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ApEx is beginning a 10-part InDepth series titled ‘Nepal’s Energy Myopia’ starting with a roundtable on the issue this week. The larger goal of the series is to take a deep dive into Nepal’s energy sector and unearth the opportunities and challenges and to question assumptions. For the roundtable, we welcomed five guests with expertise in different aspects of energy production and consumption to share their views on the series title.

Deepak Gyawali, Ex-Minister of Water Resources 

During the Panchayat regime, there used to be proper planning and sound vision for the energy sector. There was a sound projection of how our demand increases with time. Such planning and projection works are rather haphazard these days. There is no study involved. 

The role of the private firms and foreign investors in Nepal’s energy sector increased significantly after the 1990s. Energy development licenses were issued to them willy-nilly, without carefully studying their projects and conditions. 

Our per capita energy-consumption of around 300 units is the lowest in South Asia. This means we will need a lot of energy in the coming days. We have to switch to clean energy sources for cooking and transport, which means more hydropower. This cannot be achieved without the right vision. The fact is that the vision we had during the Panchayat period was scrapped after the restoration of democracy. 

When it comes to investing in hydropower, we should concentrate on Nepali investors. Foreign investors seek more guarantees, want to put more risks on the government, and take home more profit. We must ask ourselves whether Nepal is really benefiting from their investment in hydropower. Existing policies make electricity more expensive, not cheaper.  

The private sector should also introspect: does it seek to make profit by selling electricity after project completion or during the construction phase itself? 

We have some targets in the energy sector but they are fundamentally wrong, with the focus on the sale of electric vehicles and other things. We are not focusing on what amount of fossil fuel we want to displace through such measures. In the past 14 years, we have failed to introduce the amended Electricity Act or to create a basic framework on how federal, provincial, and local governments should work in the energy sector. The entire sector is a mess. There are many areas where we can use clean energy including the ropeway, which consumes less energy than other means of transport. But we have not taken any initiative towards this end.  

Bhushan Tuladhar, Clean energy campaigner

Certain clean energy targets have been fixed in Nepal, which is a positive thing. For example, Bagmati province has vowed to completely switch to electric vehicles by 2028 in its five-year plan.  Likewise, the Ministry of Energy has set some targets in its white paper on the much-needed transition from traditional to clean energy.  The Nationally Determined Contribution prepared by the government has pledged a net-zero energy system by 2045. There have been some serious studies while fixing these targets. But to achieve these goals, Nepal needs a clear path, which is missing. 

For example, we have pledged that 25 percent of the vehicle sales in 2025 will be electric. But we lack a blueprint for this. In the absence of a clear roadmap, inconsistent policies and provisions appear in the annual budget, creating confusion. 

Vague policies also discourage the private sector from investing. There is no clarity in our long-term plan on hitting targets in transport, cooking, and other sectors. What we need is a continuous campaign on the switch to clean energy. All state mechanisms, particularly local governments, must be mobilized in this, backed by a national commitment and of course a clear roadmap. 

Our constitution mentions a clean environment as a fundamental right of citizens. But international studies show that every year approximately 42,000 Nepalis die from air pollution. There is a need for a revolution in our cooking system.  Instead of exporting electricity to India, we must utilize it in cooking. About 67 percent of Nepalis still use the smoky biomass to cook. We need to launch a special campaign to switch to clean energy in our kitchens. 

Madhusudhan Adhikari, Executive Director, Alternative Energy Promotion Center  

There is a misconception in Nepal that energy means electricity. The contribution of electricity in our energy mix is less than 10 percent. In other words, when we discuss energy in Nepal, we are debating on that 10 percent. We are not sufficiently utilizing modern and clean energy. We have the Energy Ministry, which functions more like a hydroelectricity ministry.  This means there is no clarity of vision.  We are investing our time, energy, and mind only in hydropower. We have to look at other sources of energy as well. Recent technologies are focused on other energy sources besides hydropower. So, in the future, hydropower could become the most expensive kind of energy. 

There are also questions over whether our rivers are fit for hydroelectricity, given our problems with floods, landslides and other natural disasters. Even in hydropower, we are focusing on the run-of-the-river projects, with no attention being paid in building storage projects. Similarly, Nepal Electricity Authority is just focusing on power import and export. There are also many flawed provisions in our energy policy and our understanding of energy consumption is all wrong. 

Our main target at this point is to lower fossil fuel imports. But we lack dedicated institutions and targeted effort to switch from conventional to clean energy.  To check chronic pollution, electric cars should be made mandatory in Kathmandu after certain years. 

High cost of production is a big barrier to the growth of Nepal’s energy sector. We should have a policy to decrease the cost of energy production.   

Prakash Chandra Dulal, Executive Committee Member, Independent Power Producers’ Association, Nepal 

The new laws formulated after the restoration of democracy in 1990 guaranteed the private sector’s role in the energy sector. Nepal has some plans to develop the sector. For instance, the hydropower strategy promulgated in 2002 talks about the production of cheap electricity and encourages exports. Similarly, the document talks about the private sector’s role in hydropower development. We are not completely private entities but operating under the BOOT (build, own, operate, and transfer) model. The law talks about providing various facilities to hydropower projects. But then we have failed to build projects at low cost and to export electricity. Policy inconsistencies caused by frequent government changes is part of the problem. 

