Is Nepal already in a geopolitical trap?

Over the past few years, Nepal has found itself in the midst of a tug-of-war among three major global powers: India, China, and the US. Each of these countries are vying for influence in Nepal’s economic, military, ideological and technological spheres.

Let’s begin with the US. The Biden administration in the US has made advancing democracy one of its key global priorities. In South Asia, Nepal appears to be in the high priority of the US democracy projects. The US has been inviting Nepal’s prime minister to its annual democracy summit. Both communist and non-communist prime ministers have attended the summit. The US is making efforts to counterbalance the influence of the Chinese Communist Party in Nepal and uphold democratic values in the region. In the meantime, the US is equally concerned about the influence of India’s Bharatiya Janata Party (BJP) which is pushing for the restoration of Hindu state in Nepal. A US document says: “The Nepali political class’s penchant for balancing relations with its large neighbors India and the People’s Republic of China (PRC) renders security cooperation, including with the United States, prone to political interference.” 

Despite claims that it does not export its communist ideology, China has been promoting its political model in other countries. Under the guise of showcasing its achievements, China has been exporting its ideology to South Asian countries. Chinese leaders are urging their Nepali counterparts, particularly those aligned with the communist ideology, to embrace the Chinese model. Every year, China invites a large number of Nepali communist leaders to its cities to showcase its development model. Of late, Nepali leaders have started saying that Nepal can replicate the same model which reflects a growing acceptance of the Chinese  model within the country.

Though India and the US are on similar pages on a range of issues, the two powers have divergent views about the democratic values in South Asia. India, on its part, is sending conflicting signals on the ideological front. While the Indian government seems committed to uphold democracy, secularism and inclusive constitution in Nepal, the ruling BJP harbors reservations about Nepal’s 2015 constitution, which, it perceives, is imbued with Western values. The BJP’s parent organization, the Rashtriya Swayamsevak Sangh, is reaching out across the political parties and the general people with Hindu-centric agendas. The BJP believes it can reduce Western influence on Nepal, dismantle secularism and restore Hindus state through such activities. Such activities are already polarizing Nepal’s political fabric.

In addition to ideological battles, Nepal is grappling with strategic challenges posed by major powers. China’s Belt and Road Initiative (BRI) and its insistence on the One China policy dominate all its engagements with Nepal. Likewise, China’s Global Security Initiatives (GSI) and Global Civilizational Initiatives (GCI) and Global Development initiative (GDI) are getting more prominence over economic issues. Nepal has consistently expressed its commitment to One China policy for over 50 years now. Still, China does not seem convinced and seeks reaffirmation on One China policy every time.

 

A press statement issued after Prime Minister Pushpa Kamal Dahal's visit to China last September also reiterated Nepal's firm stance against Taiwan Independence. His new Foreign Minister Narayan Kaji Shrestha echoed the same sentiment during his visit to China last month. Although China keeps emphasizing on the Belt and Road Initiative (BRI) in various meetings, tangible progress on infrastructure development under the BRI umbrella has not materialized yet. Government officials, politicians, and foreign policy analysts say that Nepal needs to capitalize on China's economic growth. However, this aspiration has yet to materialize due to the significant focus that both countries are placing on strategic concerns.

While Chinese investment in Nepal is on the rise and cooperation between the two nations has expanded in recent years, substantial investment projects that could catalyze economic growth remain elusive. Instead, Nepal’s attention is primarily directed towards ensuring that its territory is not used for anti-China activities. Regarding Chinese investment in Nepal, there have been occasional complaints from the Chinese side regarding obstacles faced by its investors.

Nepal engaged in a four-year debate on whether to accept the $500m support from the Millennium Challenge Corporation (MCC) of the US government. The MCC projects are finally into implementation. However, the project is not gaining the desired pace. Many attribute the slow progress to the government’s lackluster commitment to these projects. This tepid response was partly influenced by China’s strong opposition to the projects which labeled it as part of the Indo-Pacific Strategy (IPS). Nepali politicians, bureaucrats and experts continue to struggle in comprehending the US policy towards Nepal in the context of the IPS. Following discussions on the IPS, attention in Nepal shifted on the State Partnership Program (SPP) of the US government.

Under domestic pressure, the government led by Sher Bahadur Deuba of the Nepali Congress wrote a letter to the US government stating that Nepal won’t be a part of the SPP. Of late, there has been a notable increase in interest from US investors looking to invest in Nepal. However, Nepal has yet to effectively address this interest despite a substantial increase in US assistance through USAID.

All this shows that Nepal has already fallen into the geopolitical trap. Nepal is not seeing much investments in priority sectors as major powers are prioritizing their security and strategic interests. Though Nepal is pushing for more economic collaborations, strategic issues are dominating the bilateral negotiations and public discourse. Nepal’s current key priorities are economic recovery, minimizing the impacts of climate change and creating jobs but due to the geopolitical tensions these issues are getting a backseat in the engagement with major powers.

Nepal has struggled to take a clear stance on initiatives like the IPS, BRI, and other strategic endeavors. While managing these challenges should be the top priority of the government, the country is marred by internal political instability. Geopolitics is gradually creating rifts within Nepali society. Nepal needs to make concerted efforts to mitigate internal divisions and chart a path forward that safeguards Nepal’s interests amidst global power struggles.