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The unfolding ATM hacking saga is one more reminder of the pathetic state of the safety of our digital architecture. Five Chinese nationals, abetted by three Nepalis, could withdraw nearly Rs 35 million from various ATMs in Kathmandu after they hacked into these banks’ common card switching mechanism, the Nepal Electronic Payment System (NEPS). In fact, over the past few years, ATM hackings have been taking place with troubling frequency. Nepal Rastra Bank, the central bank, which is supposed to monitor the commercial banks for the strength of their digital safety, has been unable do so with its ‘inadequate resources’.

This is dangerous. Potentially trillions of rupees of people’s savings are at risk. There are apparently many loopholes in our digital payment platform that skillful hackers can exploit. Nepal’s commercial banks have been brazen in their negligence. For instance, even though the central bank has made chip-based debit cards mandatory, many banks continue to dole out cards without these safety features. But then the central bank itself has been lax in monitoring these commercial institutions.

This shows how lightly the Nepali state and its public and private enterprises take digital safety. How irresponsible have successive governments been in not strengthening the central bank’s digital safety branch! Surely, even a few billions rupees is not too high a cost to prevent a potential collapse of Nepal’s economy at the hands of crafty hackers. Yet full-on complacency has been the norm till date. The SCT and NEPS, the brokers of these ATM-based electronic bank transactions, have been breathtakingly negligent, too, with reported cases of their technicians being allowed to operate from their insecure home-based cyber networks.

Hackers in and out of the country are getting more sophisticated, and they know Nepal is among the countries with the least secure electronic infrastructures. In the latest edition of the (global) National Cyber Security Index, Nepal ranks a lowly 92^nd out of the 100 countries surveyed. If our leaky digital systems are not overhauled immediately, a far more ruinous heist could be around the corner. 

State visits are the highest level of diplomatic engage­ment between two sovereign countries. They signal the two are in good terms, value one another, and want to further bilateral ties. By visiting Nepal four times in the five years of his first term as the Indian prime minister, Narendra Modi conveyed the great value he placed on Nepal-India ties. (Of course, he wouldn’t have come if these trips also didn’t boost his pro-Hindu credentials and his image of a globally recognized statesman back home.) Modi had come to Nepal within two months of becoming prime minister in May 2014. In his second inning, he hasn’t been here for three months. Even in this short time, Modi has already visited nine countries, including making state visits to other neighborhood countries like the Maldives, Sri Lanka, and Bhutan. This suggests something is amiss in Nepal-India relations, which is also why India has refused to accept the joint EPG report. Perhaps it was Nepal’s reluctance to make an official statement in recognition of India’s recent decision on Jammu & Kashmir—unlike the Maldives and Bhutan. Per­haps the Indians are unhappy with the growing proximity of the Nepali political class with the Chinese. Or perhaps Modi sees no personal benefit in visiting Nepal after his second electoral victory.

By contrast, Chinese Foreign Minister Wang Yi will be in Kathmandu on September 8 to pave the way for the long-awaited Nepal visit of Chinese President Xi Jinping. Again, a state visit is also a lot of signaling. So, if Xi comes, will it be an unmistakable sign of exemplary Nepal-China ties? Not nec­essarily. It will be more a case of the Chinese wanting to give a clear message to other powers that it is still a potent force in Nepal. The message is aimed less at the Indians (whom the Chinese still see as their ‘juniors’) than at the Americans (whose success the Chinese want to emulate in every field). The unfolding of the military-centric Indo-Pacific Strategy (IPS) in Nepal is a big bother up north.

Xi, with his penchant for grandeur, could announce some big projects in Nepal, including in PM Oli’s home district of Jhapa. And Xi will be warmly received. Whatever the per­sonal calculations of individual NCP leaders, as a political party, they are unanimous about the urgency of enhanc­ing relations with China. This is why a priority of the new National Security Policy is to ‘prevent another blockade’ at any cost. This, in the reckoning of the ruling communist party grandees, will be possible only through more balance between India and China.

