (Bayeh, 2015). This Article declares that both coastal states and land-locked states have equal liberty in the sea. Article 90 mentions the right of navigation for land-locked and coastal countries (Uprety, 1994). This convention entered into force in 1994 and, as of 2008, was currently binding on 154 States, including the European Community (Treves, 2008).

UNCLOS-1982 Article 37 states that “all ships and aircraft enjoy the right of transit passage” (Martín, 2010). A total of 132 countries have signed UNCLOS-1982, including the European Community (Parks et al., 2019) and China and India. Subject to this international sea convention are ships of all countries, whether coastal or land-locked, and enjoy the right of innocent passage through the territorial seas, as described under Article 17 (O’Hagan et al., 2019). Article 128 provides for land-locked countries’ use of free zones and other customs facilities (Bayeh, 2015) and provides under Article 131 for equal treatment in maritime ports (Nelson, 2006), One-fifth of the countries of the global community are without access to and from the sea; free access to the sea opens such countries’ access to international trade (Uprety, 1995).

Article 124 provides freedom of sea transit to land-locked nations and defines the term “land-locked” as a state that has no seacoast and the term “transit State” as a nation, a country, with or without a sea coast, that is situated between a land-locked country and the sea, through whose territory traffic passes in transit. The term “Means of transport” refers to railway rolling stock, sea, lake and river craft, and road vehicles, where local conditions or require porters and pack animals (Novinka, 2009). The provision secures the rights of all land-locked countries throughout the world, including Nepal.

Article 51 of the Indian constitution lists the need to maintain just and honorable relations between nations and respect international law and treaty obligations (Sharma et al., 2017). This constitutional obligation also requires the Indian Government to abide by international law related to access to the sea, to which India is a party.

The Vienna Program of Action 2014 to 2024 gives a guarantee of freedom of transit to the landlocked countries. The World Trade Organization (WTO) Article V of the General Agreement on Tariffs and Trade (GATT) 1994 provides a national transit scheme for all members without explicitly mentioning landlocked countries (Ghani & Haverty, 1998). The conference related to the Second Intergovernmental Preparatory Committee, held in Almaty, Kazakhstan, in 2003 (Mishra & Singh, 2008), also provided transit access for land-locked countries.

From the regional and global perspectives, Southeast Asia organized the ASEAN Region Forum (ARF) statement on threats to security. A conference on cooperation against piracy was held at the Association of Southeast Asian Nations Regional Forum in 2003 (Yonah & Richardson, 2010). The UN Security Council has also been discouraging acts of piracy and armed robbery at sea (Hodgson-Johnston, 2015).

Global Practices

Access to the sea is the natural right of land-locked countries, but these countries get transit facilities only through TTAs with coastal states, such as the Bolivia-Chile Treaty of 1904, the Laos-Thailand Treaty of 1978, the China-Mongolia Treaty of 1991, the Kazakhstan-Russia Treaty of 1992, and the Mongolia-Russia Treaty of 1992 (Mishra & Singh, 2008). Land-locked means surrounded by land, with no way to get in or out except by crossing another country’s territory. Land-locked countries are surrounded by other nations and have no access to a significant navigable waterway, so these countries have always been at a mercantile disadvantage to its seafaring neighbors (Garner, 2004). If a land-locked country wants to access the sea, there must be agreement with coastal states, according to UNCLOS-1982, Article 124.

There are 44 landlocked countries in the world,1 among which 16 are in Africa,2 15 in Europe,3 2 in South America (Hassan, 1976),4 and 12 in Asia.5 Nepal is the seventh-largest land-locked country in Asia. Another South Asian land-locked country, Bhutan, has been using a Bangladeshi seaport (Glassner, 1978). In the Asian land-locked country of Laos the volume of imports moving to Laos via Vietnam and Cambodia fell to 51% from 1954 to 1955 (Farrell, 1992). After 1959 Laos also signed a TTA with Thailand, South Vietnam, and Cambodia (Glassner, 1978). Land-locked countries must remain on good terms with a transit state, regardless of political, social, cultural, military, economic, or other disparities between them. The transfer of sovereignty that created India, Pakistan, and Afghanistan resulted in a signed agreement to provide mutual freedom of transit for traffic to and from the territories of the other parties (Uprety, 1995). Mongolia and Afghanistan are forced to eschew the most direct route to the sea because of political considerations (Menefee, 1992). China and Mongolia signed a TTA in 1991 (International Think Tank for Landlocked Developing Countries Ulaanbaatar, 2017). Mongolia and the Russian Federation also signed a TTA in 1991. These are some examples of transit transport relationships between land-locked and coastal nations.

