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The KP Oli government has made ‘diversification’ a cen­tral plank of its foreign policy. But what does it mean? Talking to APEX, former foreign minister Ramesh Nath Pandey said there is no such thing as diversification in foreign policy. As far as sovereign countries are concerned, they only have national interests. Pandey does not get how enhancing relations with marginal countries like Costa Rica, Cambodia and Vietnam will protect Nepal’s interests. The government does not see it that way.

As foreign minister Pradeep Gyawali has tried to explain, in this globalizing world, diversification means establishing fruitful relations with as many countries as possible. Didn’t Nepal amply witness the disastrous consequences of overre­liance on a single country during the 2015-16 blockade? Thus increasing connectivity of every kind with China, Nepal’s only other neighbor, is at the heart of this diversification pol­icy. But the policy is not limited to China. Nepal surely wins if we can bring more Buddhist tourists from Cambodia and Vietnam to Lumbini. Or if Costa Rica votes in Nepal’s favor on a crucial UN election. Not just that. The more countries we interact with regularly, the greater will be the international support in another blockade-like situation.

In this, the calculations of the Oli government also mirror the South Asian strategy of the Trump administration. After India and China, the US is easily Nepal’s most important international partner, and if Nepal wants to diversify, it must have a healthy working relation with the world’s sole super­power. So the Americans too are welcome to the new Nepal of Oli’s imagination. Likewise, the new American Indo-Pacific Strategy entails closer cooperation in South Asia with the likes of Nepal and Bangladesh where India and China com­pete for influence. The American strategy is to strengthen India’s hand against China.

But diversification of Nepal’s foreign policy that king Mahendra first mooted back in the 1950s, and is now being pushed by PM Oli, is also a risky proposition. How does Nepal balance the American demand for greater freedoms for Tibetan refugees in Nepal with China’s absolute abhorrence of the idea? As their tech war intensifies, do we import tech­nology from China or the US? How do we choose between Huawei and Google, for example? With Nepal now an official BRI partner, how do we deal with India’s suspicion about the initiative? And how will Nepal reconcile its greater engage­ment with the US with the old Indian wish that western presence in Nepal be minimal?

Nepal’s foreign policy apparatus seems ill-equipped to maintain such a delicate balance when it is not even aware of Nepali MPs taking part in a Tibet-related conference abroad. On May 23, Narendra Modi led the BJP to another thumping majority in Indian national elections. No one really knows what kind of foreign policy the new Modi government will adopt, or how it will work with the US or China on regional issues. Diversification into remote countries is all and good. But right now, Nepal has its hands full with the three tradi­tional powers.

Acting US Deputy Assistant Secretary of State for South Asia David J Ranz’s Nepal visit was part of recent American efforts to ‘explain’ to Nepalis the much-hyped Indo-Pacific Strategy. To this end, senior American officials have been regularly visiting Kathmandu. The process of Nepali scholars and journalists being ferried to the US for the same purpose has also begun. Separately, while Ranz was in Nepal, Shambhu Kattel reported in Annapurna Post of the third joint ‘anti-terrorism’ military drills between Nepal and China, planned for August-September.

These two seemingly unrelated events have many common threads. The Americans, who see Nepal playing a ‘central role’ in the Indo-Pacific, want to minimize Nepal’s participa­tion in the BRI. They are loath to see China’s growing activism in what they have traditionally viewed as the perfect outpost from which to monitor the communist China’s rise. Nepal’s joint anti-terrorism military drills with China trouble them. The Indians too have never gotten over how Nepal, a keen participant in Chinese military exercises, ditched the India-led BIMSTEC military anti-terrorism drills in Pune last year.

The Indians and the Americans have many differences over how they view South Asia. But they also know that only by working together can they check China’s expanding presence here—the joint military drills with Nepal the perfect manifes­tation of this presence. Both India and the US have repeatedly objected to Nepal’s military exercises with China. Under pressure, the then Army Chief Rajendra Chhetri had even assured the Americans that he would not allow the exercises to go ahead—only to be overridden by his political masters.

But why is the focus of Nepal-China military drills the loaded concept of ‘anti-terrorism’? Those in the know say the Chinese pushed for anti-terror drills for two reasons: one, it would send a clear message to the Indians and Americans that China has a lot of clout in Nepal; and two, China wanted to draw the world’s attention to Uighur ‘extremism’ in Xin­jiang and its ‘success’ in controlling it: If the Americans can have terrorist correction facilities why can’t the Chinese have similar re-education camps of their own?

