The Geo-Strategic Himalayas: Navigating Nepal’s Path to Stability and Sovereignty
Introduction
Located in the heart of the Himalayan region, Nepal is
ensnared in a precarious geopolitical position. Beyond the geological fault
lines that lie beneath its surface, the country must also grapple with the
escalating web of geo-strategic competition between its two influential
neighbors, India, and China. The stakes are towering, and tensions are mounting
as these nations aggressively vie for influence in the region. This has thrust
Nepal into a challenging situation, one that demands meticulous navigation and
deft diplomacy to ensure stability and security for its people.
The devastating earthquake of 2015, and
more recently in 2023, also underscored its unenviable position in the tenuous
balance of power between two regional giants: China and
India. This piece details
Nepal’s diplomatic efforts to assert sovereignty against the backdrop of
environmental and political pressures and investigates the broader implications
for regional stability and international diplomacy. The article investigates
the dual challenges Nepal faces: the threat of natural calamities and the
complexities of balancing ties with India and China. Through this analysis,
Nepal emerges as a poignant example of a small state leveraging its strategic
location and diplomatic posture to navigate the complexities of international
relations in a rapidly changing global landscape.
Seismic Shifts After 2015
A decade after the 2015 earthquake’s devastation, Nepal has
embarked on a transformative journey, reshaping its domestic policies and diplomatic
posture amidst the challenges of reconstruction and regional diplomacy. The
earthquake catalyzed a re-evaluation of disaster management
and infrastructure resilience, leading to the enactment of stringent building codes and
the establishment of the National Reconstruction Authority. These measures
signify Nepal’s commitment to fortifying its infrastructure and institutions
against future calamities. Simultaneously, Nepal’s diplomatic endeavors have evolved, reflecting a nuanced
strategy to balance its relations with China and India. Nepal has sought to
diversify its international partnerships, leveraging its strategic position to
attract investments in infrastructure and development projects from both neighboring giants. Nepal’s
foreign policy aims to maximize autonomy and economic recovery by engaging with
China’s Belt and Road Initiative (BRI) while maintaining strong ties with India
through bilateral agreements and trade partnerships. The recalibration of domestic
policies and international relations illustrates Nepal’s adaptive strategy in
the face of adversity, positioning itself as a resilient and astute player in
the complex geopolitical landscape of South Asia. More recently, in 2023, an
earthquake in Ramidanda killed 123 people, the
deadliest earthquake since 2015. It was as a painful reminder of Nepal’s
geographic endowments and also a test of its newly
established approach to foreign policy to manage the foreign aid overtures and
disaster relief diplomacy of states in its neighborhood.
Navigating the Sino-Indian Discord
Straddling a rising China and India, Nepal occupies a unique
strategic position in South Asia. This positioning subjects it to the
fluctuating dynamics of Sino-Indian relations, compelling Nepal to skillfully
balance its diplomacy to uphold sovereignty and advance its national
interests. The
complexities of this balance are magnified during crises, such as the 2015 and
2023 earthquakes, which exposed Nepal to the geopolitics of international aid,
where humanitarian efforts are closely intertwined with strategic interests.
The earthquake’s aftermath illuminated
the dual-edged nature of foreign aid, revealing its role as a soft power tool
for China and India to wield as influence in Nepal. This scenario placed Nepal
at the heart of a soft power tussle, necessitating a tightrope act to manage
relations with both benefactors without compromising its autonomy. Furthermore,
the earthquake and subsequent overtures underscored the strategic significance
of Nepal’s infrastructure and trade routes, especially those entwined with
India. The disruption of these lifelines is not only hindered disaster recovery
but also accentuated Nepal’s economic vulnerabilities. The disruptions had far-reaching
impacts, affecting the flow of essential goods
and amplifying
the challenges in Nepal’s diplomatic and economic spheres.
As Nepal navigates this geopolitical
rift, its evolving strategies reflect a deeper understanding of the regional
power play. By leveraging its strategic position, Nepal seeks to foster
balanced engagement with China and India, aiming for harmonious coexistence
that safeguards its interests in the tumultuous South Asian geopolitical landscape.
China’s Economic Footprint in Nepal: A
Path to Indebtedness?
China’s expanding influence in Nepal, marked by substantial
infrastructure investments under the Belt and Road Initiative (BRI), is a
strategy to enhance regional connectivity and foster economic growth. China’s
BRI footprint includes critical projects such as roads, airports, and
hydropower plants like the Marsyangdi Hydropower
Station, a cross-border optical fiber link, and the Pokhara International
Regional Airport. The Kerung-Kathmandu cross-border
railway project is most critical as it offers Kathmandu a way out of the
so-called India-lockedness. It grants Nepal much needed
alternative access to the rest of the world. Additionally, It signifies a move
towards modernizing Nepal’s infrastructure and stimulating economic development
However, these investments also raise concerns over the sustainability of the debt
burden and the risk of "debt-trap diplomacy," a term used to describe
the predicament where a country becomes overly indebted to
China, potentially
leading to a compromise in its financial independence and sovereignty.
Critics of the BRI argue that China’s
investments, while beneficial, often entail loans with higher interest rates
and unfavorable repayment terms compared to those offered by multilateral
lenders like the World Bank or the Asian Development Bank. For example, the
loan for the Pokhara International Airport carries a 2 percent interest rate, significantly higher than what
multilateral lenders offer. This financial dilemma raises apprehensions about
Nepal’s future autonomy, especially considering its ongoing recovery from
natural disasters like the 2015 earthquake. The discourse around China’s
investments in Nepal reflects a critical examination of whether these
infrastructural advancements pave the way for economic prosperity or ensnare
the nation in a cycle of indebtedness that could impinge on its sovereignty.
