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Washington wants Nepal to become India’s ally against China.
Written by Lucas Leiroz, researcher in Social Sciences at the Rural Federal University of Rio de Janeiro, geopolitical consultant.
Tensions remain high in Asia. Small countries with little power of international influence are under pressure day after day to choose a side to follow amid the extreme polarization of the region. This is precisely the case of Nepal, which is being forced by the US to sign a pact that, in exchange for financial aid, imposes as a condition a strategic rapprochement between the country and India – which is a regional ally of the Washington and rival of China.
The agency Millennium Challenge Corporation, better known by the acronym MCC, signed in 2017 a pact with the Nepalese government to provide an amount valued at 500 million dollars, to be applied in infrastructure, social and environmental projects. The agreement, while apparently quite lucrative, continues to cause strong controversy and polarization in Nepal, for a very simple reason: in exchange for the help, the MCC demands greater integration between Nepal and India, mainly in the electricity sector. The agency enthusiatically supports reforms and promises investments in these countries’ cross-border electricity trade.
MCC’s decision to sponsor India-Nepal integration is not surprising. This organization is financed by the US government and, consequently, its actions are carefully planned in order to serve Washington’s geopolitical interests. However, the impact of such a maneuver on Chinese interests in the region leads many Nepalese lawmakers and experts to be suspicious of the real intentions behind this agreement – which explains the strong opposition.
The current leader of the Nepalese government, Sher Bahadur Deuba, despite having previously promised to follow through with the pact, has had many difficulties in dealing with the pressure, mainly from the communist party, which leads the coalition in opposition to the government. Oppositionists point out the dangers of signing an agreement that will virtually “choose” India amid regional disputes between this country and China to consolidate a strategic space and zone of international influence.
Now, the US tactic consists of trying to convince the Nepalese government that the MCC pact is absolutely apolitical and devoid of geostrategic value. On a recent trip to the country, Donald Wu, assistant secretary for South and Central Asian Affairs at the US State Department, met with Deuba and some representatives of the opposing coalition to try to negotiate a common agreement. However, negotiations seem to have not progressed significantly, since Nepalese officials did not believe the ”apolitical” narrative about the pact.
Certainly, displeasing both China or the US and India is harmful for Nepal. When a small state with little influence is geographically located in a tense and disputed region, the most strategic attitude to be taken is the declaration of absolute neutrality, with the state denying any interest in supporting either side. Nepal is not really supposed to gain by cooperating with just India or just China – which is why it needs to maintain a respectable neutrality strategy that allows it to trade freely with both powers. By agreeing to buy Indian electricity in exchange for financial aid from the MCC, Nepal would be making a major blow against Beijing, the consequences of which could be severe.
Despite this, there are factors that lead experts to believe that even excluding the neutrality hypothesis and having to choose between sides, negotiating with China seems more profitable for Nepal than with US-India. Currently, both countries already have a good cooperation structure in the electricity sector and this tends to increase. China and Nepal are expected to trade 2,000 MW of electricity by 2030. With the completion of some Belt and Road Initiative projects, electricity produced in Nepal is expected to be commercialized via the Chinese route to several other countries, even outside the Asian continent. This horizon of possibilities may simply disappear if Nepal decides to join the US-India axis, serving as an instrument of the Western strategy for Indo-Pacific.
Facing the impossibility of defeating Chinese influence directly and having severe difficulties to stop the growth of BRI, the American bet is on trying to co-opt small countries to prevent them from cooperating with Beijing, making them satellites of Washington or New Delhi. Nepal, as a country bordering India and China, seems a perfect strategic partner in this regard and this is why the country is so valuable to American plans in the region.
Of course, all of these factors will be taken into account and it is likely that Deuba is quite cautious about the position to be taken, considering that he is an experienced politician who previously served as prime minister during the monarchy. However, regardless of what is decided, the Nepalese position needs to be taken soon, as the parliament’s delay in ratifying the pact – which has been signed in 2017 – brings several discredits to Nepal as a partner country for cooperation projects on the global platform . Neutrality seems the most correct path to follow – secondly, the most reasonable decision would be the one that would allow the Nepalese people to enjoy the benefits of BRI.
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nice to MCC being covered on SouthFront