Could you shed some light on the much-discussed Nepal-China strategic partnership?

During Xi Jinping’s Nepal visit, the two countries agreed to elevate their ‘comprehensive economic partnership’ to ‘strategic partnership’. China is very clear about the strategic partnership with Nepal. First, it is not an alliance. In Chinese foreign policy, we never seek alliance with other countries; this is a fundamental of our policy that everyone should understand. Strategy in my understanding means China has put Nepal in its foreign policy priority. It is also about long-term relationship for broader economic cooperation.

There is skepticism in Nepal that such a partnership could be transformed into a security alliance?

As I said, the strategic partnership with Nepal does not have any security and defense implications and it is all about enhancing economic collaborations.

What are the other issues related to this strategic partnership?

By strategic partnership we want to emphasize that we have given importance to Nepal. Both sides should discuss the areas of focus like agriculture and infrastructure based on mutual consultations. There are several areas on which two countries can work together.

In the second informal summit between Chinese President Xi and Indian Prime Minister Modi in October, China pushed the ‘China-India Plus’ concept. What does it actually entail?

This means having consensus between China and India to jointly promote economic development in this region. This is not limiting, like the idea of trilateral cooperation, which is about three countries. There could be four-side or five-side cooperation. The Plus formula is multi-lateral cooperation and not limited to China, India, and Nepal.

Does it mean India and China would consult each other before big infrastructure projects in Nepal?

It is about benefiting from each other’s competitive advantage. India has its own comparative advantage. China is competent in infrastructure, and China also has plenty of financial resources. In big projects you have to combine all sides, combine all comparative advantages. In Afghanistan, this concept is already being implemented. India and China are together training young diplomats there. In the second informal summit in India, Chinese President Xi and Indian Prime Minister Modi have agreed to extend this cooperation in other regions such as Africa and South East Asia.

Will India-China Plus minimize possible conflict between India and China in Nepal?

Of course. This concept entails enhancing economic cooperation in this region. It is not only about big projects but all types of cooperation.

But does not the ‘Plus’ concept minimize Nepal’s role?
Again, China-India Plus is not only about trilateral co-operation. It could also be multilateral. When I was in Dhaka, some experts there said that Bangladeshis do not want to be clubbed under Plus. I fully understand such feelings. But we can also have China-Nepal Plus; or China, India, US Plus Nepal. There is no problem.

Is this Plus concept confined to economic and infrastructure issues or does it also touch security issues?
It is limited to economic cooperation. No security policy or defense policy here.

In Nepal, the railway with China is often a subject of intense debates. What are the prospects of Chinese railway coming to Nepal?

We have a bright future for connectivity projects. Now, I think railway still has many technical problems because of the high mountains. There are also chances of earthquake in the proposed area. We have to go through studies and choose best options. We should not hurry to build a railway line. We have to move ahead carefully as this connectivity is for long term; not for one day or one year.

Nepal has already signed up to China’s Belt and Road Initiatives (BRI) but there are continued concerns over debt trap.

The debt trap diplomacy terminology was actually coined by Indian scholar Brahma Chellaney, famous for his hostile view of China. He coined this term in 2017 just before the first Belt and Road Summit in Beijing. The debt trap is a misnomer. See Bhutan. Many Indian companies have invested in hydropower projects there and Bhutan is struggling to pay back the loan. But no one talks about any debt trap there. This is pure propaganda.

What about the modality of investment in the proposed railway with Nepal?

The multi-dimensional connectivity concept includes highways, railways and opening more border points. Nepal can use Chinese airports too. Investment modalities are still up for discussion.

Nepal is already in the BRI but India is yet to join it. How optimistic are you that India will come around?

It is clear that India will not join the BRI in the near future. India has given some reasons on why BRI is bad for it. India is ready for economic cooperation but it does not like the label of BRI and we are flexible on this as well. But rest assured there will continue to be great economic cooperation between the two countries.

How does China view the border dispute between Nepal and India?

The Spokesperson of China’s Ministry of Foreign Affairs has clarified on this. China has not taken any position on it and we are hopeful that India and Nepal can settle it through peaceful negotiations. China also prefers to settle boundary disputes through peaceful means. We resolved our boundary dispute with Nepal in 1961 so there is no dispute between the two countries. India has also encroached on some Chinese territory in its new map.

Two Madhes-based parties, the Rastriya Janata Party Nepal (RJP-N) and the Samajbadi Party Nepal, have prepared a blueprint for their long-delayed unification. And following the unification (if it happens) another round of Madhes movement may be in the cards.

The two parties have also reached a tentative agreement to adopt a twin leadership model, whereby there would be two presidents—one from each party. On the ideological front, there has been an agreement to embrace the principle of socialism with a focus on marginalized groups.

But despite these agreements something is still preventing the merger. Many party insiders say the only stumbling block now is Upendra Yadav's refusal to leave the government. “The unification will take place when Yadav quits,” says Keshav Jha, General Secretary of the RJP-N.

“Both the sides realize that without a united force of the Madhesi and other marginalized groups we cannot exert sufficient pressure on the government to amend the constitution,” he adds. But Yadav’s withdrawal from the government is one of the RJP-N’s preconditions to unification.