Xi’s Kathmandu trip could also hasten Modi’s, in what will be his first since his reelection. India and China are not openly confrontational these days. Yet they have also come to view each other as natural adversaries in South Asia jostling for influence in the region, particularly after India’s embrace of the IPS. The Indian political leadership will not let its tra­ditional sway in the region wane easily. Now that the Nepali foreign minister has spoken in favor of India’s stand on J&K, Modi will have an added incentive to visit Nepal. But after the fanfare that will surround Xi’s visit, Nepal will be under pressure to match it when Modi comes to town.

In this week’s interview with APEX, former Chief Election Commissioner Bhojraj Pokharel rules out an out-and-out dictatorship in Nepal. “Democracy is in our blood,” he says, and Nepalis don’t easily tolerate autocrats and dicta­tors. He speaks of how Nepalis have revolted in unison when­ever their democratic freedoms have come under assault—the protests against (and the ouster of) King Gyanendra being the latest example of this healthy trend. But can we afford to be so sure about the health of our democracy?As Harvard University political scientists Steven Levitsky and Daniel Ziblatt argue in their book ‘How Democracies Die’, the death of democracy is incremental. Warning signs are aplenty though. In their view, excess concentration of powers in one branch of the government, intolerance for the opposition parties (seeing them as mortal enemies rather than ideological opponents), and lack of forbearance (caution in the use of power) are hallmarks of a weakening democracy.

The two authors apply the lessons mostly to the US. Yet they are just as true in Nepal. Here too there has been an undeniable concentration of powers in the executive, and gradual weakening of the legislative and the judiciary. The ruling and opposition parties routinely denounce one another as ‘unpatriotic’ and unworthy of power. The com­munist executive has been too eager to abuse its powers, for instance, in its latest attempts to silence free press through the media bill.

Even strong institutions are not enough to contain deter­mined autocrats, the authors argue. Far too often, charis­matic leaders like Mussolini and Hitler are far too canny. They use their guile to subvert institutions, often with public support. What was true of them yesterday is true of the likes of Erdogan and Modi today. In a country like Nepal with weak institutions, a powerful executive can easily cow or coopt them. Just look at the recent packing of the judiciary with NCP loyalists.

Nepali politics has gotten increasingly partisan, and meaningful debates are becoming rare. There are instead shouting matches. Public trust in state institutions is very low, as is clear by repeated protests against social injustices like the rape and killing of Nirmala Panta and the case of Rabi Lamichhane. In these turbulent and uncertain times, people flock to those who can give them a semblance of certainty. Unscrupulous politicians try to win people over by appealing to their basest instincts, often exploiting their caste and creed sentiments.

But Pokharel does have a point. Nepali political parties endlessly try to put the other down (as in the US) but when needed they can also sit together and hammer out serious issues (unlike in Trump’s US or Modi’s India). Whenever authoritarianism rears its head, Nepali parties across the political spectrum close ranks, as happened when they launched joint protests in 1990 and 2006. Absent monar­chy’s ambitions, Nepal does not have a history of military coups. The robust private media aren’t easy to cow either. Yet complacency is ill-advised. As Levitsky and Ziblatt argue, the slide of democrats into dictators can be hard to spot. The pervasive ethnic, regional and class divides, and lack of foresight of our political class, could yet again doom Nepal’s democracy.

What PM KP Oli did on the evening of August 20 was unprecedented. He hastily summoned an all-party meeting to discuss ways to preserve the post-2006 political gains. In the meeting, he pointed out how the new federal republic was facing a great threat from the far left (Biplob and company) as well as the far right (the ex-mon­arch and the parties supporting monarchy’s revival.) The meeting was called a day before Indian Minister for External Affairs Subrahmanyam Jaishankar was scheduled to arrive in the Nepali capital for the fifth meeting of the India-Nepal Joint Commission. And two days before PM Oli was to go to Singapore on an extended medical leave. As many analysts have pointed out, the timing of the all-party meeting was no coincidence.

