Reorienting Nepal’s Foreign Policy For Economic Development

Kushal Pokharel


Foreign policy of every nation entails a complex interplay of geography, history, national ideology and socio-cultural system, which aims to promote national interests and enhance the dignity of the nation in the international arena. The evolution of Nepal’s foreign policy dates back to the time of Prithvi Narayan Shah, architect of modern Nepal, who pursued a balanced neighbourhood policy between the British India Company and China.


Major determinants

Considering Nepal as a ‘yam between two boulders’, the then king adhered to the principle of ‘non alignment’ in dealing with neighbours which continues to be one of the major determinants of our foreign policy till date. Besides, the principles of Panchasheel, U.N. Charter, norms and values of world peace are embedded in the constitution as major guiding factors of Nepal’s foreign policy. Even in the changed domestic and international political context, many elements of our foreign policy still remain constant thereby failing to take into account the dynamic forces.

Moreover, lack of consensus on issues of national interests among  the political leaders has stood as an obstacle in redefining our policy priorities. Reflection of an unstable domestic politics and conflicting stances of the national leadership in responses to international regional and global issues have tarnished the national image. Thus, there is a need for a vigorous and pragmatic foreign policy with economic orientation.

Focusing on economic rather than conventional diplomacy has become more urgent. Application of tact and intelligence in promoting the sectors of trade and investment constitutes an integral part of economic diplomacy. Attracting Foreign Direct Investment from China and India to introduce new technologies, skills and managerial expertise in areas of comparative and competitive advantages viz. hydropower and tourism can boost our economy. Developing Nepal as a hub of religious tourism will improve our foreign currency reserve. However, effectiveness of economic diplomacy hinges on several factors.

Overhauling the foreign policy apparatus demands great attention. A pro-active role of the Ministry of Foreign Affairs (MOFA), the leading agency that engages in various issues of bilateral and multilateral affairs, is a pre-condition. Restructuring MOFA to equip it with the necessary knowledge, skills and technologies to cope with the emerging challenges in the field of international economic relations is a must.

Conceiving Nepal’s foreign service as a separate and dynamic institution compared to other branches of civil service requires intensive homework and rigorous thinking on the part of policymakers. Appointment to foreign service positions on the basis of merit rather than political patronage ought to be implemented.  Nevertheless, functional co-ordination among various line agencies of government to achieve foreign policy objectives in a prioritised and time bound manner should be emphasised.

Mobilisation of diplomatic missions to promote our economic interests would help this cause. No less important is encouraging the participation of the private sector in international trade based negotiations. Similarly, in the current era of liberalisation, privatisation and globalisation, relying on new methods of diplomacy like culture and citizen diplomacy to supplement mainstream diplomatic efforts is crucial.

Buffer to bridge

 A strong call for coming out of the ‘yam pysche’ has echoed from several quarters, including the academia, political scientists, diplomatic experts. Particularly, after the transition of Nepal from a constitutional monarchy to a federal democratic republic, the foreign policy discourse is being reshaped, though the effort is piecemeal and haphazard. Abandoning the buffer mentality and becoming a vibrant bridge between India and China has been a proposed direction to maximise national gains in the field of development.

The ‘land-linked’ possibility of the nation will materialise when Nepal can emerge as a transit route for facilitating India-China foreign trade. At a time when the trade relations between India and China are increasing manifold, it is practically possible for Nepal to reap economic dividends in the form of better employment opportunities and revenue mobilisation among others.

In fact, lack of an alternative route has been a key bottleneck in India-China economic relations.  However, Nepal needs to establish better infrastructure: roads, transport and communication supplemented by predictable trade policies. Similarly, Nepal can determine China’s entry into South Asia as China doesn’t have any alternative route available to penetrate this region. With such potentialities, the discussion of Nepal-India-China trilateral cooperation is also on the rise in  bilateral and trilateral policy circles.

In sum, reinvigorating Nepal’s foreign policy to improve social and economic well-being with improved structures, functions and processes should be the top-most priority of the national leadership. Collaboration and synergies among state and non-state actors is a must to the success of economic diplomacy. Unless there is a clear vision of tapping opportunities emanating from the intense competition between India and China, Nepal’s transformation from buffer to bridge will remain unaccomplished.

(The writer is a Faculty of Contemporary Politics at Himalayan Whitehouse Graduate School of Management. [email protected])   




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