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 China, Russia, Kazakhstan, Kirgizstan, Tajikistan, and Uzbekistan founded the Shanghai Cooperation Orga­nization (SCO) in 2001. There were two more curious additions as full SCO members in 2017: India and Pakistan. Nepal for its part secured the status of a ‘dialogue partner’ during the 2015 summit in Ufa, Russia. At the time, there was much hoopla in Kathmandu’s strategic circles, as they struggled to understand Nepal’s role in this Eurasian eco­nomic and security body. When queried, officials of the then Sushil Koirala government were vague. Perhaps they too were clueless.

While I was digging into the source of Nepal’s interest in the SCO back in 2017, I had met Upendra Gautam of the China Study Center. He informed me that it was Prime Minister Girija Prasad Koirala who first showed an interest in the SCO soon after its formation in 2001. To quote Gautam from my article in Republica, “… the price of oil in Nepal had been steadily increasing. Koirala thought it would be wise for Nepal’s energy security to explore Central Asian oil markets”.

Which was mighty interesting. But even after Nepal secured the status of a dialogue partner in 2015, it could not make any headway in the regional grouping, maybe because it jumped on the SCO bandwagon without any homework. At the 2017 and 2018 SCO summits, Nepal was not even invited. Nor was there any effort from Nepal for a greater SCO role, or for participation in this year’s summit (June 12 and 13) in Bishkek, Kazakhstan.

Russia and China, the two main backers of the organiza­tion, are both uncomfortable with what they see as America’s unnecessary encroachment into their neighborhood. No doubt the two Eurasian behemoths have their differences. But as their relations with the US have soured, they have vastly increased their economic and military cooperation. With their long involvement in Nepal, it should not be a surprise if Russia and China start coordinating their Nepal policy—particularly if the Americans and the Indians, as part of the new Indo-Pacific Strategy join hands to limit their strategic space in Nepal.

Theoretically, the SCO gives India and Pakistan a rare platform to talk. This is important, including for a better prospect of the SAARC which Nepal currently chairs. Prac­tically, trying to bring India and Pakistan closer via the SCO is as good as flogging a dead horse. Separately, the KP Oli government might see the organization as a part of its ‘diver­sification’ policy. But Nepal first needs to be clear on where India, its most important foreign partner, stands on the SCO. Ever wary of China, India has been hesitant to push the SCO idea too far. Nor does it want to jeopardize its relation with the US. This dynamic will play out here in Nepal too.

Nepal has some tough strategic choices to make. Having declared its opposition to joining the Indo-Pacific Strategy, is it in Nepal’s interest to angle for a greater role in a competing security organization? On the other hand, if we are serious about connecting with Central Asia via China—as GPK envi­sioned, and as the country signing up to the BRI signaled—the Beijing-based organization could be a useful vehicle. Making this difficult choice requires greater clarity on Nepal’s diver­sification policy.

 Pushpa Kamal Dahal’s ‘untimely’ reminder of his written agreement with KP Oli, that each of them will get to lead the government for two-and-a-half years, was primarily directed at one person: Narendra Modi. Dahal made his case on May 29, accompanied by a ‘leak’ of the agreement, on the eve of PM Oli’s departure to New Delhi to take part in Modi’s second swearing-in as prime minister. But it was only a reminder. Last year, when Dahal was in New Delhi, he had already briefed the Indian government that there had been such an agreement and that he was the PM-in-waiting. Dahal has a checkered history of engaging in all kinds of dubious dealings abroad. On the pretext of medical check-ups for himself or one of his family members, he jets off to New Delhi or Singapore or Washington DC for hush-hush meetings with foreign spooks and bureaucrats. He does so with one intent: to find an external route back to power in his homeland.

The former Maoist supremo has been trying to impress on the Indians (and the Americans) that he is the only politician in Nepal who is acceptable to people from all political, ethnic and regional backgrounds (read: Madhesis) as the country looks to institutionalize the nascent federal republic. Oli, of late a suspect in New Delhi and Washington for his supposed pro-China proclivities, finds himself at a distinct disadvantage in this equation. Foreign powers know they cannot com­pletely trust Dahal. Yet they also increasingly believe Nepal’s pro-China tilt can be checked only if Oli is ousted as PM.

Dahal has now thrown down the gauntlet to Oli: either quit as the prime minister after a year or hand him party leader­ship. Even if Oli agrees—a big if—things won’t be straightfor­ward. Communist parties believe in centralized leadership for a reason. If Oli leads the government and Dahal the party for any length of time, the NCP will likely split sooner or later. Some reckon that is exactly what big powers active in Nepal want: A situation of ‘controlled instability’ in which they get to do as they please.

Interestingly, China is itself frustrated at what it sees as lackluster performance of the much-vaunted, two-third Oli government. Not only has PM Oli dragged his feet in clearing the obstacles for the BRI projects in Nepal. Nepal under Oli also wants all the goodies, including the trans-border railway line, pro bono, which is a no-no for Beijing as the Chinese economy begins to cool off. Perhaps the Chinese too are looking for someone more amenable than Oli? Considering the recent Modi-Xi bonhomie, it may also not be a surprise if China has agreed not to step on Indian sensitivities in Nepal, its traditional ‘backyard’. If Oli expects the northern neighbor to unconditionally prop him up, he may be in for a surprise. Faced with a protectionist US, China has far bigger fishes to fry in India.