The 15th plan prepared by the National Planning Commission talks about rapid production of hydroelectricity to boost the country’s energy sector and decrease the import of fossil fuels. Our policies are good; the problem is in implementation. Frequent government changes and with them a change of direction are a big impediment. Clearly, there is a need for the upgradation of the electricity supply system to encourage electricity-use in cooking. The federal, provincial, and local governments should come up with a clear plan on this. 

For instance, municipalities and rural municipalities could declare themselves free from LPG gas and fully switch to electricity. To do so, all three levels of government should provide subsidies.  With proper planning, local governments can implement this scheme within five years.

Sushil Pokhrel, Managing Director, Hydro Village Pvt Ltd 

One-fifth of the world’s energy comes from hydropower. It has played a big role in the growth of countries like Bhutan, Norway, Canada, and the US. They are role models for us.  Many countries have undergone economic revolutions through hydropower, so it is not wrong to advocate for it here in Nepal as well. The private sector has a high potential in hydropower. We have invested trillions of rupees. Scores of small and big hydropower projects are currently underway. With an integrated legislative framework or a one-door policy, there is no doubt we could have attracted more investment in hydropower.

But investing in Nepal’s hydropower projects is not enough. Foreign investment is low because of some flawed policies, for instance our failure to offer foreign investors an exit strategy. Established global companies are not investing in Nepal’s energy sector due to the country’s murky policies and regulations. If we fail to ensure minimum requirements, it will be difficult to attract investors. The hydropower sector has contributed a lot to Nepal’s social and economic transformation. 

Power production is expensive due to lack of basic infrastructure, which is the government’s responsibility to build. We have to invest energy and resources to build infrastructure. Likewise, our notorious red-tapism scares away prospective investors. Investment process should be made clear and free of any ambiguity. 

Another important issue is an investment-friendly climate. Nepal is not the only lucrative country for hydro-investment. We have to fix our issues to encourage more investment. After all, it is not just big businesspersons and investors who have stakes in hydropower projects. Even those of more limited means have a direct sake in it. 

The CPN (Maoist Center) won 122 mayors and municipal chiefs in the May 13 local elections–16 more than its 2017 tally. The party had contested the elections as part of a five-party alliance alongside the Nepali Congress, CPN (Unified Socialist), Janata Samajbadi Party, and Rastriya Janamorcha. The primary objective of this alliance was to mount a challenge against the CPN-UML with its formidable organizational strength. 

While the Congress emerged as the largest party, the second spot went to the UML. The Maoist Center came a distant third. Whatever the election outcome, top Maoists leaders are of the view that the current five-party alliance should be continued until the parliamentary elections. 

At the same time, talks about a left alliance, particularly between the UML and Maoists, do not die down. In fact, there is a strong sentiment among the second-rung leaders of both the Maoist Center and UML in favor of a left alliance. 

In this context, Kamal Dev Bhattarai of ApEx talked to senior Maoist leader and party chief Pushpa Kamal Dahal’s close confidant Haribol Gajurel. 
How do you evaluate the party’s performance in local elections?  

The five-party alliance was formed to fight the authoritarian bent of the UML, whose leader tried twice to dissolve a  democratically elected parliament. Broadly, the alliance has been successful. The local election was a battle between progressive and regressive forces. The regressive force has been weakened. The Maoists had expected to win around 150 seats but then the alliance didn’t work as planned in some places. 

Will the current alliance endure until the parliamentary elections? 

Regressive elements are trying to undermine the republic and the federal setup. So the continuity of the current left-democratic alliance is necessary in order to rout them.  The five parties are in discussion on how to make the alliance even more fruitful in the parliamentary elections. 

There are rumors of Maoist Chairman Dahal being offered the post of prime minister if he agrees to a left alliance? 

These rumors are aimed at confusing the people. The party’s rank and file is unhappy with the leadership of KP Oli who failed to keep the erstwhile Nepal Communist Party united. As a result, the previous communist government could not stay in power for the full five years. It is also important to consider that Oli’s UML faced a defeat in the recent local-level elections.  

So the offer of premiership to the Maoist party is nothing more than a UML ruse to neutralize the growing resentment within the UML party and divert attention of party leaders and cadres.

So you then see no chances of a left alliance? 

Personally, I don’t, at least not until Oli abandons his regressive and authoritarian bent. Oli has assigned some of his leaders to convince the Maoist party on a left alliance. But there hasn’t been any progress. Right now, the Maoist Center doesn’t see a solid basis for such an alliance. 

But this is not to say that there aren’t leaders inside the Maoist party or the UML who genuinely believe in the sanctity of the left alliance.  

What about reports about China again pressing left parties to come together? 

China is always in favor of left unity in Nepal. By China, I mean the Chinese Communist Party (CCP), not the Chinese government. It is no secret that the CCP wants to see the left forces of Kathmandu working together.