In a recent meeting of the Samajbadi Party, senior leader Baburam Bhattarai apprised party members of the progress so far in the unification process. “There have been discussions in the party. But we need not decide in haste,” says party general secretary Ram Sahaya Yadav, who is close to Upendra Yadav.

Although pressure seems to be building on Yadav to quit the government, he is not in a mood to do so immediately. “As another big Madhes movement is unlikely soon, Yadav has calculated that it would be beneficial to stay put,” says a Samajbadi Party leader requesting anonymity. Yadav has reportedly told party leaders that the party should exert pressure on amendment from the streets, the parliament, as well as the government.

Common cause

The two parties have also agreed to form a bigger alliance of identity-based political forces. According to leaders from the two parties, the next movement would be held under the banner of Rastriya Mukti Andolan. By accommodating Janajati and other forces that felt betrayed by the 2015 constitution, they plan to form a political force that provides an alternative to the ruling Nepal Communist Party as well as the main opposition Nepali Congress.

Amending the constitution remains a key political demand of the Madhes-based parties. The first amendment in January 2016 partially fulfilled their demands, but they have continued to push for another. But chances of another amendment in the near future appear bleak; the ruling NCP, which holds a two-third majority in the federal parliament, is not committed to it. That is why the Madhes-based parties wish to forge a united front and launch a street movement to exert pressure on the government.

There have been several rounds of talks between the government and the Madhes-based parties, but negotiations have broken down of late. Leaders of the Madhes-based parties say they supported the government with the belief that PM Oli would address their demands. “We haven’t had talks with the government on constitution amendment in recent months,” says Jha.

In public forums, Oli says the constitution can be amended ‘on the basis of necessity’ without further elaboration. NCP co-chair Pushpa Kamal Dahal is more receptive than Oli to the demand for an amendment. But a big section of the party, mostly comprised of the erstwhile CPN-UML leaders, is rigid. They seem confident that it is difficult to launch another Madhes movement as Madhesi leaders themselves govern Province 2.

The Madhes-based parties, meanwhile, are planning protests in the Tarai and in Kathmandu starting April 2020.

Many foreign policy experts in India are quoted as saying that there is no alternative to dialogue on Kalapani. Those who don’t want to be quoted tell a different story. As Kalapani is strategically important to India, they suggest, Nepal should not ‘politicize’ it. 

In other words, Indian troops are unlikely to leave Kalapani. Says a senior Indian Ministry of External Affairs official, “As Kalapani is a tri-junction, China can use it to monitor our activities across the border. So Kalapani is far more important to us than other disputed areas such as Susta.” New Delhi won’t relent also because it suspects China’s hand in the current anti-India protests in Nepal.

Meanwhile, Nepal says it has ample documentary evidence to prove its ownership of Kalapani. The Oli government is busy working out how best to proceed. Once it makes a decision, Nepal will seek a high-level engagement with India. Nepal will make its case for Kalapani; as will India. There is no other way out of this than through a healthy back and forth. It is also about time this old sore in Nepal-India ties is removed once and for all.

But, heck, it won’t be easy. Arrayed against India’s ‘national security’ will be Nepal’s ‘territorial integrity’. These are not issues that lend themselves to easy compromise. Even if the top leaderships of the two countries are willing, a backlash from other stakeholders back home would be all but certain. Even though the state is also led by the BJP, the government of Uttarakhand where Kalapani has been placed will protest. Back in Nepal, anything short of complete removal of the Indian troops will be seen as a betrayal, and the NCP-led government is in no mood to give the opposition an inch of the ‘nationalist niche’ it successfully carved in the 2017 elections.      

That does not mean Kalapani is unsolvable. As the bigger power and the instigator of the current dispute, the onus is on India to make the first concession, however painful. If it does, India could quickly win back the goodwill of Nepalis, India’s natural religious and cultural brethren. Such a gesture will also make it easier for Nepal to negotiate. Given PM Narendra Modi’s strong hold in India, there is little he cannot do with a bit of clever statesmanship.

The knotty Kalapani mess unlikely to be sorted soon

“Demarcation of two short segments of our boundary with Nepal—Kalapani and Susta—is yet to be completed. Of these, Kalapani is strategically important, since it determines the tri-junction between India, Nepal and China,” said V.P. Haran, a former Indian ambasador to Bhutan and Afghanistan, at a 2017 discussion organized by the Indian Ministry of External Affairs at the Central University of Tamil Nadu.

Haran’s views reflect those of the Indian establishment, which argues that Kalapani is crucial for India from a security point of view and ‘it should not be politicized’. This essentially means India is not ready to withdraw its troops from there.

There are plenty of historical documents that show Kalapani is Nepali territory. As Foreign Minister Pradeep Gyawali says, “We have sufficient evidence that Kalapani is ours. Voting had taken place in Kalapani in the 1959 parliamentary election. The area was included in the national census of 1961. And the Nepal government had collected revenue from the Kalapani area in the same period.”

Yet Kalapani has been a bone of contention between Nepal and India for around six decades due to the presence of the Indian security forces there since (at least) the 1962 Sino-Indian War. Successive Nepali governments—whether royal or democratic—have requested India to remove its security camps from Kalapani, to no avail. It remains a political agenda for Nepali leftist parties; it is also an election agenda for the politicians of the Indian state of Uttarakhand whose map now includes the territory.

