Nepal's struggle to strike balance between India, China

17 April 2015 12:16 (Last updated 17 April 2015 12:18)

China and India compete for influence in Nepal but analysts question whether the country
can capitalize on the opportunity

By Deepak Adhikari
KATHMANDU, Nepal
Sandwiched between India and China, Nepal, in recent years, has found itself being serenaded by its neighbors, but analysts
question whether the Himalayan nation, mired in political instability, can capitalize on the newfound courtship.
Each funded by India and China, two hydroelectric projects in Nepals Western region illustrate the growing competition between its
neighbors to invest in developing the countrys war-ravaged infrastructure.
The Pancheshwar Multipurpose Project, a 6,000 megawatt hydroelectric project on the Mahakali River on Nepals western border
with India, which after languishing for 17 years due to political instability in Nepal, received a go-ahead after the official visit of Indian
Prime Minister Narendra Modi to Nepal in August last year.
A 750 megawatt hydropower project on the West Seti River in the same region had been stalled since Chinas Three Gorges
Corporation signed a deal with Nepal in 2012. After the visit of Lu Chun, the chairman of the Chinese company, early this year, the
$1.6 billion project is all set to begin its work this summer.
While India has for long been the most important trading partner and a key player in Nepals politics, Chinas more recent assertion
in the wake of the end of the Shah monarchy, has made Nepal a theater of geopolitical rivalry.
India shares a 1,700-kilometre open border with Nepal. For the mandarins of New Delhi and Kathmandu, the porous border is a
contributor to crimes in the region, but for people living along it, the boundary is a lifeline.
They not only cross it in search of work, but also marry across the border, establishing relations that last for generations.
At the political level, the ties have often been fraught and antagonistic. Nepali leaders cite past water-sharing pacts with India, which
allegedly favor India, as examples of its high handedness.
Relations have improved following the visit of Modi last year, when he allayed the fears of the smaller neighbor by acknowledging its
sovereignty and offering financial aid.

During the visit, Modi announced a concessional line of credit of $1 billion to Nepal for the countrys infrastructure development. Last
year, Nepal also inked power trade agreement with two Indian firms to develop two major hydropower plants, which aim to supply
power to the energy-starved country.
India has fixed its focus on the Tarai region along its border, where it is funding a postal highway and since 2004, has been donating
up to 30 million rupees to village leaders, MPs or charity groups to build libraries, school buildings and hostels as part of its small
development scheme.
For Beijing, Nepal serves as a gateway to the vast India market.
Nepal has agreed to be part of Silk Road Economic Belt to South Asia. Beijing is funding the construction of five dry ports along the
checkpoints in the border in the Himalayan region.
In 2013, it completed a 22 kilometer road in central Nepal. The second road connecting Nepal with the Tibetan county of Kyirog is
poised to become the shortest overland route between China to India.
China has also promised Nepal to extend the Qinghai-Tibet railway, which recently began operations in Shigatse, up to Nepals
capital, Kathmandu.
Geja Sharma Wagle, a geostrategic analyst with Nepal Institute of Policy Studies, a Kathmandu-based research organization, said
Nepal was well placed to take advantage of the growing interest of its neighbor.
"Nepal is in a unique position to strike a fine balance between the neighbors. We are in a privileged position and we should
capitalize on this without hurting our national interest," Wagle told The Anadolu Agency.
"Our neighbors have turned to Nepal as a strategic partner. If Nepal wants to take advantage of this interest, our leaders should
form separate policies to deal with each country," he said, pointing out that both countries have chosen strategically important
infrastructure investments.
"Both have invested on airports, hydropower, road and telecommunications," he said.
Former Chinese premier Wen Jiabao stopped over in Nepal in late 2012 towards the end of his tenure, continuing a tradition of a
visit to Nepal by a Chinese leader every decade. Chinese President Xi Jinping is likely to visit Nepal this year to mark the 60th
anniversary of diplomatic relations between China and Nepal.
Despite being caught in one political crisis after another as it struggles to forge agreement for a republican constitution -- awaited
since the end of its civil war in 2006 -- Nepal is trying to catch up with the neighbors overtures.
Late last month, Nepals President Ram Baran Yadav visited China to take part in the Boao Forum for Asia, where his Chinese
counterpart Xi Jinping pledged an aid package of 14 billion rupees ($140 million) to Nepal, a five times increase in Chinese funding.

"The prosperity of smaller countries is important for Chinas continuous growth and to attain political power in the world order, but
that will not necessarily make all small, underdeveloped countries prosperous," wrote Bhojraj Poudel, a Beijing-based columnist on
Chinese influence in Nepal.
"The prosperity of such small countries like Nepal lies in their political course and the development strategies these countries
adopt," Poudel wrote in a recent column for The Kathmandu Post
For Wagle, both neighbors have zeroed in on the security sector in order to cultivate a long-term alliance.
"Both countries provide financial and technical support to the security forces including the Nepal Army. Their goals are to make the
security forces loyal to them. Historically, India has been a major supplier of lethal weapons to Nepals national army. China seems
keen to provide non-lethal aid," he said.
China has earmarked 3.5 billion rupees to build a training academy for the Armed Police Force on the outskirts of Kathmandu. Not
to be outdone, India has pledged 9 billion rupees for a similar initiative for Nepal Police in Panauti, a town 20 kilometers northeast of
Kathmandu.
Both countries, according to Wagle, seek to minimize the American and Western influences in Nepal and maintain their traditional
sway over the Himalayan nation.
"Chinese leaders particularly think that if Western influence increases in Nepal, it will be used as a launchpad to destabilize its
restive Tibetan region," said Wagle.
Tika P Dhakal, a Kathmandu-based strategic affairs analyst, warns that Nepal may miss this opportunity due to internal problems.
"Nepal has been in a state of perennial crisis after the end of Maoist insurgency in 2006. This has taken a toll on political
leadership's ability to articulate Nepal's concerns vis-a-vis both India and China," he told AA.
Over the years, Chinas primary concern has been the ever-increasing trade deficit with Nepal and the issue of Tibetan refugees, a
20,000-strong exile community who took refuge in Nepal after fleeing their homeland following the Chinese occupation in the 1950s.
"We might lose this historic opportunity because of political instability. Both neighbors want development without political
disturbances, but we don't seem to be in a position to guarantee it," he said.
"Both countries' interests converge on infrastructure development of Nepal. Nepal wants to accommodate both the neighbors. Nepal
has historically pursued a balancing act and that's the way to go," he said.

I always wondered why somebody doesnt do something about that. Then I realized that I was
somebody. Lily Tomlin
It doesnt matter how many say it cannot be done or how many people have tried it before; its important to realize that
whatever youre doing, its your first attempt at it. Wally Amos