Nepal has long been adopting a foreign policy based on non-alignment and the time-honoured principle of Panchasheel. But foreign policy experts in Nepal now say there is an urgent need for the country to review and redefine its foreign policy vis-à-vis the changing world order, balance of power and rise of Asian powers, such as India and China. In line with this thinking, the government recently formed a committee to review its foreign policy.

Experts also believe Nepal must now lend deep thought to economic diplomacy to reorient its economic development ambitions, especially at a time when two of its neighbours, India and China, have been making rapid economic strides. Against this backdrop, Narayan Upadhyay of The Rising Nepal spoke with foreign relations expert Sunil K.C., founder and chief executive officer of a Kathmandu-based foreign relation think-tank - Asian Institute of Diplomacy and International Affairs (AIDIA).   

Excerpts: 

In your view, does Nepal need to reorient its foreign policy?              

Nowadays, we often talk about the revival of the “Asian Century”. Broadly speaking, this indicates a global power shift towards Asia, especially in reference to the rise of China and India. The rising Asian powers are also contributing enormously to the transformation of the global balance of power. With the changing international power dynamics, it is important for Nepal to review its foreign policy and make it compatible with today’s changing world order. Our geographical positioning also demands some extra caution in conducting our foreign relations. We also must prioritise and choose the best policy option, concretise and ensure effective bilateral and multilateral engagements, and protect and promote the country’s national interests.  

Recently, AIDIA organised a conference entitled “Revisiting Nepal’s Foreign Policy in Contemporary Global Power Structure”, where more than 25distinguished national and international experts expressed views on various issues. The Nepali government has formed an expert committee to review the foreign policy of Nepal. We in AIDIA will share the outcome of the conference very soon with the government. We firmly believe that the document will work as a good reference in the process of reviewing Nepal’s foreign policy. 

But one important thing to be considered is: as we are aware of the impact of domestic policy on the making of the foreign policy, the country should maintain a high level of consensus at home by incorporating the genuine concerns of all the stakeholders involved in the foreign policy making process.         

How do you assess the present status of our foreign relations with India and China?

Nepal has always sought for maintaining balanced relations between India and China. But we should not view it from a quantifiable perspective. As we do have our unique features of relationship with both the neighbours, we definitely have different levels of engagement as per our respective mutual interests.

Undoubtedly, our current status of foreign relations, or dependency, is heavily southward-oriented. But we have to explore new avenues for our engagement with both of them while rightly securitising their competing interests vis-à-vis Nepal.  

Both of our neighbours are offering us connectivity proposals (railway proposals from India and connectivity proposal from China under the OBOR framework).We must take these proposals seriously. It will diversify our relational dynamics. Effective border connectivity on both sides will enhance our trade, tourism, investment and people-to-people contact.     

But, very importantly, we should not play with one neighbour against another in the name of serving our interest. We must promote a relationship of trust with both of our immediate neighbours. It is in the best interest of Nepal.    

How do you see the economic diplomacy of Nepal and how can the nation promote it?   

Economic diplomacy has become a high priority of many countries in the present day world.  Nepal has also envisioned economic diplomacy as one of the key pillars of its foreign policy. And it is encouraging to see that from the 11th periodic plan, Nepal has incorporated the agendas of economic diplomacy.       

I want to emphasise primarily on three areas for the promotion of economic diplomacy of Nepal. First, identifying key areas -- hydro-power, tourism, foreign employment and some other areas -- where Nepal has high potential and comparative advantages. Secondly, strengthening the institutional capability of the Ministry of Foreign Affairs (MoFA), diplomatic missions, National Planning Commission, tourism/investment/trade promotion boards, private sectors like CNI, FNCCI, NRN, among others. Thirdly, and most importantly,  effectively promoting and  pushing ahead the economic agendas at bilateral and multilateral forums, such as Bangladesh, Bhutan, India and Nepal (BBIN), SAARC, BIMSTEC, while ensuring an investment-prone environment at home.   

Developing an effective inter-ministerial coordination mechanism, conducting regular dialogue with the concerned stakeholders like the Confederation of Nepalese Industries (CNI), FNCCI, Non-resident Nepalis (NRN) and organising conferences, symposiums and trade fairs to promote economic diplomacy are the other areas that need our particular attention.  