 In this reading, the prime minister seems worried that at least some parts of the Indian establishment are back to using their old bag of tricks in Nepal. Just like India had at one point leveraged the presence of the warring Maoists on its soil to extract concessions from Kathmandu, it is giving shelter to Biplob Maoists in case it needs to put the ‘pro-China’ Oli on notice. Likewise, the saffron-clad government of Narendra Modi wants to see the revival of the Hindu state, perhaps even the monarchy.

But why would India try to undermine a system that it itself carefully cultivated starting with the drafting of the 12-point New Delhi agreement in 2005? For one, the political establishment behind that agreement comprised the more secular-minded Indian National Congress and Indian com­munists, and definitely not the BJP. With the BJP government in India looking to undo everything associated with the INC, perhaps it is attempting a ‘course correction’ in Nepal as well. Perhaps when Pradeep Giri, who has always been close to the Indians, talks about the possibility of Nepal’s absorption into India a la Sikkim, he was really on to something.

Or perhaps all these are idle speculations among Nepalis long used to spinning conspiracy theories about Indian ‘grand designs’. Correlation, after all, is not causation. Maybe PM Oli, who will likely need another kidney trans­plant, was worried that he may not have much time on his hands, and just wanted to warn his political brethren about Nepali extremist groups and the threats they pose while he still could.

Yet it is easy to make out that not everything between Nepal and India is hunky-dory. In Nepal for the Joint Commis­sion meeting, Jaishankar was non-committal about the most important issue for Nepalis: Modi’s refusal to accept the joint EPG report. There could also be no substantial progress on any of the pending issues, from Mahakali to the postal high­way. Just the fact that it took this long for a high-level Indian official to come to Nepal speaks volumes about the state of Nepal-India ties. Maybe the Indians wanted firmer support from Nepal on J&K, which they didn’t get. Maybe Nepal, whose government is routinely painted as China-leaning in New Delhi, cannot be easily trusted. Or maybe something more sinister is afoot. Whatever the case, the post-blockade rapprochement between Kathmandu and New Delhi is still very much a work in progress

North Korean dictator Kim Jong-un was spotted with a $12,000 Portofino Automatic at a recent missile launch. The timepiece was ill-fitting on the leader of a country whose average citizen is lucky to earn a tenth of its price in a year. Of the total revenue North Korea collects from its impoverished citizens in taxes, it spends a quarter (perhaps more) on nuclear weapons—and bling for its Supreme Leader.But no amount is enough for the country’s burgeoning WMD program. The United Nations last week came out with an investigative report on how North Korea supports its nuclear weapons program by hacking into and stealing from online accounts of international banks and financial institu­tions—to the tune of some $2 billion already.

The UN is looking into at least 35 cases in 17 countries, excluding Nepal, of North Koreans using cyberattacks to raise money for its nuclear program. According to the Associated Press, South Korea was hardest hit, the victim of 10 North Korean cyberattacks, followed by India with three attacks and Bangladesh and Chile with two each. The 13 countries suffering one attack each were Costa Rica, Gambia, Gua­temala, Kuwait, Liberia, Malaysia, Malta, Nigeria, Poland, Slovenia, South Africa, Tunisia and Vietnam.

Even though the UN report does not mention Nepal, in 2017, cyber-attackers from North Korea had hacked into the computers of NIC Asia Bank, from which they siphoned off Rs 40 million. Other North Korean hacking attempts in Nepal have been less successful. But after recent incidents of North Korean cyber attacks around the world, the Nepal Police has now put Nepali BFIs on ‘high alert’.

This is an old game. Nearly isolated from the rest of the world, the North Korean state has to somehow finance itself. This it does by operating illicit businesses (mostly restaurants managed by its proxies) abroad. It also runs shady IT compa­nies in various countries.