Earlier this month, India published a new political map which showed Kalapani as Indian territory, sparking controversy and strong protests in Nepal. Although preparations are underway to hold Secretary-level meeting on the issue, officials from both the sides have told APEX that it can only be resolved at the highest political level—if at all. “Several times in the past, the two sides have realized that the issue should be addressed and dealt with politically, so negotiations at a bureaucratic level cannot yield results,” says a former Indian ambassador, who recently served in Nepal, on condition of anonymity.

He says that although Kalapani and Susta have been political tools in Nepal, no Nepali politician has taken it up seriously with the top Indian leadership in recent times. “There is this tradition of just mentioning this issue in joint statements,” he adds.

Gordian knot

But even such political-level talks are unlikely to easily succeed. In the view of another senior Indian Ministry of External Affairs official who deals with Nepal, “As Kalapani is a tri-junction, China can use it to monitor our activities across the border. So Kalapani is far more important to us than other disputed areas such as Susta.”

Even the ex-envoy acknowledges that “withdrawal of troops from there will have an adverse effect on our national security, so the issue should not be politicized and exaggerated.”

Nepali politicians and officials, however, dismiss such logic, and argue that India cannot occupy Kalapani for the simple reason that it belongs to Nepal.

The Indian security establishment started taking Kalapani even more seriously after the Doklam standoff in 2017, not least because of some troubling noise from China. In August 2017, when the Doklam crisis was at its peak, Wang Weni, Deputy Director General of the boundary and ocean affairs department of the Chinese ministry of foreign affairs, had said, “India has many tri-junctions, what if we use the same excuse [that Indian troops used to enter Doklam, a territory claimed by both Bhutan and China] to enter the Kalapani region between China, India and Nepal…?” Soon after this statement, media reports in New Delhi indicated that India had increased its vigilance in areas around Kalapani.

‘Nepalese encroachment’

Following the protests in Nepal over the 2015 India-China bilateral statement on trading through the tri-junction of Lipulekh in Kalapani, the Indian side had informally floated a proposal before Nepali leaders to resolve the Kalapani issue with land swaps. India has adopted the same formula to settle border disputes with Bangladesh. Nepali leaders, however, rejected the proposal as Kalapani is purely Nepali and not disputed territory.

Kalapani is a political agenda in India as well. The ex-Nepal envoy believes Indian politicians are ready to resolve this issue but there is a public perception in India that Kalapani is Indian territory—even as Nepalis strongly believe India has encroached upon their land. “Given this scenario, finding a solution will be very difficult and time-consuming. It is a highly emotional and sensitive issue that top politicians of the two countries need to tackle prudently,” the former ambassador advises.

This sensitivity has often been reflected on the floor of the Indian parliament. On 26 July 2000, then member of Lok Sabha and current Chief Minister of the state of Uttar Pradesh, Yogi Adityanath, questioned Jaswant Singh, then Indian Minister of External Affairs, about reports of the efforts to resolve the Kalapani issue amicably. Singh replied, “There is a difference in perception between India and Nepal on the boundary alignment in the western sector of the India-Nepal border, where the Kalapani area is located.” Singh said the Indian government was aware that some people might exploit such differences in perception between two friendly neighbors.

On 7 December 2000, some members of India’s Rajya Sabha asked Ajit Kumar Panja, then Minister of State for External Affairs, again about media reports on talks between India, Nepal and China to settle the Kalapani dispute. In response, Panja doubted the veracity of such reports.

Then, on 6 December 2007, border issues were again discussed in the Indian parliament. Pranab Mukherjee, then Minister for External Affairs, pointed the finger at Nepal: “The shifting of course in Susta region of the Gandak River, the mid-stream of which formed the boundary as per Treaty of Sugauli of 1816, has resulted in claims/counterclaims by both sides in this segment. Government is constantly monitoring the situation with a view to prevent encroachments by the Nepalese side.”

Dragon dragged in

Some Indian officials and scholars claim that the issue of Kalapani has been complicated after Nepal tried to bring China into the matter. Says Nihar Nayak, a New Delhi-based expert in Nepal-India relations, “Officially, Nepal brought the issue before India after the signing of the Mahakali treaty in 1996.” India at the time assured Nepal that the issue would be resolved through a joint technical committee, which was formed in 2002. Six years later, the issue was once again discussed between then Indian External Affairs Minister Pranab Mukherjee and his Nepali counterpart Upendra Yadav. “Reportedly, on both occasions, Nepal indirectly hinted that China should be included in the negotiations,” adds Nayak.

But foreign secretary Madhu Raman Acharya says he is unaware of Nepal ever seeking Chinese assistance to resolve the issue. “In fact, China says it is a bilateral issue that must be resolved between Nepal and India,” he told APEX. China has remained silent and Chinese media have largely ignored the recent Kalapani dispute.

“I don’t know why China should be dragged into the matter if the dispute is between Nepal and India,” says Bhaskar Koirala, Director of the Nepal Institute of International and Strategic Studies. “I believe the issue should be resolved by Nepali and Indian experts in a technically sound manner. There is no need to stage demonstrations in front of the Indian embassy. That is a wrong approach.” 

