The biggest blot on Matrika Prasad Koirala’s political career was the Koshi agreement. He constantly faced accusations of being “the Koshi seller”. Since 1954, Koshi daan (‘Offering Koshi’) to India has been a persistent political slogan in Nepal. The Nepali Congress is also associated with the Koshi agreement, although no one from the party was in the government when it was signed. In fact, when the agreement was signed on 24 April 1954, the Congress was barely on speaking terms with the Matrika-led government.

The agreement—signed by Mahabir Shumsher Rana, Nepal’s project development minister, and Gulzarilal Nanda, India’s planning minister—was about the construction of a dam to control the flow of the Koshi River. Preliminary study on the project had already begun during the Rana rule. The agreement became contentious as it was signed at a time when the Indians held strong sway over Nepal’s ruling circles, and particularly after Nepal failed to derive ‘significant benefits’ out of it. Matrika was very close to Indian Prime Minister Jawaharlal Nehru. He used to consult with Nehru on even minor issues and made decisions accordingly.

During monsoon, the Koshi River used to inundate the Indian state of Bihar, so India desperately wanted to build a dam. (The river is still known as ‘the sorrow of Bihar’.)

Matrika reasoned that if Nepal did not allow the construction of a dam in its territory, India would build one a bit lower down at Tedhibazaar and inundate Nepal. He was therefore eager to sign the agreement. But because Nepal could not offer an alternative to the engineering model suggested by India, the Indian proposal prevailed.

It seems the Indians badly misled their Nepali counterparts. Laxman Prasad Rimal, a secretary at the then canal and power ministry, has written: “The day before the signing of the agreement, we had clearly concluded that Nepal would hand over the Koshi barrage to India on a 99-year lease. Although the Indian side wanted it to be 199 years, we had agreed on 99. But later we found out that the formal agreement stated 199 years. I turned completely pale.”

According to Himalaya Shumsher Rana, the then finance secretary, “The Indians had made many demands regarding the execution of the Koshi barrage project. There was a provision that would completely hand over the dam’s maintenance to the Indians. We had maintained that such provisions would be unacceptable, but our ministers overrode our objections and signed the agreement.”

The technical aspects of the project were not thoroughly discussed. Many believed that the deal was signed hurriedly and unscrupulously. As a result of the Koshi agreement, Matrika could not establish himself firmly in the hearts of Nepalis.
King Tribhuvan had been to Switzerland for medical treatment, and his son Mahendra was in charge of governing the country. Mahendra was not happy with Matrika. Rumors about Matrika’s imminent ouster were circulating.

Matrika received assurances from Mahendra that he would not be ousted. And he believed it. But on 2 March 1955, as a cabinet meeting was taking place, a letter from the palace suddenly arrived. After reading it, Matrika remarked, “I’m no longer the prime minister and you’re no longer ministers.” Matrika was thus kicked out ignominiously.

Mahendra took over the country’s governance, arguing that “putting in place a competent cabinet that works in the country’s interest would require some time”. And when King Tribhuvan passed away in Switzerland a few days later, the reins of power fell completely into Mahendra’s hands.

Matrika never got an attractive position after that. With King Mahendra’s good graces, he did become a member of the Upper House a few years later. But he never stopped aspiring to the prime minister’s post. He kept spurring the monarch to impose direct rule on the grounds that the BP Koirala government (elected in 1959) was corrupt.

On 15 December 1960, King Mahendra did stage a coup against the two-third majority BP Koirala government. The Koirala family was scattered. Following the advent of the Panchayat regime, some Koiralas were in jail while others were living in exile. The palace kept using Matrika; he was appointed ambassador to the US. This was a curious turn of events as Matrika had already been a prime minister.

Subsequently, he was appointed a National Panchayat member on 11 June 1978—which was the only politically profitable position he got during the Panchayat era. But throughout that era, Matrika was considered a potential prime ministerial candidate. In 1985, he contested an election to the National Panchayat from Morang but was badly defeated. After that, he was no longer a part of the ruling circle.

Following the fall of the Rana regime, Matrika had become the county’s first civilian prime minister with great dignity. Subsequently though, he failed to maintain the same level of dignity as a leader. He died on 11 Sept, 1997.