Switzerland is a European land-locked country, which geographical features are similar to Nepal. The established railway and their potential extension in the mountain regions of Switzerland depicts the similar railway which is proposed by China-Nepal rail line from the Chinese autonomous province of Tibet (Keyrong) to Nepal (Rasuwagadi) and Rasuwagadi to Kathamdnu. The Chinese independent Tibet territory from Shigatse to Keyrong has almost the same geographical condition, but it is promised to be connected from the ShigatseKeyrong rail line in 2022 (Lee et al., 2018). The Schengen Agreement (Coleman, 2016) is also an example of how land-locked countries can enjoy transit and transport via the BRI.

Analysis

Land-Locked Nations and the Necessity of Sea Transit

Before discussing why an alternative transit route is necessary for land-locked nations, it is first important to understand why coastal neighbors impose blockades over land-locked countries when the latter are already at a distinctive disadvantage because of the huge transportation costs for accessing global markets compared to those of their coastal neighbors (Faye et al., 2004). Land-locked countries always seek connections to the sea and expect to encounter no barriers. The rights of landlocked nations are found on doctrines of natural law. It has been claimed that land-locked countries are entitled to free transit by virtue of their sovereignty (Sinjela, 1982). This theory emanated from the Roman concept of servitude, a limited right of ownership. In the Roman law the owner of a piece of land had the right to use it in any way he chose, so long as that use did not trespass on the rights of his neighbor (Glassner, 1983Sinjela, 1982). Existing theories related to land-locked countries’ right to access the sea developed from natural law jurisprudence. Sea law has been based on the essential principle of mare liberum for the last five centuries. The arrangement of open waters meant that the sea was available for the user, a res communis, and every nation had the right to navigate and fish freely. Countries could exercise their economic well-being over the carriage, navigation, and use of natural resources (Klein, 2005). The 1919 Treaty of Versailles mentioned the freedom of transit in some cases, and the 1921 Barcelona Conference 1921 also stated the freedom of transportation. However, the United Nations General Assembly more firmly established the question of free access to the sea in 1957 and the 1958 Law of the Sea Conference (Latimer, 1977). International law contains no customary right to fly over the territorial sea of another state, which corresponds to the right of innocent passage (Farrell, 1992). A crucial question that arises here is whether one nation can disturb other nations’ rights to the sea if coastal and land-locked nations have signed a TTA. This paper describes the history of Nepal’s blockades and justifies the need for an alternative route to the sea.

The Blockade History of Nepal

The first blockade: 1969

Nepal has already faced three blockades from India since India’s independence from the British Raj (i.e., in 1969, 1989, and 2015; International Think Tank for Landlocked Developing Countries Ulaanbaatar, 2017). However, Nepal and India signed their first TTA in 1950 (Glassner, 1983Jayaraman & Shrestha, 1976) and revised it in 1960, 1971, and 1978 (Uprety, 19941995). The governments of Nepal and India also discussed renewing the agreement close to its expiration in March 31, 1989 (Subedi, 1997), but King Birendra’s address in the Non-Aligned Nations Summit Conference in 1976 resulted in a misunderstanding between the two countries, as a result of which the first TTA and a separate transit transport treaty signed in 1978 expired (Scholz, 1977). In 1989, India imposed a blockade on the eastern, western, and southern borders of Nepal (Koirala, 1990). In 1991, the two countries agreed to sign a TTA based on periodic adjustments based on the status of bilateral relations, which was revised in 2013 (Nayak, 2016).

The second blockade: 1989

When India imposed an economic blockade for the second time in 1989, which lasted until April 1990 (Uprety, 1995), Nepal faced a huge crisis. In 1989 Nepal’s total population was 15,022,839 (Department of Industry, Planning, & Tripureswore, Kathmandu, 2014). The 13-month blockade had a significantly negative effect on Nepal’s economy (Sharma et al., 2017). The cause of the blockade is not certain, but one of the news agencies at the time wrote that the reason was Nepal’s growing closeness with China, as Nepal had purchased Chinese anti-aircraft guns in 1988 (Singh, 2018). In 1956 and 1989, China’s government supported the Government of Nepal with assistance in 42 projects (Garver, 2009). Meanwhile, India did not support Nepal in Nepal’s proposal to establish itself as a “Zone of Peace” (Shukla, 2006). Although these two countries have a long history with each other, Nepal and India, leading to the Anglo-Nepali Treaty of 1923, continued to remain friendly, except for 13 months in 1989 and 1990, when India enforced a trade and transit blockade against Nepal (Paudel & Burke, 2015). During the blockade, Nepal suffered shortages in fuel, salt, cooking oil, food, and other essential commodities that were typically imported from India (Singh, 2018). India had also used Nepal’s trade and transit dependency on India to achieve its tactical agenda. The blockade India imposed resulted in a serious humanitarian crisis in Nepal because of the shortage in essential supplies, consequently negative sentiment toward India emerged among the Nepalese people.