How did you see the recent US report?

The US comes up with such reports on an annual basis, and its reports are considered credible, given the huge American investment in security and intelligence. The US has been publishing various reports on Nepal for a long time. This time, they emphasized two issues. Their findings on the TIA is trustworthy and objective. But I do not completely agree with the US assessment of the activities of the Indian Mujahideen. But we cannot dismiss these findings casually.

The Indian Mujahideen was somewhat active here at one point, but the situation has improved. Our security forces have been able to curb their activities. 

You say the report cannot be dismissed. How then should we deal with the threats?

Our security forces should be aware and alert about the possible presence of terrorists in Nepal. First, there are flaws in the TIA’s security arrangements. Second, we have an open border with India. The report also states that the open border has been misused for human trafficking, trans-border crime, terrorist activities, drugs and arms trafficking. During the insurgency, more than 90 percent of the total arms had been smuggled into Nepal. The government and security agencies need to accept the US report as a source of information and carve out an appropriate policy to preempt possible terrorist acts. Similarly, coordination among security forces needs to be improved.

You said the concerns over the TIA were credible. How so?

I do not completely agree with the report but there are some security lapses at the TIA. We have had a plane hijacked from our airport and there are frequent reports of smuggling of gold and drugs from the TIA. 

Some claim the US brought out the report to justify bolstering its security presence in Nepal.

As a superpower that tries to impose its hegemony, the US has been active in Nepal too. Such tendencies are more prevalent in South Asia. American focus shifts constantly. In different years, it has focused on different countries such as Afghanistan, Nepal, Pakistan, Bangladesh, the Maldives and Sri Lanka. Somehow, there are always some terrorist activities taking place in South Asia so regional and international threats constantly emerge from the region. If there are regional and global security threats emanating from Nepal, global powers will obviously play here.

During Chinese President Xi Jinping’s visit to Nepal last month, Nepal and China agreed to elevate their bilateral relation to a strategic level. How do we read this agreement?

For the first time in Nepal’s diplomatic history, Nepal has signed an agreement of strategic partnership with a country, although the document says that such a partnership is only for economic purposes. There are mainly two types of partnership in bilateral relationship: comprehensive economic partnership and strategic partnership. While the former deals with social, economic and cultural issues, the later includes strategic, defense and security components. A comprehensive partnership is elevated to a strategic partnership if the countries feel the need to cooperate in strategic, defense and security areas. First, there is a diplomatic relationship between two countries. An upgrade of the diplomatic relationship results in a comprehensive economic partnership, and the elevation of a comprehensive partnership leads to a strategic partnership. If two countries collaborate further on defense-related issues, they opt for an alliance.

Does strategic partnership with China go against the principles of Nepal’s foreign policy?

Till date, Nepal is committed to non-alignment, Panchsheel and the UN charter. Until Xi’s visit, Nepal had not forged a strategic partnership with any country. A strategic partnership contradicts the norms and values of non-alignment and other fundamentals of Nepal’s foreign policy.  Nepal is sandwiched between two emerging powers. We are naturally closer to India than to China in terms of geography, culture, economy, transit, communications, etc.
 

But the government has clarified that the strategic partnership is purely economic in nature and Nepal will soon have similar agreements with India and other countries.

Yes. Right after Xi’s visit, Prime Minister KP Oli said Nepal would sign a strategic partnership with India as well. But how many countries can you have strategic partnerships with? What does strategic partnership mean? It seems that we are talking about strategic partnership without knowing its crux.

How would you relate the IPS and our strategic partnership with China?

The US has said it would have strategic partnerships with Nepal and Sri Lanka. But Foreign Minister Pradeep Gyawali has repeatedly said that Nepal will not join the IPS. On the one hand, Nepal is repeatedly expressing its dissatisfaction with the IPS. On the other, we are forging a strategic partnership with China.

What are the chances of a full-blown alliance with China?

First, the strategic partnership was forged without any preparations on the Nepali side. Second, the Chinese wanted to sign an extradition treaty in Xi’s presence. Third, if you read Xi’s article published in Nepali newspapers prior to his visit, you see that he had emphasized a defense partnership. Fourth, in 2017 China came up with a document much like the IPS titled ‘China’s Policies on Asia Pacific Security Cooperation’ and it has recently come up with a white paper on the same. Both the documents mention defense cooperation with neighboring countries.

If you sign a strategic partnership, you have to be ready to discuss security and geopolitical issues. In the future, China may force us into an alliance citing common security threats. What will Nepal do if China proposes an alliance, with the argument that the two countries have common security threats? We agreed to a strategic partnership without any homework on its long-term implications. This is a major shift in Nepal’s foreign policy.
 

How do the US and India see our new strategic partnership with China?

After Nepal signed on to the BRI in 2017, there have been changes in the American and Indian approaches to Nepal. They have not officially commented on the Nepal-China strategic partnership. But ever since Nepal signed on to the BRI, there has been a series of visits by top US officials, who have all shown concerns over the BRI, a debt trap and Chinese investments in Nepal. There is a view in Delhi and Washington that the communist government in Nepal tilts toward China. It seems they are now preparing a counter-strategy.

