Among the perceived flashpoints of Asia, Nepal is one of them. Nepal’s sandwiched location between India and China puts it on top notch foreign policy priorities for the US, India and China. In current times, when the world is beginning to segregate in two opposing camps: Indo-Pacific camps (US, India, Japan) led by the US and the western international order camps led by China. This $27 billion economy is struggling hard for its independent survival. This survival depends on its inclination with either India or China.
Unfortunately, this nation falls in a trap to incline with both countries – as these two giants are ideological and socially asymmetrical. These lopsided effects have put this nation in a trade deficit of $11.63 billion in 2017, accounting for the total export counts of $818.7 million and imports counts of $11.3 billion in 2017. This is due to landlocked geography of Nepal, limited industrial base and access to seaports. By countering the decade-long influence of India on Nepal’s trade and transits, Nepal signed a ‘Trade & Transits Protocol’ with China to get access to the Chinese ports. Followed by the agreement, Nepal can now use seaports like Tianjin, Shenzhen, Lianyungang and Zhanjiang and also land ports Lanzhou, Lhasa and Xigatse.
However, Indian media had commented harshly on this development and argued that it is due to inefficient policies of the central government in India that China has sorted influence in Nepal. In this realm, either aligning to India or China will hurt both these giants individually. If Nepal is left independently, it’s perceived by India or China that this impoverished land will be ‘used up’ strategically by the western powers to counter India and China. In 2015, when Nepal promulgated new constitution despite India’s dissatisfaction where the Indian government put some reservation on the content of the constitution; narrated by Nepali as the interventionist policies by India on Nepal on their internal matters. Nepal rejected the reformation provisions made by India and promulgated the constitution its own way. This has ended India’s long historical hegemony over Nepal, and many Nepalis are indeed happy with this development.
But, India’s departure from Nepal has put western powers in the frontline of the political game. This also had alarmed China, because of the ever-increasing role of the west from constitution making as well as encroachment of several agendas in Nepali constitution such as federalism, secularism and inclusivity. After three years of constitution promulgation in Nepal, still, the minorities are not satisfied with the constitution of Nepal – making it similar to the Weimar Republic of Germany. Like Weimar, Nepal is now on the path of inflation, political extremism from left to right, and some sorts of separatist movement. It is often wise to say it is now becoming ‘Remittance Republic’ (like the banana republics) as remittance makes 32% of Nepal’s GDP in 2017.
Nepal-India share an open border, and it’s a perceived harbour for several human trafficking issues, and terrorism as reports by the US suggest. After several years of political instability, Nepal has now two-third majority government led by Nepal Community Party (NCP), but this party seems very ineffective when it comes to managing Nepali affairs. Right from local rape cases to nationwide agenda of welfare health policies, this government is forced to concentrate on areas which are not the role and responsibilities of the federal government. It should have been managed by the local bodies. This fragmented state machinery is halting the expanding democratic space in Nepal.
Geopolitics And Geo-Economics Issues
Recently planned BIMSTEC militarily drills by India were cancelled by Nepal at the last moment. When it was cancelled, Nepali army representative was already there in Pune, India to prepare for the drills. This shows a communication gap between Nepal’s civilian governments and military, which of course is not a good sign. Nepali political circle commented about these drills as this was a military pact. As Nepal follows non-aligned foreign policy, this drill is against our policy. Interestingly, after rejecting BIMSTEC military drills, Nepal conducted military drills with China known as ‘Sagarmatha Friendship-2’ in Chengdu. This complete saturation within NCP and government reflects Nepal’s childish posture on diplomacy.
It’s hard to say whether Nepal’s continuous series of fragmenting state machinery is pre-planned or it’s the product of our inefficient management. But one thing is for sure – that in diplomacy to promote foreign countries strategic interest the receipt countries political environment must be weak. As we are living in the Indo-pacific strategy age, where every action is oriented to block China’s intention to achieve its BRI objectives, the internal situation in Nepal is moulded in such a way that it is forced to align with China resulting in seeking Chinese aid and loan on a concessional basis. When Nepal starts operating the infrastructure constructed by China, Nepal’s internal managerial capacity creates problem for its efficient management of the infrastructure (Example is Trolley Bus in Kathmandu developed by China is now in tatters due to Nepal’s poor management), and forcefully handovers to China resulting into debt-trap diplomacy as narrated by the west.
Examples include several developing countries like Pakistan, Sri Lanka etc. The current national debate on bringing Chinese rail to Kathmandu whether on aid or loan is a heated issue among policy wonks, academics and political actors in Nepal. Secondly, India is also planning to bring rail connectivity to Kathmandu. These two initiatives by India and China to connect Kathmandu seem more strategic rather than economic. The questions are on the table, whether these two giants are preparing for the next ‘Great Game’ in Asia in which unfortunately Nepal will become the ‘playground’.
Nepal’s pegged currency with Indian currency is another chapter of Nepal’s sorrowful story. When geo-economics disrupts in the Middle East, it is directly affecting countries like Turkey and India. When Indian currency performs badly against US$, this impoverished country suffers a lot. This aid rentier state falls in the double-sided effects of increasing value of foreign loans as well as rising import prices. This has made degrading foreign reserves and high levels of inflation in Nepal. Underlining this factor, Nepali mainstream media lacks conventional wisdom and critical thinking and its affiliation with certain political parties in Nepal is creating a ‘party based’ variety of news which is feeding its own masters and landlords. Nepal’s two cash crops are hydropower and tourism. Hydropower is already under ‘Media Coup’. Most of the pledged and working projects are by India or China because of their strategic interest and location in which west feel reluctant to invest on hydropower as they can’t connect electricity switch on their lights in Brussels and Washington in economic cost.
Nepali media nowadays portrays projects taken by India as a loss for nationalists, and projects taken up by China as a win-win for nationalists in Nepal. Additionally, Nepali left government now seems more align to provide hydropower projects to China and democrats government to India. This friction of aligning in current Budhi Gandaki hydropower project with India or China shows that Nepali democrats are wearing a ‘New Delhi’ hat and the communists are wearing a ‘Beijing’ hat. The previous Deuba government said that this project would be constructed by the Government of Nepal itself based on the expert report. But, this NCP government is internally giving this project to Chinese company Gezhouba. Nepali media seems very critical in signing hydropower projects with India. But, the reality is every river in Nepal flows to India and India is the main stakeholder in managing Nepal’s waters for prosperity. And, Nepal’s prosperity lies in hydropower projects in both runoffs – river and dam-based projects. Prosperity in Nepal won’t come without investment and letting river as it is. We are still in the hangover of nationalism (Nationalism in Nepal defined as countering India’s influence).
The question arises, does Nepal’s stability matters for India, China or for the west. In this volatile times of the 21st century where every country is promoting their own national interest, no one thinks about any other country’s interests. This traditional international relations rule puts countries like Nepal in a trap. We are neither capable of countering all these nuclear-powered giants nor can see ‘things happening’ as they are. Is this the reality or Karmic curse of being sandwiched between the two giants; who are writing a new history in the 21st century and regaining their influence as per the pre-renaissance order. And the traditional western powers want to stop their influence via Nepal. Is there an international diplomatic passage for Nepal? Let us brainstorm!