An insurrection of sorts is brewing in the CPN-UML. KP Sharma Oli, the all-powerful party leader and two-time prime minister, is being called out for his poor leadership.

This week, speaking in a TV interview, Ghanashyam Bhushal, one of the party leaders, blamed Oli for the UML’s poor showing in the May 13 local elections. Bhushal not only told his interviewer that Oli must be held to account for the UML’s poor electoral performance. He also called on the party leader to step down on moral grounds.

This was probably the harshest criticism of the UML chief following the 2021 party-split. Oli’s fierce critics like Madhav Kumar Nepal and Jhala Nath Khanal—both former prime ministers—have left the party and registered a new one.

Such is the power and popularity of Oli inside the UML that barring some pointed remarks by Bhim Rawal, another senior UML leader, Oli has enjoyed unprecedented sway among the rank and file.   

Bhushal’s remarks against Oli haven’t gone unnoticed in the party. The UML’s Central Disciplinary Commission, led by Keshav Badal, has already recommended action against him. Now, it is for the party’s central committee to decide whether Bhushal should face the music for criticizing Oli.

Badal says Bhushal must be punished for trying to besmirch the party’s image.

“Every party member must respect the party’s ethics and discipline,” he says. UML’s Vice-chairman Ishwar Pokhrel describes the issue as “an internal matter” and not a subject of public discourse. “We will arrive at an appropriate decision after discussions in the party,” he says.

But the Bhushal episode has made one thing crystal-clear: the UML is struggling to maintain healthy intra-party democracy.

The UML disciplinary body’s recommended action against Bhushal has drawn mixed reactions from in and outside the party.

Some UML leaders say the party is clearly in need of an opposition voice to maintain healthy check and balance and to keep the leadership on the right track, particularly after the departure of senior leaders like Nepal and Khanal.

Oli maintains a strong grip on the party and speaking against him has repercussions. Even top leaders don’t dare criticize Oli these days.

As the UML is the only big party in Nepal not to have a strong in-party opposition to its top leadership, says a party leader requesting anonymity, Bhushal is trying to position himself as a strong and legitimate opposition voice.

“After Madhav Kumar Nepal’s exit, Bhim Rawal tried to occupy that space by challenging Oli for UML leadership at 10th general convention. He failed and perhaps Bhushal now believes it is his turn to stake claim as Oli’s main in-party ideological opponent,” says the leader. 

Bhushal had also gone against the will of some senior leaders and vied for the post of the party’s vice-chair at the general convention. 

Some UML leaders believe Bhushal is being treated unfairly and that taking action against him for criticizing Oli does not reflect well on the image of a democratic party like UML. But there are others who argue that although Bhushal’s attempts at democratizing his party are admirable, he does come across as an opportunist, given the nature of his past spats with Oli.

When Oli became prime minister for the second time in 2018, Bhushal was one of his most vehement critics in the UML. In order to placate Bhushal, Oli then offered him a position in his cabinet, which the latter accepted in a heartbeat.

That Bhushal, someone who railed against ideological and policy-level flaws of the then Oli government, accepted the ministerial berth cannot be forgotten, says the UML leader.  

“And when the dispute inside the then Nepal Communist Party (NCP) was at its peak, it was Bhushal who provoked Madhav Kumar Nepal and Pushpa Kamal Dahal to revolt against Oli,” says the leader.

Journalist Sitaram Baral, who has closely followed Nepal’s left politics for two decades, says Bhushal is trying to send a message to Oli that his working style and leadership are not helping the party. “I believe Bhushal is in favor of a broad left alliance and he sees Oli as the main obstacle towards this goal,” he says.

But whatever Bhushal’s end-game, Baral believes he has raised an important question of democracy inside Nepali political parties.     

Otherwise, dissent tends to be suppressed and attempts are even made to sabotage the political careers of dissenting leaders. This tendency, some political analysts say, is one of the main reasons for the repeated splits we see in Nepali political parties. The break-ups, first of the Nepal Communist Party (NCP) and then the UML, are cases in point. 

At the same time, maintaining healthy intra-party discipline is also a big challenge for political parties. 

Political analyst Lokraj Baral says Oli may have an authoritarian bent, but his critics like Bhushal and Rawal have also displayed opportunistic tendencies, making it difficult to trust them entirely.    

“They instigated Madhav Kumar Nepal to fight Oli and when the party broke up, they chose to remain in the parent party. Such behavior is also bound to weaken intra-party democracy,” he says.

Instead of speaking with the media, Bhushal should have raised his objections against Oli from within the party, Baral adds.  

“At the same time, Oli should learn to listen to the grievances of his party leaders,” he says. “It is amply clear that some UML leaders are displeased with Oli but afraid to speak up.” 

Afghanistan, a member country of the South Asian Association for Regional Cooperation (SAARC), has been facing a humanitarian crisis following a Taliban takeover in August last year.  

One of the SAARC’s major objectives is to ensure food security for the people of the region through its Food Bank. The purpose of this bank, which was established in 2007, is to ensure enough food stock for each member country. 