The third blockade: 2015

India blockaded Nepal’s and India’s southern border (Nepal’s Birgunj and India’s Raxaul) in 2015. This border is a crucial one, as more than 70% of imports enter Nepal via this border (Murton & Lord, 2020). UNICEF revealed that more than three million children under the age of 5 years were in danger of death or disease through Nepal’s exacting winter months because of a severe shortage of fuel, food, medicines, and vaccines during the blockade (Nepal Rastra Bank, 2016). Numerous Nepalese people had to turn to the black market to purchase fuel that was smuggled through India. Fuel prices, were usually two to three times higher than usual because of the massive fuel crisis (Murton & Lord, 2020). The blockade started on September 25, 2015 and ended on February 5, 2016. Nepalis’ lives were full of difficulties during the blockade (Sharma et al., 2017). Nepal’s entry to the sea for trade carriages was only through the Indian Sea, so Nepal had limited bargaining power (Lahiri & Masjidi, 2012). In addition, India is only one exporter of petroleum products to Nepal (Acharya & Marhold, 2019). Nepal always depend on Indian Oil Corporation for imports of refined petroleum products (Nayak, 2016). Therefore, the blockade during that period resulted in extreme scarcity on petroleum products and medicine.

Twelve-year petroleum product import ratio in Nepal

During the blockade, Nepal had considerable difficulty getting petroleum products, which was indicated by the petroleum delivery ratio in the last 12 years in Nepal (Table 1). The supply of petroleum has increased each year except 2015/2016. The imports of petroleum products in 2014/2015, 2015/2016, and 2016/2017 were significantly different, as the supply decreased massively in 2015/2016 (Table 1), largely because of the blockade. Petroleum is a matter of urgent necessity for every essential service, including hospitals.Table 1. Twelve-Year Import Ratio of Petroleum Products in Nepal.

Fiscal yearPetrolDieselKeroseneAviation fuelLP gasLP gasLP gas
2008/2009128,372489,21977,79974,3063802,188115,813
2009/2010162,902608,06552,71482,8242402,612141,171
2010/2011188,082652,76443,39999,9902281,434159,286
2011/2012202,467653,56041,609109,9040440181,411
2012/2013223,087721,20324,065115,8962602,456207,038
2013/2014253,381808,56718,409125,67802,172232,660
2014/2015287,473921,71419,653141,4040883258,299
2015/2016*240,386785,68514,19483,819077214,194
2016/2017407,2701,319,87319,607164,836036312,928
2017/2018488,6751,588,86922,337197,22000370,560
2018/2019566,8271,714,91725,004200,10800429.609
2019/2020512,1281,473,53618,924137,42400449,063

Source. Nepal Oil Corporation Limited (http://noc.org.np/import).

Note. In Kiloliters, except LP gas, which is in Metric Tons.

*

Blockade year.

OPEN IN VIEWER

Eight-year export and import position in Nepal, by country

Transit rights refer to transported goods and passage (Kraska, 2014). Exports and imports determined a country’s level of development. Barriers to the border or sea transit point directly affect a country’s export and import position. Figure 2 shows 8 years of Nepal’s export and import position. The figures are helpful in determining why alternative transit is necessary for land-locked nations.

Figure 2. Eight years of imports in Nepal, by country.Source. Department of Customs, Government of Nepal (https://www.customs.gov.np).

OPEN IN VIEWER

Figure 3 shows each year’s import and export ratio in increasing order, by country. Fiscal year 2015 to 2016 shows a significant difference in imports and exports in that period from other periods, with the blockade that neighbor India imposed in this fiscal year likely to be the primary cause. Nepal’s only way to access the sea is from India. Preventing access to the sea affects imports and shipping and is a serious legal violation from the perspective of international law.

Figure 3. Eight-year exports in Nepal by country.Source. Department of Customs, Government of Nepal (https://www.customs.gov.np).

