Recent years have seen a sea change in Nepal’s foreign policy. The KP Sharma Oli administration, in the wake of the disastrous Indian blockade of 2015, has attempted to break with Nepal’s reliance on the southern neighbour, going to lengths to court Beijing. Nepal has signed up to China’s flagship Belt and Road Initiative (BRI) and also forged a transit and transport treaty. Then, in October, President Xi Jinping visited Nepal, the first visit by a sitting Chinese president in 23 years, eliciting a newfound fascination with the northern neighbour.

But things are not always as simple as they appear, especially in geopolitics. And so, it is about time to speak to someone who can parse what is currently happening.

I meet Nishchal Nath Pandey, director of the Centre for South Asian Studies think tank, at the Calm restaurant in Tangal. Pandey is a prolific commentator and has studied and worked widely across the region. I thought it best to begin with what every Nepali foreign policy wonk seems obsessed with—the Millennium Challenge Corporation’s (MCC) Nepal compact.

Nepal signed up to the US’ new foreign aid arm in 2017 to little compunction. But now, the compact, which requires parliamentary ratification, has recently earned the ire of some politicians. Over Mustang aloo and fish nuggets, I ask Pandey to help me understand this newfound opposition.

“I have a different take on the MCC debate,” says Pandey. “This is part of Nepal’s strange exercise of multi-party democracy where the Nepal Communist Party is both the ruling party as well as the opposition.”

According to Pandey, ruling party leaders are both in favour of the MCC and in opposition. This is because the party does not want to cede the nationalist platform to another party, especially the Nepali Congress.

“This is a tactical move and it is what left parties do all over the world,” he says. “They do not want to give the nationalist stance to any other party because that stance comes in handy during elections. When some leaders of the ruling party speak out against the MCC, why aren’t they punished or told to keep silent by the two chairmen?”

After all, the ruling party is communist and in most communist parties, public dissent is generally not tolerated. Communist leaders in the past have asked a hundred flowers to bloom, only to cut them down when they do.

“The Nepal Communist Party is a master at creating misconception while the Nepali Congress is unable to even create a perception,” says Pandey. “When the MCC is ultimately ratified by Parliament, some sections of the ruling party will tell the Americans that despite all the hurdles, they were able to get it passed. Other sections of the same party will go to the electorate and say that we managed to revise its anti-national elements before ratification.”

It’s a smart strategy, but Pandey himself sees few issues with the MCC.

“It is going to help us build infrastructure,” he says. “Our roads are poor and when we start exporting energy, we are going to need transmission lines. The things that the MCC aims to do are good for us.”

But ruling party leaders seem hung up on one aspect of the MCC—whether or not it is part of the US’ Indo-Pacific Strategy (IPS). And they continue to discuss this, despite numerous American officials categorically saying that the MCC is definitely a part of the IPS.

“Every new American administration comes up with its own jargon in international diplomacy,” says Pandey. “The Nixon administration talked about ‘Ping Pong diplomacy’; Reagan spoke about ‘The Evil Empire’ and ‘Star Wars’; President Bush highlighted the dangers of the ‘Axis of Evil’ and throughout the Obama years, there was the ‘Pivot to Asia’. All these jargons are used to suit the prevailing situation and context. So let us not get too carried away with this nomenclature.”

Pandey is right regarding nomenclature but our leaders do not seem to grasp that the IPS is the name for the Donald Trump administration’s foreign policy for the region, not something that any country signs up to join.

Another concern for communist party leaders appears to be that they’re afraid of getting on China’s wrong side, since they believe that the IPS is aimed at countering China. This might not be completely misguided but it misses the bigger picture. Hou Yanqi, the Chinese ambassador, recently said that Nepal should accept all foreign aid if it helps with economic development, sending a clear message to the Nepali political fraternity that China has no skin in the game.

“We have to watch the behaviour of the established power and the aspiring power,” says Pandey. “They do not want to fight each other directly but they want to fight in other theatres. We cannot afford to have Nepal as a theatre of strategic competition between major powers. The only option is to hedge and try to take economic advantage from the enormous amount of money they are going to spend.”

