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Madhu Raman Acharya is a seasoned foreign policy expert. He served as the foreign secretary of Nepal (2002-2005), ambassador to Bangladesh (1998-2001) and permanent representative of Nepal to the United Nations in New York (2005-2009). He joined the foreign service as a joint secretary in the Ministry of Foreign Affairs in 1996. Acharya also served as the director at the United Nations Assistance Mission in Iraq (2010-2011). During the 1990s, he served in the UN missions in Cambodia, South Africa and Liberia. 

Foreign policy is the action, strategy, and application of the instruments of national power of a country for the fulfillment of its national interests vis-à-vis other countries. It involves changing the behavior of other states to suit one’s interests or adjusting one’s own behavior to benefit from the external environment. Together with other instruments such as our military strength, foreign policy and diplomacy are the key drivers that safeguard our independence, sovereignty, territorial integrity and national dignity. 

Nepal’s Foreign Policy 2077 acknowledges the challenges and opportunities posed by the external environment and seeks to fulfill our national interests through bilateral, regional and multilateral engagements, explaining our positions in a number of issues, particularly in advancing economic objectives. There are issues that need to be addressed in our foreign policy, including through a broad national consensus and integration of our national economic and security policies. In this article, Acharya has defined the elements for a blueprint of Nepal’s foreign policy. 

Domestic sentiments and aspirations

Foreign policy should resonate with domestic sentiments and aspirations, reflecting our transition from Least Developed Countries (LDCs) to a Middle-Income Country. Our pursuit of socio-economic development and prosperity hinges upon creating a favorable external environment, encompassing foreign investment, export trade, tourism, and harnessing human and natural resources. Anchoring foreign policy to democratic principles and inclusive governance aligns with our national ethos, requiring a departure from traditional approaches towards a broader worldview.

Foreign policy is an extension of domestic policy in relation to our external environment that should resonate with domestic sentiments and aspirations. As we are graduating from the LDCs and aspiring to become a Middle-Income Country, we have unfulfilled desires and promises for our socioeconomic development and prosperity. We must achieve these pursuits by creating a conducive external environment in terms of foreign investment, export trade, tourist inflows, and harnessing human and natural resources. We have espoused democratic pluralism and adopted an inclusive constitution in a federal and republican setup. We should spearhead our foreign policy to suit our domestic policies and interests. 

The Hindu-Buddish worldview treats the world as one neighborhood (Basudhaiuva Kutumbakam) and propagates peace for earth and space alike (Prithvi Shanti, Antarikhsa Shanti). Our worldview of peaceful co-existence (Panchsheel) aligns with the principles of non-alignment. We can utilize our traditional cultural and soft power including the birthplace of Buddha and home to Hindu civilization. 

In view of our existence as an ever independent-nation and the oldest nation-state in South Asia and our experience in dealing with immediate neighbors and big powers, Nepal has earned tremendous goodwill and trust through the pursuance of independent and dignified foreign policy, though that has shaken from time to time. Nepal must build upon its traditional goodwill and dignity focussing on its national interests. 

Placed between two of the world’s fastest growing economies and rising powers, Nepal stands to benefit from their rise, provided it taps the benefits arising from their rise. We can become a “land-linked economy” coming out of our constraints of landlockedness. Our diplomatic strength becomes formidable when we act based on certain principles, when we have political stability and unity among major political actors on foreign policy issues. We should take advantage of the burgeoning Nepali diaspora as a strength and opportunity to build our case aboard, especially in economic activities. We must devise our foreign policy around our strength and available opportunities around us by broadening our choice and options to fulfill our national interests.    

Interest-based foreign policy

Nepal’s constitution stipulates that we will conduct our foreign policy to advance our national interests. The constitution says that the state will conduct its international relations to safeguard our independence, sovereignty, territorial integrity, national unity, and the protection of rights and dignity of Nepali people and the country’s economic prosperity. 

Our political actors often appear divided, sometimes parroting the lines of major powers or neighboring countries. They often act in narrow political, party, or personal interests, rather than in national interests. They should rather act according to national interests. We must pursue an interest-based foreign policy that keeps national interest at its core. In fact, national interest is the raison d’etre of foreign policy, and we should never forget that mantra in the conduct of our foreign policy. We must anchor our foreign policy and diplomacy for the fulfillment of our economic interests and objectives. 