OPEN IN VIEWER

BRI Routes for Alternative Transit to Land-Locked Nations

China announced its BRI in 2013, which is also referred to as the OBOR. The gigantic project reconstructs the ancient Silk Road and extends from China to Europe (Chaisse & Matsushita, 2018) via six corridors and one maritime route. The Chinese government plans for the OBOR to reach not only Europe but also Africa and South America and to allow land-locked countries to reach the sea. The BRI aims to connect China and Asian, African, and European countries using attractive infrastructure and official connections to create a worldwide community through common welfare, purpose, and accountability. In its broadest description, the BRI might cover up to 65 nations, 4.4 billion people, and account for ~30% of the global gross domestic product (GDP; Chen, Sui, et al., 2019). Nepal signed a memorandum of understanding (MoU) with China and arranged for cooperation under the BRI in 2017 (Adhikari et al., 2019). OBOR is part of a policy to gain benefit over China’s neighbors and other nations through the region. (The six proposed BRI corridors are shown in Appendix A.)

A look at the six corridors makes clear that land-locked countries that are connected through the BRI will be able to gain access to the sea. The China–Mongolia–Russia corridor crosses through the land-locked nation of Mongolia. The New Eurasian land bridge through Kazakhstan, the China-Center Asia-West Asia Corridor, moves through land-locked Kazakhstan and Kyrgyzstan, and the China-Indonesia Corridor proceeds through Laos. With all these routes going through both land-locked and coastal countries, the BRI sets a long-lasting means for land-locked nations reach the sea through an alternative sea connection.

Relationship Between the BRI and the TTA

The BRI is a long-term major national strategy for connecting China with other countries by stressing cross-border and multinational cooperation and offering new opportunities for China’s inland regions (Wei et al., 2018). Nepal and India share 1,880 km of border, whereas Nepal and China have a 1,414 km border. Kodari-Nyalamand and Rasuwa-Kerong are two points that have already been opened to international trade. The Kodari-Nyalam border was semi-closed after the devastating earthquake of 2015 (Nayak, 2016), as the road infrastructure is not sufficient for export and import users from the northern side. Nepal must have access to the sea port to export and import goods from international markets, so it has been using the Indian sea port. China accelerated its efforts to promote the BRI in 2015. The National Development and Reform Commission (NDRC) of China issued the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road,” which described the principles, frameworks, areas of cooperation, and future plans of the BRI (Iida, 2018). The BRI involves extensive government-to-government, enterprise-to-government, and enterprise-to-enterprise relationships (Wang, 2017). Both the China (Shanghai) Pilot Free Trade Zone and the Taicang Port are located at the intersection of the Yangtze River Economic Belt and the 21st Century Maritime Silk Road (Wang & Chen, 2019). To manage these relationships, a “going global” strategy for Chinese coastal ports has been proposed. The ports cover Shanghai, Tianjin, Ningbo-Zhoushan, Guangzhou, Shenzhen, Zhanjiang, Shantou, Qingdao, Yantai, Dalian, Fuzhou, Xiamen, Quanzhou, and Haikou as key gateways providing support to the “going global” strategy along the OBOR. The proposal regards these port cities as nodes to co-build a smooth, safe, and efficient transportation passage (Chen, Fei, et al., 2019).

In September 2015, India blockaded the Southern border of Nepal (Shrestha, 2017). Nepal was already facing massive damage because of an earthquake in April of that year, and many construction materials were needed for post-earthquake reconstruction (Longman & Miles, 2019). The earthquake killed more than 10,000 people and destroyed thousands of houses (Sharma et al., 2017). The blockade obstructed imports of not only petroleum but also medicines and earthquake relief material, and peoples’ daily lives were upended. That was not the first time Nepal had faced a border blockade problems from India, so Nepal and China signed a TTA. After the agreement with China, Nepal had two routes to sea: the old way through India and other and the newly agreed route through Chinese territory.

Analysis of the TTA between Nepal and China

The BRI is a concept of long-term international cooperation that the People’s Republic of China initiated in 2013 (Lam et al., 2018). Nepal signed the TTA with China based on the BRI. This agreement has been coded under Article 125 of the United Nations 1982 Convention on the Law of the Sea (Mangone, 1995). This agreement was founded on the UNCLOS-1982 provision and the importance of the OBOR that China proposed, as mentioned in TTA’s preamble (China-Nepal TTA, 2016).6 The TTA between China and Nepal welcomed the BRI in Nepal and carries a mutual understanding regarding freedom of transit, transfer, and transport of goods, customs, and other necessary arrangements. With this provision, Nepal has access to export and import through the sea. Nepal can use Chinese territory easily without any barrier, and both countries agree to stop criminal activities at transit points, as stated in Article 2.7 Article 2 deals with the two countries’ rights of security management.8 and provides that the parties can manage essential security and control international criminal activities, like arms smuggling, money laundering, and others.

