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“Foreign relations give shape and content to a country’s foreign policy. The vehicle and conduit for foreign relations is diplomacy.
We should enhance our diplomatic skill and reach to best suit our national interests and to promote our international image. Consistency and firmness with character, not vacillation, should guide our foreign policy.”
-Excerpt from the article.
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Kedar Bhakta Shrestha
-Former Foreign Secretary of Nepal, Former Ambassador to EU, Belgium, Netherlands and Luxembourg, Ambassador to the USA, Past President of the AFCAN
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Before starting to discuss the emerging global issues and the foreign policy of Nepal, it would be appropriate to broadly identify what these issues are. Also we have to be clear in our minds as to what we are talking about – whether they are issues, events, orders and trends.
There are outstanding issues like climate change and environment, trade, rise of fundamentalism, cross border terrorism, drug and human trafficking, refugees and migration, foreign employment, poverty, unemployment, human rights, gender equality, democratic deficit, etc. There are yet newer issues arising out of globalization such as the impact of the Information and Communications technology revolution, cybercrime, artificial intelligence, crypto currency and so on.
Again there are events, seen or unforeseen like BREXIT, Covid pandemic, natural disasters or the recent Russia-Ukraine war which impact international relations, one way or the other, in varying degrees to different parts or countries of the world.
And then there is the larger picture of the emerging trends and evolving world order roughly since the beginning of the 21st century- the most visible and important one being the shift of economic power towards Asia and the phenomenal rise of China.
Before we deal with the above issues and try to relate them to Nepal’s foreign policy stances, I propose to make a quick listing of important events/ initiatives shaping Nepal’s foreign relations and policies over the years after the second world war and up to the end of the 20th century.
Even during the isolationist Rana regime, Nepal tried to expand its engagement with the outside world as evinced by some of the following actions:
a) Nepal participated in the Asian Relations Conference hosted by the provisional Prime Minister of India Jawaharlal Nehru and held in New Delhi in March-April 1947. A high level delegation led by General Bijaya Shamsher JB Rana participated in it.
b) Nepal established diplomatic relations with the United States on 25 April 1947 and with France on 20 April 1949.
c) On July 22, 1949 Nepal applied for the UN membership with a 22 – page letter explaining the country’s sovereign status and other pertinent matters related therein. The letter was written by none other than Gen Bijaya Shamsher. But Nepal became the victim of international power play and its application was vetoed by the USSR.
After the advent of democracy, Nepal gradually expanded its diplomatic ties with different countries of the world and also established its missions in important capitals abroad. Some of the important events/actions include:
# Admission to the UN on 14 December 1955.
# Establishment of diplomatic relations with China in 1955.
# Establishment of diplomatic relations with Israel in 1960.
# Participation in the 1st Non-aligned Summit in Belgrade as a founder member.
# Opening of the Kathmandu- Kodari Road in 1967.
# Nepal as UN Security Council member in 1969-70.
# Early recognition of Bangladesh in 1971 – 6th country.
# Start of large-scale participation in UN peacekeeping operations – a contingent of 671personnel in UNEF -II in Golan Heights.
# Zone of Peace Proposal in 1975.
# Hosting Colombo Plan Conference in 1977.
# Founding of SAARC in 1985 and establishment of its Headquarters in Kathmandu in 1987
# Nepal again becomes UN Security Council member in 1988-89.
# Several state visits – both in-bound as well as outbound.
The above events and actions spanning more than half a century help us understand the trajectory of Nepalese foreign policy as well as its evolution and implementation. The oft-quoted dictum says that a country’s foreign policy is shaped and guided by its national interests and influenced by its geo-political factors and historical legacy. Nepal cannot be an exception to these observations. Our constitution clearly stipulates that our international relations would be conducted on the basis of national sovereignty, territorial integrity, mutual respect, non-interference in the internal affairs of other countries and peaceful coexistence.
Based on the above observations, let me enumerate the focal issues of our foreign policy in the context of emerging global and regional trends. Maintaining cordial and promoting mutually beneficial relations with our immediate neighbours are of foremost importance in the conduct of our foreign relations.
Nepal-India-China:
Geography and socio-cultural factors have shaped and nurtured Nepal- India relations for centuries. Even today, Nepal’s trade and economic relations, socio-cultural interaction and engagements with India are so deep and far-reaching that it touches almost every aspect of our everyday life. In spite of the fact that Nepal has considerably diversified its trade, India still accounts for almost two- thirds of its external trade. India is also extensively involved in economic cooperation in areas such as infrastructure, health, education, energy. Because the relations are so extensive, there are many problems and issues that arise from time to time as well as the ones that have remained unresolved for a long time. We need to address such problematic issues with a fresh mindset on both sides.
