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The $500 million US grant to Nepal under the Millennium Challenge Corporation is part of the Indo-Pacific Strategy

The $500 million US grant to Nepal under the Millennium Challenge Corporation is part of the Indo-Pacific Strategy

Bhaskar Koirala, the Director of Nepal Institute of International and Strategic Studies (NIIS), is an old China hand. He is a keen observer of the strategic competition among big powers in Nepal. Kamal Dev Bhattarai caught up with Koirala for his insights on Nepal’s foreign policy, the new rumpus over Venezuela and Nepal’s relations with China and the US.

How do you evaluate the Oli government’s foreign policy in the past one year?

The country is still in transition and even senior leaders are not sure which direction it is headed in. In this transitional phase, the leadership is weak, and there is a lack of clarity on the country’s foreign policy objectives. There are fundamental disagreements on what kind of foreign policy Nepal should pursue. So I do not know how you can claim success in the conduct of foreign policy. We can take the most recent example of Venezuela, and use it as a benchmark to determine the quality of foreign policy processes in Nepal. If you go back a bit and try to understand how this government has defined its relationship with China, India and the US, I see a lack of clarity.

Why do you think that is the case?

There is no creativity in the overall process. A lot of things could have been initiated in relationships with India, China and the US. But you do not see that happening. After one year, what is the result? Where is the government headed? How has the government defined its foreign policy? 

You referred to Venezuela. How has its handling by the ruling party and the government been?

Lately, the government seems embroiled in the Venezuela issue. Many were surprised by this; no one had expected happenings in that country to have reverberations in Nepal. It started with a press statement by a co-chairman of the ruling party. Some say it is an ideological issue and the communist party had to stand by it. But I think this is an example of negligence in the conduct of foreign policy. But let us not blow things up. There was similar negligence when the Ministry of Foreign Affairs was supposed to mention ‘condolences’ instead of ‘congratulations’ while sending a message to Indonesia after it was struck by a devastating cyclone. Venezuela’s case was one of similar negligence, no more. Nepal does not have a substantive relationship with Venezuela.

Do you espy China’s hand behind Dahal’s statement on Venezuela?

I think that’s totally ridiculous. I do not think China would dictate to another country what kind of foreign policy statement it should release. I certainly do not believe, unlike what some media outlets have suggested, that China somehow coaxed Nepal into taking this position.

It seems that the government’s position has created some friction in our relations with the US.

It has created a serious problem in bilateral relations with the US. How long its impact will last, I do not know but it seems to be a big issue. In a recently held diplomatic briefing of the government, the US Ambassador to Nepal was missing. The US has said that the investment summit that Nepal is going to organize in March is premature. Remember, the statement on Venezuela was signed by a co-chairman of the ruling party and on the party’s letter pad, and it was backed by the Foreign Ministry later. That is not how foreign policy issues should have been handled. Even small negligence can lead to a serious crisis.

Talking about the Americans, how important are Nepal-US ties?

The Nepal-US relations have been very important over the past 70 years. Recently, Minister for Foreign Affairs Pradeep Gyawali visited the United States. At a recent program in Vietnam, I met Alice Wells, the US Assistant Deputy Secretary of State, who gave examples of how the Indo-Pacific region is becoming more and more important for them. She said the $500 million grant to Nepal under the Millennium Challenge Corporation (MCC) is a part of their overall Indo-Pacific Strategy.

The MCC does two things: road maintenance and construction of transmission lines. Roads are already there and the Americans help repair them. Nepal has huge potential in hydropower, so the US is helping Nepal stand on its own feet. So, you can look at it in those terms as well. And you do not have to see it as the US trying to contain China from here. The US is a big power. As a relatively small country in this region between two larger states, Nepal should have its own identity. Nepal should stand on its own feet and should be independent. 

I find the concept of the US Ambassadors Fund for Cultural Preservation (AFCP) interesting. Long before the earthquake, the US helped with the conservation of our temples through the AFCP. So, the US is trying to help Nepal to preserve its identity in this age of rapid globalization; maybe it thinks Nepal’s identity is being diluted. The US is helping us because it lost many aspects of its culture to modernization. They want to help us preserve our identity.

But there are views that China is concerned about Nepal cultivating closer ties with the US.

