94Ha Viewpoint
Nepal, a small country with backward economy, weak strength and poor geopolitical conditions, seems to have gained a strategic opportunity to seek benefits from the three major powers at the same time, against the background of the intensified strategic competition between China, the United States and China and India. In fact, it is in a strategic dilemma that any diplomatic action may lead to retaliation and punishment from at least one major power.
Khadga Prasad Sharma Oli, who took office as Prime Minister of Nepal again in July this year, visited China for four days in December, breaking the diplomatic practice that the first stop of the new Nepali Prime Minister’s bilateral visit is India. This is considered to be Nepal’s pressure and demonstration on India, and also considered to be a victory of Chinese diplomacy over India. The real situation is far more complicated than this interpretation. No matter who is the Prime Minister of Nepal, no matter how much he personally hates India, he must make India the first choice and focus of diplomacy, because Nepal is highly dependent on India in many core areas.
First, Nepal’s economy is highly dependent on India. Due to objective geographical constraints, 80% of Nepal’s foreign trade passes through India, and almost 100% of strategic resources such as oil pass through India. The trade volume between Nepal and India accounts for about 65% of Nepal’s total foreign trade.
Secondly, Nepal is also highly dependent on India for military security. In 1950, Tibet was peacefully liberated. Nepal, which borders Tibet and has no knowledge of China, signed the Treaty of Peace and Friendship and its annex with India out of an instinctive reaction of geopolitical precautions to seek India’s security protection, at the cost of Nepal’s security issues having to be negotiated with India. The treaty is still valid.
In addition, Nepal is also highly close to India in terms of society and culture. Nearly 90% of the 30 million Nepalese believe in Hinduism. The languages and scripts of the two countries are very similar, and there are no language and cultural barriers between the people of the two countries. Citizens of the two countries can travel and work freely in each other’s country without any documents. Currently, there are about 3 million Nepalese living in India.
India regards itself as the successor of Britain and has always regarded South Asia as its sphere of influence and “back garden”, and does not allow foreign powers to interfere. In order to more effectively influence or even control Nepal, India has funded the Nepali Congress Party (which currently has the most seats in the Nepali Parliament) and also supported the Madhesi people in Nepal. The Madhesi people live in the Terai region bordering Nepal and India. Since 1947, Madhesh Province has been striving for autonomy, but has been rejected by successive Nepali governments. Reshaping the Nepal-India relationship under Indian domination has been Nepal’s primary strategic goal since it broke free from British control in 1947.
In 1973, India annexed Sikkim, and Nepal strengthened its relations with China for fear of becoming the next Sikkim. In 1989, India imposed an embargo on Nepal because Nepal imported weapons from China, which almost paralyzed Nepal’s economy. Nepal was forced to sign a new transit agreement with India, and India once again dominated Nepal-India relations.
In 2008, Nepal ended its monarchy and entered the republic era. It has experienced 13 changes of government so far. India has always distrusted the Nepali government, which is formed by the so-called pro-China political parties such as the Communist Party of Nepal (MC), the Communist Party of Nepal (UML), and the Communist Party of Nepal. In 2015, Nepal and India had a serious confrontation over the Madhesis in the new constitution, and India imposed an embargo on Nepal for 135 days. Nepal finally succumbed to India’s pressure. From July 2021 to December of the following year, the relationship between the two countries warmed up during the rule of the pro-Indian Congress Party, but the strategic mutual trust between the two countries had been seriously damaged. Nepal maintains a special relationship with India, which is a helpless move for fear of Indian hegemony.
Oli is the core leader of the Communist Party of Nepal United Marxist-Leninist Party. In 2015, the confrontation between Nepal and India occurred during his second term as prime minister. Oli hopes to use the “Belt and Road” to turn Nepal from a landlocked country to a land-linked country to get rid of its excessive dependence on India. In March 2016, Oli signed the “China-Nepal Intergovernmental Transit Transport Agreement” during his visit to China. In 2017, China and Nepal signed a memorandum of cooperation on the “Belt and Road”. In September 2018, China and Nepal signed an agreement to allow Nepal to enter Chinese ports such as Tianjin, Shenzhen, Lianyungang and Zhanjiang. In October 2019, Xi Jinping paid a state visit to Nepal, and China and Nepal upgraded their relationship to a strategic partnership.
In order to stop the growing Sino-Nepal relations, the Indian government has stepped up its punishment of Nepal. Since 2021, it has refused to buy Nepali electricity built with Chinese capital, and has not allowed such electricity to be exported to Bangladesh through India. India also strictly prohibits civilian aircraft flying to Pokhara Airport from passing through its airspace, causing Pokhara Airport to be unable to make ends meet and heavily in debt. From 2024, India will restrict the import of any products containing Chinese ingredients from Nepal. After taking office as prime minister at the end of July this year, Oli repeatedly requested to visit India, but all were rejected. It can be seen that Oli’s first visit to China this time, breaking diplomatic conventions, is a second-best rather than the best choice.
Nepal’s founding king Shah (Prithvi Narayan Shah) once likened Nepal to “a sweet potato sandwiched between two boulders.” When Sino-Indian relations deteriorated, Nepal faced the difficulty of choosing sides between its only two neighbors. When Sino-Indian relations were friendly, Nepal was worried that it would become a bargaining chip in Sino-Indian interest transactions. As the strategic competition between China and the United States intensified, the United States began to pay attention to Nepal, which seemed to give Nepal a third choice. In July 2017, China and Nepal signed a memorandum of cooperation on the Belt and Road Initiative. In September of the same year, Nepal signed a contract with the Millennium Challenge Corporation (MCC) of the United States. In February 2022, during the rule of the pro-US and India Congress Party, the Nepalese Parliament passed the MCC Nepal Project Contract and Supplementary Agreement. According to the contract, MCC will donate US$500 million to Nepal within five years, and Nepal will contribute US$197 million as “matching” funds to build or improve roads in the country and establish about 300 kilometers of power transmission lines.
It is clear that this aid is aimed at China. Since then, all Nepalese governments have stated that they will not accept Chinese loans, but only donations, resulting in slow progress of nine Belt and Road Initiative projects between China and Nepal, and the strategic mutual trust between China and Nepal has also been damaged. During Oli’s visit to China, the “Belt and Road” Cooperation Framework signed by China and Nepal evaded the issue of donations and aid. The US-Nepal “State Partnership Program” (SPP) military cooperation project was stillborn due to opposition from both India and China.
Nepal, a small country with backward economy, weak strength and adverse geopolitical conditions, seems to have gained a strategic opportunity to seek benefits from the three major powers at the same time, against the backdrop of the intensified strategic competition between China and the United States and China and India. In fact, it is in a strategic dilemma that any diplomatic move may lead to retaliation and punishment from at least one major power. Only by making up its mind to grit its teeth and overcome the pain of over-dependence on India can Nepal get along well with the three major powers and completely get rid of the long-term diplomatic dilemma of walking on thin ice.
