Upholding Balanced Foreign Policy

At a time when the political leaders are singing the songs cooperation, collaboration, harmony and peaceful coexistence, the whole world is experiencing armed and financial conflicts, unrests, oppressions, sabotages and existential threats. While the US and its allies are trying to impose what they see as a just world order, China and some other countries are challenging what they consider as the US-hegemony. Stranded in between the major conflicting powers are medium and small countries and regions.

Nepal’s geopolitical location emerging as one of the most sensitive of its kind. Nepal is sandwiched between two most populous countries- India and China. As China is making inroads into South Asia, a region hitherto considered as Indian courtyard, we find ourselves under immense pressures of the two giant neighbours, both asking us to take sides we have carefully avoided for last seven decades. We are also trying to maintain healthy relations with the US, the UK, Russia, Japan, and international and regional institutions. Nepal foreign policy has been largely shaped by domestic economy and national sovereignty since 1950s. The fact that our sincere economic and trade proposals frequently face our neighbours' security concerns suggests that our geopolitical position holds significant strategic value.

China has remained sensitive following the Khampa Uprising (1956-1958), allegedly sponsored by America and characterised by a rebellion against the communist rule in Kham, a Tibetan region, partially involving Nepali land. India, which shares open border with Nepal, has expressed similar concerns. There are also allegations that Pakistan's Inter-Services Intelligence has used Nepal as a staging ground for infiltrating militants into India. Groups targeting India, such as those operating in Kashmir, are said to have found safe havens and logistical support here. While both India and China seem to understand that Nepal is not involved in such cross-border activities, both are demanding Nepal’s active cooperation. Nepal has rightly upheld the policy of not allowing the use of Nepali land against its neighbours and other countries.

Regional initiatives

In addition to entry and active participation in the UN, Non-Aligned Movement and other international institutions and organisations, Nepal has sought to create and utilise regional forums to garner support for its economic and trade interests. Realising the threats of emerging climate change that could further deteriorate the fragility of mountain economy and seeing the scope of regional cooperation of the countries in the Hindu Kush Himalayan region, Nepal, Afghanistan, Bangladesh, Bhutan, China, India, Myanmar and Pakistan created the Kathmandu-based International Centre for Integrated Mountain Development (ICIMOD) in 1983. Nepal legitimised the institution through an Act of Parliament.

Aiming to reduce trade barriers, promote regional infrastructure development, and enhance cooperation in social, cultural, and political spheres, Nepal joined hands with Bangladesh, Bhutan, India, the Maldives, Pakistan and Sri Lanka, and established South Asian Association for Regional Cooperation (SAARC) in 1985, with Kathmandu as its headquarter. It focuses on economic growth, trade, investment, peace, security, and stability among its member states.

Nepal also joined hands with Bangladesh, Bhutan, India, Myanmar, Sri Lanka and Thailand, in creating another regional forum, the Dhaka-based Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in 1997. It aims to promote economic cooperation, trade, and investment. It focuses on areas such as transportation, energy, tourism, and technology. BIMSTEC also seeks to enhance regional connectivity, cultural exchange, and address common challenges like poverty and disaster management. Nepal is a member of BBIN (Bangladesh, Bhutan, India, Nepal), established in 2010, which aims to promote regional connectivity, trade, and economic cooperation. 

Of the above initiatives, ICIMOD has conducted research on mountain ecosystems, provided technical assistance, and supported sustainable development initiatives. ICIMOD's work has contributed to Nepal's understanding and management of its mountain resources. SAARC has been plagued by internal disputes, particularly between India and Pakistan, hampering other regional issues and the implementation of cooperative initiatives. Additionally, the significant economic disparities among member states have made it difficult to forge consensus on trade and investment policies.

BIMSTEC has faced challenges due to its geographical diversity and the competing interests of major powers in the region. It lacks adequate resources and infrastructure. While BIMSTEC has made progress in certain areas, such as trade and tourism, its impact has been limited. Even BBIN has encountered similar obstacles. Infrastructure challenges, trade barriers, and the limited scope of its focus have hindered its progress. Despite efforts to promote connectivity and trade, BBIN has yet to realise its full potential.

Nepal has tried to diversify international partnerships. Chosen and implemented wisely, we can benefit from cooperation with the Millennium Challenge Corporation (MCC), Belt and Road Initiative (BRI), Shanghai Cooperation Organisation (SCO), World Bank (WB), International Monetary Fund (IMF), Asian Development Bank (ADB), and Asian Infrastructure Investment Bank (AIIB) and other similar initiatives. These platforms offer diverse avenues for development.

Economic cooperation 

Nepal has secured a $500 million MCC grant for infrastructure projects, specifically focusing on road upgrades and electricity transmission. ADB committed around $558 million in 2022 alone to Nepal, targeting infrastructure, education, and health sectors. Likewise, partnerships with WB and IMF helps our macroeconomic stability, financial reforms, and poverty reduction. In 2023, WB committed $200 million to build Nepal’s economic resilience post-COVID. Involvement in SCO provides a platform for regional cooperation on security, economic development, and cultural exchange. Similarly, BRI projects can enhance regional connectivity. AIIB and ADB finance large-scale infrastructure projects, such as hydropower development. By integrating with these institutions, Nepal can foster economic growth, improve infrastructure, and enhance its role in regional and global trade networks.

So far, Nepal’s foreign policies are on the right track. We should uphold them. As mentioned earlier, as long as our national sovereignty is not affected, we should be open to economic and technical cooperations, with all international and regional institutions. It is up to us to decide which cooperation is economic, technical or strategic, and no third party should be allowed to interfere in our decisions. While we do not participate in any military alliance, we cannot and should not rule out economic and technical cooperation with any country or region or institution just because some powers dislike it.

(Professor of Pharmacy at Tribhuvan University, Email: bmregmi@gmail.com)