Central Idea

Nepal’s Prime Minister Pushpa Kamal Dahal, commonly known as ‘Prachanda’, addressed the UN General Assembly, highlighting that his nation is nearing the conclusion of its unique peace process.
He emphasized the importance of completing the remaining transitional justice tasks and sought international goodwill and support.

Why discuss this?

Challenges in Nepal: Nepal’s peace process is not without hurdles. Many Maoist leaders, including Prachanda, are accused of serious human rights violations during the 1996-2006 civil war, complicating the path to justice. Additionally, Nepal faces diplomatic challenges in balancing relationships with neighboring countries.
Diplomatic Balancing Act: Prachanda’s upcoming visit to China is seen as an effort to maintain a balance between Nepal’s relationships with China and India. His recent visit to India strengthened ties with the southern neighbor.
Public Scrutiny and Corruption: Amidst diplomatic endeavors, Nepal’s leaders, both in government and opposition, face public scrutiny for alleged corruption. The government’s credibility has diminished, both domestically and internationally.

Prachanda’s History: Prachanda’s leadership during the Maoist insurgency led to his inclusion on US global watch lists. However, he has evolved into an important figure facilitating American interests in Nepal due to the country’s strategic location.
The MCC Nepal Compact: Prachanda played a significant role in Parliament’s endorsement of the $500 million Millennium Challenge Corporation (MCC) Nepal compact grant in February 2022, despite China’s objections. This move led to improved Nepal-US relations.
Geostrategic Importance: The US has been involved in Nepal’s development sectors for 75 years, particularly through USAID. However, the MCC raised concerns about Nepal’s non-aligned foreign policy and potential implications for relations with China.

China’s Influence in Nepal: The economic blockade of Nepal by India in 2015 provided China with an opportunity to deepen its influence in the country. It intervened in Nepal’s politics and played a role in uniting communist parties.
Changing Dynamics: Nepal’s relationship with India, China, and the US shifted during K.P. Sharma Oli’s tenure as Prime Minister. Trade and transit agreements with China were signed, and Nepal gained access to northern sea routes.
COVID-19 Impact: The pandemic temporarily halted China’s development projects in Nepal. However, the acceptance of the MCC compact altered Nepal’s perspective on development partnerships with China.
Prachanda’s Approach: Prachanda and his coalition partners appear cautious about Chinese loans and prefer grants over soft loans mentioned in the Belt and Road Initiative (BRI) agreements.

Concerns in Nepal: The challenge lies in convincing China that the MCC is purely a developmental project without strategic or security implications. Nepal is cautious about falling into a Chinese debt trap.
Infrastructure Projects: Prachanda may request China to provide grants and possibly waive a loan taken for the Pokhara International Airport, which currently lacks a profitable operational plan.
China’s Strategy: China aims to expand its presence, investments, and interests in Nepal to counter the influence of the US and India. It may extend its political outreach beyond the communist parties.

India’s Perspective: India has witnessed shifts in its relationship with Nepal, and certain aspects of the bilateral ties have weakened over time.
Border Concerns: India has concerns about the open border with Nepal, citing potential threats to peace and law and order.
US-India Cooperation: India and the US share concerns about the influence of major communist parties aligning in Nepal. India sees an opportunity to work with the US to manage China’s influence in the region.
Watching Prachanda’s China Visit: India closely observes Prachanda’s visit to China to gauge the reception and how effectively he conveys Nepal’s viewpoint during discussions with Chinese leadership.

Nepal faces challenges in concluding its peace process and navigating its diplomatic relationships.
The delicate balancing act between China and India, as well as Prachanda’s diplomatic endeavors, play a pivotal role in shaping Nepal’s future on the global stage.