Nepal’s Foreign Policy: Tied up with course of China-India relations

Kedar Bhakta Shrestha

Senior Retd. Diplomat, Nepal

It is often said, and rightly so, that domestic policies shape a nation’s foreign policy. In order to study and evaluate a country’s foreign policy one has to comprehend its geo-political compulsions, strategic concerns, socio-economic scenario, political system, method of governance and existing as well as potential resources-  natural as also humane.

If we apply these parameters while discussing Nepal’s Foreign policy, certain factors come out as obvious and constant while quite a few others are variable and liable to influence the ‘direction and conduct of our foreign policies. The oft-repeated observation that Nepal is a “yam between two rocks” first made in the second half of the 18th century remains valid, even more so, at the present day.

The geographical situation of Nepal is a constant in the determination of Nepal’s foreign policy. Situated between two emerging giants destined to become the dominant world economic power houses within the next two decades, Nepal will well serve its national interests if we learn the proper ropes in our relations with both India and China.

First, a few brief preliminary observations. Nepal is often perceived both inside and outside the country, and quite erroneously, as a small country. Such a notion within the country tends to develop a complex not very helpful in the conduct of our foreign relations. If we look closely at world figures, it will show that Nepal ranks number 40 in terms of population while its ranking based on size would be 92 among the comity of nations. Looking at these figures from a different perspective, it would mean that there are I53 countries in the world which have a smaller population and that nearly 100 countries are smaller in size than Nepal. We have to develop within ourselves the habit of looking at ourselves in this proper perspective to help us develop a wholesome attitude and approach towards the development of our foreign policy.

Second, as a land-locked and least developed country, we have to find our own bearings in the comity of nations. Land-locked we shall remain more or less for ever short of a natural miracle or a massive geo-political upheaval. But least-developed we should not and must not remain forever. Herein comes the role, dynamism and vitality of our foreign policy goaded by our domestic aspirations to graduate from this dismal position.

As a least developed country, Nepal’s socio-economic indicators are understandably at the bottom. This state of affairs automatically place Nepal into particular groupings of nations in the international fora with distinct interests and priorities.

Third, issues like peace, democracy, human rights and good governance do impact on the perception by other nations about us thereby influencing their attitude and behavior in dealing with us. The recent developments in the peace process have been widely welcomed by the world at large. However, Nepal’s records in the areas of good

Governance, transparency and accountability leave much to be desired. Multiple instances of impunity and violation of the multiple instances of impunity and violation of principles of the rule of law are not something we can be proud of.

Trade, aid and developmental issues have a direct bearing in the formulation of Nepal’s foreign policy. These areas have become increasingly important issues of foreign policy. Thus, enhancing of economic interests by promotion of trade, tourism, hydropower, investment and overseas employment have become critical and important components of our foreign policy by each passing day.

With this brief remarks let me touch upon the core issues and areas of interest in the context of Nepal’s emerging foreign policy or in other words, the formulation or shaping of our foreign relations in the years to come.

Globalization, instant communication, advanced technologies such as Google, Yahoo, Spyke, Face book and Twitter have changed the way we perceive things, conduct business and interact with each other — among nations, groups, families or friends. These amazing scientific and technological advancements have presented both opportunities and challenges to everyone. How do we conduct ourselves in this changing world? What should be our focus and priorities?

First of all, I strongly believe that we should have a forward looking and a proactive foreign policy. When I say forward looking, I mean that we should look ahead and plan for the future and not be too much bogged down with the past if doing so would be a deterrent for beneficial and cordial relations with countries. We should have a vision for say, 20 years and plan for the next 10 years or so in the formulation of our policies.

Secondly, we should be proactive in areas that serve and promote our vital national interests in the conduct of our foreign relations in the bilateral, regional and international context. For that we need a clear vision, a proper plan and a coordinated action.

Third, as foreign policy is conducted though diplomacy, we have to hone our diplomatic skills. Unless we develop our communicating and negotiating capabilities, effective implementation of foreign policy becomes difficult.

Fourth, we have to understand that foreign policy is no longer the sole domain of foreign ministries and the diplomatic missions. Many other ministries, agencies and bodies have vital stake and useful role to play in the formulation and conduct of foreign policy. Although they remain at the forefront of diplomatic interaction the notion that the foreign ministries are the sole players and actors in the diplomatic field does not hold much water at the present day.

Whenever a finance minister attends a World Bank or IMF meeting, a trade minister a WTO conference, an education minister at a UNESCO conference, a tourism minister at a world tourism gathering, they are, in essence, engaged in the field of diplomacy.

Fifth, a number of players and actors in the non-governmental sector have emerged. Be it the chambers of commerce, trade bodies, tourism organizations, sports, arts and cultural groups — they all are increasingly and usefully involved in, what is being known as Track -2 diplomacy. There has also emerged a third version of diplomacy known as Track 1.5 — meaning involvement of both government and private sectors jointly in dealing with foreign governments.