Changing international circumstances

Nepal’s Foreign Policy 2077 acknowledges the dynamic external environment in which Nepal has to conduct its foreign policy, including the changes in international and regional circumstances. We must adopt a foreign policy that makes adjustments in relation to the changing international environment, including the global power rivalry, geopolitical and strategic competition, shifts in international relations and diplomacy. We should not be driven to take sides between major powers and neighboring countries, but by our interests in benefitting from their various overtures and proposals, especially in the economic domain. 

We must continue to observe a foreign policy which is rooted in our neighborhood relations, bilateralism, regionalism and multilateralism. If it is in our interests to pursue things bilaterally, we should do so while we should seek to broaden regional cooperation and economic integration when it is beneficial for us to do so. We must strive to reinvigorate regional cooperation, including the revival of stalled SAARC. We should continue to advocate for an international rule of law and a rule-based international order, which leaves no country behind and creates synergy and benefits for all through multilateral diplomacy and international cooperation. 

Consensus-based foreign policy

When political actors appear divided on foreign policy issues, outside powers will seek to manipulate that division to advance their interests. Like other countries, Nepal needs a foreign policy that is based on a wider national consensus among the political actors, the private sector, the academic, civil society and people in general. Nepal’s Foreign Policy 2077 was drafted based on the recommendations of a high-level panel that had recommended that the government adopt its foreign policy as “an agenda for national consensus”.  

Somehow, when adopted, it failed to garner political support across the board, in absence of a broader consensus and ownership from political actors. Nepal’s government should review the foreign policy document through a broad consultative process to reflect the changing realities as well as to keep all political actors and stakeholders on board.  We must also start to free our diplomacy from the excessive domination of domestic politics to avoid lack of consensus on foreign policy issues.  

Independent foreign policy

Nepal’s constitution states that the country will pursue an independent foreign policy. Nepal’s Foreign Policy 2077 also reiterates that Nepal will continue its independent foreign policy. That will require pursuing our foreign policy according to our interests, independently of the positions of other countries. Nepal will have to judge issues on the basis of merit and principles, not based on the likes and dislikes or preferences for or against any powers or blocs. 

Nepal’s constitution states that the adherence to the UN Charter, non-alignment, value of world peace, Panchsheel or the peaceful coexistence and international law are the cardinal principles of Nepal’s foreign policy. It also states that Nepal will pursue its foreign policy based on the principles of sovereign equality. Nepal has always raised its voice against the encroachment of sovereignty, independence and territorial integrity of nations. Our position supporting Ukraine after the Russia-Ukraine war emanates from this principle. 

Nepal has friendship with all, enmity with none. Nepal gives priority to its relations with neighboring countries, big powers, its partner countries and countries that generate economic benefits to us. Nepal’s unifier king Prithvi Narayan Shah likened Nepal as a “yam between two boulders,” suggesting Nepal should maintain a balanced policy not to be squeezed by either. The “yam” metaphor still holds true, except that the boulders are expanding in economic terms, whereas the yam should have found its way in the crevices of the boulders, meaning entering their economic supply and value chains. The act of balancing relations with India and China has preoccupied Nepal’s foreign policy and neighborhood relations. 

In the past Nepal observed a policy of equidistance or equi-proximity with its immediate neighbors. Balancing does not mean doing things exactly in the same manner with one or another power. In fact, it requires handling our neighboring relations without comparing one against another and without being used by one for or against another. Today’s balancing act in foreign policy involves not just having balanced relations with its immediate “land” neighbors but also with its “sky” neighbors such as the US and the EU.  

Consistent, coherent and clear

In recent years, the trust and confidence of the international community and that of our neighbors and big powers have shaken owing to the lack of clear and consistent message and action in our foreign policy, especially the changes made during each change of government and political guards. 

While the dictates of international and regional circumstances demand adjustments in our foreign policy from time to time, we must not lose sight that consistency and continuity are among the core attributes of a sound foreign policy. That alone ensures trust and confidence from our neighbors, big powers and our international partners. We must articulate our messages clearly, and communicate them well to our friends and partners so that we continue to enjoy their goodwill and support in the fulfillment of our national objectives. 