With China, our relations have grown considerably, especially in the field of trade and economic cooperation. Chinese tourist arrivals in the pre-Covid period registered a growth in number that stood second only to that from India. There were direct air links between Nepal and a number of Chinese cities during the pre-Covid period. They are being gradually reopened now. There are a large number of Chinese investments and joint venture projects. Also, Chinese contractors are engaged in several construction undertakings.
Relations between China and India have multiple dimensions wherein they have cooperative, competitive and occasionally confrontational relations. Both the countries cooperate in areas such as trade and climate change. Both compete with each other when they try to expand their areas of influence as well as to cultivate friendship and goodwill with countries far and near. Their confrontational acts mostly relate to the border disputes that flare up from time to time.
China and India are both members of the BRICS group. They are also members of Asian Infrastructure Development and Shanghai Cooperation Organization ( SCO). It is sometimes difficult to understand how the two countries will amicably work under the umbrella of these institutions. India has refused to join the Belt and Road Initiative launched by China mainly because BRI is perceived as an ambitious goal to expand China’s global reach in the mode of the bygone Silk Route.
Nepal has to walk a tightrope in its relations with either of its immediate neighbours. It has to take into account the genuine strategic and security concerns of both the countries. It should play “Nepal Card” in the conduct of its relations not only with both of them but with other countries as well.
There are a number of projects agreed upon between Nepal and both of our immediate neighbours. But many of them have not been implemented even after so many years. Many have not progressed beyond the pre-feasibility stage.
Nepal-China-US:
The growing economic power of China and its increasing military might has prompted it to be more assertive in the conduct of foreign relations. It has laid claims to areas and islands like Spratly and Paracel around the South and East China Seas raising potential conflict with countries like the Philippines, Indonesia, Brunei, Malaysia and Vietnam, who also claim these territories. Apart from the huge natural resources reported to be lying below these reefs and islands, the area also lies in the important maritime route. The United States wants to ensure safe and unrestricted movement of maritime transport and has enhanced its presence in the area.
The claim and counter- claim of these areas rich with natural resources and vital for ensuring freedom of navigation have increased the involvement of the United States in and around the area, and have become a source of conflict and show of strength both by China and the United States. Acts of miscalculation or trigger-happy policies are likely to spark conflicts that could have far-reaching consequences.
While China has become more assertive in its dealings in the region, the United States has set up a number of mechanisms like Quad Group, Indo-Pacific Strategy, AUKUS (Australia, UK and USA) to counter China’s growing moves in the region. The controversy regarding the signing of MCC by Nepal can be a case in point. Its opponents view the MCC as a part of the Indo-Pacific Strategy and a counter to China’s BRI. They claim that signing of MCC by Nepal would mean stationing US armed forces in Nepal. This is an exaggerated and unfounded claim.
MCC has been signed by countries as far away as El Salvador, Nicaragua and Bolivia in Central and Latin America and Benin and Senegal in Western Africa having to do very little with the Indo- Pacific region. Indo-Pacific Strategy may be a counter to China’s BRI but to put MCC as part of Indo-Pacific Strategy may be stretching facts a bit too far for two reasons – a) MCC has many countries outside the Indo-Pacific region and b) MCC (2004) pre -dates Indo Pacific Strategy (2017) by a number of years. No less a person than India’s former Foreign Secretary and National Security Adviser Mr. Shiv Shanker Menon, judging the Quad Security Dialogue inadequate for addressing India’s strategic concerns in land and sea, observes in his recent book “the so-called Indo-Pacific strategy is a purely maritime strategy that implicitly concede so continental order to powers other than the United States, namely, China and Russia”.
It is not easy to precisely foresee what turn and twist the China -US relations will take in the coming years or decades. It is, however, almost certain that China would have in taken the United States in GDP terms and also considerably enhanced its military Capability in the next five to seven years. This enhanced economic and military power cam make China more confident and assertive in its dealings in the region. However, this may not necessarily lead to what is called “the Thucydide’s trap”- as coined by Graham Allison – author of the book – Destined for War- in the context of the Peloponnesian War between Sparta and Athens. This war was the result of Sparta’s fear arising out of Athens’s rise.
