‘Nepal’s Geo-strategic Challenges Have Not Changed’

Dr. Christian Wagner is a senior fellow on Asia Division at German Institute for International and Security Affairs (SWP), which primarily advises in decision-making on international politics and foreign and security policy to the German government and Bundestag. He has been involved in research on security and strategic affairs of South Asia. Probably one of the best known researchers on South Asia and Nepal in Germany, he spoke on a wide range of issues, including Nepal’s geo-political challenges, impact of China and India’s rivalry in South Asia, the way ahead of Nepalese federalism and experiences with our special representative, Lekhanath Pandey— Lecturer of Tribhuvan University, Nepal and Research Fellow of Humboldt University, Berlin— at SWP headquarters in Berlin, Germany. Excerpt:

March 26, 2019, 7:47 a.m.

You recently said that Nepal’s geo-political importance is waning for the West, which is contrary to what many people believe in?

Nepal has always had a great importance for the Western countries. There is a long partnership with many Western countries to support Nepal’s economic development and to cope with the repercussions of climate change.

A waning geopolitical importance from the West can also be seen as an indicator for some positive developments. First, Nepal’s civil war between 1996 and 2006 did not have regional or global implications that would have been seen as a threat for the West. Second, the conflicting parties in Nepal have been able to settle the conflict. The process of reconstruction and reconciliation after the civil war was and still is supported by the international community. When seeing from outside the region, Nepal has achieved many success compared to other war torn countries in South Asia despite drawbacks like the controversies over the constitution or the earthquake in 2015. Some of Nepal’s geo-strategic challenges have of course not changed for instance its close relations with India and China.

But the United States has pushed Nepal to become a part of its Indo-Pacific strategy. In that sense, do you see Nepal is also being a focus for the West as well?

There is no single definition of what the Indo-Pacific should be. The American interpretation is clearly directed against China. But the Indian Prime Minister Narendra Modi made it clear in his Shangri-La speech last year that the Indo-Pacific has to be an inclusive rather than an exclusive concept which is not directed against a third country, i.e. China.

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(Dr. Christian Wagner With Lekhanath Pandey)

Countries like Nepal have to take the opportunities that come with the different connectivity projects be it Belt and Road Initiative or other approaches. On the one hand, connectivity projects can help to improve the infrastructure which is a big necessity in Nepal, can create new employment opportunities and contribute to economic development. On the other hand, governments have to avoid rising debts and political dependencies and must push for greater transparency. Nepal has a long tradition the balance India and China. Last year Nepal signed new treaties with China which improved its access to Chinese harbors. This will also improve Nepal’s negotiating positions vis-à-vis India.

There is a kind of apprehension in Nepal that the West looks it through Indian lens. Is it true?

No, I don’t think the European Union and Germany see Nepal through the Indian leans. Nepal has always had its own value and importance for Europe and Germany as a partner especially when we look at the economic and development cooperation. Western countries have always tried to support civil society and to strengthen democratic institutions.

Of course, during the civil war period India played a much more important role with all its linkages to the different conflicting parties. This also helped India to bring about the negotiations that finally led to the end of the war. One should not forget that in the 1990s, the European countries were also engaged in two other warn-torn societies in South Asia, especially in Sri Lanka and Afghanistan. The two conflicts had more implications on Western societies at that time, first by the troop deployment in Afghanistan and second by the high number of refugees from Sri Lanka in Europe. I don’t think there is a Western perception of Nepal through the security lens via India. We may share some of India’s concerns with regard to smuggling and terrorism but these are shared by Nepal as well.

What are the challenges and prospects for smaller countries in South Asia due to the growing presence of China in the region?

I think after the initial phase of euphoria about the massive Chinese investments, many countries are now witnessing a new phase with more critical reflection on the long term consequences of the BRI. We have seen critical debates on BRI coming up in Sri Lanka, but also in Malaysia and more recently in the Maldives. Even in Pakistan the new government of Imran Khan started a review of some projects of the China Pakistan Economic Corridor (CPEC). We may also see a learning process on the Chinese side. Not all promises given by governments to Chinese investors are implemented properly. Moreover, democratic government changes give voice to more critical views on BRI asking for more transparency and greater employment opportunities for the local population. The situation in Nepal is similar and it is not difficult to imagine that these aspects may also play a role in the next election.

In your view, why India is being reluctant to become a part of the BRI despite its being with China at other platforms like BRICS and SCO?

India’s has one a unique reason for its rejection of the BRI. The CPEC runs through the Gilgit-Baltistan area of Kashmir which is claimed by India since the princely state acceded to Indian Union in October 1947. So India sees the BRI/CPEC as a breach of its national sovereignty. As long as this is not solved, it is difficult to imagine that India will join the BRI. Moreover, India is also concerned with the lack of transparency of many BRI projects and the rising debts that many countries may face in the long term.