A recent editorial in the Chinese Communist Party mouth­piece Global Times was instructive: “New Zealand and Sri Lanka have recently suffered religious massacres. Xinjiang, in turn, has been shielded from the flow of international terrorism and extremism. The international opinion will gradually turn in favor of Xinjiang governance.” The larger goal is to convince the international community that the Uighur extremism in Xinjiang, if left uncontrolled, could lead to another New Zealand or Sri Lanka.

The implicit message of Ranz when he talked to Home Min­ister Ram Bahadur Thapa about Nepal needing to crack down on terrorism—including by installing the American PIECES border control database system at the TIA—is that western help is essential for Nepal to keep the ‘scheming Chinese’ in check. Rest assured: In the face of this heightened American concern in Nepal, the Chinese are not sitting quietly either

 One is a de jure communist one-party state. The other is a communist dictatorship in all but name. Yet both the countries have of late enjoyed remarkable economic success. Vietnam’s economy grew by an average of 6.3 per­cent between 2005 and 2018. The rise of Cambodia has been even more stellar, with its GDP growing at an astonishing 7.59 percent in average between 1994 and 2017. During his visit to these two countries, Prime Minister KP Oli, we are told, hopes to discover the secret sauce of their economic miracle and apply it to Nepal. But the lead-up has been marred by growing criticism of the ‘irrelevant’ visits to these distant countries from which Nepal has little to gain. Besides, the criticism goes, the prime minister of the new federal democratic republic paying an official visit to two undemocratic and illiberal countries will send all kinds of wrong signals to the international community. These criti­cisms miss the point.

Nepal, a full-fledged democracy, is no Vietnam. The ‘Social­ist Republic’ with a GDP of $224 billion is home to nearly 100m people, compared with Nepal’s GDP of around $25 billion and 30m people. Nor is Nepal as closely connected to the west as Vietnam. Oli may get some pointers on com­munist rule from Vietnam (where he is also addressing an international conference). But his true destination is Cambo­dia. It has half the population of Nepal, but a near identical GDP-size and comparable per capita income. Cambodia is also a democracy, of a kind, with a hard-left government at the helm. What PM Oli and his NCP comrades want to know is: How does a communist party tweak state machinery to hold power for 40 consecutive years while also maintaining a veneer of democracy?

In fact, PM Oli seems fascinated by his Cambodian counter­part, Hun Sen, who has been in power for 34 years in a row. Oli held an extensive one-on-one with Hun Sen while he was in New York for the UNGA in September 2018. Two months later, the two again held extensive consultations on the side­lines of the Asia Pacific Summit in Kathmandu. So keen was PM Oli to confer with Hun Sen that he stayed for three days in Soaltee Hotel, which was hosting the Cambodian prime minister in Kathmandu.

While he is in Cambodia, besides trying to learn a few tricks of the trade in centralization of power from Hun Sen, Oli will also discuss another common fascination: China. How does Cambodia maintain “best ever” relations with China while its neighbors remain highly suspicious of the Middle Kingdom? With such close ties to Beijing, isn’t it increasingly harder for Phnom Penh to deal with western powers? Can a ruler in this region be so openly pro-China and still retain power for so long?

After mounting criticism of its ‘debt trap’ diplomacy, the Chinese leadership seemed keen to emphasize ‘debt sustainability’ for all BRI participant countries, at the just-concluded second BRI Forum in Beijing. It also commit­ted to more transparency in BRI projects. This is music to the ears of the advocates of greater connectivity with China, which is essential if Nepal is to shed its ‘India-locked’ status. Yet in this corruption-ridden and foreign-dependent country there is also a strong case for transparency and sustainability of any kind of external debt, from China or any other country or institution.

Most notably, neither India nor the US took part in the BRI Forum, in any capacity. (Attending the forum were 37 heads of state and representatives from nearly 100 countries.) In the lead-up to the second forum, concerns over a debt trap filled Indian and US media outlets, if sometimes with a grudging acceptance of BRI’s benefits. The Americans maintain Nepal should resist Chinese financing unless it’s clearly in Nepal’s interest. This worries China. For the Chinese, the Ameri­can involvement in Nepal is strategic and aimed at undercutting China’s rise. This is why the ‘US-spon­sored Free Tibet activism’ in Nepal is again a growing concern for Beijing.

The ‘US-sponsored Free Tibet activism’ in Nepal is again a growing concern for Beijing

Any support Nepal gets via the BRI may be contingent on Nepal’s ability (or lack thereof ) to deal with this core security issue for China. Yet the Chinese gave President Bhandari’s visit the highest impor­tance, notwithstanding that it had to host so many high-level dignitaries all at once. Bhandari’s coverage in the Chinese media was lavish. Particularly notable was how Nepal was portrayed as an integral part of the BRI. During the trip the all-important protocols to the transit and transport treaty were signed too. A full-fledged feasibility study of the Key­rung-Kathmandu rail should soon start. It would be a surprise if these developments didn’t worry New Delhi. Many believe a new, more muscular Indian policy, one aimed at limiting China’s growing clout in Nepal, is in the cards.

