No zero sums in this great game

Nepal is celebrating the outcome of Prime Minister K.P. Sharma Oli’s China visit as a major landmark in the evolution of its foreign policy. The euphoria has been politically crafted and media hyped. It is driven by two objectives. One is domestic, of consolidating the Oli regime’s support from the ‘nationalist’ constituency that stands for reducing dependence on India and keeping Madhes and Janjatis marginalised in Nepali polity. The other is of sending a strong message to India that Nepal has a viable option in mobilising support from China to counter any pressure generated from the southern neighbour. Both objectives had been triggered by India’s support for the Madhes agitation against a discriminatory constitution adopted in September 2015. India’s support had resulted in restricted supply of essential goods to Nepal for nearly six months, causing unprecedented hardship to Nepal’s people and generating strong anti-India sentiments among the country’s hill communities.
A familiar pattern

There is a set pattern of the Kathmandu regime flashing the China card whenever it runs into difficulties with its own people and India lends support to the Nepali people’s cause. Recall King Mahendra’s use of the China card when he had pitted himself against democratic forces seeking and securing Indian support during the early 1960s. A desperate King Mahendra had then breached the Himalayan barrier by making China build a road between Kathmandu and Kodari. He flouted the India-Nepal Treaty of 1950 by soliciting Chinese support as a security protector of Nepal. His successors, King Birendra and King Gyanendra, made similar moves during 1988-89 and 2005-06, respectively, when faced with popular struggles against their authoritarian governance. Struggling popular democratic forces of Nepal sought and secured Indian support on these occasions.

The underlying thread in all these royal moves was to whip up anti-India nationalism, garner external/Chinese support and erode traditional ties with India to ensure regime security. The use of this well-known royalist strategy by the democratic regime headed by Mr. Oli’s Communist Party of Nepal-United Marxist Leninist (UML) should not come as a surprise because the UML flourished under the royal patronage and political indoctrination. Mr. Oli concluded 10 important agreements and memoranda of understanding (MoU)s during this visit to China. They cover the fields of transit and trade, connectivity and infrastructure, energy exploration and storage, banking, scholarships and training. Some of these agreements are projected as historic and unprecedented, particularly those related to transit through China and rail and road connectivity between Nepal and China. On close look, these agreements appear to be higher on symbolism than on substantial commitments for delivery. Take, for instance, the agreement on transit through China where China has agreed to provide the Tianjin seaport for transit of Nepali goods imported from third countries.

This, in principle, breaks Nepal’s complete dependence on India for all its imports. The viability of this option may however be debated as Tianjin is located at a distance of 3,000 km from Nepal, as against 1,000 km from the Haldia port in India being currently used by Nepal. Nepal’s infrastructure in its northern region to connect with the proposed Tianjin transit facility is still not in place, and will take effort and investment to be operational. Of course, this facility would come in handy in the event of a complete blockade of transit routes from India for Nepal, but in such a situation, carrying perishable and essential goods like foodstuffs and petroleum products will cost Nepal heavily in time and money.

Similarly, the proposal on connectivity of Nepal with the Tibet rail network will also take time. The proposal was first accepted in 2008, and promises were made to establish rail connectivity by 2013. This did not happen. Under the present MoU on rail connectivity, Chinese commitments are for feasibility studies and technical support only. The Joint Statement issued on Mr. Oli’s visit says that the two sides “will exchange ideas and proposals on constructing cross border railways… as soon as possible”. The Lhasa rail line has been brought up to Xigatse. Only by 2020, as per the current Chinese plans, will this line be brought nearer the Nepal border within Tibet. There is no firm commitment yet on how it will then be extended within Nepal linking Kathmandu with Pokhara and Lumbini as proposed by the Nepali side. In building this link, the track will have to scale mountains as high as 6,000 m, either through tunnels or winding channels, involving heavy costs, time and effort. Commenting on this proposal, Hou Yanqi, the Deputy Head of Asia Division in China’s Foreign Ministry, said that while China will work on rail link from Xigatse to Gyirong within Tibet, its “extension into Nepal is a long-term plan, at a point far off in future”.

Besides the constraints of costs and terrain, rail connectivity between Tibet and Nepal is also a political issue for the Chinese authorities. They have to decide on the extent to which Tibet can be opened up to the outside world through land connection. The proposed rail could not only facilitate the flight of disaffected Tibetans to Nepal, but also bring in Nepalese and other foreigners into Tibet. Is China ready for such traffic?
‘One Belt, One Road’ priorities

The Chinese side has been both calculating and careful in accommodating the Nepali agenda. It has bound Nepal, as per the Joint Statement, to “synergise” its “development planning, formulate appropriate bilateral cooperation programmes and carry out major projects under the framework of the Belt and Road initiative”. Accordingly, Nepal’s infrastructure and connectivity projects will have to be subjected to Chinese ‘One Belt, One Road’ (OBOR) priorities. Nepal will also have to “facilitate” and “encourage” Chinese investment. Most of the Chinese commitments are loans, of which only 25 per cent will be interest free. China’s dwindling growth rate and growing debt/GDP ratio does not allow China to write free cheques any longer. Nepal must also be aware of the unease and discomfort that countries like Sri Lanka and Myanmar experienced in their deepening economic engagement with China. China’s economic projects invariably come with strategic underpinnings and heavy debt burden. The Chinese caution in relation to Nepal also comes out of the latter’s intrinsic political instability and bureaucratic lethargy. There are lingering doubts among the mandarins in Beijing whether the Oli government will last long enough to implement the agreements inked, in view of the rising calls for a national government in Nepal. China also does not want to ruffle Indian feathers on Nepal as India, besides other considerations, is a much bigger and promising market for Chinese products and services as compared to Nepal.

In reaction to Nepal’s so-called flashing of the China card, India need not press the panic button or employ knee-jerk and ill-conceived diplomatic moves as it did in response to Nepal’s constitution and the Madhes agitation six months ago. Nor should it make an unethical compromise with Kathmandu on the legitimate interests of Madhesis and other marginalised groups. Resort to pushing for a Hindu state agenda and revival of the monarchy in Nepal, popular with some sections of India’s ruling party, to contain Chinese influence will prove counter-productive. And yet, India has to sit up and take a serious note of the Chinese push into South Asia, which is not simply limited to Nepal but covers all other neighbours as well.
Potential for shared prosperity

South Asia is a vital link in the Chinese OBOR plan. It is a region that borders on China’s vulnerable periphery of Xinjiang and Tibet. Its 1.6 billion people, growing steadily by 4-5 per cent on average, constitute a huge economic opportunity that China or any other country cannot ignore. India has yet to evolve a credible response to this Chinese push towards South Asia. China will readily and deftly exploit India’s flip-flops towards its neighbours in this push. India, therefore, has to deal with its immediate neighbours with prudence and sensitivity and ensure that they are not alienated. There is scope also for exploring the possibility of making calibrated use of the region’s infrastructure development under OBOR. Internal and trans-border connectivity of Nepal, Sri Lanka, Bangladesh or even Pakistan may in fact facilitate such economic integration to the long-term advantage of India as well. But in doing so, India has to guard its vital strategic space and interests, as well as those of its neighbours, that China may seek to erode under the cover of its regional economic engagement.

(S.D. Muni is Professor Emeritus at Jawaharlal Nehru University, Distinguished Fellow at the Institute for Defence Studies and Analyses, and a former Special Envoy and Ambassador, Government of India.)