By Gaurab Shumsher Thapa*
Nepal occupies a crucial geostrategic position in South Asia. It is sandwiched between powerful neighbors and competitors in India and China, surpassing the Himalayan nation in size, population, economy and military might. Yet it is one of the few countries to have remained independent throughout history. Maintaining this independence is now all the more difficult.
Geopolitical realities necessitate maintaining a delicate balance in Nepal’s relations with its immediate neighbours. Relations with India are deeply rooted in historical, cultural, socio-economic, religious and family ties. The open frontier The arrangement between the two countries facilitates the movement of people and goods. But politically, India and Nepal have had their ups and downs. Although Nepal and China also share historical relations, bilateral relations are more focused on political and economic issues than on people-to-people exchanges. Yet China has dramatically increased its influence in Nepal over the past decade. The United States is also one of Nepal’s most important development partners today.
In the 18th century, King Prithvi Narayan Shah called Nepal “a yam between two rocks”. With a third “rock” in the United States now showing keen interest in the country, Nepal must avoid becoming entangled in great power rivalry and ensure that its foreign policy remains geared towards its own national interests.
Relations with the first “rock”, India, seem to be accelerating rapidly — after a long and sometimes tumultuous history — in the 2010s. After coming to power in 2014, Indian Prime Minister Narendra Modi proclaimed his policy of “neighborhood first”. His visit to Nepal just three months after taking office was the first by an Indian prime minister in 17 years, raising hopes for improved relations between the two countries. This optimism was bolstered by India’s immediate humanitarian assistance within hours of the massive 7.8 magnitude earthquake that hit Nepal in April 2015.
But Modi’s reputation in the Himalayas quickly crumbled when Delhi pressured Nepalese leaders to delay the promulgation of a new constitution in September 2015. When Kathmandu failed to capitulate, India imposed a “undeclared” economic blockade in Nepal. Then in 2020, the then Prime Minister of Nepal KP Sharma Oli released a map encompassing the disputed territories of Kalapani, Lipulek and Limpiyadhura – which are claimed by Nepal but controlled by India – in response to India building a road in the area.
The second ‘rock’ has also sought to increase engagements with Nepal in recent years. China’s top priority in Nepal is concern over anti-China activities, specifically that the United States, in conjunction with India, could use Nepal’s geostrategic position to contain it.
China directed $188 million in foreign direct investment to Nepal in the 2020-2021 financial year, more than any other country. Nepal and China also signed a transit transport agreement for third-country trade during Oli’s visit to Beijing in 2016. It was a landmark decision that ended the sole dependence of the Nepal vis-à-vis India for transit trade. It was also a response to India’s 2015 blockade. Nepal then became a signatory to China’s Belt and Road Initiative (BRI) in May 2017, although no tangible progress was made on targeted projects including a rail link that would connect Kathmandu to Kerung in Tibet.
In the first visit by a Chinese president in 23 years, Xi Jinping visited Kathmandu in October 2019. His statement that China would help make Nepal a land-bound state instead of a landlocked one had a geopolitical resonance. COVID-19 has also presented an opportunity for China to leverage vaccine diplomacy in Nepal. But as China-Nepal relations have publicly gained ground, Beijing’s drive to maintain unity among Nepal’s communist parties has not gone unnoticed.
The newest ‘rock’ to hit the scene – the United States – first provided economic aid to Nepal in 1951 and is now one of its most important development partners. Nepal signed a $500 million grant agreement with the United States under the Millennium Challenge Corporation (MCC) in September 2017 to develop the country’s power transmission lines and road network. This deal has both national and geopolitical complexities, and there was heated debate over the pact until it was finally approved by Parliament in late February 2022.
Critics of the MCC deal claim that some provisions of the deal violate Nepal’s constitution. Critics saw it as part of the US Indo-Pacific strategy to contain China and argued that it would make Nepal a pawn in the region. geopolitical chessboard.
The ruling coalition – the Nepali Congress, the Communist Party of Nepal (Maoist Centre) and the Communist Party of Nepal (Socialist Unity) among others – did not have a unified position on the issue. While Nepal’s Congress, led by Prime Minister Sher Bahadur Deuba, pushed hard for parliamentary approval of the MCC, its coalition partners were less enthusiastic and only approved a conditional deal. Several left and right fringe parties have launched public protests against the deal.
In the run-up to the February 2022 tabling of the MCC agreement in Parliament, the United States and China have engaged in a war of words accusing each other of using non-diplomatic means to influence Nepal on the matter. The geopolitical wrangling saw Nepal’s Foreign Ministry issue a statement affirming Nepal’s sovereign right to decide what development assistance it needed in the country’s best interests. After much political wrangling, the government proposed an “interpretative statement” for the MCC pact clarifying its position on the matter and it was finally ratified by parliament on February 27, 2022.
As the saying goes, “geography is not arguing, it simply is”. Nepal’s location defines its situation. China does not want an increased American presence in Nepal. The United States believes that China’s influence on Nepal’s democracy and development is malignant. India does not want to threaten or undermine its own influence in Nepal’s affairs.
As a landlocked country with a weak economy caught between these three powers, how can Nepal establish a viable independent foreign policy?
Despite the geographical and cultural proximity, Nepal-India relations have been marked by a lack of trust in recent years. To reverse the trend, Nepal needs better economic engagement with India. Regarding China, Nepal has always supported the “One China” policy. Nepal needs to carefully prioritize projects under the BRI that are in its national interest and avoid incurring excessive debt. Nepal’s engagement with the United States must focus on economic development and carefully avoid becoming part of a strategy that threatens the security of its immediate neighbors.
Nepal can use its geostrategic location to its advantage to maintain good relations with its partners because no one is ready to lose Nepal to the benefit of others. The geopolitical stakes are set to increase in the Nepalese periphery in the years to come.
It will always be difficult for Nepal to balance its foreign policy options. But the policy of non-alignment and adherence to panchsheel (five principles of peaceful coexistence) are enshrined in the constitution of Nepal, and they are suitable for safeguarding the sovereignty of Nepal while promoting its development. Staying away from the arguments of others will keep the “yam” safe from the “rocks”.
*About the author: Gaurab Shumsher Thapa is the President and Managing Director of Nepal Forum for International Relations Studies (Nepal FIRST).