Next week’s ‘Vault of history’ column will discuss King Mahendra and his lack of commitment to the democratic process

Matrika and BP were half-brothers. While Matrika was the son of Krishna Prasad Koirala’s first wife, BP, Tarini, Keshav and Girija were the sons of his second wife. Three members of this family ended up becoming prime
ministers.

The quarrel between Matrika and BP made the country unstable. In a sense, Nepal was locked in a political transition. In May 1952, a special convention was held in Janakpur, which turned into a battlefield of sorts because of the brothers’ jostle for party presidency.

A number of Congress leaders left not just the convention, but the party itself. Then Prime Minister Matrika realized that BP exercised total control over the Congress, so he did not dare file a nomination for party presidency. As a result, BP was elected to the post without difficulty. Still, Matrika imposed a condition that the party would not interfere with government functioning.

After the convention, two factions—led by Matrika and BP—were firmly established within the Congress, and the party came out strongly against the government. It demanded that the government be “solid, bold and substantive.” It even sought a cabinet reshuffle and sent its list of candidates. It applied pressure on the government to rid the cabinet of independent ministers and fill it entirely with Congress members. But the prime minister did not heed the party’s instruction.

The Congress did not take Matrika’s defiance lightly. Upon its instruction, a number of ministers—Subarna Shumsher Rana, Surya Prasad Upadhyaya, and Ganesh Man Singh—resigned. At the same time, Matrika Prasad Koirala, Mahabir Shumsher Rana and Mahendra Bikram Shah resigned from the party’s central committee—but not from the government. The Congress then issued a second instruction, enjoining its ministers to quit the government within 48 hours. But Matrika maintained that the party did not have the right to issue instructions without considering their “context, legitimacy and utility.”

Matrika did finally resign from the prime minister’s post on 10 August 1952. And he was no longer a general member of the Congress. His resignation meant that the prime minister’s post became vacant. Following this King Tribhuwan formed an ad-hoc government under his own chairmanship, excluding the Congress. For 11 months, the country was without a prime minister and was ruled directly by the monarch.

Matrika formed a separate party—the Rastriya Praja Party—after he left the government and the Congress. The health of King Tribhuvan, a heart patient, was deteriorating and he was having trouble governing the country directly. He wanted to bring the prime ministerial system back. But BP was not in his good books. The king openly expressed his desire to pick someone from a small party. He made indirect accusations against the Congress and its leaders that they were mired in personal and partisan issues and had failed to formulate a national vision.

He argued that the number of votes did not determine a party’s strength and announced the formation of a government led by the Rastriya Praja Party. As a result, Matrika became prime minister for the second time on 15 June 1953. Eight months later, the cabinet was reshuffled and it included Keshar Shumsher Rana, Dilli Raman Regmi, Tanka Prasad Acharya and Bhadrakali Mishra, among others.

Unlike in his first term, Matrika did not enjoy strong political support, only the king’s good graces. He started blindly accepting every instruction of King Tribhuvan and his Indian advisor Govind Narain. It was natural for the Congress to dislike his cabinet, but even other parties did not approve of it.

To keep Matrika happy, the palace also bestowed upon him the title of an honorary general of the Nepal Army on 9 July 1954. Matrika was over the moon. The post of an army general was still confined within the Rana family. Although Matrika’s post was honorary, he appeared in military attire in Tundikhel to take the salute—something that drew flak from political quarters.

To please the palace, Matrika coined a term—‘Maushuf’. On 7 August 1953, less than two months after being appointed prime minister for the second time, he issued an instruction to use ‘Maushuf’ to refer to Shree Panch Maharajadhiraj and the royal family. Soon the usage became legally binding. Earlier, the Nepali term of respect—‘Wahaan’—was used to address royal members. Now that the monarchy has been abolished, the term ‘Maushuf’ has been consigned to the womb of history.

Next week’s ‘Vault of history’ column will discuss the Koshi agreement and the subsequent downfall of Matrika Prasad Koirala

5 Nepal and BRI

APEX Series

EVOLVING NEPAL-CHINA RELATIONS

 1 Post-1950 turning points (April 5)

2 The 2016 transit and transport treaty (April 19)

3 China’s relations with political parties (May 3)

4 Defense ties (May 17)

5 Nepal and BRI (May 31)

  It has been six years since Chinese President Xi Jinping announced his signature foreign policy project, the Belt and Road Initiative (BRI). And although successive Nepali governments have committed to the BRI, Nepal is yet to select specific projects under it.