Another problem for India is that the BRI is perceived as a China-led project, it’s a China brand. All countries which join BRI do it only as junior partners of China. There may be a lot of talk about “win-win” situation but because of the financial dominance of China it is difficult to imagine that these relationships are based on equality. Now, there is a clear understanding in New Delhi that India is always on par with China. But if India would join BRI it would be perceived as a junior partner in Chinese project. This is not acceptable for decision-makers in New Delhi. This may also be one reason why India lost interest in the Bangladesh, China, India, Myanmar Corridor (BCIM) after the Chinese put the project in the BRI framework. But if India and China can agree on new formats both countries may find ways to intensify their cooperation even in third countries. Both countries have already agreed to cooperate in Afghanistan.

We have heard that EU and Germany in particular are doing some sort of strategic rethinking in their relations with China. What’s this all about?

For many years, the EU and Germany have seen China mostly under economic perspectives. Many German carmakers sells more cars in China than in Germany. So China is a very important partner not only for Germany but for other European economies as well. One should not forget that BRI is targeted at Europe.

But a rethinking started with the takeover of German high-tech companies like Kuka. German industry has also becoming more critical on China complaining for instance on the protection of intellectual property rights and technology transfer. Moreover, China has also expanded its footprint with the 16 plus one format in Eastern Europe. Today, China is seen more critically because many Chinese companies have an intransparent ownership structure and many have links to the ruling party. So we may now see much closer scrutiny of Chinese investments and of Chinese takeovers both in German and Europe.

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Germany is one of a few countries successfully implementing a federal set up. How do you observe the prospects and challenges of Nepalese federalism?

I hope that the new constitution will be a landmark for Nepal’s democratic development. The complexities of Nepal’s social structure are often not understood in the West. The implementation of federalism often faces similar challenges, first, how much control should the center have over sub-territorial units, second, what are the competences between the center and the provinces, third in how far are provinces able to raise their own revenues, and finally, how much how is the representation of provinces / states at the center. The main challenge will now be to give life to the new institutions to make them work and to serve the development of the people.

Bavaria of Germany and Catalonia of Spain are demanding separate statehood. A section of Nepali polity has taken this as a reference for possible fall out of Nepali federalism.

The Bavarian case is more a folkloristic debate rather than a serious political issue. But the issues of Scotland or Catalonia are of course different and part of a larger domestic debate in the United Kingdom and in Spain.

Nepal can be seen as a good example why multi-ethnic societies should opt for some form of federalism. An interesting aspect was that the civil war broke out in 1996 under a democratic government after the Jan Andolan in 1990. The Maoist rebellion was supported by many smaller ethnic groups against the dominance of high caste groups in the political system. So democracy alone is not sufficient in multi-ethnic societies to overcome the marginalization of minorities. So, federalist structures can be an important institutional instrument to address the grievances of smaller ethnic groups, for instance with regard to rural development and security. But governments on all level, in the center and in the provinces have to responsibility to work for reforms to improve economic opportunities.

Many people in power in Nepalese federal set up are the same who had enjoyed the position in previous set up. As a political scientist, do you think a different political system requires a new faces in power for its effectiveness?

One of the bigger challenges in many countries in South Asia is the problem of social mobility. This is very much linked to the problem of economic development. The success of many East Asia Tigers countries started with land reforms and massive investment in education. These processes created also new social groups which voiced their concerns in the political system. Time bound quotas for economically marginalized groups can also be an instrument. These may be some possibilities to increase social mobility and to change existing power structures that are shaped by traditional elite and political dynasties.

What are the priority of Germany and EU for their relations with Nepal?

Germany and Nepal have good bilateral relations since 1958. The main focus of Germany’s development cooperation the alleviation of poverty, the reconstruction after the civil war, the support of Nepal’s health system, and the promotion of renewable energies. Moreover, German and the EU have always supported Nepal’s civil society and programs to strengthen democracy.

How do you observe the allegation that some I/NGOs are being involved in promoting religious conversion in the veil of development campaigns at local communities in Nepal?

I think the large majority of I/NGOs is doing very good and valuable work for the social, political, and economic development of Nepal. The new secular constitution prohibits conversion. But this should also imply that all religious communities in the country can exercise their faith in the same manner. Problems with I/NGOs which seem to promote conversion should be managed by an adequate registration process. The challenge is always to find a proper balance so that regulations are not becoming too restrictive. This may also deter other I/NGOs from their activities in Nepal. Given the good work of most I/NGO and the weakness of state services this would not be in the interest of large segments of Nepali society.

Lekhanath Pandey

— Lecturer of Tribhuvan University, Nepal and Research Fellow of Humboldt University, Berlin— at SWP headquarters in Berlin, Germany

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