Nepal’s Drift

A 250-year-old nation long in thrall to one giant neighbour readies itself to play ball with another

Chinese Premier Wen Jiabao (centre) with Nepalese Prime Minister Baburam Bhattarai (right) during the former’s visit to Kathmandu this January. LIU WEIBING / XINHUA
01 March, 2012

WHEN PRITHVI NARAYAN SHAH, the 18th-century king who heralded modern Nepal, defined the country as “a yam between two boulders”, he not only highlighted the nascent kingdom’s fragility, but also hinted at the intimidating presence of its two giant neighbours. Shah conquered several fiefdoms and principalities to unify Nepal, taking advantage of their petty wrangling. But even as he came upon success on the home front, he was still pitted against formidable foes in the British Empire and the Qing Dynasty at its peak. Shah’s metaphor has formed the core of Nepal’s strategic relations with its neighbours.

Flanked by India to the south, east and west and China to the north, the Himalayan nation has historically acted as a buffer state. The majestic mountains form a natural barrier between Nepal and China. But an assertive China, having arrived on the global stage with a bang, is leaving its footprints all over South Asia, nowhere more prominently than in Nepal. In building roads, investing in hydropower and telecoms, and signing multibillion-dollar aid packages, China is often treading on India’s toes in Nepal—and its increasing geopolitical influence in the region is making India anxious. With both countries competing for Nepal’s attention, there is a consensus in Kathmandu that the country must take advantage of the newly-ardent courtship.

Along its journey to becoming a global power, it is only natural for China to expand its reach. Many analysts claim that the next theatre of conflict between the US and China will be the Indian Ocean. In recent years, China has built a series of ports in Bangladesh, Burma, Sri Lanka and Pakistan, part of what some foreign policy wonks have dubbed the “String of Pearls”, and there are fears in India that, in establishing these ports, China is encircling the country. Analysts believe that China sees their ports serving both as trade routes and strategic bases.

Where does Nepal figure in all this? On a world map, Nepal sits like a brick between China and India. Landlocked but strategically located, the country is famed for its harsh terrain. But what Nepalis see as a ‘curse’, China sees as an opportunity. It is eager to develop railways and roads from its impoverished Tibetan Plateau to Nepal, and eventually to India.

One of these development projects is a 17-kilometre-long road under construction about 60 km west of Kathmandu. Dubbed the ‘New Silk Road’, China is building the vital route to connect Nepal’s southern plains to Kyirong county in southwest Tibet.

When completed, it will be the shortest route from Tibet to India, opening up unprecedented cross-border trade. China is keen to enter into the large and lucrative South Asian market through Nepal. And Nepal is happy to oblige. Talking to a group of journalists on 15 January, Nepal’s Maoist Prime Minister Baburam Bhattarai said, “Nepal should act as a vibrant bridge between India and China.” There has also been talk of extending the Qinghai-Tibet railway to the China-Nepal border.

Dhruba Kumar, a retired professor of strategic studies at Tribhuvan University in Kathmandu and the author of Mao and China’s Foreign Policy Perspectives, says Nepal’s leaders should formulate a policy to promote Nepal’s role in an age when security and trade are the hallmarks of foreign relations. “Back in the 1960s and ‘70s, it was important for China to pacify the borderlands in its domestic efforts to consolidate the power. At present, however, China can use Nepal as a launch pad to forge a broader strategic alliance.”

China’s major concern, however, is security in its restive Tibet Autonomous Region (TAR)—what Kumar calls “the country’s soft belly”—where dissent is growing and demonstrations against the Chinese occupation are frequent. Nepal has enjoyed outstanding ties with Tibet: Kathmandu businessmen ran their businesses from Lhasa, the administrative capital of TAR, for years. And Nepal has the distinction of being the only country with a consulate in the roof of the world.

To China, the threat in Nepal emanates from the 20,000 Tibetan refugees living in the country who stage protests year-round demanding a ‘Free Tibet’. Starting in 1990, Nepal stopped giving asylum to Tibetan refugees, and ever since there has been a tacit understanding between the Nepal government and the United Nations to allow Tibetans a safe passage to India.