But when Afghanistan plunged into a crisis, the regional body didn’t take any initiative to deliver food to the stricken country. The SAARC countries including Nepal did offer some humanitarian assistance to Afghanistan on an individual basis, but not collectively. This incongruity has also been evident in the Covid-19 pandemic. The regional bloc of eight South Asian countries was ineffective in dealing with the crisis wrought by the coronavirus. The SAARC, as a regional body, could have purchased medical equipment as well as vaccines to protect the populations of member countries. 

In March 2020, Indian Prime Minister Narendra Modi held a joint virtual meeting with heads of the state and government of the SAARC countries, where he made some lofty proposals, such as regional air ambulances and visa-free schemes for the doctors and nurses of the region. But these proposals have made no headway. 

These two recent instances have raised questions about the SAARC’s continued viability. It’s been well over three decades since the formation of this regional body and, with each passing year, it seems to be losing its relevance and legitimacy. 

Probably for the first time since its establishment, SAARC is facing an existential crisis and many have lost all hope of its revival. 

Says Moonis Ahmar, an Islamabad-based expert on South Asian affairs, in the prevailing circumstances, it is hard to think of the SAARC as a viable organization. 

“Even in major crises like the pandemic, Sri Lanka’s economic meltdown, and serious environmental challenges, the role of SAARC is nowhere to be seen because of the absence of leadership to take a stand on such issues,” he says.  

The challenges for SAARC continue to mount. 

India-Pakistan tensions are obviously the primary reason for SAARC’s ineffectiveness as a regional body. But there are other causes too, which have been explored throughout this ApEx series. One might even argue activating the regional body will now be tough–even without India-Pakistan hostility.

The international community is yet to recognize the Taliban as the legitimate government of Afghanistan. In September 2021, a meeting of SAARC foreign ministers planned on the sidelines of the UN General Assembly was canceled due to differences among member countries over the participation of Taliban representatives. 

The prospect of any high-level SAARC meeting appears slim for now. Before the Taliban takeover of Afghanistan, at least some meetings of various regional mechanisms were taking place and there was a semblance of activity. 

Lack of progress on the South Asian Free Trade Agreement and differences in South Asian satellites and motor vehicle agreements are other issues that have imperiled SAARC. Instead of promoting regionalism, member countries have preferred working at the bilateral level. Meanwhile, the agreements on strengthening regional cooperation, connectivity and economic prosperity are increasingly being sidelined.   

Over the years, there have been more than 30 vital agreements among member countries on a range of issues–their implementation remains in limbo. 

Some regional experts, however, say that the SAARC is still relevant. Even though summit-level meetings have been stalled, they argue, activities under the SAARC rubric continue.  

Despite this prevailing pessimism, they suggest continued utilization of the various platforms under the SAARC. 

Laliufar Yasmin, a Dhaka-based foreign policy expert, accepts that given the moribund situation of the SAARC, questions are being raised about its viability. 

“However, I believe the SAARC is still relevant for a host of reasons. For one, it has created South Asia as a political and a cultural region,” she says.  

The SAARC, she argues, works as a form of public diplomacy for South Asian countries even at a time of difficult political relations among its member states. 

“South Asian Games, South Asian Olympic Council, and South Asian Football Games have continued and showed the resilience of South Asian brotherhood. This may not seem to be enough, but they have survived the test of time,” she adds.  

Yasmin, who admits to being a believer in a world of complex interdependence, hopes SAARC will emerge as “a true forum of cooperation by pursuing public diplomacy.” 

But one can’t take much heart from her argument, especially when the meetings of SAARC mechanisms have also been affected in recent times. Several important agreements signed at the summit level have failed to take off. 

Don McLain Gill, a Manila-based geopolitical analyst and author, says the SAARC’s revival is “a long and arduous road.”  

“This is not to say that SAARC should be completely forgotten,” he says. “That there could be a SAARC meeting at the peak of the pandemic suggests some potential in reviving regional cooperation, especially when threat perceptions align toward non-traditional security issues,” he says. 

Given this functional, albeit selective mechanism, he adds, the SAARC can still be utilized as a platform for certain issues. “In order to provide South Asian states options and alternatives to work together on mutually agreed-upon issues, both regional and sub-regional platforms must be equally prioritized,” he suggests. 

