NEW DELHI, 8 June 2006 — Indian Prime Minister Manmohan Singh offered his Nepali counterpart Girija Prasad Koirala an aid package yesterday to help revive the economy and rebuild his strife-torn country, officials said.
Koirala’s visit holds significance as he expects India to play a major role in reviving Nepal’s economy, which is in a dismal state because of a decade of political instability and insurgency. Analysts say the aid package is likely to include grants and soft loans worth millions of dollars to help rebuild infrastructure and schools wrecked by years of political instability and a Maoist insurgency.
Koirala, 84, is leading efforts to rebuild the shattered Himalayan kingdom since being appointed in April, after weeks of street protests forced King Gyanendra to restore Parliament and end direct rule.
After a meeting between the two leaders, officials said India was planning to provide support to its landlocked neighbor.
“India remains committed to give all support in undertaking infrastructure projects, capacity building projects which have to be determined as per the priorities of the government of Nepal,” Anand Sharma, India’s junior foreign minister, told reporters after the meeting.
“This (meeting) has given us adequate information about their needs and requirements. The government of India will be working out a detailed package for Nepal which would be announced before the delegation returns,” he added.
The package is also likely to include funding for the construction of a hydroelectric plant to help combat frequent power cuts in one of the world’s poorest nations.
India is a major donor to Nepal and supplies the bulk of essential commodities to its neighbor, whose economy based on aid and tourism was badly hit during the insurgency, in which more than 13,000 people were killed.
“The two countries are looking at ways of how India can help Nepal progress in various fields — this will be financially, militarily and democratically,” said S.D. Muni, professor of international relations at Delhi’s Jawaharlal Nehru University.
“Nepal is in dire need of economic support and we expect support from India,” Nepalese Finance Minister Ram Sharan Mahat, who is accompanying Koirala, said.
India has agreed to aid Nepal in three sectors — hydroelectric, roads and aviation. While India is ready to offer Rs. 1 billion package, Nepal wants five times more over the next five years. Besides, Katmandu expects New Delhi to write off previous amount it owes on account of defense purchases from India.
New Delhi, which played a significant role in brokering the talks, is concerned about links between the Nepali rebels and growing numbers of Indian Maoist insurgents on its side of the porous border between the two countries.
Meanwhile, Malaysian Deputy Prime Minister Najib Abdul Razak and Indian Defense Minister Pranab Mukherjee yesterday discussed military-to-military cooperation and compulsory pilotage in the Malacca Straits. The Malaysian deputy premier arrived here on Tuesday on a seven-day visit.
Razak, who also holds the defense portfolio, held a one-on-one meeting with Mukherjee followed by delegation-level talks.
India backed an East Asian security initiative jointly mooted by Singapore, Malaysia and Indonesia to enforce the compulsory pilotage of the Malacca Straits at a recent security dialogue in Singapore.
All vessels passing through compulsory pilotage zones have to be navigated by skilled marine pilots designated for the task by the concerned authorities. The compulsory pilotage of the Malacca Straits was suggested as a means to safeguard ships passing through the channel against piracy and to guard against terror attacks at sea.
Mukherjee, during his talks with Razak, reiterated India’s willingness to participate in the project and share its expertise in maritime security with other countries in the region, PTI reported quoting defense sources.
Malaysia has decided to open a visa office in Bombay and issue multiple entry visas to facilitate easy travel for Indians, Razak said.
Describing plans to issue multiple entry visas as “a first step towards making travel to Malaysia by Indians easier”, Razak said the expanding Indian economy offers opportunities for Malaysian and Indian companies to explore collaborative initiatives.