The IPS aims to minimize Chinese influence in Nepal and both India and the US want to maintain their sway. Therefore, India and the US could adopt a more aggressive Nepal policy in the coming days. There are signs of an escalation in the rivalry between India, China and the US after the strategic partnership. In fact, Nepal has invited such escalation. I see the possibility of increasing strategic rivalry in Nepal. Such a tussle does not serve our national interest. In the past, we were too close to India, and now we have got too close to China.

A seemingly mysterious power-sharing agreement between KP Sharma Oli and Pushpa Kamal Dahal has been in the news since the unification of the erstwhile CPN-UML and CPN (Maoist Center) in 2018. The agreement is apparently about who leads the party and the government and for how long.

Former UML leaders, including Oli, want to either hide or downplay it, going so far as to publicly claim there is no such agreement. Whenever somebody makes a statement to that effect, a miffed Dahal immediately sees Oli and reminds him of the deal. An uneasy truce prevails after Oli assures Dahal he will honor the agreement. But another disagreement soon surfaces.

The implementation of such an agreement depends partly on what second-rung leaders of the party make of it. This week APEX explored the understanding and positions of some second-rung leaders of the ruling Nepal Communist Party (NCP) on the power-sharing deal. When it comes to the agreement, the second-rung leaders are clearly divided into two camps: those belonging to the former UML and those from the former Maoist Center.

Former Maoist leaders claim that Dahal has repeatedly briefed them on the ‘gentleman’s agreement’ with Oli. One such leader, requesting anonymity, said,  “In the final days of the unification talks between the two leaders, Dahal had informed us of an agreement on leading the government on an equal basis—meaning Oli would hand over the reins of power to Dahal after two and half years.”

Room for compromise

As far as leading the party is concerned, former Maoist leaders say there had been a deal to chair party meetings on a rotational basis, but Oli has been presiding over such meetings himself, much to Dahal’s chagrin. The leaders suggest there is room for compromise if Oli hands over party chairmanship to Dahal.

“It is unnecessary to change the country’s premiership in the middle of the five-year term if Oli agrees to hand over party chairmanship to Dahal,” says a former Maoist leader close to Dahal. He adds that Dahal has time and again said there is no need for a rotational prime minister system if he gets full responsibility to run the party. Leaders close to Dahal have hence advised him to claim party chairmanship (rather than prime ministership) in order to penetrate deeper into party organizations.

Some UML leaders, however, say they do not know of any gentleman’s agreement between Oli and Dahal; others are of the view that agreements of such nature should be presented in official party platforms.

Deputy Prime Minister and Minister for Defense Ishwar Pokhrel has been fiercely opposing the gentleman’s agreement. He has repeatedly said in public forums that the party does not recognize the deal between Oli and Dahal, if there is such an agreement in the first place.

In light of the opposition by Pokhrel and some senior leaders, Dahal has started reaching out to former UML leaders to solicit their support in implementing the deal. Just after Dashain, for example, Dahal held a long conversation with Pokhrel. But Pokhrel maintains neither Oli nor Dahal has informed him of the agreement. Pokhrel and other leaders close to senior leader Madhav Kumar Nepal say the gentlemen’s agreement between the two chairmen should be an official party agenda.

Party capture

According to sources, some former UML leaders are also trying to bring PM Oli and senior leader Nepal closer in order to sideline Dahal. The likes of Ishwar Pokhrel, Shanker Pokhrel, Som Prasad Pandey and Rajendra Pandey, among others, want to see a reconciliation between PM Oli and Nepal. They fear Dahal and his team could capture party structures ahead of the NCP general convention, and are of the view that Oli should not bequeath the party’s legacy to a former Maoist leader. Still, whether Oli’s successor would be a former UML leader or a Maoist remains a matter of speculation.

NCP leader Devendra Poudel, who is close of party co-chairman Dahal, believes PM Oli is committed to the gentlemen’s agreement, and it is rather “some second-rung leaders who are provoking him into repudiating the deal.”

Senior leader Madhav Kumar Nepal has not publicly opposed the agreement. But at the same time, Nepal himself wants to lead the party and is likely to clash with Dahal over the matter. Nepal says both Oli and Dahal should inform party leaders and cadres about the gentleman’s agreement.

Other NCP senior leaders like Jhala Nath Khanal and Bam Dev Gautam have not publicly opposed the agreement. And even as many former UML leaders want them close, Nepal’s relationship with PM Oli has instead soured. PM Oli’s nomination of seven province heads without consulting the party rank and file has further irked Nepal.

With Oli’s heath condition worsening, he will face greater pressure to hand over party responsibilities to Dahal. But Oli seems undeterred by his frail health and is in no mood yet to resign from the posts of the PM and the party chair.

While he was in Singapore for medical treatment, PM Oli had entrusted Dahal with the responsibility of chairing party meetings for the first time since party unification. Dahal had used this opportunity to consult a wide range of NCP leaders. Oli had back then apparently almost agreed to hand over all party responsibilities to Dahal but had backtracked following intense pressure from party insiders.

Restless ramblings

This has left the former Maoist supremo chomping at the bit. Dissatisfied with the delay in handing him total control of the party, Dahal vented his ire at a recent program in Banke district. He assured local businessmen that all their demands would be fulfilled “as soon as I become the prime minister.”