When President Xi comes to Kathmandu, most likely around October, Indian and western concerns will reach new heights. The Oli government’s central foreign policy plank of ‘diversification’ away from India, to avoid another blockade ‘at all cost’, is the right one. Yet with India, China and the US all tugging in different directions, it will also be devilishly difficult to pull off.

After mounting criticism of its ‘debt trap’ diplomacy, the Chinese leadership seemed keen to emphasize ‘debt sustainability’ for all BRI participant countries, at the just-concluded second BRI Forum in Beijing. It also commit­ted to more transparency in BRI projects. This is music to the ears of the advocates of greater connectivity with China, which is essential if Nepal is to shed its ‘India-locked’ status. Yet in this corruption-ridden and foreign-dependent country there is also a strong case for transparency and sustainability of any kind of external debt, from China or any other country or institution.

Most notably, neither India nor the US took part in the BRI Forum, in any capacity. (Attending the forum were 37 heads of state and representatives from nearly 100 countries.) In the lead-up to the second forum, concerns over a debt trap filled Indian and US media outlets, if sometimes with a grudging acceptance of BRI’s benefits. The Americans maintain Nepal should resist Chinese financing unless it’s clearly in Nepal’s interest. This worries China. For the Chinese, the Ameri­can involvement in Nepal is strategic and aimed at undercutting China’s rise. This is why the ‘US-spon­sored Free Tibet activism’ in Nepal is again a growing concern for Beijing.

Any support Nepal gets via the BRI may be contingent on Nepal’s ability (or lack thereof ) to deal with this core security issue for China. Yet the Chinese gave President Bhandari’s visit the highest impor­tance, notwithstanding that it had to host so many high-level dignitaries all at once. Bhandari’s coverage in the Chinese media was lavish. Particularly notable was how Nepal was portrayed as an integral part of the BRI. During the trip the all-important protocols to the transit and transport treaty were signed too. A full-fledged feasibility study of the Key­rung-Kathmandu rail should soon start. It would be a surprise if these developments didn’t worry New Delhi. Many believe a new, more muscular Indian policy, one aimed at limiting China’s growing clout in Nepal, is in the cards.

When President Xi comes to Kathmandu, most likely around October, Indian and western concerns will reach new heights. The Oli government’s central foreign policy plank of ‘diversification’ away from India, to avoid another blockade ‘at all cost’, is the right one. Yet with India, China and the US all tugging in different directions, it will also be devilishly difficult to pull off.

The concept of a ‘debt trap’ vis-à-vis the Belt and Road Initiative (BRI) has been gaining traction in Nepal. It is hard to say whether the reports and views that have come out in the popular media reflect genuine worry over the BRI’s possible harms on Nepal, or whether they aim to deliberately portray China in a bad light.

Not that Nepal should brush aside all concerns of a debt trap. In fact, a close examination of this concept based on evidence from abroad is vital. But, at the same time, should we uncritically imbibe the western views on the BRI and a debt trap? Instead, why not examine Nepal’s own history of dealing with western institutions like the IMF and the World Bank, or with bilateral partners like India, China and the US? Who has wronged us the most? Were it the Chinese who prescribed the disastrous wholesale privatization of state institutions back in the early 1990s? Or have they imposed debilitating blockades on the landlocked country?

It is naïve to assume democratic countries also have democratic foreign policies

It is naïve to assume that democratic countries also have democratic foreign policies. The disastrous American inter­ventions in the Middle East for oil, India’s hardball ‘blockade’ diplomacy, the refusal of the Japanese to atone for their sins in China and Korea, the recent history of western colonization—all suggest democratic countries sel­dom practice abroad what they preach at home. This isn’t surprising. Interna­tional interactions are guided primarily by what modern nation-states define as their national interests, which may not always align with democratic values.

This is not at all to suggest Nepal will be better off swearing unwavering faith to an undemocratic China. That would be another naivety. Again, to restate a cliché, in international relations there are no permanent friends or foes. China has traditionally appeared good to Nepal because unlike India its interactions with us have been limited. Perhaps we can gain much more by closely cooperating with it, which is also essential for the success of a vital national interest of Nepal: diversification. Our new National Security Policy also rightly prioritizes preventing another blockade “at all cost”—which can only happen with greater connectivity with China. Yes, definitely, let us look to safeguard our national interests in our dealings with the northern neighbor too. But let us also learn to draw our own conclusion.

