Foreign Policy Challenges And Opportunities.


                                                                                                Dr. Rajendra B. Shrestha



While Nepal’s relations with China have always lagged behind India for cultural, political, and geographical reasons, the signing of a comprehensive bilateral relation in March 2016 could be a game changer in the long run. Nepal’s effort towards diversifying its trade and transit access through improved connectivity and exploring alternative supplies of essential goods and services will determine new avenues of bilateral economic cooperation with China. 

On the foreign policy front, China has introduced a plethora of new bilateral and multilateral initiatives, particularly in its immediate neighborhood. Effectiveness of Nepal’s FP pivots on how it navigates in response to ‘neighborhood first’ policies of both China and India. Equidistance or the balanced approach of present may not yield desired results in Nepal’s interest. FP should be country specific based on comparative advantage and cooperation, not confrontation (learning from Chinese experience). 


Nepal China relation has always remained very friendly and based on mutual trust and unconditional cooperation.  With neighborhood first policy adopted by the new leadership in Beijing, economic cooperation with Nepal is growing even stronger.

China’s state and private capital and technology can be utilised as sources for Nepal’s development, particularly in infrastructure, social entrepreneurship, tourism, agro-forestry based industries and renewable energy. This is also substantiated by the statement of former Chinese Ambassador to Nepal Wu Chuntai that China’s new leadership has accorded high priority to relations with Nepal and has sought a win-win policy with Nepal.

China’s push for infrastructure development within its borders with the “Go West” policy together with India’s implementation of “Look East, Act East” policy, China’s building of the BCIM Economic Corridor to connect Yunnan province with Myanmar, Bangladesh and India provides opportunity for the revival of important segment of the less known Southern Silk Road of the bygone era that connects South and South East Asia.

In order to benefit from high economic growth of India and China, Nepal should work toward preparing for the country’s role as a land-link between India and China by proposing Trans-Himalayan Economic Corridor especially when China, India and other countries in the SAARC are willing for greater connectivity in the region. These corridors would lead to a win-win situation for the countries involved, especially Nepal, which is land-locked and has the potential to be a vibrant land bridge between India and China since the distance between Indian cities (Delhi, Chennai) and the inner cities of China (Kunming, Chongqing, etc.) would be greatly reduced (two to three folds) if the land route through Nepal is used.

Economic corridors between India and China through Nepal would be one component of the recent Chinese proposal of Trans-Himalaya Economic Growth Region (THEGR) since the extension of the Beijing-Lhasa railway to Shigaste, a Chinese city close to the Nepal border, would open soon.

The proposed THEGR offers a big opportunity for Nepal to benefit from being the land-linked state between the two Asian giants. It must look forward to benefitting from Indian PM Narendra Modi’s “neighbor first” diplomacy and China’s push for connectivity in the neighborhood by proposing further studies on the Trans-Himalayan Economic Growth Corridors. Mistrust of the past and complaints about old deals will not get the country far. A new beginning based on national interest must be made.

Lhasa in Tibet is emerging as a major transportation hub in Western China. China recently announced that it would build another railway to connect Lhasa with Chengdu; as a result Chinese growth centers/manufacturing hubs are moving closer to Nepal and India. There are now very compelling reasons to revive the land-link role of Nepal not only between India and China but all of South Asia, Central Asia, and East Asia eventually.

Nepal’s diplomacy should make an effort to revive Southwestern Silk Route (SWSR) to be an integral part of Silk Road Economic Belt with extension of BCIM economic corridor into Bhutan,

Sikkim and Nepal and promote aggressively the concept of Trans Himalayan Economic Belt. The loop connecting Yunan, Myanmar, India, Nepal and Tibet (that existed in the past) will be complete. Similarly, Yunnan is a planned bridgehead for integration with Myanmar, Bangladesh and India’s North East. We now need to study integration possibilities with Tibet and, especially, Yunan and Sichuan Provinces. 

Hence there is good potential for Nepal as a transit corridor initially and then ultimately as economic corridor between China and India that will benefit from being an integral part of Silk Road Economic Belt.

Economic Corridors add far more value than Transport Corridors through backward and forward linkages in the economy. Studies have identified possibilities for Koshi Economic Corridor that will integrate Eastern Region with Sikkim, Darjeeling and North Bengal and parts of Tibet; Karnali Economic Corridor that will integrate parts of Uttarakahnda (Kumaon) and North Uttar Pradesh with Far West Development Region; Bagmati and Gandak Economic Corridor will integrate Central and Western Regions with Tibet, Bihar and parts of East UP. The feasibilities of these need to be studied further.

There is no doubt that vast opportunities for tri-lateral economic cooperation between China-Nepal-India exist. Nepal stands to benefit from this tremendously if its foreign policy can focus more on economic diplomacy and work closely with both the neighbours adopting a win-win strategy.

Some speculations exist whether India will be willing for tri-lateralism and if Nepal’s diplomacy can bring the two (China and India) to meet in Nepal for this. If tri-lateralism is to materialize and succeed, I believe, certain pre-conditions need to be met which include:

Change the mindset from conflict to cooperation mode; Synergize efforts to deal with un-resolved issues with new understanding and values; Under OBOR initiative, Nepal can further understanding between the three countries for common interest projects by involving think tanks and track-two diplomacy. Think tanks play a crucial role in promoting track-two diplomacy to achieve results; hold regular bi-/trilateral dialogues and high level visits to ensure progress and build consensus; Nepal needs to act assertively in implementing its FP as an independent, sovereign, trustworthy and respectful friend in winning the cooperation from both the neighbours to its benefit; and promote mutual trust based on common wisdom, cultural values, historical ties, relative strengths and comparative advantage to grow together for a common destiny. 

I had been advocating for Nepal signing the OBOR for some time in order to reap benefits from both bilateral and trilateral cooperation with the neighbours. Nepal’s signing of OBOR partnership, albeit late, will open up the whole vista of economic opportunities if Nepal prepares projects in its interest based on its comparative advantage and political concurrences.  





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