We are confining ourselves to a certain narrative. As someone who’s been interested in Chinese foreign policy for the last 15 years, I do not think China would be concerned if Nepal develops a closer relationship with the US and deepens its relationship with India, so long as these relations do not hurt its core interests. So long as its interests aren’t affected, China would be happy to see Nepal develop a multifaceted relationship with the United States. 

There was much talk about Foreign Minister Pradeep Gyawali’s visit to the US. How did you see it?

When the then Secretary of State Colin Powell visited Nepal 17 years ago, he did not specifically come here to meet our foreign minister and discuss bilateral issues or to talk about how Nepal had an important role in the US regional strategy. Powell had come here as a part of a world-wide tour after 9\11 to garner Nepal’s support on the war on terror. Gyawali’s recent visit is very important because such a visit took place after a gap of over 17 years. I do not know when the two countries’ foreign ministers had met before Powell’s visit.

What was the outcome of our foreign minister’s trip to the US?

Although Gyawali’s visit was a very important platform to cultivate relations with the United States, we were not able to capitalize on it. Maybe it was also the fault of the foreign ministry that didn’t know how to present the visit to the Nepali public, or to other international powers. It was not like Nepal had to sign on a dotted line that it was now subscribing to the Indo-Pacific Strategy. I do not see why Nepal could not take part in discussions on the concept of Indo-Pacific. There could be, for instance, discussions on how Nepal can contribute to the peace and prosperity of the Indo-Pacific region.

We can move ahead in far more positive, constructive and creative ways rather than simply saying Nepal is neutral and implying that the Indo-Pacific Strategy is directed at China and Nepal cannot jeopardize the BRI.

The government lost an opportunity. The idea of Indo-Pacific is not contradictory to the Belt and Road Initiative. Even international media are presenting the two as mutually exclusive ideas. We can reconcile the two broad foreign policy concepts, one coming from China and another from the US.

How do you observe Nepal’s evolving relations with China?

It is headed in a positive direction. I frequently visit bordering areas such as Kerung and Hilsa. China is developing infrastructures along its border with Nepal. It shows how much importance China attaches to its relations with Nepal. We do not have the same level of infrastructure on the Nepali side. There is hardly any movement on our side. Bordering areas on our side do not have electricity. For example, police cum administrators are working without electricity in Hilsa, which is an important place. Hilsa is not connected with roads to the district headquarters. We can’t even get electricity from China, even though the locals want it desperately. There has not been any initiative to bring electricity from China to these areas. There is a lack of clarity. Pretty much the same could be said about our bilateral relations.

The BRI process in Nepal seems stuck. Then there is that talk of a debt trap.

Yes, obviously a country like Nepal, which is going through a transition and which is much weaker than China, India or the US, should be cautious. But this is just one narrative. We have to avoid the kind of entanglements seen in other countries like Sri Lanka and the Maldives. Everyone is talking about a debt-trap. But one narrative cannot define Nepal’s relationship with China. There are other bilateral issues.  Around 7,000 Nepali students are studying in China. There are 65 weekly flights between Kathmandu and various Chinese cities. They are important for boosting our economic relationship. Tourism is another area that can enhance economic relations.

But there are some structural problems between the two countries. There have been discussions on railway connectivity and people are very excited. But there is no road connectivity. We have not talked to the Chinese about ensuring our agriculture products’ access in their market. Our government authorities have not sat down with their Chinese counterparts to discuss and settle this issue. This is a glaring weakness on the part of our government. There are many examples of this relationship moving forward but there are also counter-signs. Take the example of the ring road in Kathmandu. We should take it in a positive way because it is a significant piece of infrastructure. Rather than indulging conspiracy theories, we should be thankful to the Chinese government. We can plant trees and manage cycle lanes there on our own. Again, there are multiple narratives. We should try to understand those narratives.

How does Nepal manage the strategic competition between the US, India and China?

We talked about the railway from China, which is an extraordinary development. The Nepali leadership wants to show it to the public. See this is how our relations are progressing! But the Nepali leadership has not taken the initiative to take India into confidence. We have a 1,700 km-long open border with India. It is a historical fact, whether you like it or not. Our border with China, on the other hand, is closed. Trade relations between India and China are growing and there are frequent interactions between them. They also have serious disagreements on security matters. How you allay Indian concerns about this railway from China? Is it not the responsibility of our leadership?

We have to be sensitive while dealing with this delicate matter. In sum, we have to take India and China into confidence. That is the only way to move forward.