--By Madan Lamsal
It’s been more than two months since supply management was thrown out of gear in Nepal under the pretext of the Madhes agitation. This has completely exposed Nepal government’s management capacity and diplomatic skills, the thinking and working style of the Nepali political leaders. The situation has also raised several questions. Why did Nepal-India relations sour all of a sudden? What does India want from Nepal? Is what the Madhesi parties are demanding the same as what India wants? Do the agitating Madhesi parties have the backing of the Madhesi people? Can the supply management in Nepal be eased through imports from China or any other country? There is no easy answer to these and other similar questions. However, one is not left completely clueless if one pays close attention to the current situation.
What does India want?
It is difficult to understand what exactly India wants from Nepal because India hasn’t said anything publicly. Nepali officials and businessmen have repeatedly asked this question to highly-placed Indian officials as well as the Indian ambassador to Nepal, Ranjit Rae. But there has been no clear answer. In a meeting with 30 leading Nepali businessmen at the Indian Embassy on November 13, Ambassador Rae faced this question. But he did not make clear what exactly India wants from Nepal. Instead, he kept repeating the routine diplomatic answer that India wants a peaceful and prosperous Nepal. After their meeting with the ambassador, some Nepali businessmen gathered at Hotel Shangrila and reached the conclusion that they were “ready to lobby with the government if India clearly says what it wants from Nepal.”
Going by the past and present incidents, it becomes clear that India has 2-3 concerns in Nepal. The first matter of concern for India is Nepal’s new constitution. India is not happy with this constitution. There was some Indian role in the making of all past constitutions in Nepal. But India was given no role in the finalisation of this constitution. This might have made the “Big Brother” upset. The Indian (Bharatiya Janta Party-led) Government is aware of the increased activities of Chrisitians in Nepal in recent times, so it wanted the continuation of Nepal as a Hindu state like in the past constitutions. But above everything, and as also demanded by the agitating Madhesi Front, India wanted the constitutional provision of delineation of electoral constituencies on the basis of population and not more than two states in Terai-Madhes.
Water management is one of India’s long-term interests in Nepal. The water flowing from Nepal is useful for India as a source of irrigation as well as drinking water in Bihar. The same water, however, wreaks havoc in the Indian state in the rainy season. So, India wants a control on these bodies of water so that it can control floods in Bihar in the rainy season.
Apart from these, security is a major Indian concern in Nepal. This seems to be a genuine concern as news reports about Bangladeshis and Pakistanis carrying a Nepali passport keep coming from time to time. However, experts claim that India has the preparation as well as capacity to control any anti-India terrorist activities taking place on Nepali soil. The smuggling of gold, silver, betel nuts, ginger, and even garlic into India via Nepal has become another headache for India in recent times. Some Nepali as well as Indian traders are involved in this illegal trade. In the last fiscal year alone, Nepal imported silver worth Rs 24 billion. Nepal exports silver-made handicrafts worth only about Rs 1 billion a year and the remaining domestic demand for silver is not more than Rs 3 billion a year. This clearly shows that silver worth Rs 20 billion is being smuggled into India from Nepal every year.
Similar is the story of gold and betel nut smuggling. Nepal’s yearly production of betel nuts is about 1150 metric tons while the country imports nearly 8000 metric tons of betel nut a year. Out of this, only about 3500 metric tons is officially exported. A huge bulk of the rest gets smuggled into India.
Indian investment makes up the most of foreign direct investment (FDI) in Nepal. Government of India has been building schools, health posts, roads and bridges in the villages of Nepal for decades. Apart from this, it makes significant investment in the armed forces of Nepal such as the army and the police. No average Nepali has any idea about the kind of support the Indian government provides to Nepal’s politicians of all hues in the form of health treatment, vehicles during elections and other individual support. India might think that despite such huge investment, things are not moving in Nepal as India would like them to move. We should not forget that during his Nepal visit last year, Indian Prime Minister Narendra Modi had announced Rs 100 billion for Nepal in the form of grants and soft loans. Similarly, he announced another Rs 100 billion for relief and reconstruction in Nepal after the April 25 earthquake. This was the highest amount committed by any country or organisation. However, Nepal has not been able to use these assistances.
The China Card
Nepal’s all past attempts at using the ‘China card’ against India have backfired. History is testimony to the fact that the powers of Late King Birendra were curtailed when he tried to use the China card against India.
There are many Nepali politicians who show the ‘I will turn to China’ threat to India whenever there is a problem between India and Nepal. These politicians take every possible help from India to rise to power or hold on to power and once their goals are met, they forget everything. During their visits to India before the promulgation of the new constitution, both Prachanda and Oli had made some commitments to India. According to sources, India thinks they forgot those commitments while promulgating the new constitution. However, it is quite difficult to understand why Oli, a long time pro-India politician who became healthy and fit after treatment in India, has started speaking against India.