Conventions/Agreements signed so far 

• SAARC Charter (December 1985)

• Memorandum on the Establishment of the SAARC Secretariat (November 1986)

• Agreement on the Establishment of the SAARC Food Security Reserve (November 1987)

• Regional Convention on Suppression of Terrorism (November 1987)

• Regional Convention on Narcotic Drugs & Psychotropic Substances (November 1990)

• Agreement on SAARC Preferential Trading Arrangement, SAPTA, (April 1993)

• SAARC Convention on Regional Arrangements for the Promotion of Child Welfare in South Asia (January 2002)

• SAARC Convention on Preventing & Combating Trafficking of Women & Children for Prostitution (January 2002);

• SAARC Social Charter (January 2004)

• Agreement on South Asian Free Trade Area (SAFTA) (January 2004)

• Additional Protocol to the SAARC Regional Convention on Suppression of Terrorism (January 2004)

• Agreement on Mutual Administrative Assistance in Customs Matters (November 2005)

• Agreement on the Establishment of SAARC Arbitration Council (November 2005)

• Agreement on Avoidance of Double Taxation and Mutual Administrative Assistance in Tax Matters (November 2005)

• Joint Declaration on the Admission of the Islamic Republic of Afghanistan into SAARC (April 2007)

• Agreement on Establishment of the SAARC Food Bank (April 2007)

• Agreement on the Establishment of South Asian University (April 2007)

• SAARC Convention on Mutual Assistance in Criminal Matters (August 2008)

• Protocol of Accession of the Islamic Republic of Afghanistan to Agreement on SAFTA (August 2008)

• Agreement on the Establishment of South Asian Regional Standards Organization (SARSO) (August 2008)

• Charter of the SAARC Development Fund (SDF) (August 2008)

• SAARC Agreement on Trade in Services (SATIS) (April 2010)

• SAARC Convention on Cooperation on Environment (April 2010)

• Agreement on the Establishment of the SAARC Seed Bank (November 2011)

• SAARC Agreement on Multilateral Arrangement on Recognition of Conformity Assessment (November 2011)

• SAARC Agreement on Implementation of Regional Standards (November 2011)

• SAARC Agreement on Rapid Response to Natural Disasters (November 2011)

• SAARC Framework Agreement on Energy Cooperation (Electricity) (November 2014)

(Source: SAARC Secretariat) 

There is an easy way to irk a Kathmandu-based American diplomat. Just ask: “Does the US see Nepal through Indian eyes?” In response, you will perhaps get an exaggerated eye-roll, soon followed by a reply along the lines of: “Surely, after seventy-five years of engagement, you know better than to ask that!” Well, that old question may never go away. But perhaps time has come to tweak the question, and inquire: “Does India see Nepal through American eyes?”

The Americans appear to have sold India’s strategic community on the usefulness of its China-controlling Indo-Pacific Strategy. South Block mandarins and think tank-wallahs in New Delhi are increasingly comfortable with greater American sway in Nepal. That is the only way to check China’s alarming rise of influence in the Himalayan state, they reckon, something India cannot do on its own. As Ashok K. Mehta, an old Delhi-based Nepal watcher, puts it: “The US may be promoting its own interests in this region, but those are not very different to India’s own interests,” he says. More than anything else, “India wants to keep China at a safe distance, especially in Nepal.” 

India has of late taken a low-key approach in Nepal, in sharp contrast to the earlier times when it was actively meddling in the country’s domestic affairs. Now it seems happy to watch the growing US-China tussles in Kathmandu from the sidelines. In doing so, India keeps its hands (and reputation) clean while also knowing that should the American engagement in Nepal get too close for comfort, it can always jump right back into the old game.

Full story here. 

Since 1950, US policymakers have been pitching for country-specific policies while dealing with small South Asian countries. But when it comes to Nepal, they reckon US interests are best served by a policy of close sharing of information with India.

As far back as 1954, the US National Security Council had stated in its document: “India is apprehensive of the US information and technical assistance activity to Nepal.” 

The document further said, “It is very important that they [India] feel well informed of our activities in that country [Nepal]. Our policy should be independent, but we should keep the Indians apprised of our objectives and what we are doing.”

When Nepal requested the US for military assistance in 1960—as a part of King Mahendra’s strategy of diversifying away from India and China—the Americans responded that Nepal should meet its requirement from India. The US officials further said that they would consult officials in New Delhi about Nepal’s requests. 

It is clear that the US is highly concerned about Nepal owing to its strategic location. And its engagement with the country has remained more or less unchanged since the 1950s.  In the past, the core US objective was to prevent the communist penetration of Nepal, and now, too, it wants to contain China’s growing economic and military influence in the Himalayan country. 

No wonder speculations about the US viewing Nepal through ‘Indian eyes’ continue to be rife.

This impression was further buttressed when New Delhi and Washington worked closely with each on Nepal’s peace process that started in 2006. 

In recent decades, there has been a sea change in international politics, particularly with the incessant rise of China. 

Containing China’s influence in the Indo-Pacific region through alliances and allies is a key foreign policy priority of the Joe Biden administration. The US Indo-Pacific Strategy, brought with the same purpose, has economic, political, and military components. 

Though Nepal’s participation in regional and global issues is minimal, the US has recognized the country’s central role in the maintenance of a free, open, and prosperous Indo-Pacific. That is why engagement between Kathmandu and Washington is growing, particularly after the formation of the Sher Bahadur Deuba-led government in July 2021. 

The past few months witnessed the exchange of a series of high-level visits between the two countries, and more visits are on the cards. 

Nepal Army chief General Prabhu Ram Sharma is due to travel to the US on June 27. Meanwhile, preparations are also underway for Prime Minister Deuba’s US trip. 

