Nepal’s (potential) Tibet Dividend

Last year, Germany news magazine Der Spiegel was accused of anti-Chinese bias for putting pictures of Indian and Nepalese police wrestling Tibetan protesters, with captions about China’s crackdown in Tibet. Doing that wouldn’t be factual this year either, but it would come closer to the facts than a year ago. Nepal’s authorities have recently put a ban on all demonstrations and gatherings within 200 meters around Beijing’s embassy, and its consular outlet in Hattisar. The measure came at Chinese requests, according to

nepal_friendship_treaties2March 10 will see the 50th anniversary of the Tibetan uprising, or, in Beijing’s words, a revolt of a “few reactionaries manipulated by foreign powers” 1). To keep those few reactionaries down in Nepal, too, Beijing is willing to spend a lot of money. When Nepal’s prime minister Dahal asked the Chinese government to support the construction of 400 MW Narsinghgad hydro-power project in Jajarkot and urged Beijing to help Nepal in infrastructure building and development of Special Economic Zones in February, China’s assistant foreign minister Liu Jieyi (刘结一) said that Beijing would be happy to support Nepal in its development projects.

Tibet may not be the only reason for Beijing to offer Kathmandu economic favors, but it is an important one. During January and February of this year alone, at least three Chinese delegations .. visited Nepal, seeking assurance that protests similar to those last year wouldn’t reoccur, writes

Barring Tibetan protesters from “sensitive”, albeit very public areas like the ones surrounding China’s diplomatic missions probably looks like a modest price to pay in return for Beijing’s support. Nepal is in dire straits economically and socially. After ten years of civil war, the once-guerilla Maoists are now leading the country’s government. But the army chief is blocking integration of the Maoists’ armed cadres into the national military. And after years of civil war, and with the background of the global economic crisis, help from Beijing could help the Maoists to gain legitimacy as a ruling party.

India, Nepal’s southern neighbor, shows no public anger about the rapprochement between Nepal and Beijing, and reportedly, India’s foreign minister Shivshankar Menon stated at a press conference in Kathmandu that agreements between Nepal’s and China’s governments were “an internal affair of Nepal”. But general elections will be held in India by May this year. India in general, and the Hindu nationalist BJP in particular, seem to view increased Nepal China relations as security threats to India. While Nepal’s security forces are suffering from rivalry between the national army and the Maoists’ troops, challenges are rising from the Southern Terai plains, home to numerous ethnic-separatist groups with murky links to smugglers, bandits and Hindu fundamentalists in India. 2) At the same time, Maoists are active in several Indian states.

The United Nations have made military integration in Nepal a priority. But this is exactly the field where secretary Ban Ki-moon saw very little – if any – progress in January. And neither China nor India will be of much help – while the Maoists are Beijing’s proxies, one can be sure that India would prefer to see the Nepali Congress Party, now Nepal’s biggest opposition party, in government, and that it is quietly backing the army in its intransigence 3), concerning the intergration of Maoist troopers.

Looking at Nepal’s general situation, India has reason to be confident – and comparatively relaxed – about Kathmandu’s current hobnob with Beijing. In ethnic terms, Nepal is much more connected with India than with China. Economically, too. In a commentary on March 3, All India Radio (AIR) pointed out India’s advantages.

Indian firms are the biggest investors in Nepal, accounting for about 44% of total approved foreign direct investment of over 346 mn US-D and also for 28.2% or 1281 operating ventures with foreign investment. China is only the second-largest investor with just about 12% share in cumulative investment, and Japan is third with 10% share. 4)

These are no huge numbers, and positions can easily be reversed, but in more general terms of global trade, what China can offer Nepal is also limited. The closest (and only practical) sea ports for Nepalese trade with overseas countries are in India. As a trading partner, China doesn’t (yet) feature prominently either.

India’s general elections may have some, or a big effect on Nepal’s development. The incumbent India Congress Party seems more willing to respect Kathmandu’s choices, than the Hindu BJP would.

But above all, Nepal’s future will depend on the ability of its own politicians to cooperate amongst each other, at least when it comes to issues of strategic importance. More independence from India would be not only in the Maoists, but even in Nepal’s Congress Party’s interest. So far, the country’s political culture doesn’t look mature at all. “To hear the [political party] leaders describe one another in private, their unity seems as amicable as that of fighting cats trapped in a bag”, wrote the Economist in 2007 5), and given the UN’s January report, things haven’t become nicer so far.

Nepal could actually profit from Beijing’s uninspired Tibet policy and its exigencies, if Nepalese politicians got their act together. But that’s a big “if”.

1) Economist, Feb 28, 2009, p. 16
2) Economist, Mar 31, 2007, p. 62
3) Economist, Jan 17, 2009, p. 50
4) All India Radio, Daily Commentary, Mar 3, 2009
5) Economist, Mar 31, 2007, p. 63

6 Responses to “Nepal’s (potential) Tibet Dividend”

  1. Interesting piece. Reminiscent of Soviet/Chinese disputes over influence in Mongolia.


  2. That’s probably right. A Wikipedia article about the SCO shows how Mongolia’s situation pretty graphically. But it seems to me that Nepal is in a better position in that they could play China and India off against each other more easily.



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