Following extensive US pressure, the two IT companies that were being run by North Korean nationals in Kathmandu were shut down early this year. Yet knowledgeable sources say that although the two offices no longer exist officially, they continue to operate clandestinely. Likewise, the NK-op­erated hospital in Damauli, Tanahun was reportedly closed. Yet hospital management says the closure is only temporary. Senior government officials have apparently asked the North Koreans in Nepal to lie low for the moment. Even though the communists running Nepal may ‘feel the pain’ of their North Korean comrades, they know they can ill afford to flout inter­national obligations. But nor do they want to be seen as easily caving in to the demands of the ‘imperialist Americans’.

They thus play a double game. While there used to be explicit promises of protection of North Korean business interests in the country, government authorities have closed their eyes now. No more visas for North Koreans. The old ones are not being renewed either. But that is as far as they will go. Meanwhile, the risks to the country’s businesses and state institutions continue to mount.

I guess you hear what you want to hear. Speaking before his parliament on August 6, a day after the Indian government announced the revocation of Jammu and Kashmir’s special constitutional status, Pakistani Prime Min­ister Imran Khan highlighted the urgent need to dial down tensions in the combustible, nuclear-armed region. With the ‘racist’ Modi government determined to ‘ethnically cleanse’ Muslims, there will be more home-made Pulwamas in India, he warned. In that case, India will again attack Pakistan, Pakistan will retaliate, and as neither side will back down, nuclear weapons could be used as a last resort. While Khan’s even-toned speech was largely hailed outside India, the Indians heard nothing but the threat of another Pulwama coming from the old arch-enemy. But as by far the weaker of the two powers in terms of conventional military strength, Khan is right that Pakistan will be more tempted to use nuclear weapons, which could then prompt a tit-for-tat response from India. You could argue Pakistan’s future course is not for Khan to decide. Invariably, it will be the all-powerful Pakistani military that will call the shots, including on nuclear weapons. Yet his message deserves a patient hearing.

By unilaterally changing the status of Jammu and Kashmir, India has reneged on its promise to the Kashmiris to allow them to decide their own fate. Chances are that the Hin­du-Muslim divide in India will further deepen and as Khan pointed out, there is now a real risk of another confrontation between India and Pakistan. China too has already spoken of its displeasure with the change in the status quo in Ladakh, which has now been designated a union territory that will be directly administered by the center—just like J&K.

It is likely that the RAW spooks and senior BJP leaders who descended on Kathmandu some time ago had intimated to Nepali leaders India’s future course in Kashmir and its impli­cations for Nepal. For one, India fears that after the change in Kashmir’s status, antagonized Muslims from there could make their way into Nepal, and use the open border to do harm to India. Kashmiri Muslims have been coming and set­tling in Nepal since the time of Prithvi Narayan Shah, to the perpetual discomfort of the Indian security establishment.

The change in J&K’s status, long backed by the RSS, is indicative that the BJP is less queasy about showing off its saffron hues. It is not inconceivable that the emboldened RSS could make another determined bid for the restoration of Nepal’s Hindu status, if not its monarchy. The immediate neighborhood has certainly been spooked. But so have China and the US and other regional and global powers. (American President Donald Trump’s offer of mediation in Kashmir now appears ill-advised.)

The message is that the new Indian leadership is ready to stake its claim in the world, through hard power if need be. Another barely concealed message is that the new India belongs exclusively to Hindus, and Muslims there will have to be satisfied with second-class status. One thing is for sure: the already troubling level of tensions in South Asia is set to further rise. The dysfunctional SAARC may now be the least of the regional worries O