 The globe-trotting Narendra Damodardas Modi was only half-jokingly referred to as the ‘foreign policy’ prime minister during his first term. In the five years, he visited 59 countries, from Argentina in South America to Turkmen­istan in Central Asia, from Rwanda in East Africa to Canada and the US in North America. During this time he came to Nepal four times. There were only two countries he visited more often: China and the US.

Modi has firmly entrenched India in the US-led Indo-Pa­cific Strategy even while he has tried to maintain a kind of modus vivendi with China after a tense standoff over the Doklam plateau in 2017. The BJP election manifesto spoke of enhancing India’s role in the Indo-Pacific; it was silent on the BRI. India has been noncommittal about the signature foreign policy initiative of Xi Jinping largely because CPEC, a key BRI project between China and Pakistan, passes through a disputed Kashmir territory.

But after the 2017 ‘informal’ Modi-Xi summit in Wuhan, China, the two countries have been able to collaborate, even as they “agreed to disagree” on several issues. Both realize that with the sole economic superpower turning inward, they need each other to ensure there are no bumps on their road to prosperity. India may be reluctant to sign on to the BRI, but it is keen to preserve the peaceful status quo with China. Therefore, India has proposed a second Wuhan-like informal Modi-Xi summit, this time in Varanasi, Modi’s elec­toral constituency.

Comfortable in his role as India’s torchbearer abroad, Modi no doubt feels even more confident of his ability to maintain the delicate US-China balance following his thumping victory in the recent Indian elections. It will be tough though. The Americans want India to play the pivotal role in the Indo-Pa­cific to check Chinese inroads into South and South East Asia. India also sees the centrality of the US role in its strategic competition against China. Yet it will be reluctant to further distance itself from China, irrespective of what the Americans want. China did Modi a huge favor by giving the UN Security Council the go-ahead to designate the Pakistan-based Masood Azar, someone implicated in various terror attacks in India, a terrorist. This was publicized as a huge diplomatic victory for the Pak-hardliner Modi, who as a result reaped huge electoral benefits. Modi will be obliged to return the favor to the Chinese.

But with the US determined to tighten the screws on China, will the Indians be able to resist the American pressure to ‘isolate’ the Middle Kingdom? And how will such pressure play out in South Asia, including in Nepal? Will the Indians, in true ‘Wuhan spirit’, give the Chinese, their biggest geopo­litical competitor, more or less a free hand in Kathmandu? Or will Modi agree to greater US involvement in Nepal, its traditional ‘backyard’ where India has always frowned on any western activism, to China’s visible discomfort? Or do China and the US now have such influence in Nepal individually that Indian concerns become secondary?

It will be difficult for Nepal if each of these three powers starts pursuing exclusive geopolitical interests here in Nepal. Or if two gang up against one.

The KP Oli government has made ‘diversification’ a cen­tral plank of its foreign policy. But what does it mean? Talking to APEX, former foreign minister Ramesh Nath Pandey said there is no such thing as diversification in foreign policy. As far as sovereign countries are concerned, they only have national interests. Pandey does not get how enhancing relations with marginal countries like Costa Rica, Cambodia and Vietnam will protect Nepal’s interests. The government does not see it that way.

As foreign minister Pradeep Gyawali has tried to explain, in this globalizing world, diversification means establishing fruitful relations with as many countries as possible. Didn’t Nepal amply witness the disastrous consequences of overre­liance on a single country during the 2015-16 blockade? Thus increasing connectivity of every kind with China, Nepal’s only other neighbor, is at the heart of this diversification pol­icy. But the policy is not limited to China. Nepal surely wins if we can bring more Buddhist tourists from Cambodia and Vietnam to Lumbini. Or if Costa Rica votes in Nepal’s favor on a crucial UN election. Not just that. The more countries we interact with regularly, the greater will be the international support in another blockade-like situation.

In this, the calculations of the Oli government also mirror the South Asian strategy of the Trump administration. After India and China, the US is easily Nepal’s most important international partner, and if Nepal wants to diversify, it must have a healthy working relation with the world’s sole super­power. So the Americans too are welcome to the new Nepal of Oli’s imagination. Likewise, the new American Indo-Pacific Strategy entails closer cooperation in South Asia with the likes of Nepal and Bangladesh where India and China com­pete for influence. The American strategy is to strengthen India’s hand against China.

But diversification of Nepal’s foreign policy that king Mahendra first mooted back in the 1950s, and is now being pushed by PM Oli, is also a risky proposition. How does Nepal balance the American demand for greater freedoms for Tibetan refugees in Nepal with China’s absolute abhorrence of the idea? As their tech war intensifies, do we import tech­nology from China or the US? How do we choose between Huawei and Google, for example? With Nepal now an official BRI partner, how do we deal with India’s suspicion about the initiative? And how will Nepal reconcile its greater engage­ment with the US with the old Indian wish that western presence in Nepal be minimal?

Nepal’s foreign policy apparatus seems ill-equipped to maintain such a delicate balance when it is not even aware of Nepali MPs taking part in a Tibet-related conference abroad. On May 23, Narendra Modi led the BJP to another thumping majority in Indian national elections. No one really knows what kind of foreign policy the new Modi government will adopt, or how it will work with the US or China on regional issues. Diversification into remote countries is all and good. But right now, Nepal has its hands full with the three tradi­tional powers.