Three reasons

Observers and political leaders point out at least three reasons for the delay. First, there were frequent government changes from 2013 to 2018. There has been insufficient time for preparations and no particular government has dared to take the risk of selecting projects. A year after Xi Jinping announced the BRI in 2013, the Nepali Congress President Sushil Koirala-led government made a commitment to join it, but other than making promises, there was little progress, until 2017. Toward the end of the tenure of the erstwhile UPCN (Maoist) Chairman Pushpa Kamal Dahal-led government, and a few days before the first BRI conference in Beijing, Nepal and China signed a Memorandum of Understanding (MoU) on 12 May 2017 in Kathmandu. The MoU envisions mutually beneficial cooperation between Nepal and China on the economy, environment, technology, and culture. According to the MoU, major areas of cooperation are policy exchanges, financial integration as well as infrastructure, trade, and people-to-people connectivity.

But soon after the MOU was signed, a change in government in Nepal and its preoccupation with polls stalled progress in selecting BRI projects. Progress has been limited even after the formation last year of a stable government led by Nepal Communist Party Chairman KP Oli, who has blamed other parties for not implementing the deal with China.

Second, in the face of relentless pressure from India and western countries not to join the BRI, successive Nepali governments have found it hard to take firm decisions. In the initial years, India argued that as the China-Pakistan Economic Corridor (CPEC), a flagship BRI project, passes through a disputed territory, it would encroach on India’s sovereignty, to which Nepal should be sensitive.

The third reason is lack of homework on the funding modality and other bureaucratic issues.

Dominant debate

In Nepal, railway has dominated the discourse around the BRI. A high-level government official says instead of centering all efforts on railways, smaller and more feasible projects should have been prioritized. Reportedly, the Chinese side has also suggested that Nepal select viable projects and complete them on time rather than focus on large ones.

Of late, Nepal has tried hard to assure China that it is fully committed to implementing projects under the BRI. In April, President Bidya Devi Bhandari participated in the second Belt and Road summit in Beijing. A joint communique mentions the Nepal-China Trans-Himalayan Multi-dimensional Connectivity Network, including the Nepal-China cross-border railway.

That was the first time a specific Nepali project was mentioned in official BRI documents. But it is still not listed among the deliverables. Only a pre-feasibility study has been completed and the two countries are yet to agree on a feasibility study, which will pave the way for preparing a Detailed Project Report. The pre-feasibility study has identified some topographical difficulties. Amid heated debate in Nepal about the necessity and difficulties of the Keyrung-Kathmandu railway line, Chinese Ambassador to Nepal Hou Yanqi recently said that the construction of a cross-border railway line, though important, would take time. “This is not the kind of project that can be completed in a few years. Owing to the difficult geography, construction is not going to be an easy job,” she said.

Nepal has officially decided that it wants to focus on the connectivity and energy components of the BRI projects. It had earlier selected 36 projects under the BRI, which have now been trimmed down to nine. Almost all political parties agree that Nepal should derive maximum benefit from China’s economic development, mainly through the BRI framework. While Nepal is asking for grants, China says that projects under the BRI should be by and large loan-based.

Loan or grant

But there are fears that a poor country like Nepal may not be able to pay back those loans, which some scholars have described as ‘a debt trap’. There are reports of South Asian countries like Pakistan and Sri Lanka facing debt problems with China, even as there are divergent views within those countries about the issue. Many say the debts are a result of the countries’ internal problems, and not a trap deliberately set up by China.

China maintains that the debt trap narrative is pure propaganda. “There is no instance of a country falling into a debt trap for its participation in the BRI. Quite on the contrary, it is by participating in the BRI that many countries have escaped the trap of no development,” said Ambassador Hou Yanqi.

There also are concerns about transparency in projects under the BRI. Reports of rampant corruption and environmental degradation resulting from the construction of the BRI projects have emerged. China, however, has been vehemently countering such arguments, which was one of the main objectives of the second BRI summit.

“In pursuing Belt and Road cooperation, everything should be done in a transparent way, and we should have zero tolerance for corruption. The Beijing Initiative for Clean Silk Road has been launched, which represents our strong commitment to transparency and clean governance in pursuing Belt and Road cooperation,” Chinese President Xi Jinping said in his statement. Unlike in the past, he also countered arguments about environmental degradation.

