Friday, May 28, 2010

Is Nepal “a yam between two boulders”?

Excerpts from a Foreign Affairs article on the influence of India and China in Nepalese political and economic spheres.

The Nepali crews that inch closer to China, bringing heavy trucks to a valley that has known only foot traffic, are at the forefront of a potentially major strategic shift in the region: Nepal, long a dependable ally and client of India, is building economic and political ties with China. Good roads are just one sign of this relationship and, as Rhoderick Chalmers, an International Crisis Group analyst in Kathmandu, explained to me, could "prevent India from using its ultimate sanction of economic blockade on Kathmandu." If China can begin supplying many of the goods that Nepal now receives from India -- especially petrol, diesel, and kerosene -- then India's leverage would be severely limited.

Although one new highway will not in itself push Nepal from India's sphere of influence -- history, economics, and above all, geography will see to that -- the mere fact that India may one day have to compete for Nepal's attention is a sign of Kathmandu's political reorientation. In 2006, as Nepal's monarchy teetered, Maoist leaders and pro-democracy parties signed a comprehensive peace agreement ending a decade-long civil war. Since then, Kathmandu has been building a nascent democracy while wedged in a proxy battle between China and India -- with the United States and Europe watching closely.

As Nepal inches toward a draft constitution and lasting peace deal, it is counting on India, its longstanding patron and a fellow Hindu-majority state. New Delhi remains Kathmandu's biggest supplier of essential goods, including gasoline, and the Nepalese are addicted to Indian films, music, and other forms of pop culture. Although new roads in Nepal's northern reaches may one day extend the country's economic linkages to China, for now the majority of all trade flows are to and from India in the south.

China's renewed interest in its southern neighbor is not entirely a quid pro quo. In Kathmandu, mobs of Chinese tour groups visit the tourist enclave of Thamel, where they frequent Chinese-run restaurants, bookstores, and hospitals. Meanwhile, Chinese cultural centers are popping up across the country, notably in the Terai, along Nepal's southern border with India. According to the Chinese embassy in Nepal, projects such as the Birendra International Convention Center -- a gleaming complex near Kathmandu's international airport -- and the capital city's main highway are evidence that "China treats Nepal as its closest neighbor and best friend."

Although the above initiatives aim to signify the softer side of Chinese-Nepali ties, China ultimately appears most interested in stifling "anti-Chinese" activities on Nepal's soil. And given China's single-minded focus, Communist Party leaders in Beijing seem less concerned with Kathmandu's political jockeying than with ensuring that the next government is as pliant as the current one. One strategy, analysts suggest, has been to focus fewer resources on national politics and more on localized economic aid, such as building schools in politically sensitive border areas. Although China may consider a return of communist governance ideal, its principal concern is stability. "For China, the ideological difference doesn't make any difference," said Dhungel, the presidential adviser. "They had very good relations with the king. They had a very good relationship with the Nepali Congress. And I think they will have relations with whoever emerges as a stable force."