Generally, Oli and Dahal jointly chair party meetings, although the former is dominant. As the party structures are dominated by former UML leaders and cadres, Dahal faces the challenge of making his leadership acceptable to them.

NCP leader Deepak Prakash Bhatta, who is close to senior leader Nepal, says there is no reason for dissatisfaction. “We still have 10 months to implement the deal. The pact was reached between two individuals, but its goal was to facilitate party unification. So I do not foresee any obstacle,” he says. Bhatta adds that the party unification process at the provincial and local levels has been smooth, and it would not be hard to reach a power-sharing agreement at the top.

Another leader close to Nepal, however, says there would be no objection to Dahal assuming temporary leadership until the general convention, but Dahal’s election as chairman from the convention floor is still uncertain. But the leaders close to Dahal claim the power-sharing deal would be applicable even after the general convention.

The strategic interest in Nepal seems to be growing by the day, be it the interest of India, China, the US, or the Europeans. But our prime minister was recently in Baku to take part in the NAM Summit. How do you see these twin developments?

On the issue of NAM, it has to account for its own relevance. First, consider the nomenclature. Non- aligned against whom? This is the big unanswered question. The moment we say non-alignment, it means non-alignment with certain powers. It was at the time of Cold War when certain countries came together under the visionary leadership of leaders like Nehru, Sukarno and Tito that the NAM was created. They thought of a group that would not align with the US or the USSR. But after the Cold War, there are no more two superpowers. So why nonalignment? Second, in the multi-polar world, countries like India and China are coming up and there is a larger space for Germany and Brazil, and Russia is resurgent. In that context, where is NAM going to be?

Third, we are hanging on to a past relic. This was also evident in India’s approach. PM Narendra Modi has already skipped two NAM summits. This year he sent a ceremonial vice-president. We also sent our vice-president to the previous NAM summit. This time, despite his ill health, PM Oli decided to attend himself. It was taxing on his health because it was a very short trip. We have not been able to sell the idea that the head of government himself has to participate. But, yes, the summit gives you a platform to interact with global leaders and to forge personal ties with other heads of government and heads of the state.

The Oli government says it adheres to NAM principles as it is still not aligned to any big power, for instance the US, China or India. Can’t non-alignment be defined that way?

Well, it can be. This year’s NAM summit took place in Azerbaijan in the Caucasus. We don’t have any embassy in the Caucasus. So it was a good opportunity to understand the Caucasia region and Central Asia. Those countries have a lot of energy and gas which could be brought to South Asia. If we aspire to expand our foreign relation we can think of new embassies in Central Asia. The countries there should also be encouraged to open embassies here. That way the summit in Baku was an opportunity to expand the horizon of Nepal’s foreign policy. But there was no interaction between Nepal and those countries.

But PM Oli saw it fit to meet the Venezuelan President, didn’t he?

This government has tried to have good relations with countries with left governments. It was evident during the PM’s visits to Vietnam and Cambodia, and in his meeting top leaders from North Korea and Venezuela.

But don’t you think it is still a good idea for comparably smaller powers like Nepal to band together under NAM to protect their interests against the big powers? 

But by sending its vice-president, India has signalled that NAM is more a ceremonial body. So it has significance, it has history, but it is more ceremonial, and has more of a symbolic value. We could have done a similar thing. But the fact that our executive prime minister participated in the summit obviously gave us an opportunity to interact with global leaders. But as far as the utility of NAM is concerned, it is diminishing very fast.

Again, what about the idea of smaller countries coming together to safeguard their interests?

We no longer live in a bipolar world with two superpowers and are slowly entering a multi-polar world.  As I mentioned earlier, there is resurgence of Russia, India and China. The US under Trump shows some unpredictability but right now it is nonetheless the sole superpower. I do not think NAM’s current leadership is up to handling the challenges of this multi-polar world. NAM was initiated by some visionary leaders but they are now all gone. The current NAM leaders do not have that kind of international personality. For NAM to be significant, it has to have an economic component as well. Also, if you look at multilateral institutions like United Nations, WTO, and NAM, they are facing a problem today because everybody is now talking about ‘my country first’. The United Nations is having a serious fund-crunch. There are reports that it may not be able to pay its staff. If the UN is so neglected, does NAM stand a chance?

One concept that is closely linked to NAM is Panchasheel. After his return from NAM summit, our Foreign Minister said Panchsheel principles like peaceful coexistence and sovereignty are still relevant for Nepal.

Panchasheel was actually mooted between India and China for their peaceful coexistence. I have a slightly different take on it. Indo-Nepal relations go back to the time of Ram and Sita, and much before Panchsheel was even thought of. So how can we have India-Nepal relation based on Panchsheel?  Second, our constitution says that our foreign policy is based on the UN charter and Panchsheel, and so we apparently have to abide by it. But we have to look at the practical side of things as well. Our relations with both India and China date back to pre-historic times. Now, we are trying to build connectivity through railway, roads and optical fibers. There is now a direct flight between Kathmandu and Beijing. Foreign policy parameters are also changing. We should not get bogged down with old concepts like NAM.

But NAM is also a platform for Nepal to assert its sovereignty. Our prime minister for instance got prominent space in Baku.