In informal gatherings, both Oli and Prachanda blame the rude behaviour by India’s external affairs secretary S Jayshankar during his Nepal visit just two days before the promulgation of the new constitution for their hard stance against India. It is being said that Prachanda became angry after Jayshankar threatened him with raising cases of war crimes committed by the Maoists during the decade-long armed insurgency if the Maoists didn’t cooperate with India. This is why Prachanda is raising the China card more aggressively. However, it should not be difficult for these two seasoned communist politicians that the China card is not like a credit card which can be used anytime anywhere! During the armed conflict, we did hear China say that the Maoists in Nepal defamed the name of Comrade Mao. So, it is yet to be seen how much value China would give to these ‘communist’ leaders of Nepal.
Prachanda said Nepalis would now start riding bicycles while PM Oli talked about smoothing the supply management by importing goods through China. However, neither is the government prepared for this improvisation nor is it practical. On top of that, it doesn’t seem if China is interested in this kind of arrangement. You can use China as a scarecrow to scare India. However, this is neither a short-term nor a long-term solution.
After the April 25 earthquake, China has relocated human settlements as far as 50 kilometers away from Khasa (Tatopani) to Shigatse. It is not difficult to understand that China understands that prostitution has increased in Khasa and that this border point is important only for Nepal. Experts say, “China remains alert to the fact that the Chinese people aren’t affected by the wind of federalism and separatism in Nepal.” Therefore, China doesn’t want the same level of movement of people through this border point as in the past. Experts also reveal that China wants to keep only its security forces and customs officials even at Shigatse.
Thus, it becomes clear that China is unwilling to open any of its border points with Nepal though the Nepali authorities are not tired of giving the big talk of opening seven Nepal-China border points to ease the supply of goods in Nepal. Rajesh Kaji Shrestha, president of Nepal China Chamber of Commerce and Industry (NCCCI), says, “China, it seems, is not that bothered about its trade with Nepal.” It is difficult to understand why, then, the Oli government is blaming the Commerce Secretary for hindering the process of opening the border points with China.
The other thing is India is becoming more and more important for China than Nepal in terms of trade. Indian markets are flooded with Chinese goods these days. Though China time and again commits to assist Nepal, this assistance is always negligible as compared to that of India. According to sources, the top officials of India and China met in Thailand recently and discussed the latest situation in Nepal. This shows that China is not going to please Nepal at the cost of displeasing India.
During the recent three-day UK visit by Indian PM Modi, India and UK issued a joint statement. The statement has repeated the Indian stance that only an inclusive constitution can ensure political stability and economic growth in Nepal. This was perhaps the revenge taken against Nepal for forcing the British ambassador to return home last year after he made a non-diplomatic statement and denying entry to the British airplane Chinook following the April 25 earthquake. This shows that two big countries always first see to their own interests rather than those of a small and poor country. British Minister of State at the Foreign and Commonwealth Office, Hugo Swire later called Nepal's DPM Kamal Thapa and tried to assuage Nepal's feelings on the Indo-Britain joint statement, but the British Minister carefully avoided criticising India.
The present problem is also related with the future politics of Terai-Madhes. It is known to everyone that the CPN (UML) tried its best to make sure that the Sushil Koirala-led government failed. In the first place, UML wanted the new constitution to be issued during its own government, not during a government led by the Nepali Congress. After this looked impossible, the UML took a very tough stance against the demands of the Madhesi parties. According to sources, the UML wanted the credit for resolving the Madhes problem to go to the government led by it.
According to sources, the UML was very flexible about resolving the Madhes problem. However, the circumstances became such that the UML has today become the biggest hurdle in resolving the Madhes problem which in turn has become the source of sorrow for the whole of Nepal. The post-earthquake Reconstruction Authority proposed by the Koirala government could not be formed because of the non-cooperation from the UML. On the one hand, this has delayed the post-quake reconstruction works, while on the other, the money collected from different sources for reconstruction remains unspent. This is going to have a direct bearing on Nepal’s growth rate. This also means inflation will rise and Nepalis will become poorer.
As far as the UCPN (Maoist) is concerned, it remains fragmented and divided. But the irony is the communists of Nepal who could not remain united under a single party have come together to form an unnatural coalition government. The UCPN (Maoist) has benefitted as it has been able to distribute crucial positions of Vice-president, Speaker, ministers etc among its cadres. But it can do nothing more than mount a little pressure on PM KP Oli.
The Madhesi parties, on the other hand, cannot backtrack on their demands in any significant manner, even if they so wish. What would they tell those people who have backed them so far? On the other hand, if their demands are what India wants as well, as is being said, then there is no easy solution to this problem.
The bottom line is the problem seen in supply management in Nepal has put all three sides – Nepal government, Madhesi Front and India – in a tight spot. A solution will not be found until one of them blinks first.