Challenges before new foreign minister

Arzu Rana Deuba, a Central Working Committee member of the Nepali Congress, has been appointed the Minister of Foreign Affairs in the KP Sharma Oli-led government. This marks her first ministerial role, and she has undertaken a portfolio of significant importance amidst the rapidly evolving regional and international geopolitical landscape.

Although this is her first ministerial position, her extensive experience over the past three decades in observing state functions—partly through her role as the spouse of five-time Prime Minister Sher Bahadur Deuba—affords her a unique advantage. She has been privy to high-level negotiations and has cultivated valuable personal connections, positioning her favorably compared to her predecessors. 

Coming from a well-educated family, Deuba also possesses a strong command of English, which is crucial for effective communication in bilateral talks and negotiations. Without relying on a translator, she can clearly and articulately present Nepal’s stance on both regional and international platforms. 

How she fares in her job is yet to be seen, especially in today’s volatile geopolitical climate. 

One of Deuba’s foremost challenges, says foreign policy expert Bijaya Kanta Karna, will be aligning the growing interests of major powers with Nepal’s national interests. 

Navigating the dynamics between the United States and China, as well as India and China in South Asia, is a significant task for the new government. Karna suggests that Nepal should leverage this complex situation to attract more investment and technology, thereby garnering international attention in Nepal’s favor.

The government must maintain balanced and cordial relations with all major powers, resisting pressures to align too closely with any one nation. Since the international media often frames new governments of Nepal as being “pro-China” or “pro-India,” influencing global perceptions, it is crucial for the Oli government to craft and project its own narrative.

Binoj Basnyat, a former major general of Nepal Army and political analyst, says the change in the coalition government and the alliance of the main two constitutional forces to form a national government reflect underlying constitutional weaknesses, political instability, institutional corruption, politicization of institutions, and erratic foreign policy behavior. He adds this situation arose as Nepal underwent significant transformation since 2008, while also facing the emergence of Cold War 2.0, a new global order marked by complex interactions of conflict, cooperation and competition among geopolitical rivals.

Basnyat suggests Nepal’s foreign policy should pursue three key objectives. First, domestic measures to ensure meritocracy, realism and honesty as the foundation for implementing national foreign policy within the framework of national interests. Second, economic diplomacy, which includes programs, policies or activities aimed at improving the economic well-being and quality of life for the community. This involves addressing geopolitical aspirations by accepting geographic realities, national necessities and democratic values. Third, upholding the principles of Panchasheel to protect freedom of action and maintain equilibrium with its competing partners and immediate neighbors, China and India, and global rivals, China and the US. 

Nepal’s strategic endeavors, Basnyat says, should follow a visionary approach, encompassing immediate, short-term and long-term development planning within national strategic policies to address financial arrangements. This will help avoid geopolitical uncertainty and prevent falling into strategic traps linked to political and economic conditions imposed by global visions.

As for foreign policy, he adds Nepal should strive for neutrality and a non-alignment policy to foster economic development, following the theme of ‘Yam between two boulders’ within a uniquely Nepali political and governance system.

On specific issues, Prime Minister Oli and the Nepali Congress (NC) have differing views, particularly on China’s Belt and Road Initiative (BRI). Following an agreement with Oli’s CPN-UML, the NC officially decided against taking loans under the BRI, preferring terms similar to those offered by the World Bank and the Asian Development Bank. Conversely, UML leaders advocate moving forward with BRI projects on concessional loans. 

NC and UML are also not on the same page on some issues related to India. Foreign Minister Deuba, like her predecessors, is likely to face pressure from the opposition and other parties to address the ongoing border dispute with India. However, during former Prime Minister Pushpa Kamal Dahal’s visit to India last year, both nations agreed to allow more time for diplomatic mechanisms to address this issue.

To address the pressing economic challenges, particularly stagnation and job creation, the new government requires the support of major powers and long-standing development partners to attract investment. International investment in Nepal has declined in recent years, while external debt has increased. To reverse this trend, Deuba could play a key role here for setting up effective coordination among the Ministry of Foreign Affairs, the Ministry of Finance, and the Office of the Prime Minister and the Council of Ministers.

The NC-UML coalition has yet to finalize the government’s policies and programs, leaving its foreign policy orientation and priorities somewhat ambiguous. Nevertheless, significant shifts in foreign policy are unlikely. Effective foreign policy will depend on proper coordination and communication between the Ministry of Foreign Affairs and the Office of the Prime Minister. Historical precedent shows that conflicts can arise when the Prime Minister and Foreign Minister hail from different parties.

The new government is expected to put economic diplomacy at the center of its engagement with major powers, setting aside other differences. Economic recovery and infrastructure development are key priorities for Nepal. Both coalition parties agree that Nepal should not align with any single country but should engage major powers on economic issues rather than geopolitical tensions. 

The new government’s foreign policy will likely be driven by domestic agendas, such as economic recovery, job creation and securing funding for infrastructure development. In order to accomplish these agendas, Prime Minister Oli must avoid actions that could undermine trust with major powers and other development partners.