We often hear about “democratization” of foreign policy. What that actually means is that we should conduct our foreign policy based on a broad national consensus derived from a wide consultation among all the domestic stakeholders, including the private sector, civil society, academics and the people in general. That also requires foreign policy to be transparent and accountable to the people it is supposed to serve. 

A democratic foreign policy should be inclusive, one that involves various strata of society in decisions making related to foreign affairs. Inclusiveness should be reflected not just in diplomatic appointments and negotiations; it should be a guiding principle for conducting our diplomacy. 

Layered foreign policy

We must prioritize our relations with countries and powers focussing on our national interests and their economic and political significance to us. We should conduct our foreign policy in concentric circles or mandalas, the inner circle being the immediate neighbors and the extended neighbors, and an outer ring of great powers and economic partner countries that generate us aid, investment, trade and tourists. We should strive to resolve outstanding issues with our neighboring countries, especially with India on such matters as boundary, the framework of relations and treaties. 

With China, we should find a way to implement projects under their initiatives that we have signed up, focussing on establishing missing links, trade, investment, transit and connectivity. Then we should also prioritize the countries that provide employment to Nepali migrant workers and that generate remittance, though we should aim to depend upon remittance and foreign employment in the long-run. 

Nepal’s foreign security and economic policies have similar objectives in promoting national interests, though they appear to be operating independently of each other. One of the main tasks in streamlining Nepal’s foreign policy is its integration with national security and economic policies. In fact, Nepal’s water resources, tourism, trade, transit and other policies should be integrated with its foreign policy so that we can derive maximum benefit from our external relations. 

Institutionalized foreign policy

Nepal should invest in an institutionalized decision-making practice, not act on the whim of the leaders. We should entrust our foreign policy institutions with the responsibility of executing it, freeing them from excessive political control and politicization. We must institutionalize the practice of a broader national consultation among political actors, the private sector, the academic and think tanks on foreign policy issues from time to time. That way we can build the institutional capacity of our foreign policy institutions. The foreign ministry must be consulted in all national decisions that involve external relations. 

In the past, Nepal adopted a somewhat inward-looking foreign policy, remaining in isolation without expanding relations to most countries other than its immediate neighbors or power that came in contact. Until the 1950s, Nepal essentially had relations with just India, China, the US and France. We became a somewhat open country after entering the United Nations in 1955, and the non-aligned movement in 1961. 

In the decades that followed, Nepal diversified its diplomatic relations. Nepal has today established diplomatic relations with nearly all UN members. Still, we have a limited diplomatic outreach with just 40 missions present in 31 countries. Our diplomatic representation is far below those of countries with comparative sizes and economies. We must invest in our diplomacy as an investment in our national interests. 

An innovative foreign policy

In the arena of foreign policy, we keep encountering various overtures, proposals and initiatives from our neighbors and big powers from time to time. We have been struggling to respond to such initiatives properly, let float our own initiatives and new ideas. Except for the Zone of Peace Proposal that gathered the support of 116 countries in the 1980s, Nepal has not floated a foreign policy initiative of its own that it can push internationally. 

A few years earlier, the government had floated a proposal to hold Sagarmatha Dialogue and proposed to discuss the plight of Nepal’s mountain and the Himalayas and its people on climate change and to showcase its actions to combat against and adapt to climate change. But somehow this initiative has been pushed to the back burner. 

Nepal is without any innovative ideas or proposals in foreign policy. While maintaining continuity and consistency in principles, we should take innovative initiatives and approaches to our foreign policy. Mere reiteration of half-a-century old principles alone will not create a big appeal in our foreign policy. 

For instance, we can showcase Lumbini, the sacred birth place of Buddha, the Himalayas, including the plight against climate change, our role in UN peacekeeping in which we are the topmost troop and police contributing country. We can also highlight our success in the graduation from the LDCs and our future strategy for becoming a Middle-Income Country and share our experiences on the nationally-led and exemplary peace process that we have completed recently. After we graduate from the LDCs, in which we played leadership roles, we should venture for taking up a more proactive and leadership role in the group of non-aligned countries, Group and Seventy-Seven, landlocked countries etc. 

