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The missing coherence in Nepal’s IPS and BRI dealings

Kamal Dev Bhattarai

Kamal Dev Bhattarai

The missing coherence in Nepal’s IPS and BRI dealings

Between 2015 and 2019, Nepal twice wrote to the US expressing its desire to join the SPP military exchange program

A June 20 Cabinet meeting scotched the idea of joining the US government’s State Partnership Program (SPP) that had run into controversy after being mentioned in the American Indo-Pacific Strategy (IPS). The government took the decision with a view that Nepal cannot and should not be a part of any military strategy.

As the IPS report of the US Department of Defense released in June 2019 stated, “…within South Asia, the US is working to operationalize our major defense partnership with India, while pursuing emerging partnerships with Sri Lanka, Maldives, Bangladesh, and Nepal.” Smaller countries in South Asia including Nepal interpreted this as their forced inclusion in an American military strategy. 

The same report mentions Nepal as a recently added SPP member. Then, on 9 March 2021, speaking before the US Senate Committee on Armed Services, Philip S. David, Navy Commander, US Indo-Pacific Command, mentioned how Nepal had “partnered with the Utah National Guard under the State Partnership Program”.

Politicians, policymakers, and a section of intelligentsia agree that joining such a strategy violates Nepal’s policy of non-alignment, even though the US has consistently maintained that the IPS is not a military alliance. 

Anna Richey-Allen, spokesperson at the US Embassy in Kathmandu, tells ApEx: “It is important to remember the IPS is not a military alliance and it’s not an agreement—that’s disinformation.”

The IPS, she adds, is a “non-binding US foreign policy expression of commitment” to connectedness, prosperity, resiliency, and security of the Indo-Pacific region.

Many in Nepal remain unconvinced.  

Between 2015 and 2019, Nepal twice wrote to the US expressing its desire to join the SPP military exchange program and in this period, there have been some policy changes in the US as well. In February 2022, Joe Biden’s administration came up with a new Indo-Pacific Strategy with three key pillars: governance, economics, and security. 

It is the ‘third pillar’ that has raised many eyebrows, even though American officials say the new IPS doesn’t specifically mention the SPP, or for that matter the Millennium Challenge Corporation (MCC)—another US program that created a lot of controversy in Nepal.  

In a recent parliamentary committee meeting, Nepal Army chief General Prabhu Ram Sharma categorically stated that the army had backtracked from joining the SPP after it was mentioned in the IPS. 

US officials insist the SPP is not a security alliance. “The State Partnership Program is not and has not ever been a security or military alliance. The United States is not seeking a military alliance with Nepal,” says Allen, the US embassy spokesperson. 

“The SPP has existed for over 25 years and includes over 80 partnerships with over 90 countries, the majority of which are not in the Indo-Pacific. SPP’s mention in IPS reports was public and did not change the program,” she adds.

She further explains that the SPP is mentioned in prior Indo-Pacific Strategy reports, but it is not a program arising from the IPS, nor is it integral or bound to it. 

Earlier, there was a three-year-long debate on whether the $500 million grant under the MCC Nepal Compact was part of the IPS. A sizable chunk of politicians and foreign-policy experts had then claimed that the MCC was indeed part of the IPS. 

That is why Nepal’s parliament endorsed the compact, but with a caveat— a declarative provision stating Nepal shall not be a part of any American military or security alliance including the Indo-Pacific Strategy. 

While experts are clear that Nepal should not join a military alliance or strategy, they also say the government should be prepared on how to deal with the IPS.

Sanjay Upadhya, a US-based foreign policy expert, says while not exclusively a military strategy, the IPS contains a heavy security component to advance American foreign policy objectives. 

The IPS’s economic and governance components also focus on ensuring a “free and open” Indo-Pacific. American officials have not shied away from proclaiming that the IPS is aimed at confronting China, he says. 

“It is unfair of the Americans to incorporate development issues into an explicit geostrategic framework without the consent of recipient countries. Still, it also represents the failure of Nepal’s political, diplomatic and security leaderships to proactively work out the changing dynamics and its impact on Nepal,” Upadhya adds. 

Shambhu Ram Simkhada, former diplomat and professor at Tribhuvan University, says there was gross negligence on Nepal’s part both at the time of writing to the US and while withdrawing from the program. 

“There was no consultation when the Nepal Army first dispatched a letter of interest in the program, and now the program has been canceled without providing any substantive reason. This exposes our policy inconsistency and erodes our international credibility,” he says.

The US has been coming up with sectoral strategies such as defense and climate change programs to gain regional influence. In May this year, the Biden administration launched the Indo-Pacific Economic Framework (IPEF) with the hope of giving some coherence to the economic pillar of the IPS. The framework was brought with a view that the economy is a critical part of any strategy, including the IPS, in the region. In the coming days, the US is likely to ask Nepal to join the framework as well.  

USAID, America’s premier international development agency, is also promoting the IPS in the region. So, in a way, the economic support we get from USAID also falls inside the broader IPS framework.

But then the US is not the actor to retrospectively change the nature of bilateral agreements. Its regional rival China too has put all its assistance under its Belt and Road Initiative (BRI) framework.  

Initially, the BRI was perceived as a project to disburse China’s loans to build infrastructure projects abroad. Under the initiative, dozens of projects were discussed but now all the bilateral issues have been put under the BRI framework. We cannot rule out the possibility of China tomorrow incorporating security issues in the BRI framework.

Geopolitical analyst Binoj Basnayat says now every other assistance that the US provides is linked with the IPS. But he maintains that there is no harm in accepting bilateral offers.

“We should understand the basic difference between allies and partners. We are not a US ally, for which a formal agreement must be signed. We are like a partner and this doesn’t go against our non-alignment policy,” he says.  

He suggests building a mechanism on how to take US assistance. “Let’s work out a mechanism and propose it to the Americans. It is not in the interests of Nepal to keep the US at a distance,” he says.  

Mrigendra Bahadur Karki, executive director at the Center for Nepal and Asian Studies, says political parties should forge consensus on how to deal with conflicting strategies of the US and China. 

Other experts also suggest that instead of taking a piecemeal approach, the government and political parties should come up with a broader policy on both the IPS and the BRI. As Nepal cannot decide what big powers can or cannot incorporate in their strategies, it should come up with a plan to customize those strategies to fit the country’s needs.

Upadhya says it would be prudent to parse the advantages and disadvantages of individual projects and act accordingly.

“It is easy to say political leadership should stop pursuing narrow partisan goals while asking for development assistance. The diplomatic and security leadership and other influential components of society must rather foster public debate on the wisdom of accepting or rejecting specific projects,” he says. 

He is of the view that such public pressure in Nepal would also compel potential donors to abandon their ‘take it or leave it’ attitude.