Nepal at the moment is facing considerable difficulty in balancing China’s Belt and Road Initiative (BRI) and the US’s Millennium Challenge Corporation (MCC). These are two mutually opposing geopolitical programmes in Asia today. At face value, both BRI and MCC are aimed at economic development. However, they are also strategic security partnerships for maintaining the sphere of influence and countering influence in Asia and the Indo-Pacific region. Under these circumstances, it is imperative that Nepal finds a pragmatic way forward that does not involve it being aligned to any military alliance.

For Nepal, it would have been better to assess the pros and cons from a moral and ethical perspective before joining BRI and MCC. Having already been signed, a policy based on realism is the only workable strategy for Nepal to deal with the present situation. Unlike powerful states, small power countries have to be practice more cautiousness in handling realpolitik. In fact, there have been some useful experiences in the past, where the world’s small power states have successfully set priorities to protect their national interests. These experiences may be worth reviewing and sharing, even if the lessons gained by one place may not be applicable everywhere.

Although Nepal is located in a different geopolitical space than Norway, Denmark and Sweden, these three countries have also had to make similar difficult choices throughout history.

One point of reference is the reason why Norway and Denmark joined the North Atlantic Treaty Organisation (NATO), but Sweden did not. Norway and Denmark decided to be a part of NATO because of their respective domestic needs. Sweden, having different needs, did not join.

Why Sweden took this decision needs to be viewed in its historical context. For example, Sweden declined to help Finland against the Soviet attack in 1939, but historical records suggest that 8,000 Swedes volunteered in the Finnish army. The Swedish foreign policy masters could keep their country neutral during WW2 partly because of Germany’s demand for iron supply from Sweden and partly because Germany needed to gain information about the allied powers through Sweden. The moral and ethical aspects of these choices of Swedish foreign policy is debatable and outside the scope of this writing.

Another point of reference is on which ground Sweden continues to maintain its non-aligned position despite being a member of NATO’s ‘Partnership for Peace’ programme. The said partnership is a Euro-Atlantic partnership allowing individual member countries to be part of NATO as an observer and without voting rights. Even without voting rights, the observer states have a possibility to achieve their national foreign policy objectives. Sweden joined the ‘Partnership for Peace’ in 1994.

Sweden has justified its engagement with NATO-led missions by only participating in such missions that are under a UN mandate. This means that Sweden defines its engagement with NATO and finds legitimacy through the UN mandate.

The final and most important point of reference is that the Swedish parliament adopted a security doctrine in 2009, which reads, ‘Sweden is not a member of any military alliance. Threats to peace and our security can best be averted collectively and in cooperation with other countries. It is impossible to imagine military conflicts in our region that would affect only one country. Sweden will not remain passive if another EU Member State or Nordic country suffers a disaster or an attack. We expect these countries to take similar action if Sweden is affected. Sweden should therefore be in a position to both give and receive military support.’ The Swedish approach of adopting a security doctrine through parliament suggests in short that pragmatic choices can be made in critical circumstances. This may be interesting for Nepal to look more closely at.

Coming back to Nepal’s case amid the ongoing controversy over the MCC, the US has made it clear that MCC is part of the Indo-Pacific strategy, which is a security alliance. In this context, Nepal accepting MCC obligations, in general, cannot be seen as a compromise to the state sovereignty of Nepal. However, the specific clause of MCC prevailing over the national constitution (and laws) is contrary to the sovereignty principle. If Nepal’s parliament ratifies MCC, which is required, this will certainly be an acknowledgement of the supremacy of MCC over Nepal’s constitutional system. It is a difficult legal situation for Nepal, indeed. In this case, the Swedish security doctrine adopted by their parliament may be relevant.

Nepal has invested considerable resources for MCC, and a total rejection will bring more harm than good. Apart from the obvious infrastructure developments for the country, it is detrimental for the future of Indo-Nepal and the US-Nepal relations. A pragmatic solution for Nepal is, therefore, to continue with the MCC as a peace partner. Nepal’s Parliament may pass a resolution in line with the late King Birendra’s proposal of a zone of peace which suggests a ‘close friendship and an even-handed relationship with the two neighbours’ China and India, ensuring that ‘[Nepali] territory is not used by one country for hostilities against another, expecting that the territory of other countries is not used for hostilities against Nepal.’ It needs to be acknowledged that the idea of Nepal as part of a zone of peace is still relevant.

In addition to MCC and BRI, there is yet another difficulty in setting Nepal’s foreign policy on the right track. That is the Bay of Bengal Initiative for Multi-Sectorial Technical and Economic Cooperation (BIMSTEC), which is the security umbrella of the Indian government. The Nepal government initially wanted its army to join the BIMSTEC military exercise in India, as proposed in September 2018. Subsequently, Nepal Army participation was withdrawn by the government because of opposing views within the ruling and opposition parties. Finally, a pragmatic solution was found and the army joined with observer status, somewhat similar to Sweden joining ‘Partnership for Peace’ with NATO.

With regards to the MCC Compact, the December 2018 meeting between Nepal’s Foreign Minister Pradeep Gyawali and the US Secretary of State Mike Pompeo needs to be recalled. The two sides were reported to have reviewed and upgraded political and ‘strategic ties’. The very term ‘strategic ties’ points to the geopolitics in the region. There is no doubt that the MCC Compact is part of a military strategy. For Nepal to achieve its goals to remain non-aligned, it seems necessary to search for a solution based on realism. A resolution from the parliament, I believe, defining Nepal’s non-alignment to any security alliance as well as establishing a partnership for peace with both MCC and BRI. Nepal should not copy the Swedish security doctrine, as Nepal has its own past initiatives from the time of the monarchy. Whether MCC and BRI are truly non-militaristic or not, both the US and China will have to appreciate a Nepali security doctrine if it is defined and passed by the country’s parliament.