Backed by an apt diplomacy

Nepal’s foreign policy must take into account the new trends in diplomacy and international relations around the world. There is an increasing focus on public diplomacy and soft power instruments to pursue a favorable public opinion abroad towards the respective countries. Diplomacy is becoming virtual, digital, instantaneous and taking place in the informal and personal domains. It is being conducted by a myriad of actors, not just foreign ministry mandarins. 

Today’s diplomats are required to perform many non-traditional roles and functions. There is emphasis on multi track diplomacy involving the private sector, civil society, think tanks, parliamentarians, security officials, sports and culture. Nepal should engage in niche diplomacy, focussing on the issues that are of its interests, and the issues in which it can contribute with competitive advantage and experience. We also need separate cadres of bilateral and multilateral diplomats, and diplomats focussing on political, economic and consular aspects. 

In diplomacy, we must punch according to our diplomatic weight, commensurate with our strength and capability and comparable to countries of our size and economy. A good foreign policy must be backed with an apt diplomacy and robust institutional set up. 

In conclusion, Nepal needs an interest-based, principled, independent, consistent, inclusive, integrated, layered, balanced and forward-looking foreign policy. Our foreign policy should be guided by our domestic sentiments and aspirations, driven by national consensus, and adjusted to by the changing geopolitical, regional and international circumstances and shifts in international relations and diplomacy. It must be rooted in neighborhood relations, regionalism, multilateralism and international cooperation to suit our interest’s. It should be based on our national strengths and creation of options and instruments that widen our opportunities and benefits to fulfill our national interests.

