Dr Anil Sigdel: Nepal must creatively take benefits from its partners

The Annapurna Express

The Annapurna Express

Dr Anil Sigdel: Nepal must creatively take benefits from its partners

Dr Anil Sigdel is a US-based foreign policy expert. He closely follows world politics with a special focus on South Asia. Kamal Dev Bhattarai of ApEx speaks to him about great power rivalry and its implications for South Asian countries.

How do you evaluate Xi Jinping’s neighborhood policy since he came to power in 2013?

Once he took the helm, President Xi Jinping began to launch regional and global initiatives one after another, elevating China’s external outreach to an unprecedented level. Now as he moves on with his third term, China’s traditional peripheral countries policies have been already institutionalized into a full-fledged neighborhood policy. China’s proactive neighborhood diplomacy is here to stay.

As great powers do, China, with its policy of economic assistance as a tool of foreign policy to increase influence, has tried to ensure that its neighbors will not align with its adversaries, for instance the US or India, in a way that would create unfavorable conditions for China’s strategic objectives. China, therefore, says it wants an amicable and secured neighborhood for China. In the words of Chinese state councilor and foreign minister Wang Yi: “China supports countries in the region (Asia) in distancing from the geopolitical trap.”

While President Xi’s predecessor Hu Jintao had also emphasized such policies—common development of China and its neighbors—and worked on them, Xi has substantially boosted that assistance mechanism to achieve clear results. China now has a long-term neighborhood policy, that is its outreach will not have a character of highly generous economic package or surprise deals as seen in the beginning but a more matured engagement with a graph slowly and steadily moving upward. These priorities also emanate from the Chinese thinking that in order to become a regionally influencing power—or even globally—China has to become influential in its own neighborhood first. Moreover, Xi’s thoughts that talk about “new type of international relations” are enshrined into the party constitution.

In any case, Xi will continue to push his policies as he sees fit in his third term. We have seen recently that China has been strengthening its ties in the broader South Asia as well – China invited Indian Ocean region countries, excluding India, for a meeting in which Nepal had also participated. As China and India have consistently struggled to find a common understanding along their borders, the importance of South Asian neighbors will remain for China. As seen in the past, to what extent China’s policy in South Asia matters also depends on what type of governments are in place in South Asian countries. In addition, the US is an important player in South Asia, which fuels further frustration to the Chinese Communist Party.

How do you see the growing US-China rivalry in South Asia, and where does India stand on it?

US-China rivalry in South Asia has led China to go beyond its own traditional red lines by visibly and vocally interfering into domestic politics and foreign policy matters. China has engaged in a war of words with the Americans in Nepal over the MCC grants. It has made controversial statements on Bangladesh’s likelihood of joining the Indo-Pacific policy of the Americans. Similarly, China-India borders have seen frequent skirmishes in recent years, while even the strongest of Chinese partners like Pakistan or Sri Lanka have felt the pressure of balancing their foreign policies. But on the flip side, due to this great power rivalry, the importance of these South Asian nations has clearly increased. It is obviously not easy to balance, but if played well, it can certainly bring opportunities.

As far as India is concerned, US-China rivalry in South Asia gives both challenges and opportunities for India. The US policy of bringing more regional Asian partners on board to build a coalition that would balance the massively rising power of China has been a much-needed counterweight vis-à-vis China from an Indian standpoint. Moreover, the Indo-Pacific Strategy has also created a space for India, as a major and like-minded partner of the US, to pursue its own goal of becoming a separate pole by acquiring necessary capabilities and making new partnerships and coalitions with other powers.

India, cognizant of the power differential with China, had no choice but to align with the US in the broader policy of cooperation around the Indo-Pacific. India sealed deep defense agreements with the US, became a major partner of coalitions like Quad, and began cooperation in several other domains. The US granting India a Strategic Trade Authorization status, for instance, was on par with what the US did with its Asian treaty allies like South Korea and Japan or the European NATO allies. In a strong signal to China, the US made these exceptions for India to help it acquire civil and military high-end technologies.

However, India and the US are not treaty allies with mutual defense. Besides, India maintains suspicion towards growing US outreach in the region of its preeminence. India would welcome the US in South Asia to the extent that it would uphold and boost Indian primacy, but not any bilateral or other cooperation between the US and South Asian countries that would not keep India in the loop. From the South Asian countries’ standpoint, this is how the US should go about, whereas for India it is naturally a matter of concern. India is very sensitive about any military or defense partnership between the US and Nepal or its other neighbors.