We must strongly push for our priorities in economic diplomacy in order to lead the country on the path of development and prosperity. A strong economy will certainly give the nation an edge in the world.

How can Nepal benefit from the OBOR?

It can be of great benefit, as long as the leadership doesn’t take on too much debt to participate in it. The Chinese may offer loans at low rates, but there must also be greater accountability in the use of these funds. I think one benefit is to play off the Chinese against the Indians, but Nepal really should begin to take control of its own destiny without the colonist mentality imposed by New Delhi. China is trying to make Nepal a transit point, which could be helpful for Nepalese traders and foreign traders to make it a purchase point and use it as a junction. In the end, it will help our overall economy if we utilise it in a smart way to become self-strong.

What would be the impact of it on our economic diplomacy with India?

May be, it will force India to abandon socialism, and Kathmandu could be like Yiwu, regarded as the wholesale capital of China. Of course, India will realise that they are no longer your colonial master, and India will start more lending to Nepal. India will start to revise its own economic policy towards Nepal in an open way, and Nepal will have multiple choices for business and investments in the coming days. Nepal will have balanced trade with both the emerging economic giants of the world. If OBOR connects Bangladesh through Nepal, Nepal will have easy access to Mongla Port of Bangladesh for third country trade, then it will make the country less dependent on India for third country trade.

 How do you view Nepal’s recent Belt and Road Initiative agreement with China? Will it impact Nepal’s relation with India?

It’s a very good idea to be a part of the OBOR, but it depends upon how much benefit we can take from China in the coming days because we have signed various agreements with China and India, but in the end, the question comes at the execution level. OBOR is China’s vehicle to promote its trade and connectivity in global affairs, and it is trying to lead the world through connectivity. It is up to Nepal, and not to India, to move ahead - or not to -with the OBOR because India is still reluctant to be a part of it.

Of course, it will have an impact on India, and it will think that Nepal’s economy will go with China and Nepal’s economic dependence on India will be less. Delhi could sense that they will have a weak geo political ground in Kathmandu in the coming days. But in the end, it depends upon our leadership to decide what sort of role they are going to play in the coming days to balance relations with both the neighbouring countries. Diplomacy is all about economic diplomacy, so we have to see our economic interest first, and we must try to be an independent nation with a strong economy.

What is the importance of institutional memory in shaping foreign policy of a nation?

Institutional memory in foreign policy making provides a sound understanding of the unfolding events and helps foreign relation experts to interpret the issues from a historical perspective. So, institutional memory is pivotal in enhancing the systems and procedures that ensure the right archiving of the issues pertaining to foreign relations.

For instance, Nepal has now planned to review its foreign policy. Scrutinising the contemporary international systems and global power balance is important vis-à-vis the shaping of the nation’s foreign policy. In the meantime, it is also equally significant to conduct a thorough analysis of various facets of our foreign policy from our past experiences. This will guide us to reach the level of logical reasoning to shift the priorities of our foreign policy as needed. That’s why, institutional memory plays a crucial role in foreign policy making.     

What is the role of think-tanks in shaping foreign policy?

If we look internationally, think-tanks are playing a very crucial and pivotal role in the process of shaping and making of foreign policy of any nation. We can look at our immediate neighbours, which have got very vibrant think-tanks. They are providing incisive policy recommendations to the government. At the same time, the think-tanks are well-equipped with sufficient human resources.

In our case, we still have a long way to go. But I think we are trying our best to contribute and support the Nepal government in providing it with key and important recommendations even with our limited available resources.

In the end, tell us about your institution, AIDIA.

The Asian Institute of Diplomacy and International Affairs (AIDIA is an independent, non-partisan, foreign policy think-tank, based in the highly geo-strategic Himalayan region. Headquartered in Kathmandu, Nepal, AIDIA aims to lead a new era in foreign policy and international relations, and reflects the unstoppable rise of the Asian continent as the key stakeholder in the economic, strategic and geo-political equations of the present day world.

AIDIA provides a platform for policymakers, academicians and industry leaders from around the world to come together to debate, discuss and share their views on contemporary geopolitical and geo-economic issues confronting the international community.