Article 3 of the TTA mentions that the two countries agree to use the term “transit transport,” defines traffic-in-transit,9 and states that both can use roads and railways as transit transport.10 Article 4 incorporates customs and transit duties.11 Transit and transport, customs rules, quarantine, and inspection are grave matters in transport goods, so both countries agreed to fix the exit and entry points.12 Both states agreed upon the competent authorities. In 2018, both Nepalese and Chinese officials finalized a protocol meeting in Kathmandu that ensures Nepal access to the Chinese ports at Shenzhen, Tianjin, Zhanjiang, and Lianyungang. China also allowed Nepal to use its dry (land) ports at Lhasa, Shigatse, and Lanzhou, as well as roads to these facilities (Lee et al., 2018). This TTA has allowed Nepal’s ships to sail using the flag of Nepal on the high seas.13 Article 8 of this agreement talks about protecting public morals, and human, animal, and plant life and health. The primary point is the security and political, social, and economic stability. The agreement also prevents the smuggling of goods. The agreement does not hinder either country from signing other international TTAs and allows them to sign necessary international conventions.14 The two countries agreed to consult each other for effective and smooth implementation. Both countries will decide on necessary amendments to the agreement,15 and route and condition modalities are to be settled through consultation with both countries.

If a dispute arises, it will be settled by consultations between the two countries (China-Nepal TTA, 2016).16 Despite its many provisions, this agreement alone is not sufficient. The Sea Law of 1982, Articles 281 and 282, imagine the resolution of disputes outside the framework (Klein, 2005) by applying the model of the Northeast Asian sea-bed dispute settlement procedure (Kwon, 2000). This agreement took forced in 2016 and can be renewed every 10 years. If any of party to the agreement wants to terminate it, it must provide written notice 6 months earlier.17 The agreement extension provision is competitively sufficient because of the 10-year life of the agreement. When Nepal signed the TTA with China, Nepal envisioned a railway network from Gyirong to Kathmandu and other places in Nepal.

Purposed Lanzhou–Kathmandu South Asia corridor

When signing the TTA and the BRI with Nepal in the 2016 BRI forum, China announced a Lanzhou-South Asia Corridor through Kathmandu, Nepal. This route starts from Lanzhou, in the Gansu Province of China, to Kolkata, India, through Nepal. It was not purposed as part of the original OBOR in 2013. From China’s Gansu province, through the capital city of Lanzhou to Kathmandu, Nepal, the total distance of the route is 3,055 km. It was declared the third international train (China-South Asia) corridor in 2016. It is 2,341 km from Lanzhou to Tibet (Shigatse), 540 km from Shigatse to Gyirong, and 185 km from Gyirong to Kathmandu. If the purposed rail line is connected, it will cut 10 to 45 days from the cargo route in Nepal (Lee et al., 2018). Nepal has been using the Kolkata route for cargo.

China’s BRI, which promotes regional infrastructure integration among Eurasian countries, is also concerned with transport infrastructure that would connect China to Europe. For example, regular container train services (China–Europe Railway Express) that connect Chinese cities (mainly inland cities, such as Chongqing, Chengdu, Wuhan, and Xi’an) with European and Russian cities, have been increasing rapidly in both number and the area that they cover in China and Europe (Shibasaki et al., 2019). As a result, Nepal will enjoy all routes of the BRI to connect the world. Therefore, the TTA and the BRI have been milestones in the prospect of a sea connection for land-locked Nepal.

A high-level Chinese technical team under Jhang Lee Yang, the deputy administrator of National Railway administration, in cooperation with the Department of Railway (DoRW) of Nepal government conducted a field visit to the proposed 287-km-long Gyirong-Kathmandu-PokharaLumbini Railway Project in Nepal. It was during the visit of Nepalese Prime Minister KP Sharma Oli to China in March 2016 that the agreement for the construction of the railway between Nepal and China was signed (The Himalayan Times, n.d.). See Map 7 and Map 8 in the Appendix B.