Corning to the specifics of Nepal’s emerging foreign policy scenario— the most important factors lay within our country itself. How we manage the peace process, constitution making and thereafter the restructuring of the state, formulating economic and social policies, system of governance, and the sharing of power between the centre and the states will determine the course of our foreign policy in the years to come.

Irrespective of how things develop in the country in the days to come, we have to keep one thing in mind and that is that for the effective implementation of our foreign policy, we need a strong role for the centre- particularly in areas that have relevance and touch upon the domain of foreign policy. A weak centre in the proposed federal structure will not lend itself to the making and conduct of an effective foreign policy.

Moving out of the national scene if we look around the world we see the most stunning and far reaching developments taking place all over and more significantly in our neighborhood itself. The dissolution of the Soviet Union, end of the cold war, rise of the United States as the lone super power and the phenomenal economic growth of China and India are developments that have changed and are changing the shape of the world.

Although the United States remains the mightiest military power in the world, its claim as the sole super power of the world will come under strong questioning in the days to come as China and India will continue to stride the world with their astounding economic growth. The impressive economic progress made by Brazil, Russia and South Africa and who along with China and India constitute the now well known BRICS group will be a formidable force in the world stage whenever they act in concert.

Japan in spite of its problems will remain an economic power house. Germany although over burdened with the task of rescuing the problematic economies of the European Union will continue to be a major world economy. Then there are the second rung of countries like South Korea, Indonesia, Thailand, Singapore, Mexico and Turkey who will play an increasingly important role in world affairs in the days to come. Although political non-entities, Hong Kong and Taiwan are also heavy weights in world of trade and finance. Then there are, of course, the Arab and other OPEC member countries who, with their enormous wealth will continue to have their clout in the world.

According to several estimates, China is headed towards overtaking the United States in GDP and become the world’s number one economy; some say as early as 2025 while some others put the date closer to 2035 or thereabouts. It will be a safe bet that 2030 will be the more approximate date. Then again, the forecasts of India catching up with China have also become a veritable cottage industry.

Forecasts apart, it seems almost certain that in the next 15/20 years, the world scene will be dominated by the US, China, India and EU, the latter if it could manage its internal problems. Japan, Russia and Brazil, closely followed by Indonesia will emerge as major players in the international arena.

Nothing would be more vital and important for Nepal than the course of Sino-Indian relations in the years to come. Economic power breeds confidence. It also nurtures arrogance. My submission is that Sino- Indian relations will have the four basic characteristics with “c”- cooperation, competition, confrontation and conflict. We can see the examples of the first two “c”s, namely cooperation and competition at play in their relations.

Both India and China have cooperative relations in the field of trade, investment, energy and environment. They are competing for greater influence in and around the Indian Ocean region -China by forming the so-called “string of pearls” stretching from Hong Kong to the port of Sudan including ports in Myanmar, Bangladesh, Sri Lanka and Pakistan. We also see India stretching its muscles by conducting joint exercises with Vietnam in South China Sea and occasional naval exercises with Sri Lanka, the Philippines and New Zealand.

Will such competitive actions provoke confrontation between China and India? Unless there is some untoward incident caused by some miscalculation or overzealous action, it is unlikely that they will result in confrontation between the two countries. There may be complaints, accusations, harangues and verbal threats from both the sides. But that need not necessarily lead to confrontation. Other sensitive areas are the border areas between the two countries. There again, in spite of some moves viewed as aggressive by the other side, common sense has prevailed so far from escalating these actions into confrontation.

The ultimate scenario- that of a possible armed conflict between the countries is something nobody can predict or guarantee about its non-occurrence. Scholars have a tendency to point out that whenever two great power centers emerge, rivalry often escalates to conflict. Now that both the countries have nuclear capabilities, this in itself will be a deterrent for a large scale conflict.

So what is there for Nepal in these various scenarios of Sino-Indian relations? How do we steer ourselves in different situations of these sensitive and complicated relationship? We find ourselves placed between the two largest growing economies. In such a situation the most sensible thing will be to make the most out of it for our own benefit and national growth. We should try to attract maximum investment from each of the countries.

China has become India’s largest foreign trade partner with 60 billion dollars worth of transactions. The bilateral trade is expected to reach 100 billion. Transportation cost, on average, amount to 10% of the total trade. In other words, in a trade of 100 billion, transportation cost will be to the tune of 10 billion dollars. If we could have 10% of the transportation moving from Nepal, we stand to generate 1 billion dollars worth of business annually, a substantial amount for a country like Nepal. As not all goods can be economically moved from one country to another by air or sea route alone, surface route can provide an attractive alternative for movements of goods. However, we will need to develop our infrastructure to handle this traffic in trade. We will have to seek the assistance from both the countries in this respect. Also, development of such an infra-structure will also help to boost our bilateral trade with each of these neighbors.