 Why does China see the US-backed concept of Indo-Pacific as a ‘strategic threat’? For the Chinese, “the term ‘Indo-Pacific’ is less the acknowledge­ment of an ineluctable political geography than an initial, inchoate move to create a political initiative, one intended to rival China’s Belt and Road,” Bruno Maçães of the Hudson Institute writes in his perceptive new book Belt and Road: A Chinese World Order.

For its part, the US, Maçães writes, wanted to promote the concept of ‘Free and Open Indo-Pacific Strategy’ as a “push back against the notion that Western values are doomed to lose influence in the core regions of the Belt and Road.” The Americans may deny their recent activism in the Asia-Pacific region is aimed at countering China’s BRI all they like. Yet it has become a truism in this part of the world. With the recent decision of the Indian foreign ministry to set up a separate Indo-Pacific unit, the BJP government has also made its pref­erence for the American Indo-Pacific over China’s Belt and Road crystal clear.

 Expect little of substance from President Bidya Devi Bhandari’s visit

 India again refused to take part in the high-level BRI Forum in Beijing, the second edition of which is being held in Beijing this month. Represent­ing Nepal at the event will be President Bidya Devi Bhandari. Besides addressing the summit, she could sign agreements with her Chinese counterpart Xi Jinping on finalizing the protocol to the 2016 trade and transit agreement and on expediting construction of the Keyrung-Kathmandu rail link. The visit will aim to further integrate Nepal into the BRI framework and to give impetus to long-stalled Chinese projects in Nepal.

PM Oli is sending the president instead of going himself as he wants to dispel the default assumption in New Delhi, and in many western capitals, that he is ‘pro-China’. With Indo-Nepal ties finally back on an even keel and Nepal look­ing to cultivate the US as a part of its diversification strategy, Oli does not want to be seen as cozying up to Beijing. He knows there is always the danger of his ever-unreliable com­rade Pushpa Kamal Dahal using changing geopolitical winds to tack his way back to Singhadurbar. Putting all his eggs in a single basket could be dangerous.

Expect little of substance from President Bhandari’s visit. As the Chinese economy slows, their generosity will have a limit. Nor does China want to buttress the western accusa­tion that it is looking to trap smaller countries in the region under a mountain of debt. Yet it will do just about enough to keep Nepal in the BRI orbit, and at a safe distance from the ‘meddlesome’ Americans. The Indians have never been their real problem.

There is a notable difference in the election manifestos of the ruling BJP and the opposition INC in India over the Indo-Pacific Strategy. While the INC manifesto is silent on this, the BJP’s states that the goal of “ensuring an open, inclusive, prosperous and secure Indo-Pacific will be pursued vigorously”. The BJP manifesto is in line with the BJP government’s rejection of China’s proposal to take part in the second high-level BRI Forum this month. India had also boycotted the inaugural event in 2017.

There is a deep divide in New Delhi over India’s role in the American Indo-Pacific Strategy. China hawks see it as a coun­terweight to an overbearing Middle Kingdom in the South China Sea. But many on the left believe India should rather work closely with the next-door China, a fellow developing country, rather than with the distant and ‘unreliable’ US. Yet the right-leaning BJP’s manifesto suggests a clear support for the US strategy, and if reelected, PM Modi seems keen on working with the Americans to contain China’s rise.

The INC is more skeptical of the US but if it comes to power, it too may feel compelled to support the strategy as the gaps between the economic and military heft of India and China widen. Then there are those who see no reason the BRI and the Indo-Pacific cannot go together. But that is easier said. More likely, because of its calculus on Pakistan, India will continue to shun the BRI and support the Indo-Pacific. Smaller countries in the region will not remain untouched by this development.

Recently, the ruling NCP co-chairman Pushpa Kamal Dahal visited the US, ostensibly to treat his wife. The hush-hush trip and the American government’s iron-clad guarantee against his arrest for war crimes set the tongues of strategic thinkers in Kathmandu wagging. Even in the past, Dahal has flown to Singapore and Hong Kong, often on the pretext of treating a loved one, to keep his secret rendezvous with security officials abroad. How did Sita Dahal get better so soon after landing in the US? Could it be that the real purpose of the trip was that the Americans wanted to talk to her husband about his possible role in enforcing the Indo-Pacific Strategy in Nepal? That they, and the Indians, still doubt the loyalty of the Beijing-friendly KP Oli and would like to see him gone as soon as the option of tabling a no-confidence motion against the PM opens up in less than a year?

As the American presence in South Asia increases as part of their new strategy, Nepalis, used to seeing their country as a playground for India-China geopolitical rivalry, will have to grapple more and more with a third power. Not that this power was entirely absent earlier.