I guess you hear what you want to hear. Speaking before his parliament on August 6, a day after the Indian government announced the revocation of Jammu and Kashmir’s special constitutional status, Pakistani Prime Min­ister Imran Khan highlighted the urgent need to dial down tensions in the combustible, nuclear-armed region. With the ‘racist’ Modi government determined to ‘ethnically cleanse’ Muslims, there will be more home-made Pulwamas in India, he warned. In that case, India will again attack Pakistan, Pakistan will retaliate, and as neither side will back down, nuclear weapons could be used as a last resort. While Khan’s even-toned speech was largely hailed outside India, the Indians heard nothing but the threat of another Pulwama coming from the old arch-enemy. But as by far the weaker of the two powers in terms of conventional military strength, Khan is right that Pakistan will be more tempted to use nuclear weapons, which could then prompt a tit-for-tat response from India. You could argue Pakistan’s future course is not for Khan to decide. Invariably, it will be the all-powerful Pakistani military that will call the shots, including on nuclear weapons. Yet his message deserves a patient hearing.

By unilaterally changing the status of Jammu and Kashmir, India has reneged on its promise to the Kashmiris to allow them to decide their own fate. Chances are that the Hin­du-Muslim divide in India will further deepen and as Khan pointed out, there is now a real risk of another confrontation between India and Pakistan. China too has already spoken of its displeasure with the change in the status quo in Ladakh, which has now been designated a union territory that will be directly administered by the center—just like J&K.

It is likely that the RAW spooks and senior BJP leaders who descended on Kathmandu some time ago had intimated to Nepali leaders India’s future course in Kashmir and its impli­cations for Nepal. For one, India fears that after the change in Kashmir’s status, antagonized Muslims from there could make their way into Nepal, and use the open border to do harm to India. Kashmiri Muslims have been coming and set­tling in Nepal since the time of Prithvi Narayan Shah, to the perpetual discomfort of the Indian security establishment.

The change in J&K’s status, long backed by the RSS, is indicative that the BJP is less queasy about showing off its saffron hues. It is not inconceivable that the emboldened RSS could make another determined bid for the restoration of Nepal’s Hindu status, if not its monarchy. The immediate neighborhood has certainly been spooked. But so have China and the US and other regional and global powers. (American President Donald Trump’s offer of mediation in Kashmir now appears ill-advised.)

The message is that the new Indian leadership is ready to stake its claim in the world, through hard power if need be. Another barely concealed message is that the new India belongs exclusively to Hindus, and Muslims there will have to be satisfied with second-class status. One thing is for sure: the already troubling level of tensions in South Asia is set to further rise. The dysfunctional SAARC may now be the least of the regional worries O

What does the extraction of the Prime Minister KP Oli’s wisdom tooth have to do with Nepal’s foreign policy? A lot, it turns out. PM Oli chose to get his troublesome tooth yanked out at the time Chinese Foreign Minister Wang Yi was preparing to come to Kathmandu, perhaps to lay the ground for the official visit of his Big Boss. How could PM Oli host such an important guest when he could only mumble, right? No sooner had his gums healed than the prime minister decided time was ripe for a thor­ough check-up and a spell of rest, in what would be a 10-day Singapore package. Meanwhile, fellow co-chairman of the Nepal Communist Party, Pushpa Kamal Dahal, embarked on a ‘family trip’ to Dubai. Both these trips were planned following the three-day Nepal stay of the RAW chief Samant Goel, who had held extensive discussions with both Oli and Dahal. Coincidence? Perhaps. Goel came calling to Nepal when the federal govern­ment was starting its preparations to welcome Xi Jinping: The prime minister had begun taking the inputs of security agen­cies on the logistics of Xi’s movements, the TIA runaway was being spruced up, and the whole airport vicinity beautified.

Now, suddenly, no senior government official is ready to discuss Xi’s visit, even though sources both at the Ministry of Foreign Affairs and the Chinese Embassy say they are doing their best to make Xi’s visit possible—and soon. Some specu­lated that if he came at all, the Chinese president would turn up around Oct 11-12, when he is scheduled to visit Varanasi to meet Narendra Modi, in what is being billed as Wuhan 2.0. But those dates fall in the middle of the Dashain festiv­ities. Government officials are unlikely to be up for such an important assignment when they would prefer to be home with their families.