BRI Projects in Nepal

The financial investment for Nepal’s development is more from China than other countries. In 2015, Chinese Foreign Minister promised US$ 480 million for infrastructural repair under the BRI (Carrai, 2018). Since 2000 to 2017 Chinese business agencies invested around US$115 billion (Murton & Lord, 2020). In 2019 Asian Infrastructure Investment Bank approved U.S $ 0.9 Million Grants to Nepal for the preparation of TamakoshiV Hydro plan (AIIB, 2019). Similarly there are more than 35 projects running with the financial support of China (see some major running projects in Nepal Table 2).Table 2. BRI Projects in Nepal.

Serial no.Project
1Araniko Highway disaster and climate change project
2BhittamodLamabagarLapcha corridor
3Construction of six ICPs in PulangYari (Humla), Liji Nechung (Mustang), JilongRasuwaJangmuKodariReuOlangchungola, and ChentangKimathanka
4Exhibition centers in all seven provinces
5Free trade area in Betrawati of Nuwakot and PanchkhalKavre
6Galchi-Rasuwagadhi-Kerung 400 kV transmission line
7Gandaki corridor (BelhaiyaKorala)
8Groundwater possibility in Kathmandu at Chandragiri
9Handicraft village in HumlaSimikot
10Karnali corridor (JamunahaHilsa)
11Kathmandu Outer Ring Road
12KimathankaHile road construction
13KodariBirgunj corridor
14KoralaPokhara road
15Koshi corridor (Rani-Kimathanka)
16Lift irrigation project in PanchkhalKavre
17Mahadevkhola rainwater harvesting project
18Mid-Tarai lift irrigation project
19Multifunctional lab at Rasuwagdhi border point
20New city at BherigangaSurkhet
21Sunkoshi Marine diversion multi-purpose project
22ThoriKerung corridor
23Upgrade of Rasuwagadhi-Kathmandu road
24View tower in Nagarkot

Source“Negotiation stalls on 35 proposed projects”(n.d.).

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Conclusion

Before its TTA with China, Nepal had used only one seaport, in Kolkata, India, but after the TTA with China, the sea route through China was opened. Nepal and China have already signed an agreement about using four seaports and three dry ports in China. This TTA is the groundwork for the BRI, which plans to extend the rail connection through the Chinese Autonomous Region of Tibet (Gyirong) to Nepal (Rasuwagadi) and from Rasuwagadi to Kathmandu. If Nepal starts to import and export through Chinese territory, the time and money required for Nepal to import and export goods to and from China and other East Asian countries will be substantially reduced. The significant critical accomplishment of the TTA and the BRI is that it has opened an alternative way to the sea for Nepal. Therefore, the TTA and the BRI have been milestones in the prospect of a sea connection for land-locked Nepal.

Both agreements have guaranteed Nepal access to the sea through Chinese territory. After these agreements, Nepal will also be allowed to use its flag on ships at sea.

The 21st century is an era of globalization. Every nation has right to be part of the global market and to export and import. It is obvious that those nations that have sea ports have more access to the global market than land-locked nations do, as by sea is the most efficient and cheapest way to transport cargo. However, land-locked nations also have a right to the use of sea ports. Nepal had access only to Kolkata sea port in India, so it was fully dependent on India for its exports and imports. Because of the Indian monopoly over Nepal’s access to the sea, Nepal was blocked in 1969, 1989, and 2015 from access. However, Nepal signed a TTA with China in 2016 that provided Nepal access to seaports in China. This alternative transit point has since kept access to the sea in case of another blockade by India.

The TTA between Nepal and China is part of the BRI, which includes 35 projects that affect Nepal. The extended rail connection through the Chinese Autonomous Reason of Tibet (Gyirong) to the Nepalese border (Rasuwagadhi) and from Rasuwagadhi to Kathmandu is a dream project for Nepal that will soon become reality. In 2018 officials from Nepal and China finalized a protocol during a meeting in Kathmandu on giving Nepal access to the Chinese ports at Tianjin (天津), Shenzhen (深圳), Lianyungang (连云港), and Zhanjiang (湛江). China also agreed to allow Nepal to use its dry ports at Lanzhou (兰州), Lhasa (拉萨), and Shigatse (日喀则), as well as roads to these facilities.