With the passage of the $630m MCC compact, a US grant program, by Nepal’s parliament in February, America’s financial assistance to Nepal has increased substantially as well. 

Meanwhile, India, which has for long been apprehensive of the presence of outside powers in its backyard, also seems to be getting comfortable with the growing US engagement in the region. This is in part due to increasing conflict between India and China, mainly after the military clash in Galwan Valley in 2020. 

In recent years, there has been a strategic convergence on many issues between New Delhi and Washington. Despite their differing positions on Russia, the two countries are working together on regional affairs. 

A former Indian ambassador to Nepal, who spoke to ApEx on condition of anonymity, says there is a tentative understanding between India and the US about the latter’s engagements in South Asian countries. 

The growing US-Nepal ties have garnered mixed reactions among the policymakers and think tanks in New Delhi. 

Amid the heightened US-China rivalry, India, too, has stepped up its engagement with Kathmandu, even as it remains silent over the growing bonhomie between Kathmandu and Washington. As Nepal’s engagement with China has slowed, its interactions with the US and India are continuously increasing.

Some analysts in New Delhi argue that, as India alone cannot curtail China’s influence in the Himalayan country, the country should not object to Washington’s greater sway in Kathmandu. 

“New Delhi for now appears to be happy with its low-key approach as it witnesses the growing US-China contestation in Kathmandu from the sidelines,” says the former ambassador.

Ashok K. Mehta, a former major general of the Indian Army and an old Nepal watcher, agrees. 

India takes the recent engagement between Kathmandu and Washington positively, he tells ApEx. 

“The US may be promoting its own interests in this region, but those are not very different to India’s own interests,” he says. “In this region, India wants to keep China at a safe distance, especially in Nepal.” 

In a telegram to the US State Department in 1973, the US embassy in New Delhi stated that “the official Indian policy is consonant with our interest in having a South Asia of stable, independent states where no outside power has an exclusive position.” 

It went on to say: “All the smaller neighbors suspect India really wants hegemony, and indeed it may. They react by trying to maintain close relations with world powers.”  

For a long time, Mehta says, Deuba has been known as “a good friend of the West”. This has gone down well in New Delhi, at a time India is tilting towards the US.  

“In the past, India used to say China is not a threat to the region. This has now totally changed, mainly after the clash in Ladakh,” he adds.

Following the endorsement of the MCC compact by Nepal’s parliament, the US has been an active player in the region under the Indo-Pacific Strategy. 

“Both India and the US see China as the main threat in the Indo-Pacific region,” Mehta says.

Amit Ranjan, a research fellow at the National University of Singapore, says as New Delhi and Washington are on good terms, India may not show much concern over Nepal-US engagements for now. 

In the long run though, he says Kathmandu’s closeness to the US may affect Indian interests in Nepal. 

“For now, India sees that the US isn’t working against Indian interests in South Asia. It is of the view that the US is here to check Beijing,” he says.  

Nepali Congress is set to become the largest party at the local level, with the main opposition CPN-UML relegated to a distant second position, followed by CPN (Maoist Center). Kamal Dev Bhattarai of ApEx talks to senior UML leader Raghuji Pant on local poll results and his party’s plans. 

How does the UML evaluate local-election results?

We had expected to emerge as the largest party from the May 13 elections, albeit with a narrow margin. That did not happen. We were mindful that a split in our party and formation of the five-party electoral alliance could affect our performance. But as the UML had contested the local elections of 1999 and 2017 alone and still emerged as the largest party, we still hoped to retain our strength. But this election’s results have forced us into a rethink.

What other factors could have affected the results?

Like I said, there is a need for a review of the election results inside the party. Again, the alliance among the five ruling parties affected our chances. But I am hearing from across the country that there were internal reasons too. There are questions about the UML not being able to mobilize its organization and strength. Similarly, there are also doubts about whether we were able to provide fair chances to all party leaders. We have to discuss and analyze whether we paid sufficient attention and did enough homework while selecting candidates. But election results do show that our performances in Madhes have improved.

There have also been rumors of ‘intra-party’ betrayal.

I am not aware of such an incident, and I don’t know the situation of our party across the country. The primary factors behind UML’s poor election performance, as far as I can say, were the party split and the five-party alliance. 

Will this election’s outcome lead to the formation of another left alliance? 

In my view, two alliances will likely emerge in Nepali politics. The UML will lead one alliance and the Nepali Congress will lead another. Under our current electoral system, the chances of any one party getting a majority on its own are slim. In the previous elections, the erstwhile Nepal Communist Party received the majority of votes, but we failed to maintain the UML-Maoist Center unity. So I highly doubt that the upcoming elections will see that alliance’s revival. My personal view is that any political alliance should be based on ideology, policy, and concrete programs. 

It is obvious that if a left alliance were to be formed, it should be under the UML, which is the largest left force. But the current political circumstances are not favorable. The Pushpa Kamal Dahal-led Maoist Center and Madhav Kumar Nepal’s CPN (Unified Socialist) are against UML. In this scenario, a left alliance seems unlikely in the near future.