Xi coming then? That depends largely on Nepal. The country has failed to prioritize the projects it wants China to support under the BRI framework. Why would the Chinese president come if he does not get to sign off on any of the big BRI projects? If Nepal is serious about welcoming him, senior government officials surely know of his penchant for spec­tacle and grandiosity: Xi won’t come to sign a $100m deal.

The foreign ministry seems keen on the visit. But other ministries tasked with finalizing the BRI projects have been rather sluggish. There may still be time though. If some big projects can be mutually agreed upon, the Chinese President need not link his Kathmandu visit with his trip to Varanasi. The globe-trotting Xi can always stop at Kathmandu during any of his foreign tours. But don’t hold your breath.

Dahal has deeply internalized the notion that his path back to power runs through New Delhi. Oli too knows he cannot alienate India if he is to serve out his term as prime minister. A displeased China, by comparison, is not a mortal danger to either. For all the talk of growing Chinese influence in Nepal, it is India still calling the shots

The framers of modern India had this pacifist streak. The foreign policy visions of Mahatma Gandhi, Jawaharlal Nehru and Jayaprakash Narayan were colored by Gandhi’s own brand of non-violence. Nehru, independent India’s first prime minister who also held the foreign affairs portfolio, and Gandhi’s mentee, frequently talked of the need for a ‘world government’. He believed the world’s division into competing military blocks, each with its own nuclear arsenal, was a herald to an apocalypse; only a global government could create conditions for peace, and save the planet. Peace and brotherhood were the answers to the global problems, not wars and arms.

As Dhruva Jaishankar of Brookings India points out, this kind of idealism of democratic India’s founding fathers was also self-serving. They were all too aware of the limitations of their dirt-poor country and knew that it was in no position to assert itself either economically or militarily. Preaching homegrown non-violence and morality-based foreign policy was comparably easier. In order to assert itself on the global state, India thus took the initiative to organize the 1955 Bangdung Conference that brought together 29 independent African and Asian countries. Nepal took part, too, in what was the precursor to the Non-Aligned Movement (NAM).

The NAM was another handy tool for big countries like India and Indonesia to quietly pursue their economic and strategic objectives without coming afoul of the Americans or the Soviets. India’s role in the NAM was dubious from the start. It was supposedly neutral on all important global issues; but practically, it was all but aligned with the USSR. Under the cover of NAM and non-violence, it also quietly went about creating an ‘exclusive sphere of influence’ in South Asia. As Jaishankar hints, the stronger that India gets militarily and economically, the more comfortable it could feel in ditching its non-aligned and pacifist miens.
But NAM served not just India. On the face of an overbearing India, creeping communism from the north, and a hegemonic US, a small, underdeveloped country like Nepal found it useful too. Nepal’s leaders too expressed an undying faith in ‘non-violence’, ‘non-interference’ and ‘mutual coexistence’—even as they repeatedly sided with this or that big power to serve their interests. King Mahendra was an expert at leveraging the Americans and Chinese interests in Nepal to buttress his populist anti-India image. Much later, KP Oli could romp home to an unprecedented electoral victory by cozying up to China in his supposed bid to maintain the small country’s absolute sovereignty.

The Oli government still professes to abide by the Panchasheel, the NAM’s bedrock principle, as it looks to expand its global footprint. Again, from the start, a focus of NAM countries has been to maximize their geostrategic options, even as the platform gave them a convenient, pacifist cover. Big powers had their own calculus. India has never abandoned its goal of maintaining exclusivity in South Asia. China, a NAM observer state, meanwhile, wants to be the next superpower by pursuing its own, ‘unique’ political course. The US wants its old sway intact, including in South Asia. What better way for Nepal to pursue its interests in this crowded field than by continuing to parrot the sonorous non-alignment mantra?