However, it is becoming increasingly clear that Nepal now appears more clearly and frequently in the big powers’ radar screen than previously. Hence it should maintain a careful balance in its dealings with China and the United States, as it has to be with India and China.
Enters Russia:
The recent invasion of Ukraine by Russia has deeply shaken the fault lines of Western European geo-political landscape. It is difficult at this stage to predict how much the war would prolong or how it would end. It seems Russia is trying to regain, as much as possible, the glory and reach of the Soviet days. It will not be possible for Russia to do so as times and situations have changed drastically over all these years.
Traditionally neutral countries like Finland and Sweden have applied for NATO membership and would have been admitted to it but for the objection by Turkey on grounds of their harboring anti-Turkish terror groups. It seems Ukraine will join the European Union sooner than later. These developments will have far reaching consequences for Russian and the western countries’ relations.
Countries far and wide have felt the adverse consequences of the Ukraine war. The prices of gas and oil have shot up considerably and Nepal has already seen a sharp rise in oil prices. The disruption of sunflower oil imports from Ukraine has already seen a remarkable reduction of its export by Nepal.
The world will see a shortage of wheat supplies as its production will be affected due to the Russo-Ukrainian war – both major producers. Several important metals and microchips exported by Russia will no longer be available to western industries-thereby reducing their production capabilities. A number of west European countries, especially Germany, will have to tap alternative sources of its energy supplies- currently coming from Russia.
Russia seems to have so far somehow managed the effects of the western sanctions. But it will not be able to withstand for much long the pains, pressures and the consequences of the sanctions. Although its US dollar assets are estimated to be as high as $640 billion, they remain mostly frozen. There have already been talks of default by Russia on its due payments.
Major Emerging Economic Powers:
The MINT group of countries was coined by Fidelity investments in 2011 and popularized by the British economist working with Goldman Sachs, Jim O’ Neill-who coined the now famous acronym -BRICS.
MINT stands for Mexico, Nigeria, Indonesia and Turkey and are likely to emerge as strong economic powerhouse in the years to come. The well-established Asian economic power houses such as South Korea, Taiwan, Singapore, and Malaysia will continue to mark their strong presence in the world economic scene.
Nepal should maintain and enhance its trade, investment and other economic relations with the above countries. Nepal has residential embassies in all the G-7 countries except Italy and in all the BRICS countries. Among the MINT countries, Nepal has no embassies and among the other emerging economic powers, it has missions in South Korea and Malaysia. Nepal is thus comfortably placed to pursue and strengthen its trade and economic relations with the above countries.
Nepal has missions in a number of countries in the middle East Arab countries. This is necessitated by the presence of a large number of Nepalese migrant workers.
Qatar, United Arab Emirates and Saudi Arabia are the largest destinations for Nepalese labour force. There are regular voices raised for enhancing employment opportunities inside Nepal itself and thus reducing the migratory process of the Nepalese laborers. This will not be possible anytime soon. As long as we have to continue sending our fellow citizens to these and other major labour destination countries like Malaysia and South Korea, we will have to look after their rights and welfare.
United Nations and other International and Regional Organizations:
Nepal’s performance in the UN during the last few years have been of a mixed nature. It suffered a humiliating defeat for the non-permanent seat of the UN Security Council in 2006, securing the lowest number of votes (28) against Indonesia (158). This stands in stark contrast to Nepal securing the highest number of votes for the 1969-70 tenure and third highest for the 1988-89 Security Council non- permanent seat. Again in 2011, Nepal’s candidate for the UN General Assembly President, Kul Chandra Gautam was defeated by Qatar’s Al-Nasser. These adverse results may be attributed to poor planning and analysis as well as inadequate lobbying. However, Nepal managed to boost its image when it was elected to two subsequent terms in the UN Human Rights Council – for 1918-20 and 2021-23.
One activity that has helped boost Nepal’s image abroad is its participation in the UN’s peacekeeping missions. Starting with the UNEF-2 in 1974, when Nepal sent a contingent of 671 troops to the Golan Heights, it has been a major contributor to the UN peacekeeping operations and now stands among the top. It should continue to be among the leading troop contributing countries.
The establishment of SAARC in 1985 was hailed as a major achievement, raising hopes for peace and progress in the region. But the slow progress in cooperative actions and lack of any noteworthy achievement had begun to raise doubts about the viability of the organization. It is a pity that SAARC has not been able to have its Summit meeting since the last one held in Kathmandu in November 2014. There seems to be no sign of any Summit meeting any time soon.