I think the UML should be prepared to contest upcoming elections alone. If it gets a majority it should form a government, if not, it should be ready to play the role of a responsible opposition. In the meantime, the party should also continue its efforts to forge a left alliance.  

Do you think a broad left alliance is a necessity?

The local-level election results clearly show the necessity of forging a left alliance on the basis of ideology, policy, and programs. We want such an alliance but the circumstances are not favorable right now. I am always in favor of an alliance based on a solid ideology and program. And the largest party should lead such alliances. But we are not following such a principle. Our politics went out of track soon after the restoration of democracy in 1990. After 1991, there was a sharp contradiction between the UML and Congress. What went wrong is that the UML aligned with Lokendra Bahadur Chand’s Rastriya Prajatantra Party, which had just 10 seats in the 205-member Parliament. The Nepali Congress, meanwhile, aligned with the Surya Bahadur Thapa-led faction of the Rastriya Prajatantra Party, which had even fewer seats in parliament. 

They were unprincipled coalitions, and weakened parliamentary democracy. We should not repeat such mistakes. 

Like Chand and Thapa after 1990, Pushpa Kamal Dahal has become a key character in fomenting political instability. He keeps changing camps. There should be alliances but all issues should be cleared before the elections. For instance, if an alliance led by UML wins, UML should be allowed to form a government under its leadership. In the same vein, if the Congress-led coalition wins, it should lead the government.  This issue should be cleared before forming an alliance. UML and Congress should not repeat the past mistake by putting fringe parties at the core of their alliances.

An American diplomat’s visit to Nepal this past week has created ripples in Nepal’s political and diplomatic circles following her meetings with some Tibetan refugees.

On May 21, Urza Zeya, the US Under-Secretary of State for Civilian Security, Democracy, and Human Rights, who is also the special coordinator for Tibetan issues, visited the Tibetan refugee camp in Jawalakhel, Lalitpur. Later that day she also went to Kathmandu’s Boudha, home to a large number of Tibetan refugees. 

The Ministry of Foreign Affairs in Kathmandu said it was unaware of Zeya meeting Tibetan refugees. But such a meeting here was expected, as Zeya had come to Nepal from India where she had also met refugee leaders as well as the Dalai Lama, the Tibetan spiritual leader.

Some political leaders, ex-diplomats, and bureaucrats criticized the government for allowing her to see Tibetan refugees, saying that it violated Nepal’s One-China policy. They were of the view that increased American intervention on Tibetan issues in Nepal could sour Kathmandu’s ties with Beijing.

Foreign relations experts, however, say Zeya’s visit to India and Nepal doesn’t indicate a change in the old US policy on Tibetan refugees.  

Upendra Gautam, general secretary at China Study Center-Nepal, says America’s policy on Tibetan refugees remains unchanged.

“There could be some changes in presentation but America’s core agenda is engagement with Nepal on Tibet,” he says. “Zeya’s recent visit may be an effort to convey the message that this policy remains intact.”

However, the US-China dispute over the selection of the Dalai Lama’s successor has made the issue prickly.

The verbal war between Washington and Beijing over Taiwan, Tibet, and human rights is escalating. Additionally, there is a pressure on the Biden administration to come clean on global human rights issues. Some American Senators are even urging Biden to invite the Dalai Lama to the White House.

As Tibetan issues fall under Zeya’s brief, say experts, it is not uncommon for her to visit Dharamshala, India, or Nepal’s Tibetan community. 

Gautam says it is up to our leaders to decide what exactly the country’s commitment to One-China entails.

The Biden administration had appointed Zeya as a special coordinator for Tibetan issues in December 2021. She has been tasked with “promoting substantive dialogue” between China and the Dalai Lama. Her main responsibility is to protect the human rights and fundamental freedoms of the Tibetan people. 

“She [Zeya] will promote respect for the human rights and fundamental freedoms of Tibetans,” US Secretary of State Antony Blinken had said during her appointment, “including their freedom of religion or belief, and will support efforts to preserve their distinct historical, linguistic, cultural, and religious heritage.”

As a Tibetan issue coordinator, this was her first visit to India and Nepal.

However, this is not a new post created by the US. The coordinator’s office, which is within the State Department, was established by the Tibetan Policy Act of 2002.

In her meeting with high-level government officials, Zeya and her delegation reportedly asked Nepal to help preserve “the distinct religious, linguistic, and cultural identities” of Tibetans living in Nepal. She also urged Nepal to respect Tibetan refugees’ right to peaceful protest.

Nepali officials, however, told the visiting US delegates that Tibetan refugees are being supported on humanitarian grounds, and that Nepal cannot provide them all the rights.

The US stand on Tibetan refugees in Kathmandu is articulated in its annual human rights report prepared by the State Department. In it, Nepal is accused of continuing to limit the Tibetan community’s freedom of expression through attempts to stop Tibetans from celebrating culturally important events.  

“Most Tibetan refugees who lived in the country, particularly those who arrived after 1990 or turned 16 after 1995, did not have documentation, nor did their locally born children,” the report says.