The foremost challenge in Nepal’s foreign policy comes from the adjustments we should make in the changing geopolitical and international circumstances, including managing the conflicting interests, geopolitical rivalries, and strategic competition of our neighbors and great powers. The strategic competition between India and China is not new. Another great power, the United States of America, has entered the scene, sometimes with competing strategic interests. We have to operate without being a playground for competition among our neighbors and great powers. Nepal does not wish to be drawn into the “geopolitical contest”, “strategic competition”, and “big power rivalry”. The three-way geopolitical competition in Nepal involving India, China, and the United States is not necessarily against Nepal’s interests, as it can generate benefits and opportunities in aid, trade, and investment. We should develop relations with all powers, focusing on our interests and without taking sides in their geopolitical contests. During the Cold War era, we managed to maintain the best relations with the superpowers—the United States and the Soviet Union—and obtain aid and support from both. There is no reason why we cannot maintain the best relations with India, China and the United States and benefit from their support and cooperation simultaneously. We should deal with them based on our national interests while finding a niche in their competition so we can benefit from them. Because of our relations with major powers and immediate neighbors, we often face difficulty in reaching decisions regarding the initiatives or proposals they bring from time to time, also because they sometimes contain competing interests. The United States of America has been pursuing its Indo-Pacific Strategy (IPS) and seeking to apply it in the countries of the “Indo-Pacific Region,” including through its Millennium Challenge Corporation (MCC). China has launched multiple initiatives, including the Belt and Road Initiative (BRI), Global Development Initiative (GDI), Global Security Initiative (GSI), Global Civilization Initiative (GCI), etc. We should develop principles for dealing with diplomatic proposals from great powers or our immediate neighbors. We should accept them if they are in our interests and not entertain any if that undermines our foreign policy principles. According to our policy on non-alignment, we cannot become a party to any security or military alliance. We should avoid any overture that has a political or strategic objective that seeks to use us against one or another power or neighbor. We should respond to such proposals by assessing their economic viability and benefits rather than political preferences. We should retain our decision-making autonomy without being compelled to choose for or against such proposals. If we maintain such clarity and keep reiterating them, decisions concerning them will be easier. We should take into account the emerging alliances and partnerships in the region, without being dragged into their competition. They include the IPS, Quadrilateral Security Dialogue (Quad), the trilateral partnership between Australia, the United Kingdom, and the United States (AUKUS), the Regional Comprehensive Economic Partnership (RCEP), etc. We need not fear them but rather be vigilant without taking sides while not missing opportunities arising from them for our economic development. We must assess changes in geopolitics and adjust our policies accordingly. Though the world has become a“global village,” geopolitics is back. Geopolitical tensions have increased with the rise of new powers in every region, including ours. There was a time when the power that commanded the seas ruled the world. Then, whichever power controlled the Eurasian mainland extending from the Volga to the Yangtze and from the Himalayas to the Arctic, exercised supremacy. Today, the power that commands the Asia-Pacific region can have geopolitical sway. Now called the Indo-Pacific Region, it is rapidly evolving as the center of gravity for geopolitical contests. The balance of power is shifting to developing countries, particularly in Asia. The continent is retaking its lost dominance in the world economically. Asia has also become a new theater of great power contestation, including in the South China Sea. Our region, South Asia, remains a geopolitical hotspot, thanks to the strategic competition involving great powers, Indo-Pakistan relations, extremism and terrorism, unresolved boundary issues, and the crisis in Afghanistan. The 2017 Doklam standoff and the 2020 Galwan Valley border scuffle between India and China highlight the potential risks of unresolved bilateral boundaries in regional stability and security. India and China cooperate on several issues and platforms while engaging in competition in others. They cooperate on climate change, development, and global governance. Both are members of the BRICS, SCO, Asian Infrastructure Investment Bank (AIIB), etc. Their bilateral trade has reached $135bn. They have a stake in working together for their interdependence and regional stability. We have seen what can happen when they bypass us. Their 2015 agreement for opening the Lipulekh Pass for trade and pilgrimage came without consulting us. An African adage says, “Whether the elephants are dancing or mating, the grass will get crushed in either case”. In the past, we handled geopolitical challenges without compromising our independence and sovereignty. We should keep a constructive engagement with our neighbors and great powers by diversifying our relations, resolving outstanding issues, strengthening regional cooperation and economic integration, pursuing political stability and economic development, and fostering national unity. We need not fear geopolitics but handle it according to our interests. It is our priority to maintain the best relations with India and China and benefit from their economic progress. We need to find a niche to benefit from their competition, especially in the economic realm, without being dragged into their sides. Both are our sources of trade, tourism, investment, and aid. So far, little automatic spillovers from their economic growth have come to Nepal. We must take proactive action to benefit from their economic growth. Nepal’s unifier king, Prithvi Narayan Shah, likened Nepal to a ‘yam between two rocks’. The ‘yam’ needs to extend its roots into the crevices of the ‘boulders’. Nepal should seek economic integration with India and China, enter their supply and value chains to benefit from their economic rise. In economic growth, Nepal is a slow-moving tortoise between a marching elephant (India) and a flying dragon (China). It would be in our interest to invoke the Rhino (Gaida) in us to match them with an equally-robust growth trajectory. At the least, we can move like a rabbit—fast and vigilant—to benefit and catch pace with both. We can benefit from India and China by promoting trade opportunities, offering ourselves as a transit economy, focusing on infrastructure development, including connectivity projects, attracting tourists and FDI, and transferring technology, knowledge, and skills from them. We need to move beyond the slogans of ‘transit economy’, ‘dynamic bridge’, ‘land-linked economy’, and ‘trilateral cooperation’ that our leaders keep reiterating. We need evidence-based studies, proactive diplomacy and specific proposals and agreements. The opportunity to serve as a transit economy may not be there forever. We need to catch such opportunities until they are around with us. We must strive to maintain the best relations with our immediate neighbors with a respectable framework of relations based on sovereign equality and mutual benefit. We need to resolve outstanding issues with India, concerning the review of the 1950 treaty and the Kalapani-Lipulkeh-Limpiyadhura boundary issue, including through the logical conclusion of the report of the Eminent Persons Group (EPG) instituted bilaterally. We should focus on building trust and confidence at the political levels and continue to work at diplomatic and technical levels to safeguard Nepal’s national interests and resolve the outstanding issues with neighboring countries, mainly India. With China, we should find a way to implement projects under the BRI and bring into operation the bilateral transit and connectivity agreements. This is an excerpt from the speech of the author delivered at second YKN lecture series