Nepal and Indo-Pacific

Nepal is at the crossroad between two strategic ideas i.e. the Belt and Road Initiative (BRI) and the Indo-Pacific strategy (IPS) as the country aspires to become a middle-income State by 2030. This dilemma must also be tampered with Nepal’s commitment to non-alignment. It is hoped that a crucial decision will be made that will have far-reaching consequences for the nation.

Be that as it may, the Nepalese government has the potential to play a vital role in both strategies and for that, the time has come to redefine the country’s strategic perspective and position, as also define its BRI and the IPS strategies. This necessitates an intense discussion on the issue including a policy dialogue. The think tanks of Nepal too must be invited to provide inputs on how Nepal, a landlocked country in the South Asia region, can benefit from both strategies.

The Nepalese government clearly understands that without Foreign Direct Investment (FDI) there is no possibility of graduating from a low-income country by 2030. Therefore, the government must explore opportunities offered from the country’s geographical and geostrategic location between the world's two greatest economic giants i.e. China and India. In that context, in May 2017, the Nepal government signed a Memorandum of Understanding on the Belt and Road Initiative (BRI) framework for development assistance.

The Indo-Pacific Strategy comes at a time when the Chinese Foreign Ministry in Beijing stated that “Nepal firmly adheres to the non-alignment policy, however, disapproves of the so-called 'Indo-Pacific Strategy’”. This prompted the US Embassy in Kathmandu to seek clarification from the Nepalese government. The Chinese statement and US’ reaction affirm that both countries have a growing interest in Nepal. In December 2018, during his visit to the US, Nepal's foreign minister stated that Nepal is part of US’ IPS. This invited sharp reaction from the ruling party leaders to clarify what the US statement meant for Nepal. There was also pressure by Nepal’s ruling party leaders not to support the Indo-Pacific strategy because it aims to undermine the Chinese relationship.

Due to this pressure and consensus among the political leaders, Nepal could not officially acknowledge the announcement made by US officials, saying that Nepal had not decided to participate in the US-led strategy. Since then, whenever the US administration officials tried to signal that Nepal could be a part of its Indo-Pacific strategy, Nepal has remained both non-committal and indecisive.

Similarly, the Nepalese political leaders also appear to be divided over United States Millennium Challenge (MCC) project signed in September 2017. A section of ruling party leaders firmly stood against parliamentary ratification of the compact, arguing that the MCC is part of Washington's Indo-Pacific Strategy, which has military components to counter China. This clearly shows the divide among the Nepalese political parties regarding the Indo-Pacific strategy.

Considering that both China and the US have geostrategic interest in Nepal, the country should think broadly about their political determination and showcase their will to put people and country’s development first. Nepal’s non-alignment policy should clarify what it means to be non-aligned and how it relates to BRI and IPS given that both can potentially strengthen economic collaboration, improve road connectivity, promote trade and investment, and access a hassle-free route to the sea.

Nepal Government is in a dilemma and trying to counter balance the BRI and the IPS. Any strategy that infringes upon national interests or projects designed fully aligned with national priorities and selected by the host country should not be disapproved. Nepal has immense untapped potentials, and these require huge investment. The win-win collaboration and partnership and balanced stands with BRI and IPS can create huge prospects. At another level, Nepal has a trade deficit with both India and China. Any strategy built as ‘one-way traffic’ is not a win-win cooperation and collaboration. Nepal is a gateway to South Asia for China as also a gateway for US’ Indo-Pacific to China. A careful management of fragile geopolitics can bring about stability.

Hence, it is opportune time for Nepal to redefine the country's non-alignment policy and what it means for a developing the nation and people. There is no reason for small States to bandwagon the powerful nations or side with only one power. There is the possibility of building a balancing coalition, and the hands of such a coalition can be strengthened. Nepal needs political will and determination. The political leaders have greater responsibility to think and analyze how Nepal can benefit from both the BRI and the IPS. There is an utmost need for genuine discussion, dialogue, and consensus on how landlocked Nepal can gain the utmost benefits from the two profitable strategies awaiting at its doorsteps.

Mr. Mukti Suvedi is an International Development and Peacebuilding Expert and Visiting Research Fellow-Center of Religion, Reconciliation and Peace, University of Winchester UK, Faculty Peace and Conflict Studies- Sault College, ON, Canada and Tribhuvan University, Nepal.

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