Nepal: Shaped by foreign powers

Foreign policy is but an extension of domestic policy, goes an old Bismarckian saying. The current Nepali regime found the axiom relevant enough to include in its new foreign policy document. But in our case, could the opposite be as true? Could Nepal’s domestic politics be but an extension of its foreign policy? 

India has had a major—if not the decisive—role in each of contemporary Nepal’s major political changes. Back in the late 1940s, without the Indians getting worried about the prospect of the communist China gobbling up Nepal (after Tibet), perhaps it would not have given refuge to King Tribhuvan and backed Nepali democratic forces against the reigning Ranas. The 1989 border blockade had a big role in the removal of absolute monarchy in 1990. Pretty much the same story of active Indian intervention has been repeated in more recent times.

New Delhi set the terms of the 2005 12-point agreement—the precursor to all recent progressive changes. In 2015, India blatantly intervened in Nepal’s constitutional process, pushing the Nepali prime minister into China’s open arms. This marked the start of China’s unprecedented sway in Nepal. In fact, whenever Kathmandu has felt threatened by the south, it has invariably looked north for succor. 

The Nepali Congress internalized the ideals of independent India’s founders and the party has since had a soft spot for the largest democracy in the world. Nepali communists, naturally, borrowed heavily from Chinese and Soviet Marxists. Now they are in thrall to a faux-communist capitalist state. It says much that the Nepal Communist Party might not have existed without the Chinese looking for a new permanent friend in Nepal. Having invested so much, China has also sought to actively shape Nepali politics, much like India has done for all these years.

Nepali monarchy survived for so long following its restoration in 1950 because it was mighty useful to China. It died partly because its existence started threatening core Indian interests. The precariously placed, landlocked country has thus had to chop and change its institutions and politics in tune with changing Indian and Chinese interests. 

Look at our important national issues today: Kalapani, high-speed rail, hydropower development, tourism, remittance—they all depend on outside actors, mostly India and China. Nepali elections are won by demonizing India; the government formed thereafter tries to cover its incompetence by appeasing China. 

Isolated in his own party, KP Oli is again looking to secure his twin chairs by cultivating the Indians. But the rest of the NCP is still firmly in the Chinese camp. Nepali Congress, meanwhile, has taken upon itself to push the American MCC compact. In one way or the other, our domestic political actors are inviting foreign meddling as befits them.  

In this cloudy climate, it is impossible to gauge whether domestic politics influences foreign relations or vice versa. For instance, is Oli reaching out to India to save his chair? Or it is a case of India wanting to mend bridges with Oli, an old (if estranged) friend, as China tightens its grip on Nepal? China stitched up the NCP and now wants to forestall its split, an effort with as yet unclear ramifications for Nepal.   

In this interconnected world, it is hard for any country to remain unaffected by outside developments. But Nepal, primarily by the virtue of its unique geography, remains more vulnerable to foreign headwinds.

On Nepali op-ed writers

Are our opinion writers being true to the big responsibility they hold? This is a tricky question for a columnist to broach. I now have the challenge to settle it without a hint of self-aggrandizing superiority. 

As a columnist, I like to believe that op-ed columns influence how readers think about the issues discussed. But there are people who question whether editorials, columns, and op-eds, the output of arm-chair thinking as they like to call it, really matter. Some argue that people are so deeply invested in political affiliations and affected by personal experiences, they rarely change their stance. And, further, the political insiders who wield a disproportionate influence on policy outcomes hardly get influenced by mere columnists like us. But still, I am using this column to talk about the state of our op-eds, which, to a large scale, represent the state of our intelligentsia.

A case in point is a recent upsurge in pro-monarchy protests all over the country. As far as I know, preparations for them got under way long time ago. Influencers sympathetic to Hinduism and monarchy were being contacted all over the country, asked to be prepared for a ‘big show' in near future, and a strong effort at channelizing the dissent was underway.

The incident of Dolakha Bhimeshwar Mahadev idol's 'perspiring' was utilized to rake up the protests. There is a strong belief in Nepal that sweat beads appearing on that idol is a sign of some great upheaval in the country’s politics. It's a rare phenomenon, happening only once in decades. In the past, whenever that happened, the King used to carry out a Kshama Puja, seeking forgiveness from the god to be saved from the fury.

This definitely was the best setting to launch a protest in favor of monarchy. And the first protest was launched around a month back, a day after the 'sweat beads' appeared.

People are frustrated with the present state of affairs in Nepal. And they trust very few politicians. But do people then really trust the ex-king? If yes, what has swayed the opinion in his favor, in the past 14 years, from the time he had to submit to the democratic parties?

