It is unfortunate, however, that there are already plenty of instances when the political sphere stymied the growth of Nepal’s foreign interests: our embarrassing failure to land the UN General Assembly’s presidency in 2011 serves as a classic example. But this is only one of many such instances.   

Towards regional cooperation

Yet, Nepal still has the opportunity to progress regionally, especially if it manages to pay heed to the growing strength and influence of the Shanghai Cooperation Organisation (SCO). The SCO is a regional body that will soon comprise of more than half the world’s population after the integration of India and Pakistan into a body that already has Russia, China, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan as full members, and Sri Lanka, Iran, Afghanistan and Mongolia as observers or dialogue partners. Even a cursory glance at these nations on a map will reveal Nepal as a conspicuous absentee from a regional body concentrated in Central and South Asia where Nepal is not even an observer state.

But barring even such a glaring geopolitical absence, there are a multitude of economic and strategic rationales for Nepal’s presence in the SCO. Indeed, when one takes into account the enormous opportunities for economic cooperation with the world’s fastest emerging economies, these emerging economies’ willingness to tap into underdeveloped markets like ours, and with the wide-scale energy projects the SCO is undertaking and our own energy issues, it would make considerable sense to join the SCO as an observer state, and then phase into being a full member.

International avenues

The more prominent question one might ask of Nepal’s presence in the SCO, however, has to do with the US and the apparent misalignment of US interests if Nepal joins the SCO, as the SCO is a body that was initially formed as a counterweight to the North Atlantic Treaty Organisation (Nato). The SCO, however, has now developed into a regional body more concerned with economic growth, energy security and countering terrorism. Since there were no US qualms about India and Pakistan’s observer status at the SCO, and given both nations’ extensive ties with the US, there is more than enough reason to say that the US will not be bothered by Nepal’s presence in the SCO. Indeed, in light of Nepal’s geographic location, joining the SCO would only be regarded as logical and intuitive.

It is logical also because regionalism and involvement in multilateral regional bodies provides a much more expeditious avenue to initiate and facilitate international projects. This is because regionalism in domestic politics is much more acceptable than bilateralism, as bilateralism connotes alignment towards a particular nation or bloc, and this comes with obvious political implications. Indeed, if we are to examine Baburam Bhattarai’s signing of the Bilateral Investment Protection and Promotion Agreement (Bippa) with India, there were numerous political opponents to this deal which looked to tighten Nepal’s ties with India. However, if such a trade agreement were to take place within the framework of Saarc, for instance, or the SCO (looking to the future) there would be lot less political backlash and a lot more scope for economic cooperation.

But another question arises: what can the SCO do that Saarc as a regional body cannot? For one, a key objective of the SCO is to invest in and explore the huge economic potential of South Asia and this converges with our key objective of drawing in foreign investment into our promising hydropower and herb industries. What is even more promising is that the SCO’s energy club is incredibly active, and both Russia and China are extremely eager to expand energy production and SCO markets. There is no question that we would benefit from engagement in the SCO, and especially the energy club, as it would serve as a platform to facilitate multilateral cooperation on our energy front and subsequently develop our energy and hydropower infrastructure, ultimately allowing our progression into an energy independent exporter. Here, the SCO’s development of oil and gas pipelines to connect South Asia’s hungry markets can also contribute to a lessening of our sole reliance on Indian imports.  

Trade and transit

Moreover, the SCO has managed to initiate a multitude of large-scale transportation infrastructure projects in Central Asia, through which the SCO is planning to physically connect to South Asia. There is no doubt that Nepal can serve as a key link in this regard. Indeed, many commentators speak of Nepal’s geostrategic future as a transit state facilitating trade between India and China and so, joining the SCO would be highly conducive to the aspirations of Nepal to move beyond its current paradigm of thought, which many commentators label as the ‘Yam syndrome’. The SCO would provide the multilateral framework necessary to ease our transition from a buffer state into a transit state, especially because transportation for trade and transportation connectivity will be very high up on the SCO’s agenda. There is no question, then, that we must act on the need for efficient trade routes between China and India when this issue is still on the SCO’s agenda because we can provide these routes.

Overall, we see that Nepal has been incredibly slow in regional matters and that it must in some form participate in the SCO. We have an opportunity to join a regional platform that may reduce our reliance on India for oil and gas; a platform where we can talk about our potential for energy production and talk to nations who want to invest; and a platform where we can discuss our potential as a transit state and talk to nations who want to use us as a transit state.

Koirala is pursuing economics and political science at Grinnell College, the US