A nation’s foreign policy is dictated by its economic policy. In Nepal, however, it is the other way around. This is due to a huge budget deficit and not being self-sustaining, which leads to dependence on foreign aid and remittance. As a result, our foreign policy is largely limited to the interests of other nations and our struggle to balance them with our own. The geographical location of Nepal resembles a strategic fortress in the mountains between two emerging superpowers. 

The porous border with India in the south facilitates unaccounted traffic of goods and people. Its benefits have been reaped by both Nepalis and Indians for generations. In the north, China, or to be more specific, Tibet Autonomous Region, can be accessed. The historical trade routes are still intact providing numerous opportunities. This border, though not free due to its difficult terrain, is another concern for unaccountable traffic and its accompanying complications. 

The tiger

India is a thirsty nation, literally. According to the Intergovernmental Panel on Climate Change, India is designated as a “water stressed region”. At the current rate of industrialisation and urbanisation, it is expected that the utilisable fresh water will fall below the international standard. Of the many major projects undertaken by the authorities, one of particular interest to Nepal’s context is the Indian Rivers Inter-Link Project which proposes using river systems for storing and transporting water. Nepal’s rivers contribute to the following river systems—Koshi-Ghaghara Link, Koshi-Mechi Link and Gandak-Ganga Link. One cannot easily underestimate India’s desperation in securing ownership of this resource. 

India intends to ensure universal availability of electricity by 2017, but is plagued by intermittent and unreliable supply. The deep-rooted and well penetrated cultural and familial relationship between India and Nepal amounts to frequent travel and emigration of people. Both nations attribute large portions of their workforce to each other. In this context, India sees Nepal as a crucial component of its foreign policy reflected by the fact that its largest foreign mission is in Nepal. 

The dragon

China views Nepal as being integral to its foreign policy due to Nepal’s strategic location and its border with Tibet. China wants a stable, peaceful and prosperous Tibet. Herein lies the principal doctrine for its relations with Nepal. China has boosted its annual aid to Nepal more than five-fold to 800 million renminbi to mark the 60th year of the establishment of bilateral relations last year. 

China’s expansion to meet its strategic and trade ambition is largely concentrated in the String of Pearls theory to secure and protect these maritime routes. Lately, this expansion has been met with close confrontation by elements of the US Pacific Fleet and other regional allies who also lay claim to the vast riches in the South China Sea and Indian Ocean. India particularly has been expressing concern as this envelops its entire sphere of influence, but it is also cautious not to get entangled in an unwanted conflict. In this context, there is no particular strategic importance of Chinese influence in Nepal as its ambitions are largely limited to those relating to Tibet, quite contrary to the hue and cry in the Indian media. 

There has been a slow but steady rise in the number of Chinese nationals permanently operating businesses in Nepal. It is estimated that about 120,000 Chinese tourists travel to Nepal. One of the most dramatic changes reflecting this are the number of signs in Chinese characters at tourist locations. There has been an increased number of Chinese language programmes in schools and institutes along with the rise in Chinese arrivals, mostly initiated by the Chinese Embassy in Kathmandu. 

Way forward

There is a vivid portrayal of Nepal’s dependence on India for almost every commodity. The dependence has been sharply increasing in the last decade in all categories including agricultural produce, poultry and other basic necessities. Only 40 percent of the population has access to electricity. This is a very sad state of affairs, especially considering that Nepal has a huge hydropower potential. Nepal is in the midst of an energy crisis with crippling power cuts and rising dependency on fossil fuels. 

To a layperson, modern India’s need to secure water seems to be tantamount to all forms of its diplomatic relations with Nepal. Exploitation and misinterpretation of the Madhes Movement culminated in a blockade meant to weaken the willpower of the Nepali people in order to what can only be presumed as an effort to establish a receptive government which shall, in due course, ensure that India has exclusive rights to the water resources. If the federal government will not grant such a treaty, it seems the provinces are being sculpted geographically to facilitate the same. There have been echoes in the halls of power considering Nepal as a “buffer state” against what South Block claims to be the expanding arms of China. This psychological fear of Chinese influence has placed Nepal at the receiving end of many excessive reactions by New Delhi. 

Nepal’s relations with China should be accelerated. Nepal should intensify trade and commerce with Tibet and encourage Chinese investment in infrastructure and hydropower. Any scepticism of India regarding this matter should be transparently addressed through frequent high level meetings. 

Thucyclides’s Trap refers to instances when an existing power is threatened by an emerging power, concluding in conflict. The Thucyclides’s Project conducted by Harvard University has identified 16 such cases, and 12 concluded in war. Although this term is traditionally used for US-China relations, let us not stage the same in Nepal’s trilateral relationship with India and China. Confidence gaining measures, high level deleg tions, more frequent summit 

meetings, proportionate and mutually beneficial sharing of water and other diplomatic initiative are sure to transform this mistrust into an example of cooperation and  economic prosperity. 

Karki holds an MBBS degree from Zhejiang University, School of Medicine Hangzhou, China