The fact that the two giant neighbours disagree so often has affected Nepal’s internal politics as well. Sudheer Sharma, the editor of the Nepali daily Kantipur and a frequent political commentator, argues that the geopolitical rivalry between China and India has undermined Nepal’s tenuous peace process that began after the hostilities between the Maoist rebels and the government forces ceased in 2006. “There is a tendency in India to actively point to the risk from China. Then, China reciprocates by becoming more assertive. And, the series of reactions emanating from this creates commotion inside Nepal.”

Nepal’s king Mahendra Shah (1955-72) exploited the bitter rivalry between China and India in the 1960s and his son and last king, Gyanendra Shah, followed suit by closing down the Kathmandu offices of the so-called Tibetan government-in-exile, based in India, in early 2005. While India, the US and the UK stopped the supply of arms to the Nepalese Army as a sign of their support to the putsch by King Gyanendra on 1 February 2005, China continued to send truckloads of arms and ammunition, but its support failed to ensure the stability of Gyanendra’s regime, which was finally toppled in 2006.

In the past, India has objected to China’s military overtures in South Asia and, as a key player in the political settlement of Nepal, has often been accused of micromanaging Nepali politics. In 1989, when Nepal purchased weapons, including anti-aircraft guns, from China, India imposed economic sanctions, citing the 1950 Treaty of Peace and Friendship that placed Nepal under its security umbrella.

Nepal’s monarchy, a 250-year-old institution that came to an end in 2008 when the king was finally reduced to civilian status, had been China’s trustworthy ally. But the June 2001 massacre of Nepal’s royal family served as a blow to Beijing’s ruling elites. Gyanendra, after seizing power in 2005, tried to play the so-called ‘China card’ by recommending China as a member of the South Asian Association for Regional Cooperation during the organisation’s 13th summit in Dhaka in 2005, but the move backfired. It angered India, who in turn engineered a deal between then underground Maoists and the parliamentary parties, heralding the end of the monarchy.

After joining the peace process in 2006, Nepal’s Maoists, who draw their ideology from the Great Helmsman, began to cosy up to China. Several senior Maoist leaders visited China and the Chinese, in turn, sent delegates to Kathmandu, causing jitters in New Delhi, which maintained that such exchanges were under its exclusive domain.

With the August 2011 election of Baburam Bhattarai, the Maoist ideologue with close ties to India, as the new prime minister, some say India’s more troubled relations with Nepal are set for a course correction. But China’s eagerness to capitalise on solid ties with the Himalayan nation is not likely to diminish.

In March 2011, China’s Army chief Chén Bĭngdé visited Nepal and signed a military aid package worth $20 million. And in mid-August, a 60-member delegation led by Chinese Communist Party’s powerful Politburo Standing Committee member Zhou Yongkang pledged loans and aid worth $50 million.

The flurry of visits culminated in the most high profile delegation Nepal has received in decades. On 14 January, Chinese Premier Wen Jiabao stopped by Kathmandu en route to the Middle East. In an apparent bid to prevent the Tibetan exiles in Kathmandu from launching pro-Tibet demonstrations, Wen’s visit was only announced hours before his arrival.

And he didn’t disappoint his hosts. Wen committed more than $140 million in development funds for Nepal, increasing China’s previous package by a third. Kathmandu reciprocated by pledging to not allow anti-China activities in the country.

Chinese interests are not just confined to upgrading security in the Himalayas—they have also been thrust upon India’s doorstep. According to news reports, the Hong Kong-based Asia Pacific Exchange & Cooperation Foundation signed an agreement with the United Nations Industrial Development Organisation to invest $3 billion in developing the southern Nepali town of Lumbini, just a few kilometres from the Indian border, as a special economic zone, complete with an international airport, hotels and a university. India has not looked upon the plans favourably, according to some reports. Lumbini, also known as the birthplace of the Buddha, might just become a microcosm for the geostrategic rivalry being played out in Nepal.

Since it emerged as a nation two and a half centuries ago, Nepal has struggled to step out of the shadow of its neighbours. For most of this period, India has played a dominant role. But as China prepares to take the stage, Nepal’s willingness to play a part could make all the difference. While talking to reporters the day after Premier Wen’s visit, Prime Minister Bhattarai announced: “If we won’t be able to develop our country as a bridge between the neighbours, Nepal will lag far behind. If we don’t do this, Nepal’s economy risks being submerged into the economies of China and India.”