What Pandey recommends is realpolitik, seizing advantages from both sides while not overtly siding with one. It is what any small country trapped between two giant powers should do and despite decades-long lip service to a foreign policy of equidistance, Nepal has largely been unable to translate that commitment into action.

“The US wants to retain its position as a superpower but it is getting a challenge from China,” says Pandey. “As a small country, Nepal needs to watch the trends very carefully and be prepared to deal with the transition. It is not classical geopolitics anymore.”

When it comes to hedging bets, Nepal pulled off quite a spectacle with President Xi’s visit in October. It sent a message, heralding the rise of a new geopolitical actor in Nepal. But according to Pandey, that’s all it was—optics.

“High-level foreign visits are good because they give the impression that Nepal is safe,” he says. “But we now have a very large canvas of relations with China—tourism, trade, economic relations, military, and communist to communist—and we need to work towards implementation. All our development partners and neighbours say that we are very poor at implementing decisions and agreement. We talk, we agree in private and then we disagree in public.”

But enough about China. It is time to speak of the elephant in the room—India. Manjeev Singh Puri, the Indian ambassador, has just departed and New Delhi has yet to appoint a new ambassador. Whoever India sends next will have their hands full, given the Kalapani irritant and India’s own domestic issues as it continues to battle a wave of discontent across the country.

What can we now expect from India, I ask Pandey.

“In his second term, Indian Prime Minister Narendra Modi has become more decisive and forceful. He is now gearing up to implement his philosophical and ideological vision for India,” says Pandey, pointing to the revocation of the special status of Jammu and Kashmir, the Supreme Court decision to build the Ram temple in Ayodhya, and now, the decision to implement the Citizenship Amendment Act.

“There was a statement by the Indian Defense Minister that their policy of not using nuclear weapons first was not cast in stone. Minister of Road Transport and former President of the BJP Nitin Gadkari recently also said that ‘there was Nepal as a Hindu nation but now there is not a single nation. Where will Hindus and Sikhs go?’ These statements needs to be studied carefully as they will have direct implications on Nepal and the neighbourhood,” says Pandey.

It is clear that neither China nor India currently present easy challenges for Nepal’s foreign policy. But some might say that the Foreign Ministry under Pradeep Gyawali has managed to function in a somewhat capable manner. The government line is that Nepal is now “seen and heard” across the world.

“Our foreign policy priority of being seen and heard more often is definitely noble,” says Pandey. “The planned ‘Sagarmatha Dialogue’ fulfills a major need that a large international event takes place in Nepal. It will project Nepal’s independent international image but it should not be a one-off event.”

In order for Nepal to be seen and heard more often, it is also important for more Nepalis to be able to go abroad easier. That requires a stronger passport, which should be a foreign policy priority, says Pandey.

“It should be a foreign policy priority to strengthen our passport so that we can get visas on arrival, especially in countries that Nepali tourists visit,” he says. “Why shouldn’t we get a visa on arrival in Bangkok, Kuala Lumpur or Dubai? Some countries have embassies in Nepal but in order to get a visa, Nepalis have to go to India. That is a humiliation.”

We’ve finished our food and drank two cups of tea and coffee each. I imagine we’ve touched on most issues of import when it comes to Nepal’s foreign policy. But there is one question that I have been waiting to ask. Much of the Nepali intelligentsia appears to believe that Nepal is supremely important for India and China when I am not so certain it is. So I ask.

“Our strategic importance has actually grown,” says Pandey. “We border Tibet, long known as the soft underbelly of China, and Uttar Pradesh and Bihar, the most populous and underdeveloped areas of rising India. China also wants to penetrate the very large South Asian market through Nepal. But we have to tread very carefully as we are entering a grey area. What decisions Nepal makes now will determine our future.”

ON THE MENU

CALM, TANGAL

Potato wedges: Rs 180

Fish nuggets: Rs 350

Americano X2 : Rs 340

Masala Tea X2 : Rs 340