Conducting trade from Chinese territory certainly reduces the time and money involved in importing and exporting goods from and to China and the East Asian countries. Both agreements the TTA and the BRI guaranteed Nepal access to the sea through Chinese territory. This research analysis has shown that the BRI provides Nepal access to the world market, along with the Chinese marketplace. The BRI has provided cross-border connectivity, and it has given Nepal secure access to the sea. Analyzing all routes that the BRI envisions that all the ways that the BRI will connect coastal and land-locked countries have almost solved the border blockade problem that land-locked countries, including Nepal, currently face.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Zhiguo Ma https://orcid.org/0000-0001-8344-8887

Footnotes

1. Landlocked Countries of the World https://www.worldatlas.com/amp/articles/landlocked-countries-of-the-world.html

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2. Landlocked Countries in Africa https://www.mapsofworld.com/africa/thematic/landlocked-countries.htmlBotswana, Burkina Faso, Burundi, Central African Republic, Chad, Eswatini (Swaziland), Ethiopia, Lesotho, Malawi, Mali, Niger, Rwanda, South Sudan, Uganda, Zambia, Zimbabwe.

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3. Andorra, Austria, Belarus, Czech Republic, Hungary, Kosovo, Liechtenstein, Luxembourg, Macedonia (Yugoslavia), Moldova, San Marino, Serbia (Yugoslavia), Slovakia, Switzerland, and Vatican City

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4. Bolivia and Paraguay

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5. Afghanistan, Armenia, Azerbaijan, Bhutan, Kazakhstan, Kyrgyzstan, Laos, Mongolia, Nepal, Tajikistan, Turkmenistan, and Uzbekistan

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6. Agreement on Transit Transport Between The Government of Nepal and The Government of People’s Republic of China(March 21, 2016 Beijing). [See in Preamble– “Noting the relevant international legal instruments, especially the 1982 United Nations Convention on the Law of the SEA, recognizing that Nepal, as a land-locked country, has the right to have permanent access to and from the sea, and the right of freedom of transit, and realizing the need to facilitate the transit transport through their territories; Considering the importance of the One Belt One Road Initiative proposed by the Government of the People’s Republic of China”.]

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7. Article 1—“The Contracting Parties shall provide each other with the freedom of transit across their respective territories through routes mutually agreed upon. Operational modalities including the utilization of ports, routes, and conditions of transits, mode of transport and transfer of goods, customs and other necessary arrangements to facilitate transit transport shall be mutually agreed upon by competent authorities of the Contracting Parties and shall be laid down in the Protocol which shall be an integral part of this Agreement.”

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8. Article 2, Paragraph (i)—“Each Contracting Party shall have the right to take all indispensable measures to ensure that transit activities on its territory does not in any way infringe its legitimate interests of any kind or facilitate any transnational crimes such as stowaways, money laundering and arms smuggling.”

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9. Article 2, Paragraph (ii)—”Nothing in this Agreement shall prevent either Contracting Party from taking any measures which may be necessary for the protection of its essential security interests”.

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10. Article 3, Paragraph (i)—““The term transit transport” means traffic-in-transit which covers the passage of goods, including consigned baggage, across the territory (including territorial land, inland waters, and territorial seas) of a Contracting party when the passage is a portion of a complete journey which begins or terminates within the territory of the other Contracting Party, with or without transshipment, warehousing, assembly, disassembly or change in the mode of transport. Nothing in this Article shall be construed as imposing an obligation on either Contracting Party to establish or permit the establishment of permanent facilities on its territory for such assembly, disassembly or reassembly. Agreement on transit transport between the Government of Nepal and the Government of People’s Republic of China (March 21, 2016 Beijing)”

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11. Paragraph (ii)—“The Contracting Parties agree to use railway rolling stock and road vehicles, vessels and other transport means agreed upon by the Contracting Parties in transit transport”.

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12. Article 4—“The cargo and goods in transit transport shall be exempt from customs duties and from all transit duties or deposits for the payments of these taxes of transit state if the customs and the relevant quarantine and inspection departments of the Contracting Parties are satisfied that the requirements for transit transport Procedures are met, except reasonable charges for transportation and such other charges as are commensurate with the costs of services rendered in respect of such transit transport”.

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13. Article 5—“For convenience of the transit transport, the Contracting Parties agree to provide at point or points of entry or exit, on such terms as may be mutually agreed upon by competent authorities and subject to the relevant laws and regulations prevailing in either country, warehouses or sheds, for the storage of transit goods awaiting customs clearance before onward transmission.”

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14. Article 7—“In order to enjoy the freedom of the high seas, merchant ships sailing under the flag of Nepal shall be accorded, subject to the laws of the People’s Republic of China, treatment no less favorable than that accorded to ships from any other foreign country in respect of matters relating to navigation, entry into and departure from the ports of China, use of these ports and harbor facilities, except that the provisions of this Article shall not be extended to the coastal trade.”

