Historically, in a majority of the cases, a rising power has threatened the existing ones in the race for the world’s leading power. With the rise of China, leading to a competition and conflict with the United States (the existing power), global power politics has changed dramatically. The power struggle shifting to Asia, particularly around China’s periphery, has made Nepal’s position trickier. Diplomatic manoeuvring by global and regional powers to persuade and coerce geopolitically important countries to lure on their side reflects the complexity of the challenges facing countries like Nepal.

Countries are under pressure to shift their perception and policy amidst the war in Ukraine and the soaring tension in Taiwan Strait. Every country in the world is affected directly or indirectly by these events. Both strong and weak powers adjust and realign their policies differently to make themselves relevant in the changed geopolitical context. India shifted its policy from non-alignment to multi-alignment. Despite criticisms, it has been consistent with a multi-alignment strategy. Nepal is under intense pressure to revisit its policy due to growing geopolitical competition and the assertive diplomatic posturing of great powers.

The non-aligned movement was initiated right after the end of World War II, in the context of a wave of decolonisation, and to abstain from the collective defence architecture—North Atlantic Treaty Organisation and the Warsaw Pact. After the end of the Cold War and the collapse of the Warsaw Pact, the utility of non-aligned movement began to falter. The emergence of regional power centres and multi-polarity have further diminished the relevance of non-aligned movement in the traditional sense. However, the concept of nonalignment has been taking different shapes and facades to adapt to fast changing geopolitical dynamics.

Nepal’s dilemma

Nepal is at a crossroads in making the right policy decision and formulating the right strategy in the fast-changing and turbulent geopolitical environment. Nepal keeps hammering on non-alignment policy without realising the nature of shifting global reality and growing complexity. Traditionally, Nepal is under India’s heavy influence due to the 1950 Treaty provisions, political connection, open border regime, and trade dependency. With the emergence of the struggle for global dominance, American and Chinese security strategies, economic strategies, and counter-strategies have unfolded.

Pragmatically, in today’s interest-driven world, a country can neither remain fully aligned nor fully non-aligned—hence, the selective alignment would better serve the country’s interests. Beteen the 1960s and 1980s, diversification of foreign relations was a popular foreign policy agenda of Nepal. In that era, development aid and loan were not inter-connected to security strategy or viewed as an alignment with the donor. Nepal also accepted development aid from India, China, the United States, Russia, Japan, the United Kingdom, and many others. Both rich and big countries allocate a certain percentage of their budget for economic assistance to developing countries. In recent years, financial aid and loan have increasingly become a tool for compelling a receiver country to choose sides.

Nepal is in a dilemma in figuring out whether or not an aid or loan package is part of the security strategy of the donors. The problem further lies in rightly comprehending and responding to Indo-Pacific Strategy (IPS), Millennium Challenge Corporation (MCC) and Strategic Partnership Programme (SPP) of the United States and Belt and Road Initiative (ISP), Global Security Initiative (GSI) and Global Development Initiative (GDI) of China. Likewise, the broader interest of India in Nepal through the 1950 treaty and discontent with the involvement of China in mega projects make the road bumpy. Great powers want Nepal to side with them and become part of their respective strategy or initiative. The key challenge lies in reaping benefits from economic aid packages and preventing itself from entangling inside Chakravyuha (labyrinth). The strategy of smart alignment would help prevent sliding into such complexity.

Strategising smart alignment

The conventional application of non-aligned policy in the changed global and regional security environment is no longer relevant. Countries come under pressure to expose their position on major international issues while voting in the UN Security Council, UN General Assembly, and UN Human rights Council on critical issues. Economic aid, loan, external financing in development projects, international trade, awarding a contract to international bidders, and foreign direct investment has become an inseparable part of security strategy.

Between the 1960s and 1980s, Nepal’s policy of non-alignment and diversification of foreign relations was successful. Nepal became a non-permanent member of the UN Security Council twice in this period. Development aid poured in from all donor countries irrespective of their ideology or the security bloc they belonged to. The situation changed radically after the end of the Cold War. Although Nepal had tried to maintain “equiproximity” or “equidistance” relations with neighbours in the post-1990 era, it was often blamed for tilting and using India or China cards for its benefits. Hence, smart proximity with neighbours and interest-based relations with all would be the right policy choice for Nepal to achieve stability, security, and prosperity. Further, Nepal also needs an external balancer to achieve its long-term security interest.

In today’s polarised, volatile, uncertain, and security-obsessed world, the smart alignment would be the best strategic option for Nepal. It combines selected components of policies and best practices from both alignment and non-alignment policies. It is a multi-layered and multi-dimensional relationship calculated mutually with different countries. As a least developed and weak power, Nepal is at the receiving end of economic aid and loans. The receiving countries seem increasingly vulnerable than ever before as aid and loans underpin security strategy. Loans on mega projects create challenges to state security when the receiver fails to pay back.

Implementing the idea of “friendship with all and malice to none” and enhancing cooperative relations with all to promote international peace, prosperity, and security would be in the best interest of Nepal. Striking the right balance amidst soaring great power rivalries would better serve the national interest. As a small power, Nepal needs to adopt non-provocative and soft posturing. Considering the geopolitical situation, a low-lying strategy would be the best mantra for Nepal. Nepal needs to promote its culture, utilise its diaspora, and be attractive to others by use of various soft power tools.

Nepal has self-imposed a condition that prevents it from joining a military alliance and allowing foreign military bases in its territory based on its historical lessons and geopolitical compulsion. Its policy document also backs this commitment. Hence, from a security standpoint, the country is non-aligned and neutral. As a neutral country, it can’t allow any state or non-state actor to use its territory against its neighbours and allies. Nepal needs to maintain an appropriate military and para-military force size to ensure this commitment. However, maintenance and enhancement of existing military-to-military relations with neighbours and great powers are essential for non-traditional cooperation such as HADR, peacekeeping, and bilateral joint military exercises.