Not only had Gyanendra become unpopular because of his authoritative moves, his son, Crown Prince Paras's reckless behavior had also turned public sentiment against the monarchy. As it is, there was a large section of people who believed that Gyanendra and his family was somehow linked to the massacre that killed late King Birendra’s family.

But there has been an upsurge of opinions in national newspapers recently in favor of the monarchy. The beauty of op-eds is that they take a clear stand. That, there are arguments in favor of or against a particular issue, whether politics or policy related. But most of the opinions in our newspapers seem to disregard that even opinions have to be fact-based. And to ensure that is the duty of our editors.

Let's discuss something that has a strong correlation to the pro-monarchy rallies. Dec 15 this year marked the 60th anniversary of the coup by King Mahendra. On 15 Dec 1960, Mahendra had sacked Nepal's first parliament and democratically formed government, and jailed the towering leader, BP Koirala. Naturally, this season of the year is flooded with opinions about Mahendra, BP, Panchayat and the coup.

Let's now compare three pieces published recently in Nepali newspapers around this topic. An op-ed in Kantipur daily by Saurabh gave Koirala the title of ‘fifth Beatles’. A difficult read as always—given the writer’s penchant for splattering disjointed references threaded loosely to prove his point—the aim of this piece seems to be to dispute BP’s view as a ‘self-claimed towering figure’ in his autobiography, and to accuse the Congress of forever relying on the crutch of that biography. But Saurabh touches a low when he announces that Congress is a party born to be in the opposition as power is unlucky for it. 'Unlucky', that's right, you read it correct.

In the same daily, Shankar Tiwari wrote another op-ed which tried to establish that Mahendra was power hungry, struck with inferiority complex due to the ‘Super Human’ BP's personality and hence staged the coup. Better than Sourabh's astrological prowess, this article tried hard to re-establish the official line of Nepali Congress at a time support for monarchy has been rising from the ashes. But this piece also fails to quote credible sources for all the dramatic events from the bygone era that has been used to prove the points. The reader can either trust the writer blindly or assume the sources.

Another interesting take on the topic is by Raamesh Koirala, published in the Naya Patrika Nepali daily. In a long piece, written in a nonchalant tone, Koirala disregards the personality conflict theory, and tries to establish that the coup was a result of geopolitical compulsions. Having touched upon the matter-of-fact details of the era, he says BP couldn't prove himself to be a better choice than Mahendra for India and the US. But, in a zest to prove his point that nothing but Machiavellian calculations count in politics, he states that the Tribhuwan Highway was made more meandering and difficult as King Tribhuwan had sold out to India.

While these arguments seem plausible, and are a perfect pitch for a gossip conspiracy theory session, stating something without proof in a national newspaper, I believe, violates some sort of professional decency.

Why are we fretting over these details? After all, opinions are just opinions! This has been the attitude of our editors and writers alike, whenever I have tried to discuss these issues.

But democracy survives on informed decisions by the masses. And unless the opinion makers believe in the big onus that's on their shoulders, it will be near impossible to stop this downward spiral of decadence we face today.

As with most questions of human behavior, the evidence of opinion columns changing opinions is mixed. But there can be no doubt that ideas matter—that powerful messages conveyed in compelling ways can change the course of political debates, movements, and elections.

And of course op-eds matter. So much so that no newspaper is complete without them. But are our op-eds keeping up with the radical upsurge in the standards and expectations of our readers?

Nepal’s elusive foreign policy consensus

Communists easily cotton to ‘contradictions’, as is again seen in the just-publicized foreign policy framework of Nepal. Perhaps the central contradiction in this 31-page document is the contention that Nepal can have a workable foreign policy only with a level of political consensus. Efforts will hence be made to take opposition parties and intellectuals into confidence on vital foreign policy issues. Yet the same document acknowledges that it will be a tough task. 

Concomitantly, the new foreign policy outlook will purportedly help realize the Nepal Communist Party’s election slogan of ‘Prosperous Nepal, Happy Nepalis’. Other political parties will naturally shun an electoral slogan as a tenet of the country’s foreign policy. As it is, after the all-round failure of the Oli government in two and half years, the slogan has become bit of a joke. The government would have done well to quietly drop this NCP shibboleth than continue to hype it up and invite further ridicule. 

Again, as the document avers, consensus in foreign policy will be hard to get. But is it even possible? When Nepali political commentators, including this writer, talk of the importance of such consensus, are they being realistic? In the true spirit of dialectic materialism, let me this time argue against the likelihood of such foreign-policy consensus, as desirable as it may be.  