“We need to pursue open, green and clean cooperation. The Belt and Road is not an exclusive club; it aims to promote green development. We may launch green infrastructure projects, make green investment and provide green financing to protect the Earth which we all call home,” he said.

Although Foreign Minister Pradip Gyawali has publicly said that negotiations are underway on the investment modality for the BRI projects, there has been minimal discussion on this issue. In fact, issues about funding modalities have been a major obstacle to signing specific projects. While Nepal prefers some grants, China would largely offer loans for BRI projects. Observers seem unsure about the difference between taking a loan from China and from, say, the Asian Development Bank or the World Bank. Experts are of the view that Nepal should conduct a thorough risk analysis before selecting projects under the BRI and accepting loans for them.

4 Defense ties

APEX Series

EVOLVING NEPAL-CHINA RELATIONS

  1 Post-1950 turning points (April 5)

2 The 2016 transit and transport treaty (April 19)

3 China’s relations with political parties (May 3)

4 Defense ties (May 17)

5 Nepal and BRI (May 31)

 As a part of his policy of expanding the scope of Nepal’s foreign policy, King Mahendra, particularly after the 1962 India-China war, started reaching out to western countries for military assistance. Western countries, mainly the US and the UK, responded positively to Mahendra’s request for military assistance, and in 1964, Nepal signed an agreement with the US, under which the Americans agreed to provide logistical support to the then Royal Nepal Army. Subsequently, the UK also started providing some military assistance to Nepal. India was already a major defense supplier to Nepal. Since 1950, Nepal and India have also been awarding the Army chiefs of each other the honorary rank of General in recognition of the harmonious relationship between the two armies.

Three countries—India, the US and the UK—have long been Nepal’s major defense partners, both in terms of grant and sale, and have helped meet the requirements of the Nepal Army (NA). But in the last three decades, there have been many changes in Nepal’s defense cooperation. China has emerged as another major defense partner.

Recent engagement between the two countries suggest China is all set to overtake Nepal’s traditional defense partners. Observers say these changes should be viewed both from domestic and international angles. First, Nepal’s internal political changes are conducive to enhancing ties with China on all fronts, including defense collaboration. Second, China has taken assertive steps to expand its military influence in neighboring countries.

Since the establishment of diplomatic relations between Nepal and China in 1955, the armies of the two countries have had cordial ties. Although Nepal and China signed an understanding on military cooperation in 1988, bilateral defense cooperation gained momentum mainly after King Gyanendra’s royal takeover in 2005, and particularly after the abolition of the monarchy in 2008. For instance, on 24 Oct 2005, China pledged military assistance worth $989,000 to Nepal, primarily to curb the Maoist insurgency.

Between 2001 and 2005, the Nepal government also purchased military hardware from India, the US, the UK and Belgium to fight the rebels. But after the 2005 royal takeover, India, the US and the UK suspended their military aid to Nepal, demanding the restoration of democracy. The NA faced a shortage of military hardware to be sent to its peace missions abroad.

In order to address its security interest in Nepal after the abolition of the monarchy, China adopted a policy of deepening collaboration with Nepal’s security forces. Officials from China’s People’s Liberation Army (PLA) started cultivating relations with Nepal’s defense minister and army chief—something which continues to date. In June 2017, China handed over the National Armed Police Force Academy, which it built, to the Nepal government. In the handover ceremony, then Chinese Ambassador to Nepal Yu Hong said, “China is always willing to conduct pragmatic cooperation with Nepal in the field of talents, development and national security.”

Even before 1990, both Nepal and China had made efforts to enhance military collaboration, but those moves were opposed by India. In 1989, Nepal bought anti-aircraft guns, medium range SSM, and AK- 47 rifles from China—much to the chagrin of India, which argued that the purchase goes against the spirit of the 1950 Peace and Friendship Treaty. After the restoration of democracy in 1990, during the visit of interim Prime Minister Krishna Prasad Bhattarai to New Delhi, Indian officials asked him why the Nepal government purchased weapons from China. “Because we got them cheap and India did not meet all our requirements,” Bhattarai reportedly told the Indian officials.