It further says that the Tibetan refugees are unable to legally obtain business licenses, driver’s licenses, bank accounts, or own property, and that some refugees resort to bribery to obtain these services.

The report also says that Nepal Police routinely detains Tibetans and raids the Tibetan Refugee Welfare Office. 

Zeya reportedly raised these issues in her meetings with the Nepali officials.

Nepal is preparing to provide identity cards to the Tibetan refugees, but this plan has been met with strong resistance from China.

Beijing fears that the current “West-friendly” government in Kathmandu could allow refugees in Kathmandu to increase their anti-China activities.

Just before the US delegation’s visit to Kathmandu, Chinese Ambassador to Nepal Hou Yanqi had met Home Minister Bal Krishna Khand and reminded him of China’s position on the Tibetan refugees.

The US side didn’t publicize Zeya’s engagement with the Tibetan community in Kathmandu.  The delegation had also met some human rights activists and Dalit lawmakers. Neither the US nor Nepal issued a formal statement on these meetings.

In recent times, America’s engagement with the Tibetan community has been further cemented after the US Congress in December 2020 passed a bill aimed at boosting American support for the Tibetan community in key areas. It includes the provision of sanctioning Chinese officials if they try to appoint the next Dalai Lama.

Built on the landmark Tibetan Policy Act of 2002, the Tibet Policy and Support Act addresses Tibetan human rights, environmental rights, religious freedoms, and the democratic Tibetan government-in-exile. The act states that the naming of the next Dalai Lama is the sole right of Tibetan Buddhists and there should be no interference in it from China.

The selection of the Dalai Lama’s successor is going to become a bone of contention between the US and China, with India likely to support the US position. China, meanwhile, has been insisting that the succession has to be decided within Chinese territory and that it has to have a say in the matter.

Similarly, the American Asia Reassurance Initiative Act of 2018 commits to providing a budget to nongovernmental organizations to support activities preserving cultural traditions and promoting sustainable development, education, and environmental conservation in Tibetan communities in Tibet Autonomous Region and in other Tibetan communities in China, India, and Nepal.

Ever since the formation of the Sher Bahadur Deuba government, the US and European diplomats have been seen engaging more and more with Kathmandu’s Tibetan community.

In the first week of March, on the occasion of Tibetan New Year, the ambassadors of many countries had participated in a special function organized in Lalitpur.

China, meanwhile, has been trying to crack down on the Tibetan activities in Nepal. Beijing’s concern over Tibetan refugees in Nepal increased particularly after 2008, when Nepal became a republic.

Given the fragile political situation in Nepal back then, Beijing was worried that anti-China activities could increase. China then took up the Tibetan refugee issue with Nepali political parties and started cultivating deeper ties with them.

That year, in the run-up to the Beijing Olympics, as the world’s attention was on China, Tibetans staged several protests in Kathmandu. Hundreds of demonstrators were arrested. The protests were followed by a series of high-level visits by Chinese officials to Nepal. China also beefed up security along its border with Nepal and imposed stronger restrictions on cross-border movements. A WikiLeaks entry from 2010 reads: “Beijing has asked Kathmandu to step up patrols… and make it more difficult for Tibetans to enter Nepal.” 

Foreign policy experts say the US may further push the issue of Tibet, but the heart of the matter is how Nepal independently deals with it without being influenced by either side. 

Rupak Sapkota, a scholar on Nepal-China relations, says latest high-level visits from the American side should not be viewed only through the prism of bilateral relations. The Biden administration has in fact been engaging the Indo-Pacific region through new initiatives and increased investment.

“Containing China remains at the heart of America’s Indo-Pacific-related policies, including the latest in the form of the Indo-Pacific Economic Framework. America’s growing engagement with Nepal is a part of its regional and global strategies,” he says.

He adds that Nepal should be cautious about “the genuine concerns of neighboring countries.” China has strongly reacted to Zeya’s meeting with Tibetan refugees in India and Nepal.

On May 19, Zhao Lijian, China’s foreign ministry spokesperson, said the US should honor its commitment to acknowledge Tibet as a part of China, and not support Tibetan Independence.

“It should stop meddling in China’s internal affairs under the pretext of Tibet-related issues, and offer no support to the anti-China separatist activities of the Dalai clique. China will continue to take necessary measures to resolutely safeguard its sovereignty, security, and development interests,” he said.

A Nepali diplomatic source says China has taken the US officials’ India and Nepal visits seriously.

“The Chinese side do not have any objections to greater economic partnership between Nepal and the US but in recent times the US has been trying to stir up China’s sensitivity while dealing with Nepal,” the source tells ApEx.

On the problems faced by Tibetan refugees in Nepal, the source adds that “China doesn’t recognize them as refugees”. Nonetheless, Nepal can engage in consultations aimed at addressing their health, education, and livelihood-related concerns. 

As Prime Minister Deuba prepares to jet off to Washington for an official visit sometime in July, “The Chinese side believes that Kathmandu should take Beijing into confidence while making any decisions on Tibetan refugees. China is preparing to seriously take up this issue with Nepal,” says the source.