How we handle Nepal-India and Nepal-China relations in the backdrop of the unfolding Sino-Indian relations will be the test of Nepalese foreign policy in the days to come. The continuous and frequent influx of Chinese officials to Nepal has raised concerns in India. The test of the strength and agility of our diplomacy will lie in how successful we are in convincing both of our neighbors that our policy is guided solely by our national interests without any intent to harm either’s interests. There are challenges and it is not always easy but we have to learn to walk the tight rope in dealing with either of our neighbors. All said and done, we cannot remain an island of poverty amidst this growing affluence all around us and only a sound foreign policy and the diplomatic tact and skill to implement it will help us to rise from this dismal position.

Moving beyond our immediate neighbors, we should concentrate on issues that matter most to us- development. In order to have a meaningful development-oriented foreign policy , we need to energize our economic diplomacy which has six major components, namely, promotion of trade, aid, investment, tourism, hydro-power and foreign employment.

Nepal’s foreign policy must be guided by and geared towards development through the medium of economic diplomacy. As hinted earlier, diplomacy is no longer the sole concern of the foreign ministry and the diplomatic missions alone. Various ministries, departments, agencies of the government should act in close cooperation in order to pursue a vigorous and fruitful economic diplomacy. Overall national interest should give way to petty and harmful considerations of turf. Moreover, nongovernmental groups such as chambers of commerce, tourism bodies, employment sector groups should be brought in for coordinated action in relevant areas.

Even in this age of globalization, one of the emerging trends is the formation of regional groups. The European Union, in spite of occasional problems, has become a truly pan-European movement with free movement of goods, services, capital and people with a common currency, except in a few cases. The resulting benefit has been too numerous to enumerate and far exceed the negative picture as may be reflected by the current crisis in some of the member countries. ASEAN has emerged as a formidable economic bloc. Similar groupings in different regions of Africa and Latin America have helped boost trade and economic cooperation among member countries.

In our own region, SAARC was established 26 years ago with much fanfare and expectations. There have been numerous declarations, conventions, agreements and understandings aimed at achieving economic and social development, poverty alleviation, combating terrorism and trafficking, several institutions and bodies like SAARC Regional Centers, SAARC University, and South Asia Forum have been established. Likewise several instruments like Development Fund, Food Security Reserve are available. But it must be said in all fairness that SAARC’s performance has fallen short of the peoples’ expectations and it has failed to deliver the benefits of cooperation. Unless we are able to move ahead towards a more meaningful economic integration, SAARC will have limited impact in the lives of the peoples of the region. We all are aware of that the main cause of the dismal progress made by SAARC is due to the deficit of trust among two of its largest members. Nepal should actively promote the cause of SAARC.

The other major areas of foreign policy in the days ahead will be terrorism, climate change, disarmament, trafficking of drugs and women and children. As regards terrorism, Nepal is a signatory to international as well as regional conventions and must be always on guard to live up to its obligations. There is no place for terrorism either home grown or imported in a modern society and we have to be alert and vigilant that it does not take root in our society.

Global climate change and its effect on environment have become increasingly important issues in foreign affairs. These issues have trans-national ramifications and the act or omissions of one nation or group of nations affect several other countries in an adverse manner. Nepal can reap rich dividends by learning properly what is being known as the “carbon diplomacy”- how to claim carbon credit from polluting countries.

Nepal has long been committed to the cause of peace and disarmament. It is one of the major troop contributors to the UN Peacekeeping operations and this has helped improve Nepal’s image in the international arena. It should not only continue but try to enhance its peacekeeping activities by greater participation in future peacekeeping activities.

To conclude, I would like to reiterate that Nepal should have a forward-looking and a pro-active foreign policy. It has to closely watch, study and interpret developments in Sino-Indian relations in order to manage and navigate its relations with either of the neighbors. It should focus on strengthening its economic diplomacy in a manner that will yield positive results for its economic growth. It should continue its efforts to make SAARC more effective and result-oriented for regionalism is the trend of the modern day world and no country, however rich or powerful can make things happen on its own. And lastly, a strong and unwavering commitment to the principles and purposes of the United Nations. A larger and more active participation in the UN peacekeeping operations should be one of the major foreign policy agendas of the country.

(Author’s presentation at an Institute of Foreign Affairs Seminar, November 14, 2011. Thanks the author and the organizer. Published in the larger interest of the readers in Nepal and beyond-Ed)

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  • Posted on - 2012-10-03    by     bb adhikari
  • i like it,plz send me such articles in my facebook id bbadhik ari
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