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15. Article 9—“Nothing in this Agreement shall prevent either Contracting Party from taking any measures which may be necessary in pursuance of general international conventions, whether the Contracting Party has signed or will sign hereafter, relating to transit transport, export or import of particular kinds of articles such as narcotics and psychotropic substances, animal and plant quarantine objects or in pursuance of general international conventions intended to prevent infringement of copyright or trademark right or relating to false marks, counterfeits or other methods of unfair competition.”

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16. Article 9, Paragraph (i)—“In order to facilitate effective and smooth implementation of this Agreement, the Contracting Parties shall consult each other when necessary. This Agreement may be amended upon consensus reached by the Contracting Parties through consultations.”

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17. Article 10—“This Agreement shall come into force on the date of signature, remain valid for a period of ten years and be automatically renewed in every ten years unless either of the Contracting Party gives to the other a written notice, six months in advance, of its intention to terminate the Agreement.”

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Appendix A

BRI’s Six Corridors

i.

New Eurasian Land-Bridge: It starts from Western China to Western Russia. The railway structures of Kazakhstan and China recognize the seamless link, thus beginning the New Eurasia Land Bridge. From Fujian Provence Xiamen to the destination, it is 11,866 km (Wen et al., 2019).

ii.

China–Central Asia–West Asia Corridor: It goes through Western China to Turkey. It starts from the Xinjiang Uygur Autonomous Region to central and western Asian countries like Kazakhstan and Kyrgyzstan (Wen et al., 2019).

iii.

China–Indochina Peninsula Corridor: It starts from Southern China Yunnan Provence capital city Kunming to Singapore. It passes along Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, and finally ends in Singapore (Tracy et al., 2017).

iv.

China–Mongolia–Russia Corridor: It starts from Northern China Liaoning province’s capital city Shenyang and reaches eastern Russia. It’s a cargo train route to Hamburg through Manchuria Pass, which will arrive within 13 days of the carriage period (Yu & Chang, 2018).

v.

China–Myanmar–Bangladesh–India Corridor: It starts from Southern China, Yunnan Province’s capital city Kunming to reach Kolkata, India. BCIMEC is going through Myanmar, Bangladesh, and India (Wen et al., 2019).

vi.

China–Pakistan Economic Corridor (CPEC): It goes through China South-Western Xinjiang Uygur Autonomous Region, Kashgar city to Pakistan Gwadar port (Wang & Yau, 2018). It is an ongoing project.

vii.

Maritime Silk Road: This waterway goes from the Chinese Coast through Singapore to the Mediterranean (Mayer, 2018). The Main route of Silk Road starts from Xian; Xian is the capital of Han Dynasty, name of Chang’an. It is the Silk route that connected Asia to Europe and Africa; the New Silk Road main route similarly starts from Xian (Wang & Zhao, 2013). The present Silk Road is further separated into north, south, and central corridors, and these all routes start from Xi’an. The north route goes through Gansu Province; the south route passes through Shaanxi Province Fengxiang and the fundamental way goes through JingchuanPingliangHuining, and Lanzhou (WuweiSun & Liu, 2019).

Map 1. New Eurasian land-bridge.Sourcehttps://www.geopoliticalmonitor.com/fact-sheet-the-new-eurasian-land-bridge/

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Map 2. China–Central Asia–West Asia corridor and China–Indochina Peninsula corridor.SourceLee et al. (2018, p. 285)

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Map 3. China–Mongolia–Russia corridor.Sourcehttps://www.geopoliticalmonitor.com/fact-sheet-china-mongolia-russia-corridor/

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Map 4. China–Myanmar–Bangladesh–India corridor.Sourcehttps://www.insightsonindia.com/2019/04/29/bangladesh-china-india-myanmar-bcim-economic-corridor/

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Map 5. China–Pakistan economic corridor.Sourcehttp://cpec.gov.pk/map-single/2.

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Map 6. Route of Silk Road economic bent and maritime.Sourcehttp://beltandroadcenter.org/2017/12/15/maps-of-the-silk-road/

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Appendix B

Map 7. Purposed Lanzhou–Kathmandu South Asia rail line.SourceLee et al. (2018, p. 287).

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Map 8. Nepal proposed railway network.Sourcehttps://www.vifindia.org/article/2019/october/11/chinese-investments-in-nepal-in-the-context-of-bri

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