After 1990, the defense collaboration between Nepal and China did not gain much momentum. However, Nepal continued to convince India that it has the right to purchase military hardware from third countries. Along with regular military assistance from China, it would be worthwhile to discuss some vital developments that contributed to increased military cooperation between the two countries in the past decade.

After the first Constituent Assembly (CA) elections in 2008, then Defense Minister Ram Bahadur Thapa signed an agreement in December 2008 with China on military assistance worth $ 2.6 million for the modernization of the NA. After that, Chinese military officials, including the PLA chief, have continued to visit Kathmandu. A close analysis of trends shows that soon after the formation of a new government in Nepal, either China invites our defense minister for a visit or high level Chinese officials come to Kathmandu. In the case of the NA chief, there is a tradition of visiting India first after assuming office.

Another turning point, according to observers, is the Indian blockade in 2015-16. First, the PLA heavily supported Nepal’s rescue and recovery efforts. Second, political parties have reached a consensus that collaboration with China in defense, like in other sectors, should be enhanced.

Two vital developments in 2017 deepened the military cooperation between Nepal and China. After a long hiatus, Chinese Defense Minister and State Councilor Chang Wanquan paid a three-day visit to Kathmandu in March. He announced a grant assistance of $ 32.3 million to Nepal, to be spent on building Nepal’s capacity to deal with natural calamities and purchasing equipment for Nepali peacekeepers deployed in conflict-affected areas.

In the same year, the armies of the two countries conducted the first-ever joint military drill, paving the way for further collaboration. After the formation of the new government led by Nepal Communist Party (NCP) Chair KP Sharma Oli, Deputy Prime Minister and Minister for Foreign Affairs Ishwor Pokhrel visited China in October 2018. During the visit, Pokhrel and Chinese State Councilor and Defense Minister Wei Fenghe signed a Memorandum of Understanding (MoU). “Minister Pokhrel mentioned the importance of military co-operation in military training, hardware in humanitarian and disaster management, and medical equipment and peace-keeping operations, and requested for Chinese support in establishing Defense University in Nepal,” reads a press release issued by the Nepali Embassy in Beijing after the visit. As per the agreement, China increased its military support by 50 percent to strengthen Nepal Army’s capability in disaster management and to better equip Nepal’s UN peacekeeping missions. China also announced an assistance worth RMB 150 million (Rs 2.53 billion) for the NA for the next five years. Nepali army officials say the relationship between the two armies is cordial.

“The Chinese side always respects Nepal’s sovereignty, which has helped make relations cordial,” says former NA Spokesperson Brigadier General Deepak Gurung. For instance, even when Tibetan rebels were conducting raids inside Tibet from Mustang back in the 1950s and 60s, the Chinese PLA had asked Nepali security forces to take care of the problem rather than get involved itself.

Today’s collaboration between the NA and the PLA, Gurung says, should be seen in the larger context of China opening up and its assertive foreign policy. “There have been many changes, mainly after the restoration of democracy in 1990, and also after 2008,” he told APEX.

Observers say growing Chinese military influence should be understood in the larger context of the Science of Military Strategy unveiled by China in 2013, which talks about developing a modern and capable military. “China has since been assertive in all areas of foreign policy, including military diplomacy,” says Deepak Prakash Bhatta, a military affairs expert.

Vital milestones

• Bilateral military cooperation started in 1988

• Nepal purchased military hardware such anti-aircraft guns, medium range SSM, and AK- 47 rifles among others in 1989

• Soon after the royal takeover in 2005, China pledged military assistance of $989,000 to Nepal to fight the Maoist insurgency

• In December 2008, Nepal and China signed an agreement on military assis­tance worth $ 2.6 million for the modern­ization of the Nepal Army

• In 2009, China agreed to provide military aid worth 20.8 million Yuan (approxi­mately Rs 220 million)

• In 2011, during his visit to Nepal, then Chi­nese Army Chief Chen Bingde announced military aid of $7.7 million for the Nepal Army

• In June 2013, Nepal and China agreed to construct the National Armed Police Force Academy during Chinese State Councilor Yang Jiechi’s visit to Kathmandu

• In 2017, China pledged an assistance of $32.3 million to the Nepal Army

• In 2017, Nepal and China began the first ever joint military drill, which was a major turning point in bilateral defense cooper­ation• In October 2018, China announced to pro­vide an assistance worth RMB 150 million (Rs 2.53 billion) to the Nepal Army for the next five years