Yes, we have to be active in these multilateral organizations but let us make sure we also have correct representations there. Our diplomats are also highly qualified, not only to project our international image but also to ensure that our economic needs are met.

Who is setting Nepal’s foreign policy priorities right now?

It is the prime minister. It is a top-heavy structure. All vital positions are occupied by Nepal Communist Party. Do NCP leaders have expertise in every field, from economics to literature, from academicians to foreign policy, virtually everything? This is where the problem lies. It looks like NCP does not need expertise from outside.

In the end, how to you evaluate the foreign policy of Oli government in its 20 months in office?

There are both plus points and minus points. The plus points are: the visit by Chinese President Xi Jinping which took place after a long hiatus, the government pushing hard for better connectivity with both the neighbors, Nepal being heard and taken seriously by foreign partners because we have become more active, and the visit by Foreign Minister Pradeep Gyawali to Washington.

On the minus side, the core issues remain. Nepali flights are still banned in European countries. Even though Visit Nepal Year is approaching we have not been able to solve this issue. Our foreign missions remain inactive and there is no clear ToR of some embassies. Regarding Indo-Nepal relation, why has the EPG report not been submitted to the two prime ministers? Why couldn’t we have provided for submitting the final report to the two foreign ministers instead? Some of these core issues  remain unsettled.

As the UN Security Council deadline for the repatriation of all North Korean workers draws closer, a senior US government official says Nepal is making ‘good progress’ in implementing the Dec 22, 2017 Security Council resolution. As per the resolution, Nepal will have to repatriate all North Korean workers by the last week of December this year.

Speaking to media persons on the condition of anonymity, the US government official added that Nepal is on course to meet the deadline. “It is gratifying that Nepal government is taking steps and cooperating with both US government and UN officials to implement sanctions,” he said. In the second week of June this year, Mark Lambert, US special envoy for North Korea, had visited Nepal to take the stock of progress on Nepal’s part. During his stay, he had met lawmakers, government officials as well as ruling Nepal Communist Party Co-chair Pushpa Kamal Dahal.

According to Nepali officials, Lambert had expressed concerns over North Korean workers and the businesses they ran in Kathmandu. The ruling NCP, however, is divided over cracking down on North Korean activities in Nepal. Many in the party believe that as bilateral relation between Nepal and North Korea is on track, the activities of North Koreans in Nepal should not be restricted. But, as a UN member, Nepal is obliged to implement the UNSC sanctions.  

The US official also discussed the possibility of cyber-attacks by North Korean hackers to steal money from Nepali banks.  The Americans believe North Korean hackers have stolen at least $1.1 billion in a series of attacks on global banks over the past four year, of which $81 million was taken from the central bank of Bangladesh in February 2016. “As other South Asian countries may face the same problem we are ready to support their banks protect themselves from hackers,” the official added.

The UN panel on implementation of sanctions is investigating North Korea’s evasion of financial sanctions to illegally transfer funds from financial institutions and cryptocurreny exchanges, according to a UN report. According to it, such cases were reported in Bangladesh, Chile, Costa Rica, Gambia, Guatemala, India, Kuwait, Liberia, Malaysia, Malta, Nigeria, Poland, Republic of Korea, Slovenia, South Africa, Tunisia and Vietnam.  

A senior official at the Ministry of Foreign Affairs of Republic of Korea also pointed to possible cyber-attacks from North Korea as a major challenge other countries. On Nepal’s part, US officials say they are ready to help it enhance its cyber capabilities. 

Earlier, during his visit to Kathmandu in May this year, acting Deputy Assistant Secretary at US State Department’s Bureau of South and Central Affairs, David J Ranze, had taken up this issue with Nepal. Similarly, the same issue figured in Foreign Minister Pradeep Gyawali’s visit to Washington in December last year.  

The UN and the US are both concerned that North Korea nationals continue to work in several countries with the goal of generating funds for North Korean nuclear and ballistic missile programs. In order to monitor the status of sanction implementation, UN had formed an expert panel. 

After pressure from US officials, Nepal instructed nine companies with North Korean investment to close down and take back their investment after liquidation of their companies. Nepal has also informed North Korea that it is not going to issue any business visa to its nationals after October-end, 2019. 

Available evidence suggests many countries have not done enough to send back North Korean workers. There is also a tendency of changing the North Korean companies’ names to evade sanctions. 

For at least a year North Korea has been at the forefront of global discussions and media coverage in light of its recent engagement with the US, even though the engagement has not helped in the denuclearization of North Korea. Similarly, there have been several rounds of talks between North Korea and South Korea. The ongoing diplomatic engagement, however, has helped reduce tensions in the Korean peninsula.

“The two leaders also agreed to expand ‘China-India Plus’ cooperation, push forward facilitation of regional inter-connectivity, and work with other related parties to strike the Regional Comprehensive Economic Partnership (RCEP) agreement as early as possible.”

This is part of a statement provided by Chinese State Councilor and Foreign Minister Wang Yi in Beijing on October 13. The two leaders in the statement refer to Chinese President Xi Jinping and Indian Prime Minister Narendra Modi. But there has been no official response to Yi’s claim that the two leaders agreed to expand China-India Plus cooperation.