On the other hand, India is
Nepal’s main trading partner and foreign investor. It is the only country that
provides trade transit for landlocked Nepal, via twenty-two recognized routes
to Kolkata/Haldia. Around two thirds of Nepal’s trade passes through Birgunj-Raxaul.
New Delhi seeks to expand its influence in Nepal, and like China is also investing
in infrastructure like including hydropower plants, roads, and railways. Nepal’s
engagement with China’s BRI and its financial policies could have profound
effects on its relationships with India. By increasing economic ties with
China, Nepal may gain infrastructure development and economic growth
opportunities but also risks falling into a debt trap, potentially increasing China’s
influence over Nepal’s domestic and foreign policies. Furthermore, the Chinese are putting
pressure on the Nepalese government to rectify the Belt and Road Initiative and also, at the same time, accept the Global Security
Initiative and Global Development Initiative, which have been recently proposed
by the Chinese side to counter the Indo-Pacific strategy in the region. This
dynamic necessitates a delicate diplomatic balance for Nepal to manage its ties
with India. The relationship between China and Nepal was further strengthened
with the visit of Chinese President Xi
Jinping in September
2019. During his trip, the bilateral relations were upgraded from a "Comprehensive Partnership of
Cooperation Featuring Ever-lasting Friendship" to a "Strategic Partnership of
Cooperation Featuring Ever-lasting Friendship for Development and
Prosperity." The benefits that Nepal has obtained from the inclusion of
the term "strategic" in its diplomatic approach remain uncertain, but
it undeniably resulted in a victory for China both in letter and spirit. Narayan
Kaji Shrestha, who has recently been appointed as Nepal’s deputy prime minister
and foreign minister, visited China on March 24 for his inaugural tour instead of
India. The visit occurs within three weeks of the formation of the new
government in Nepal on March 4, due to a prompt invitation from the Chinese Foreign Affairs
Ministry and the Chinese Communist Party (CCP) Politburo. However, the leftist
parties, such as the Communist Party of Nepal-Maoist Centre and Communist Party
of Nepal-Unified Marxist Leninist (CPN-UML), have proposed shifting away from
India’s dominant role in Nepali foreign policy. This aligns with their
political agenda and ideological affinity with China. Consequently, Nepal must
carefully navigate these relationships to maintain its sovereignty and leverage
benefits from both neighbors without alienating either, which demands a
balanced approach that respects historical ties with India while engaging with
China’s offer of economic opportunities.
The Balancing Act: Crafting a Sovereign
Future
Nepal’s strategic balance between China and India is pivotal
in crafting its sovereign future. Diversifying its international relations is
essential for reducing dependency on any single nation, thereby enhancing
Nepal’s diplomatic leverage and economic stability. Adopting a ‘multi-aligned’
diplomatic strategy, Nepal can engage both neighbors in a manner that avoids favouritism, fostering a balanced relationship that prioritizes Nepal’s national
interests. Economically, fostering an investment-friendly environment to
attract a broad spectrum of international investors is crucial. This
diversification can mitigate the risks of heavy indebtedness and ensure that investments
are aligned with Nepal’s sustainable development goals.
Strengthening ties with multilateral
institutions and engaging in regional cooperation frameworks, like the South
Asian Association for Regional Cooperation (SAARC), can further augment Nepal’s
bargaining power on the international
stage. For
instance, the E.U. authorized a €2 million aid package that will provide
shelter, potable water, sanitation, healthcare, and other materials. Similarly,
a U.S. development agency announced that Nepal would receive up to USD 85
million over five years for the education of marginalized and early grade pupils. Moreover, Washington and Kathmandu
signed the Millennium Challenge Corporation Nepal Compact (MCC-Nepal) grant in
2017 to improve infrastructure. Domestically, investing in internal capacities such
as workforce skill enhancement and institutional capabilities is fundamental
for self-reliance and effective management of external influences.
Additionally, economic resilience through infrastructural improvements and
economic diversification is vital for mitigating the impacts of natural
disasters and thereby diminishing the necessity of foreign aid.
Conclusion
Nepal’s foreign policy shifts reveal resilience and
diplomatic agility following its experience of foreign aid and the maneuvers of
larger Asian powers. In responding to geopolitical challenges, Nepal has taken
significant steps to balance its ties with China and India, leveraging
investments to bolster its economy while carefully navigating the complexities
of ‘debt-trap diplomacy.’ This delicate balancing act has involved enhancing
disaster preparedness, diversifying economic partnerships beyond its immediate neighbors,
and engaging in multi-aligned diplomacy. These efforts reflect Nepal’s
commitment to maintaining sovereignty and fiscal autonomy, showcasing its
success in fostering a stable, prosperous future amidst the dynamics of
regional power play.
The effectiveness of
Kathmandu’s strategy to hedge its bets in the Indo-Pacific region
relies heavily on the level of domestic political stability. Hence, the primary
obstacle that lies ahead for Nepal is to build a bipartisan consensus among the
political parties and leadership over its foreign policy aims. Nepal’s crucial
national interests must not be compromised, regardless of any shifts in
government and leadership. Ultimately, Nepal’s ability to navigate geopolitical
complexity hinges on the determination of its leaders to effectively handle
them in order to protect the country’s national
interest. Therefore, Kathmandu must proceed cautiously in its internal politics
and external relations to guarantee stability in both areas, which is sine quo
non for its pursuit of strategic autonomy.
Author’s
Bio: Irfan ul Haq, is Ph.D. Political
Science, University of Kashmir, Srinagar, India.