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Foreign Minister Narayan Prakash Saud held talks with US Secretary of State Antony J Blinken in Washington, DC on Monday, focusing mainly on matters of bilateral, regional and international concerns, including the Millennium Challenge Corporation (MCC) compact, bilateral cooperation in multilateral forums and the unfolding situation in the Mideast. 

The high-level talks in the American capital, which come in the wake of a series of visits by senior US officials to Nepal, bear special significance, also because opportunities for Nepal’s foreign ministers to engage in bilateral talks with the US are relatively rare.

Before Saud, his predecessor, Pradeep Kumar Gyawali, had held official meetings with the then American Secretary of State Mike Pompeo in 2018. However, Foreign Minister Gyawali’s visit courted criticism as some leaders within his own party accused him of aligning with America’s Indo-Pacific Strategy (IPS). Importantly, there has been no reciprocal visit by a US Secretary of State to Nepal since Colin Powell’s visit in 2002.

Matthew Miller, spokesperson at the Department of State, said Saud and Blinken highlighted the ‘recently launched $500m Millennium Challenge Corporation Compact that will build infrastructure, increase access to electricity and support cross-border power trade.’ The Nepali Embassy in Washington stated in a press release that Secretary of State Blinken expressed the US wish to “see Nepal as a strong and prosperous democracy”.

The two sides also exchanged views on Nepal-US cooperation in multilateral forums, and other matters of regional and global concerns, including the situation in the Mideast, per the statement. The United States and Nepal established diplomatic relations in 1948, and the US has consistently been Nepal’s largest donor country. US policy objectives in Nepal have revolved around the promotion of a peaceful, prosperous, resilient and democratic nation, observers say. 

Over the past decade, American engagement with Nepal has substantially increased, notably seen in increased financial support through USAID and MCC, technical assistance in trade, deepened cooperation in security and defense, humanitarian assistance and disaster response.  This expansion in cooperation is reflected in the growing number of US visits to Nepal, according to the experts. 

A growing rivalry between the US and China, the Russia-Ukraine conflict, the US withdrawal from Afghanistan, climate change and other global concerns have prompted the US to intensify its engagement with Nepal. To counter the growing influence of China in the Indo-Pacific region, the US introduced the IPS, first unveiled by the Trump Administration in 2018 and further developed by the Joe Biden administration in 2022.

A vital role in the Indo-Pacific

Although Nepal is not explicitly mentioned in the IPS, the Trump administration recognized Nepal's potential central role in the Indo-Pacific in 2018. As a result, Nepal is considered a high-priority country in the region for US policymakers. Nevertheless, Nepal has consistently maintained that it does not intend to become a part of the IPS, despite all bilateral cooperation and assistance between Nepal and the US operating within its broader framework.

A key US priority in Nepal is the successful completion of projects under MCC, which entered its entry into force phase in August, accompanied by a five-year deadline. Two months have already passed since the deadline began, but there is much work still to be done. US officials view the MCC compact as a significant milestone in the 75-year partnership between the two countries. Given China’s strong opposition to the compact, the US anticipates potential roadblocks and is making additional efforts to ensure its smooth implementation.

In the meeting with Foreign Minister Saud, Secretary of State Blinken underlined the importance of timely implementations of projects under MCC. After the meeting, Blinken said, “I met with Nepali Foreign Minister Narayan Prakash Saud to highlight US investment in Nepal, including a $500m compact from MCC to support economic growth.”

As China advances its debt-lending mega-project, the Belt and Road Initiative (BRI), in an attempt to attract developing countries, the US aims to showcase the benefits of MCC projects, funded by US grants and substantial financial contributions from the government of Nepal. Simultaneously, the US perceives strong anti-MCC sentiments in Nepal as reflective of growing Chinese influence in the country. For their part, Chinese analysts say they are not opposed to American projects but seek a level-playing field for all players in development cooperation.

Combating corruption is another top US priority in Nepal. The US is closely monitoring developments like investigations into corruption cases, including the Bhutanese refugee scam. US Anti-Corruption Coordinator Richara Nephew visited Nepal in August of this year, engaging with representatives of anti-corruption institutions, law enforcement and civil society.

President Joe Biden has framed current global tensions as a struggle between democracy and autocracy. Since 2021, the Biden administration has been hosting the Summit for Democracy, highlighting the ability of democracies to address the world’s most pressing challenges and deliver for their citizens. Nepal is one of the few South Asian countries invited to participate in the summit.

Under the Democracy Delivers Initiative launched in 2022, the US provides support to mobilize resources for countries undergoing democratic renewal, maximizing the likelihood that their democratic gains endure. The US recently pledged over $145m, with more than $35m in new funding through USAID for the Democracy Delivers cohort, which includes Nepal. Additionally, the US’ International Development Finance Corporation announced $110m to support new private sector-led projects.

In 2022, the government of Nepali and USAID signed a new development cooperation grant amounting to $659m spread over a five-year period. This February, USAID Chief Samantha Power announced that USAID would provide up to $58.5m to advance democratic progress in Nepal. Following transparent and peaceful elections in 2022, Nepal has an opportunity to strengthen federalism, advance the inclusion of women and marginalized communities, empower its young people and demonstrate that democracy can deliver for its citizens.#

In addition to these initiatives, the US has intensified its defense cooperation with the Nepali Army and other security agencies. 

