China is winning the competition with India for influence in Nepal – Gautam Sen

Posted on May 6, 2020 by VOI

The question that may be appositely posed is whether Nepal has now also entered the Sinic sphere, like Tibet, and is the primacy of India in it retreating? China has been able to use its vast resources to invest in Nepal, impairing its politics and constructing high profile public works. … An important development is the new China-built railway from Kerung, Tibet, which will run to Kathmandu in Nepal. The question that inevitably arises is how this situation, which facilitated China’s ascent and India’s retreat in Nepal, occurred in the past two decades or so. – Dr Gautam Sen

The involvement of China’s ambassador recently in easing tensions within Nepal’s ruling communist coalition over a troubled succession, which would have earlier prompted Indian engagement, is a powerful symbolic indicator of changing times in Nepali politics. It is provoking renewed concern that the long history of close Indo-Nepal affiliation is coming to an end, superseded by a rapidly growing Chinese presence. Is China winning the competition with India for influence in Nepal though some Indian diplomats avow there is nothing to worry about? Nepal’s erstwhile ruling dynasty had ties of marriage and family in India and as have its Rana elites. Nepal used to share a common Hindu religious identity with Indians and the Nepali language is more Sanskritic than many Indian languages. The economy of Nepal, by virtue of geography and history, is also integrated with India’s and vast numbers of Nepalis work in India. They are allowed to come and go freely, without legal impediment and some possess Aadhar cards, presumably, because the Indian authorities turn a blind eye to it. An important dimension of India’s prominent footprint in Nepal is the presence as well of an Indian-origin business community though Nepalis resent their conduct as frequently self-serving and immoral. Their influence remains compelling by virtue of their ability to cajole and bribe to get their way. However, it would be a mistake to regard them as habitually exercised by India’s political and strategic interests in Nepal.

Historically, India had felt that Nepal was in its sphere of influence though relations have never really been amicable. The tensions long predate Indian independence, with Lord Curzon once warning Nepal’s early twentieth century Prime Minister, Chandra Shumsher Jang Bahadur Rana, that his conduct was under the scanner. Nepali resentment towards perceived Indian interference is an ancient reflexive conviction that is almost universally shared by Nepal’s elites, especially in Kathmandu. Indian interference in Nepali affairs, after its independence, began with Nehru’s moralising insistence on democratisation once the Rana political dominance in Nepal had been curtailed and the monarchy’s pre-eminence ensured in 1951. Indeed, Jayaprakash Narayan once suggested to an appalled Nehru to contemplate military intervention to bring about social change in Nepal. But the Nepali monarchy reneged on the promise to introduce democratic reform and a protest movement gathered momentum. It was led by Bishweshwar Prasad Koirala, a famed pioneer of the campaign for democracy, who founded the Nepali National Congress in January 1947 in India. He is considered a hero by most Nepalis though the anti Rana sentiment favouring reform has antecedents in the Nepal Praja Parishad, founded in 1936.

The question that may be appositely posed is whether Nepal has now also entered the Sinic sphere, like Tibet, and is the primacy of India in it retreating? China has been able to use the vast resources it acquired owing to unprecedented economic success over three decades to invest in Nepal, impairing its politics and constructing high profile public works; at one point, all visitors to the Chinese embassy were being gifted a Huawei mobile phone. In recent years, there has also been visible increase in Chinese-owned businesses operating in Nepal, with shops adorning signs in Chinese. India is also active on many levels, some of it below the radar, but cannot compete with China’s vast financial clout. An important development is the new China-built railway from Kerung, Tibet, which will run to Kathmandu in Nepal. The project is part of China Belt and Road Initiative. The question that inevitably arises is how this situation, which facilitated China’s ascent and India’s retreat in Nepal, occurred in the past two decades or so.

The transformation of Nepali society occurred in the decade after the attempt at democratic transition in the 1990s, with contemporaneous revolt in the countryside and a truculent monarchy attempting to thwart its realisation. Nepal’s constitutional politics were, in effect stillborn, inauspicious circumstances conspiring against it at the very moment of inception. India’s fateful involvement during this period, especially after 2004, was to prove inimical to Nepal’s long-term national interests and laid the groundwork for its own setbacks in Nepal, ushering in conditions for the rise of China. The so-called rural Maoist revolt was likely provoked by genuine unrest as the size of Nepal’s impoverished population grew inexorably, with which the political economy of Nepal could no longer cope. But it provided an opportunity to outsiders to insert themselves into the politics of a country of great strategic importance, sandwiched between two rival great powers of Asia. India, China and Western powers began to take an even more active interest in events within Nepal because of strategic reasons and its institutional weakness made intrusion feasible.