Meanwhile organizations like BIMSTEC and BBIN have emerged. BIMSTEC comprises SAARC members minus Maldives and Pakistan but has Myanmar and Thailand as members. We have not seen much of its activities except for the usual routine meetings. Myanmar is not quite firm in its footing in the region. It feels closer to ASEAN and is unsure of its role and destiny in aligning with BIMSTEC. Thailand, as a founder member of ASEAN is deeply involved with the organization and is ambivalent of its role in the BIMSTEC. There is no harm to expand cooperation under BIMSTEC but it should not be a substitute for SAARC which has its own usefulness and raison d’être. Nepal, as its Chairman, should keep trying to revive SAARC.
BBIN Initiative is a welcome development aimed at water resource management, connectivity of power, transport and infrastructure. The signing of the Motor Vehicles Agreement is a positive move. If the planned projects are taken up and implemented earnestly, it will no doubt help boost trade, transport and water resource management in the region.
Climate Change, Environment, Trade and Other Issues:
Climate change and its effect on the environment is a major issue. Global warming and resultant floods, wildfires, drought, erosion in coastal areas cause havoc every year in the affected areas. Rising sea levels threaten the very existence of low lying-regions. For Nepal, the melting of the snow in the Himalayan region is a matter of grave concern. Increasing pollution in the urban areas has become a universal problem. Greenhouse gas emissions from human activities exacerbate the greenhouse effect, causing climate change. The major polluting countries lack sincere commitment to reduce carbon emissions.
Nepal signed a multi-million dollar agreement with the World Bank’s Forest Carbon Partnership Facility. Under this agreement Nepal can potentially access up to US $ 45 million by 2025 by protecting forests. Also, Nepal can earn by selling its carbon credit to bigger polluters. These are very complicated and cumbersome matters. Nepal has to improve its skill in carbon trading and strive to make the most out of its Community Forestry achievements.
Trade is another complex and complicated domain which Nepal should understand and learn to navigate through. It must develop its negotiating and bargaining skills to get the most out of its international trading activities.
Foreign employment has been a major source of foreign exchange for Nepal and remittances account for nearly 25% of the national GDP. Remittances will continue to be vital for our national economy for a long time. With the growth of economic activities in the future, Nepal should be able to gradually reduce the number of labor migrants. But for the moment and also for the foreseeable future, Nepal should enhance its diplomatic skill and reach for promoting the welfare and interests of the Nepalese workers abroad.
Natural Disasters and the Pandemic:
The earthquake of April 25, 2015 devastated Nepal and caused huge loss of life and destruction of thousands upon thousands of houses, schools, temples, bridges and other structures.
Friendly countries and international groups were quick to arrive and render help in rescue, relief and rehabilitation work. But there had been several cases of delay and mismanagement in the course of relief work. Nepal should learn from this experience, should such occasions arise, to handle calamities more efficiently in the future.
Covid-19 struck countries far and wide with varying degrees of intensity. Nepal lost 12000 lives due to the pandemic. Although there was some confusion, mismanagement, lack of coordination and even unnecessary delay in procurement procedure due to some vested interests, by and large, Nepal seems to have handled the pandemic in a reasonably satisfactory manner. Having learnt the lesson from the pandemic, they should be better prepared to face such crisis in future.
Conclusion:
Nepal should keep its ears to the ground and enhance its capacity to comprehend, interpret and analyse events and trends in the neighborhood, in the near abroad, in the region and beyond. It should maintain a balanced relationship with both of its neighbours, always being sensitive to both of their security and strategic interests. It should develop relations in the region and beyond in a manner that would safeguard and promote its national interests. Foreign policy with a national consensus will have more weight abroad. Hence, we should try to have as much of a national consensus as possible in matters relating to our foreign policy.
Foreign relations give shape and content to a country’s foreign policy. The vehicle and conduit for foreign relations is diplomacy. We should enhance our diplomatic skill and reach to best suit our national interests and to promote our international image. Consistency and firmness with character, not vacillation, should guide our foreign policy.
# Based on the speech delivered by the author at a program jointly organized by the Centre for South Asian Studies and Centre for Diplomacy and Development on 2 June, 2022, Kathmandu, Nepal.
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# Text courtesy: The Association of Former Career Ambassadors of Nepal ( AFCAN), Volume 3, 2022.
# Thanks the entire Editorial team of the AFCAN and the distinguished author: Upadhyaya. N. P.
( Happy Bijaya Dashami Greetings -2080- to all our valued and respected readers both within and without): Ed. N. P. Upadhyaya.