Saud’s visit to the US should be analyzed in the context of a growing engagement between the two countries and rising geopolitical tensions. Nepal’s two close neighbors India and China will be closely watching Saud’s visit to America. There is a convergence between the US and India on the issue of countering Chinese influence in Nepal, while China is more concerned over growing American influence in Nepal.  

An important partner

Antony Blinken, US Secretary of State

We have 76 years of diplomatic relations between Nepal and the United States, and Nepal is today a very valued partner in the Indo-Pacific. We’re working together to ensure that we have a free, open, secure, prosperous region. And in so many ways, Nepal is leading, not just in the region but globally, as a very constructive actor in international organizations—of course, with so many peacekeepers, who are trying to help people move from conflict to peace around the world. And in our own bilateral relationship, we’re working to deepen it and strengthen it even more, particularly with more people-to-people as well as economic ties.

Prime Minister Pushpa Kamal Dahal has expressed his belief that the United Nations would help Nepal to conclude the peace process.

In a brief conversation with the media after the address by the United Nations Secretary General António Guterres to the joint meeting of the Federal Parliament earlier today, Prime Minister Dahal expressed the confidence that the UN as well as the international community would continue to help conclude the peace process in Nepal. "The opinion of the international community and Secretary General Guterres towards Nepal's peace process is positive," he said.

Similarly, CPN-UML Chairman KP Sharma Oli appreciated Secretary General Guterres' speech in the House on Nepal's peace process, poverty, climate change and other issues.

Stating that the UNSG Guterres has correctly evaluated Nepal, he said it is admirable to note that developed countries should help poor countries like Nepal on issues such as climate change.

Visiting UN Secretary General António Guterres has said that the world could learn much from Nepal in responding to multiple crises.

Addressing the joint session of the Federal Parliament on Tuesday, Guterres said, "As geopolitical tensions rise, global divisions are becoming deeper and more dangerous. Smaller countries fear becoming collateral damage in competition between great powers. And climate catastrophe is accelerating with deadly force."

According to him, other countries can learn much from Nepal in responding to such crises.

Nepal a promoter of peace, champion of multilateralism

Similarly, he viewed Nepal as a promoter of peace, a champion of multilateralism, and a staunch supporter of sustainable development and climate action.

"Nestled between two great powers, you have forged your own path to safeguard your sovereignty and independence.  And your journey over the past twenty years has been wonderful to see," he said, adding that a new republic with a new Constitution has the UN Charter at its heart.

He lauded Nepal, saying it was quick to embrace the Sustainable Development Goals, and is making progress on many of them. "Your country has successfully calmed the storms of conflict and moved from war to peace. A process the United Nations has been proud to support," he shared.

Nepal's dynamic story of progress continues today, the UN Secretary General viewed, adding that Nepal's graduation from Least Developed Country status is imminent. The UN is committed to supporting a smooth transition, he vowed.

United Nations Secretary General António Guterres has said Nepal has long been a friend to the international system and a steadfast champion of multilateralism, peace and developing countries’ interests.

In his address to the joint session of the Federal Parliament at New Baneswor-based Parliament building on Tuesday, the UN chief stressed on the dire need of revitalization and reforms in the system.

Noting that the world is in a state of flux and is moving towards multi-polarity, he said, "A multipolar world provides new opportunities for leadership and balance on the global stage".

The UN Secretary General said this new dynamic, however, requires strong multilateral institutions to maintain peace. "History shows us that. At the beginning of the twentieth century, Europe was multipolar, but without strong multilateral institutions, it descended into war that engulfed the world. That is not a risk we can take".

Underlining the need of strong international institutions that reflect the realities of today, Guterres said the developing countries must have far greater representation in international institutions.

He called for reform of the outdated United Nations Security Council and proposed measures to reform the global financial architecture – so that it better represents developing countries and responds to their needs.  "These proposals are gaining real traction – at this year’s United Nations General Assembly and beyond.".

The United Nations Summit of the Future next year is an important chance to push further progress, he noted, adding, "I count on Nepal’s support to help make the change we need a reality.".

The UN chief argued that multilateralism must both reflect the world, and respond to it, which means creating the institutions and tools we need to address new threats, and to seize new opportunities.

"Technology can solve problems and spur development. It can entrench divisions and inflame inequality", he said, adding that today it is doing too little of the former and too much of the latter.

He called for a global response to the technologies that are changing the world at astonishing speed in a way to harness them for the good of humanity.

The UN high-level body on Artificial Intelligence comprising experts from G77 countries will report this year, so member states can consider global governance options for artificial intelligence, he said in his address. "We must also bring the benefits of technology to all, and ensure that in a new technological era, no one is left behind. That is the purpose of the Global Digital Compact the United Nations has proposed".

It aims to bring together governments and industry to ensure that technology works for all, and accelerates the Sustainable Development Goals, he mentioned.

"As a steadfast champion of multilateralism, peace and developing countries’ interests, Nepal will be a vital ally at the Summit", the UN Secretary added.