By 2005, the Indian establishment had judged it could no longer deal with an unfathomably eccentric and unreliable King Gyanendra, who was impervious to counsel and apt to renege on agreements. King Gyanendra summarily rejected the proposed compromise of succession by his grandson, with a suitable Regent in place, until he came of age to preside as a constitutional monarch in a functioning democracy. The Maoists on the street and the countryside seemed an eminently useful instrument to deploy for his removal, which occurred in 2007. Some of these Maoists had Indian roots and a key leader, unsurprisingly, was the product of JNU, always at hand to provide sustenance for subverting Indian national interests! One assumes, the Maoists were thought easy to control though that aspiration eventually proved chimerical. The predictable breakdown in relations occurred with Indian estrangement from Prime Minister K. P. Sharma Oli of the Communist Party of Nepal though he was not from the insurgent Maoist movement. His relations, once cordial with the Indian establishment, deteriorated to a nadir when Nepal’s new constitution curtailed the influence in the national parliament of the Terai region, considered sympathetic to India. The measure resulted in a blockade of roads into Nepal from India by Terai political activists that halted commercial traffic vital for daily life. It was blamed on India, which, taking place in the aftermath of the devastation of the earthquake, provoked huge Nepali resentment. And the upshot was the triumphant re-election of PM Oli, an outcome that was not wished in Delhi.

One momentous outcome occurred with heightened US activity to enable possible use of Nepali territory for military engagement on the ground with China, since territorial access to it was unavailable through any other country. As the US scrutinized military options from Nepali territory, with which it was already familiar from incursion into Tibet in the 1950s, aided by India, evangelism was unleashed It had been presciently anticipated already by the blatant purchase of a secular clause in the Nepali constitution. It is hard to believe India was unacquainted with whole Western evangelical project and even harder to credit that it actually acquiesced. Many western countries began sponsoring religious conversion of Nepal zealously, one British ambassador even insisting publicly that missionary activity was completely legitimate. Shockingly, one senior Indian diplomat, when asked about evangelism in Nepal, opined Nepal wasn’t even a “proper Hindu country”! A senior Nepali Congress politician has also indicated that a third of Nepalis had been converted to Christianity and the population census figures are bogus since converts are advised to retain Hindu names. India once gifted Nagaland and Mizoram to Christ and evangelists have been allowed carte blanche by an unctuously sympathetic national Congress leadership after 2004. It has effectively gifted Andhra Pradesh as well during the decade of foreign usurpation of the Indian polity.

Not surprisingly, China has read the writing on the wall and opposes the spread of Christianity in Nepal that the US sees as a vehicle for creating a loyal soldiery. This is a phenomenon the British exploited ruthlessly for more than century after it defeated the brave Nepali forces and signed the Treaty of Sugauli in 1815. Interestingly, some Nepalis have been incited by China and Pakistan to demand repudiation of the colonial treaty of Sugauli and the return of significant territories ceded to the East Indian Company as a result. China’s deepened access to Nepali politicians has also provided Pakistan even greater opportunity to conduct its own business against India in the country, though there has always been more than mere cordiality in relations between the two SAARC members. In general, China’s countermeasures are evidently a response to the enhanced US presence in Nepal and what it might portend. It accounts for China’s policy of rapidly infiltrating Nepal, with the evident cheerful consent of Nepal’s political class, unmindful of the fate of Tibet once it was conquered by China. But from the perspective of China’s opponents in the region, Nepal is to apparently become the sacrificial lamb, in the hope of checkmating China, even though its fate might parallel the calamity visited upon Cambodia and Laos, once the US had finished with them. It is not clear what India will gain in the long term from Nepal’s misuse by third parties. And the uneasy Sino-Indian mutual self-restraint over Nepal that had prevailed in the past cannot be judged to have been without merit.

In this context, it is relevant to note that the Nepali polity and its economy are dysfunctional and highly vulnerable to unexpected changes that the fortuitous and inexplicable resilience of its people alone have allowed to avert collapse so far. Like politics in much of the Indian subcontinent, the newly-empowered Nepali political class has been corroded by the desire of personal advancement and enrichment, which makes it especially susceptible to foreign blandishment. However, the earlier royal dispensation was not uncommonly immune to the lure of money either. It is worth noting that one recent Nepali prime minister had changed the course of Nepali history by surreptitiously inserting the term secular in Nepal’s new constitution, in exchange for a US $5 million pay-off from a foreign embassy. Nor has the coming to power of left-wing radicals brought with it a new moral order, corrupt enrichment remaining the norm.

Even more significantly, Nepal’s economy has only been viable for many years due to exceptional international circumstances. This situation may now be coming to a close as oil prices stagnate, threatening dire consequences for Nepal. It depends on exporting labour to work in dreadful conditions abroad, their remittances funding the private well-being of families and financing the public exchequer. Remittances by Nepalis abroad amounted to 31.43 percent of GDP in 2015 and 27.8 in 2018, compared to a world average of 4.76. Nepal has achieved one of the highest GDP tax ratios among poorer countries of nearly thirty percent, by heavily taxing goods imported by remittance income. One important price it is paying is of a domestic shortage of labour for agriculture and the consequent need for large food grain imports. Thus, the vulnerability of Nepal’s economy to shock is palpable. It is a very difficult environment of economic vulnerability and Nepal’s political class is ill-equipped to cope with the unprecedented challenges, which even robustly managed societies would find demanding. As a result, one views the future of Nepal and its long-suffering and honourable people with trepidation. – New World Order, 5 May 2020

› Dr. Gautam Sen taught international political economy at the London School of Economics and political Science for more than two decades.