But what is the ‘China-India Plus’ concept anyway? No publicly available official document explains it in detail. It came to the fore after the first Xi-Modi informal summit in April 2018 in Wuhan, the capital of the Chinese province of Hubei. The summit had taken place against the backdrop of a 73-day-long standoff between India and China over Doklam, which, strictly speaking, was a bilateral issue between China and Bhutan. India had still deployed its army there on Bhutan’s behalf, stating that any changes in Doklam’s status would affect its security.

In the aftermath of the standoff, China proposed the China-India Plus cooperation in order to minimize the conflict between the two countries over smaller South Asian states. It was also an acknowledgement by the Chinese that India is the dominant power in South Asia, so they need to take the Indians into confidence while pursuing vital infrastructure projects and entering into military and other cooperation in the region. In other words, India is always an important consideration in China’s relations with South Asian countries.

Again, the Doklam issue seems to be the trigger for the China-India Plus concept, which envisions that India and China will be mindful of each other’s sensitivities and security interests in South Asia. During the Wuhan Summit, Xi and Modi agreed to implement joint economic projects in Afghanistan. Last year, they together launched a training program for Afghan diplomats in New Delhi.

China pushing

Nepal’s situation cannot be compared with that of Afghanistan, but India is obviously concerned about the growing Chinese influence here, particularly about big Chinese infrastructure projects. China thus wants to implement the Plus concept in Nepal in order to minimize the risk of confrontation with India over development projects here. Many reckon Xi’s decision to fly to Nepal from India—as opposed to coming here from China directly—indicates Beijing’s desire to execute this concept.

During Prime Minister KP Oli’s visit to China, Xi briefly shared with him the discussions he had had with Modi about the Plus concept. Xi and Modi also discussed it during their second informal summit in Mamallapuram, a coastal town in the south Indian state of Tamil Nadu, and Xi then shared it with Nepali leaders in Kathmandu. In return, Oli reportedly told Xi that Nepal is in favor of trilateral cooperation, but not the ‘two-plus one’ model. The Chinese side, however, is pushing for it.

PM Oli has rejected this proposition. In an interview with Kantipur, a Nepali daily, he argued that partnerships should be formed on the basis of equality. Experts also think Nepal should not accept this proposal, as it weakens the county's bargaining power with its two giant neighbors, and affects its sovereignty in that it undermines Nepal’s ability to deal independently with India and China on vital infrastructure and development projects. China is keen on the ‘two-plus one’ model as it wants to launch key projects in Nepal, such as the construction of a railway line, by taking India on board. China is also eager to invest in hydropower plants in Nepal and export energy to the Indian market.

Security over economy?

What about trilateral cooperation though? The idea of India and China collaborating on Nepal’s development is not new. Trilateral cooperation has been under discussion for about a decade; co-chairman of the ruling Nepal Communist Party Pushpa Kamal Dahal has been speaking about it since 2010. But how does it differ from the China-India Plus cooperation?

“China-India Plus cooperation entails the two countries taking each other into confidence while developing any projects in Nepal. The goal is to address each other’s concerns in Nepal,” says Pramod Jaiswal, Senior Fellow at the Institute of Peace and Conflict Studies, a Delhi-based think tank. “Although China-India Plus sounds similar to trilateral cooperation, the two are different. Trilateralism suggests equal share of all three countries and is more economic in nature, whereas the Plus concept is primarily security-driven,” says Jaiswal who has penned a book on trilateral cooperation.

“Genuine cooperation between China and India in Nepal is relatively easy to achieve, and there are multiple ways to do so, one example being a railway line connecting the three countries,” says Bhaskar Koirala, Director at the Nepal Institute of International and Strategic Studies. “The main argument here from a Nepali perspective is that sustained cooperation between its two neighbors in Nepal would almost certainly constitute the key ingredient for the country’s long-term stability and prosperity,” Koirala says. He adds that trilateral cooperation is not a concept proposed by the Chinese, but one that originated in Nepal, so the Nepali side should take its ownership. “I definitely agree that trilateral cooperation is much better for Nepal than the China-India Plus concept,” he says.

Hope and reality

Indian foreign policy experts and commentators, however, claim there is no possibility of India joining hands with China in Nepal. At a summit in Goa, India in 2016, then Prime Minister Pushpa Kamal Dahal had met with Modi and Xi together. Dahal had projected the meeting as a manifestation of trilateral cooperation.

The Indian Ministry of External Affairs quickly batted down any notion that it was a trilateral meeting, saying it was only a coincidence that the three leaders happened to share the same space. This clearly indicates India’s lack of interest in trilateral cooperation—and it will not materialize without India’s buy-in.

China, however, seems open to both the Plus concept and trilateral ideas. “China can invite India to join China-Nepal cooperation projects and develop China-Nepal-India trilateral cooperation. This will not only enhance trust, but also increase the economic value of the cooperation projects,” wrote Long Xingchun, Director of the Center for Indian Studies at China West Normal University, in an article published in the Global Times on October 13.

“For example, if the three countries can cooperate in hydropower generation, Nepal’s resources, China’s funds and technology and India’s huge market can be leveraged together.” As China-India strategic trust has increased, Nepal, he further argues, can use Chinese and Indian resources to promote its own development and act as a bridge linking the two nations.