Nepal’s leftist victory and the changing trans-Himalayan order

By Anil Sigdel (23 December  2017) – The Himalayan nation of Nepal, which has been mired in violence and political chaos for two decades, has taken a great leap forward with the peaceful conclusion of multi-phased federal elections on 7 December 2017 after an 11-year transition period.

In the run up to the elections the largest communist parties — the Communist Party of Nepal (United Marxist-Leninist) (CPN-UML) and the Communist Party of Nepal (Maoist Center) — announced their electoral alliance and possible merger. As expected the alliance achieved a comfortable majority in the federal parliament and impressive results in the provincial assemblies

What the leftist-majority government will mean was made clear by Maoist Center Chairman and ex-prime minister Prachanda shortly before the elections. He said that with the leftist alliance, Nepal will gain long-awaited stability that will naturally be in the interests of both India and China, Nepal’s relations with both countries will go on strengthening, and Nepal deserves the gratitude of both neighbours for this unity.

When the two parties announced their unification, CPN-UML leader and former prime minister KP Oli emphasised that Nepal’s foreign policy is based on sovereign equality, non-alignment and peaceful coexistence. The message is loud and clear for India, which has grown accustomed to using divide-and-rule tactics on Nepali governments and parties over the last two decades.

Nepali parties across the spectrum have been vulnerable to Indian tactics given their vested interest in being at the helm of domestic politics and power. But the CPN-UML has taken a decisive stand against India. This is driven in part by India’s endorsement of the agitating Madhesi people’s demand to re-map certain areas and assign constituencies on their terms in Nepal. This would jeopardise the CPN-UML’s political base if successful.

Indian elites had two objectives in mind: by supporting the Madhesi movement, India demonstrated its role in promoting democratic equality while capitalising on the opportunity to undermine parties that could be a potential threat to India.

Things took a nasty turn when India and the Madhesi leaders imposed a five-month long blockade from September 2015 to force the big parties to agree to their terms. Nepal, which had just been hit by a massive earthquake in April 2015, suffered an acute shortage of basic supplies due to the blockade. In retaliation, then prime minister Oli reached out to China and signed a historic trade and transit agreement in March 2016.

This was a watershed moment: Nepal’s hope that China would come to its rescue when it needed it the most materialised, and Oli elevated his stature to that of a long-awaited national leader. His defiance of Indian heavy-handedness even won him the support of Nepali Congress patrons.

Thereafter, Nepal–China relations strengthened. Under Prachanda’s leadership, Nepal joined China’s Belt and Road Initiative, the Nepalese Army conducted joint exercises with China’s People’s Liberation Army for the first time ever and a couple of days before leaving office Prachanda awarded the huge contract for the hydropowerproject Budhi Gandaki to a Chinese firm. China, which had recently surpassed India as the biggest investor in Nepal, was sending a signal: its policy of maintaining a low-key relationship with Nepal due to India was changing.

India’s tactics had backfired and it was forced to correct course. India has gradually accepted China’s growing ties with Nepal. The extent of China’s inroads into South Asia and the scale of investment under China’s Belt and Road Initiative was already forcing India to accept its inability to cope with the situation without the help of extra-regional powers. So India made a departure from its strategy to keep its northern belt infrastructure underdeveloped and expedited its connectivity plans in its peripheral region.

The World Bank, the Asian Development Bank, the United States and several other countries are significantly stepping up their infrastructure and other investment in Nepal. While it is good news for Nepal that the United States and other powers are putting it back on their radar, the changing trans-Himalayan order also comes as an opportunity for extra-regional powers to increase their engagement in India’s neighbourhood.

Nepal’s landlocked geography has confined the country to India’s fold: it has a 100 per cent dependence on India for strategic imports like oil and gas. It is only recently that Nepal has diversified its internet dependence on India with fibre-optic connectivity to China.

With a leftist-alliance government at federal and most provincial levels, Nepal has the chance to work on the diversification of its overwhelming dependence on India by connecting more with China. For China, now is the time to deepen its ties with Kathmandu. Nepal can make real progress in creating a conducive business climate for investment, economic growth and development. Nepal will have an opportunity to institutionalise its foreign policy which is guided by its historical pride of having never been colonised, the bravery of its soldiers and a wish to strengthen its independent profile.

India’s willingness to accept such developments is not warranted, and it is not hard to imagine that India’s next move will be to try and split the leftist alliance. Yet a stable government in Nepal offers a chance to reduce mistrust and resolve outstanding issues between the two countries, as well as find new areas to collaborate.

Dr Anil Sigdel is Director at Nepal Matters for America, Washington DC. This article first appeared in East Asia Forum.

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