Millennium Post

Nepals's Diplomatic Nebula

Diplomatic circles in Kathmandu, capital of the evolving republic of Nepal, have zoomed in on the fast-changing politico-financial scenario of the Himalayan state during the interregnum between now and mid-October this year, when the President of People’s Republic of China Xi Jinping is scheduled to visit Nepal with a sizable delegation. Apparently, the trip is to strengthen bilateral ties covering economic and financial co-operation, but more important is the probable diplomatic shift towards China. Obviously, the status of India in the Himalayan diplomacy is bound to weaken. But to what extent is the shift likely? That’s the big question before the Indian diplomats.

The new Prime Minister of Nepal and chairman of Communist Party of Nepal (Maoist Center) Puspa Kamal Dahal aka Prachanda is ga-ga over meeting the Chinese President face to face. When the leader of delegation from China Institute of Contemporary International Relations, led by Professor Ji Zhiye, met him at the PM’s official residence at Baluwatar on August 2 and conveyed the willingness of the head of state of China to visit the land-locked state in the near future, Dahal instantly reciprocated saying that he would look forward to the visit. China has expressed its willingness to exchange its development experiences with Nepal and help Nepal expedite post-quake reconstruction, and development of tourism infrastructures. Furthermore, The CICIR team was assured by the new Premier’s press aide Manohari Timilsina that the new government is for reliable and long-lasting bilateral ties with China.

The bilateral relations between the Federal Democratic Republic of Nepal and the People’s Republic of China have been friendly and defined by Nepal’s policy of balancing the competing influence of China and Nepal’s southern neighbour India, the only two neighbors of the Himalayan country. 

The weaknesses of Indian diplomacy and its dynamics are now visible. Kathmandu’s tilt toward Beijing was manifest during the premiership of Dahal’s predecessor K P Oli, chairman of United Communist Party of Nepal (United Marxist-Leninist) when the latter welcomed the Chinese Admiral Sun Jianguo who went on a three-day visit to Nepal during early June this year. Indications of Xi’s visit to the Himalayan nation – widely-seen as key to China’s outreach in South Asia as it battles for influence in the region – came to light during the three-day visit of ­Chinese Admiral Sun Jianguo earlier this week. 

Indications of Xi’s visit to the Himalayan nation – widely-seen as key to China’s outreach in South Asia as it battles for influence in the region – came to light during the three-day visit of Chinese Admiral Sun Jianguo earlier this week. The admiral is second-in-command in China’s central military commission. He had parleys with the then Deputy PM and Foreign Minister of Nepal Kamal Thapa and Defence Minister Bhim Rawalt. Hong Kong daily South China Morning Post suggested at that time that the visit of Chinese military official be looked as “a reconnaissance mission and an assessment of political ground realities in Nepal” ahead of President Xi’s likely trip. In fact, the idea of Chinese President’s visit to China in mid-October came up during the Chinese Admiral’s trip but it was under wraps due to internal political volatility, according to SCMP. But it was not unknown to Asian diplomats in Kathmandu. Even then big-wigs of India’s external affairs ministry took no serious note of the Sino-Nepal diplomatic twist.

Significantly enough, the Japanese Ambassador to Nepal Masashi Ogawa promptly called on the new PM – actually his second term after a gap – at his official residence, assuring a step-up in bilateral commercial and technological cooperation. Meeting a few news persons, the Japanese diplomat said that Japan would like to extend its hand of cooperation to Nepal’s development endeavours. But Indian diplomats in Kathmandu kept quiet, reportedly awaiting orders from New Delhi. True, Nepal began jettisoning its ties with its traditional ally, India, in 2008 when New Delhi was accused of meddling in internal affairs of Nepal when the parties were intensely engrossed in reshaping its constitution. Kathmandu began wooing Beijing almost immediate after.

But Beijing’s concern is not confined to diplomatic matters. Leaders of the Communist Party of China were worried over the collaboration between the CPN(UML) and the then Unified Communist Party of Nepal (Maoist) which was later rechristened as CPN(MC) as a sequel to a merger with a breakaway group of Maoists.

However, the new PM who is yet to form the ministry is unlikely to antagonize India. The PM’s press attaché has clarified the relationship of the new Nepal government with its two powerful neighbours. Prachanda has contacts and friends in India and he has good means of communication with New Delhi. He will keep the options open with India while welcoming Chinese financial and technical help. Nepal needs massive investment and China is in a better position to assist Nepal. Further Nepal can get big loans from the China headed Asia Infrastructure Investment Bank(AIIB) for its infra projects including roads, power and highways. India has to widen its areas of collaboration with Nepal in more infra areas to show that India is equally interested like China in the speedy development of Nepal’s economy and the Modi government will take all possible means to improve trade relations with its Himalayan neighbor. That is why India can be of value in Nepal’s foreign policy radar.

After a long-standing five months blockade by 'Madeshi immigrants' allied parties in Terai supported by India, Nepal was forced to look for an alternative to Indian supply route.
Points in Nepal-China Treaty 2016:
1. Nepal to use China’s sea port facility.
2. Transit transport agreement to be reviewed every 10 years.
3. China to build a regional international airport in Pokhara.
4. China, Nepal exploring the possibilities of signing a bilateral free trade agreement.
5. China to explore the possibility of finding oil and gas reserves in Nepal.
6. China to provide economic and technical support to Nepal to implement the project on Pokhara airport.
7. China to distribute solar panels in Nepal’s rural areas by tapping its Climate Fund.
8. China to build, manage and maintain Xiarwa Boundary River Bridge at Hilsa, Humla.
9. Nepal, China to strengthen intellectual property system in both the countries.
10. Nepal, China to extend cooperation and exchange information on banking regulations.

Special Envoy To China
PM Prachanda had recently sent a special envoy to China while another such emissary was set to visit India soon as part of Nepal’s bid to woo its two giant neighbours and firm up bilateral ties after the formation of the new government. Dy PM and Finance Minister Krishna Bahadur Mahara left for 
Beijing with an invitation to Chinese President Xi Jinping to visit Nepal.

Preferential Treatment
The US has announced preferential access for another 27 products from the least developed countries (LDCs) including Nepal. In addition, Nepal has received the same facility for 66 products under the special Nepal Trade Preferences Act (NTPA) which was passed by the US Congress last year. This means Nepal can export 93 products to the US duty-free.

Political Instability
Political instability is harming Nepal’s struggling economy, which is expected to grow only 1.5 percent this year, threatening to stall further relief for last year’s devastating earthquake victims. Nepal’s southern plains were gripped by violent protests last fall after the Madhesis, who have strong cultural ties to India, and other ethnic groups objected to the federal districts in the new Constitution.
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