We hear of other more ‘successful’ countries in the international arena having such consensus. But is that true? The two main political parties in the most potent democracy in the world cannot even agree on America’s enemy number one. The Democrats say it is election-tampering Russians; for the Republicans, there could be no bigger villain than IP-stealing Chinese. The former want to bolster global alliances, the latter think it is better to go it alone; the first group to save global climate, the second to sustain local coal-miners. 

What about India, does it have a basic political consensus on foreign policy? Hardly. The BJP and the INC are forever at loggerheads over the best way to deal with China. Interestingly, promoting engagement with Pakistan has become toxic for either party, not because the ruling and opposition parties see eye-to-eye on the Islamic republic. The BJP has rather successfully demonized Pakistan in the public eye, to an extent it would be politically suicidal for the INC to advocate any kind of Indo-Pak truce. But don’t they at least agree on the neighborhood? The official foreign policy wing of INC describes Modi’s ‘Neighborhood First’ policy as ‘Neighborhood Lost’ policy. Thanks to Modi’s misguided ways, the “long-held perception of India as a friendly ally has taken a major hit in Nepal”.

In fact, realistically, only one-party states like China, Vietnam and North Korea have such broad foreign policy consensus. For smaller South Asian democracies, the major foreign policy contradiction remains how to best balance India and China, with domestic forces in these countries bitterly divided over which of these regional giants should be favored.  

As KP Oli seeks rapprochement with the BJP leadership—Prachanda is reportedly warning his NCP acolytes that the Nepali prime minister has already sold his soul to the RSS, and is backing its Hindu-state restoration agenda in return for the longevity of his government—we are all being forced to reevaluate the NCP’s ‘pro-China’ image. Rest assured: If Oli goes India’s way, China will quickly find his replacement as its trusted power center in Nepal. 

Even if our domestic actors were willing, the big outside powers won’t allow such foreign policy consensus that cramps their own room for maneuver in this increasingly important geopolitical hotspot.

Nepali MSEs over banks

“Who should get more support from the state and who less?” is a classic conundrum generations of public policy scholars have contemplated. Nepal government’s Covid-19 emergency response in the form of relief and stimulus packages has been channelled through different state entities, adding another layer of confusion at the recipients’ side. The Nepal Rastra Bank (NRB) has allotted NPR 200 billion in refinancing facility for this fiscal. Most of the allotted resources is to be distributed as per the recommendations of commercial banks and less on case-by-case basis. Only 10 percent of the total allocation is being distributed through microfinances as refinance facility. This makes us question the policy choices about the utilization of financial resources in the pandemic that has hit the poor people the hardest.

Most financial resources that were supposed to be distributed through microfinances are for micro and small enterprises (MSEs). These enterprises are at the bottom of the country’s business pyramid and they need support in these tough times. All the losses of the micro and small industry are directly slapped on low-income people who are without other financial cushions. As it is, the NRB has allocated 70 percent of the total refinancing amount to be distributed as per loan requests through commercial banks and another 20 percent on a case-by-case basis.

There are significantly more Nepali borrowers reliant on microfinances rather than on commercial banks for loans. If we look at the nature of the loans, most loans from microfinances are for subsistence whereas loans from commercial banks are for various higher-end purposes. Businesses running with loans from commercial banks certainly contribute more to the GDP. But should the NRB prioritize high-revenue businesses when millions of lives at the bottom of the economic ladder have been devastated? Take for instance the case of the struggling dairy industry. Around 500,000 households are engaged in the sector, investing around Rs 25 billion.

Micro and small enterprises play a critical role in creating job opportunities and are considered an effective vehicle for economic empowerment at the grassroots level. But government efforts are not focused on advancing the micro and small industry. But more support to this industry could save thousands of micro and small enterprises across the sub-sectors, particularly in agriculture. The sector alone employs around 70 percent of the country’s folks, and most of their jobs are linked to micro and small enterprises one way or the other.

Globally, the role of MSEs in the economy is increasing and they now represent about 90 percent of businesses and more than 50 percent of all employment. The importance of MSEs is much higher in developing countries like Nepal where one major hurdle they face is access to finance. Against this backdrop, the government decision to allocate only minimal amounts in their support in this crisis suggests the insensitivity of policymakers to the poorest and most vulnerable sections of the society.

This is just an example of how policies hurt poor people, those who do not have resources or capacity to lobby. Presumably, the central bank works more in favour of commercial banks as they are easier to control and bargain with. But it must revisit its modus operandi and listen to voices and concerns of small businesses and microfinances as well. Or it will be forfeiting its obligation to the poorest sections of the society towards which it should be the most responsible.