Instead of these deep defense ties, India has not fully relied on this US-India partnership vis-à-vis China, but has pursued its own policies to keep different options open and play its cards autonomously. India’s ties with Russia have been a thorn on US-India ties. In India’s calculation, Russia is an extremely useful partner for its role in providing critical military technologies, diplomatic counterbalancing to China, and access to Central Asia, balance against China-Pakistan ties, and in the time of Russia-Ukraine war, supplies of cheap commodities from Russia. India-US also have divergences in many different issues, especially in terms of India’s security concerns in its north western periphery, which has kept India from choosing its so-called “strategic autonomy”.

How do you evaluate South Asian countries’ engagement with China, particularly on BRI?

Although China presents itself as a close South Asian neighbor, India has become the elephant in the room for China and South Asian countries. Unlike other regions such as South East Asia or the Middle East, where China does not see such push backs, India is a regional power in South Asia and a strong rival of China vying for its own influence, thereby posing a major setback for Chinese ambitions. These geopolitical conditions also constrain South Asian countries such as Nepal, Bangladesh, Sri Lanka and Maldives to engage with China to some extent.

The South Asian countries, for their part, also prefer to pursue a policy of strategic autonomy by equally engaging with and balancing out India, US and China. They want China but, at the same time, do not want China to be overwhelming and overbearing in their bilateral relationship. Such cautious policy is also manifested in the China-South Belt and Road Initiative. Although every country, except India, has signed BRI cooperation agreements in South Asia, they have carefully watched and learned from the BRI investments in other parts of the world and have become very cautious in finalizing projects with China. In the case of countries like Pakistan and Sri Lanka, they were already taking large Chinese investments even before the BRI.

Although President Xi seemingly stepped-up China’s role to contribute to the world economy in the wake of the 2008 financial crisis, his BRI lending model repeated the same mistakes that many Western countries, companies and banks had committed before they burst in 2008. Many roads and airports were abandoned half-built or left totally empty if completed.

In the BRI also, instead of pre-planning the contingencies, loans were agreed hastily and problems were being dealt with as they kept coming. Moreover, although the markets were not improving, loans were added in a hope to turn profit and recover which would not happen as seen clearly in the case of Pakistan and Sri Lanka. China’s BRI emphasized large and fast loans, but apparently less on risk assessments. China’s worsening ties with the West did not help, as countries got under huge pressure. Xi’s proactive outreach and massive investments in Maldives led many to suspect China’s “land grab” plan in the strategically vital region. As a consequence, both the US and Europe immediately decided to step up their diplomatic overtures in the island nation. India as the next-door power substantially stepped up its engagement as well.

No wonder, Nepal and China have not started any project under the BRI under these circumstances. China, for its part, is also moving from its domestic policy of high economic growth priority to fixing China’s unbalanced and uneven growth across the nation. As a result, its external investment will also be impacted. Moreover, China’s current account surplus — which it enjoyed when Xi came to power—has fallen too. Now with the impacts of covid restrictions and lockdowns, Chinese neighbors will likely see less generous offers.

Smaller countries in this region are feeling the heat of great power rivalry. What are your suggestions for small countries in the conduct of their foreign policy?

First of all, it would be a mistaken policy to deny the geopolitical competition among great powers in our region and try to stay away from it. Geopolitical competitions are part and parcel of international relations, and any country in the international community cannot remain untouched by it. Therefore, accepting this reality and figuring out how to make the most of it—maintaining peace and stability but benefiting economically—is the right way forward.

Especially in the case of South Asian nations, there are several weaknesses. They have a long way to go in building overall capacities and have substance in their regional cooperation. But South Asian nations may still start looking at each other in a meaningful way. Starting a consultation format grouping to promote a South Asian centrality and strategic autonomy would help. The next step would be to work on certain guiding strategic concepts to build a stronger regional bloc of these countries in the future. This in fact will also be in the interests of regional powers and great powers, as they worry that nations may be unduly influenced by their adversaries.

How should Nepal engage with great powers in the coming days? What are the foreign policy challenges of the new government?

India, China and the US have set their long-term policy priorities to engage with Nepal in the context of a changing geopolitical scenario caused mainly by China’s rise. As a result, any new government in Nepal is going to face a new reality of a need for a tri-lateral balancing act. Despite the hopes Nepal has had for economic growth and development by profiting from the progress of the neighbors, actual experience has been rather complicated. We have to learn a lesson that without a proper balancing of the interests of our external partners, there will not be any significant benefits. Great powers do not pursue a foreign policy of altruism, but of their strategic objectives.  Nepal has seemingly preferred continuity than change in this regard. In other words, as long as a Nepal government fails to creatively use the potential of its partners for the benefit of its own people and the nation, Nepal’s foreign policy will not matter much. And now to make matters worse, the neighborhood story is not just about India and China rising, but India and China potentially ending up in a war. Therefore, how our leaders and policymakers read this situation and formulate policies accordingly, will make a big difference.


icon close
News Roadblock Ad (Always Use This to Change News Block ad)News Roadblock Ad (Always Use This to Change News Block ad)