Will Oli’s return tip the scales in Nepal?

Nepal underwent another change of government in the middle of July after a coalition between the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) and the Communist Party of Nepal-Maoist fell apart.

The former broke off and joined the Nepali Congress (NC) to set up a left-of-centre government. For the first time since 2015, Nepal has a government that doesn’t rely on smaller parties in parliament.

The change in the parliamentary equation also resulted in a change of prime minister. Khadga Prasad Sharma Oli of the CPN-UML was chosen to lead the new government, marking his fourth stint in the role, replacing Pushpa Kamal Dahal — the head of the Maoists, commonly known as Prachanda — who has served as the prime minister three times.

Nepal is bordered by two major powers of Asia—China to the north and India on the other three sides.

Changeover in Kathmandu

Relations with both India and China are critical for any Nepali government, which tends to avoid tilting towards one country at the cost of the other. But now, with CPN-UML joining NC, questions are being raised about how Nepal will manage its relations with its two neighbours.

This changeover is seen as the new government aligned to both Beijing and New Delhi.

Many political watchers suggest that Nepal, being sandwiched between China and India and acting as a buffer between the two, maintains a ‘pragmatic’ foreign policy and will not swing its policy options radically.

Since Nepal has economic and security dependencies on both of its giant neighbours, it would sensibly like to maintain a policy directed at serving Nepal’s national interest.

Professor Lin Minwang, deputy director of the Centre for South Asian Studies at Shanghai’s Fudan University, says, “Nepalese diplomacy in the past has always been a balance between China and India, which is one of its basic lines. There might be slight differences between India-leaning or China-leaning in different governments, but they would definitely not offend the other one just because they are more friendly to one country.” The change of a prime minister does not necessarily change Nepal’s policy of equidistance between the two.

Going forward

For Nepal, one of the least developed countries in the world, the problems are mostly developmental. Infrastructure and social sector development are among the key issues facing Nepal. The ability to fund such developmental projects gives an edge to China, even though India’s historic relations with Nepal are stronger.

The new coalition will be tested here because the Nepali Congress has not supported the BRI, and the CPN-UML of Prime Minister Oli supports it only conditionally if China offers concessional funding. Kathmandu’s earlier proposal of 35 projects costing about $10 billion was reduced to nine priority projects.

With Oli back in power, he will come under pressure to formally launch the BRI projects?

In recent years Kathmandu is now searching for oil in the Dailekh area. Attaining fuel self-sufficiency will add considerably to Nepal’s ability to pursue a more balanced policy towards its two big neighbours.

Going forward Nepalese leadership will still need to deftly move forward in pursuit of its national interests.

Sajjad Ashraf served as an adjunct professor at the Lee Kuan Yew School Public Policy at the National University of Singapore from 2009 to 2017. He was a member of Pakistan Foreign Service from 1973 to 2008 and served as ambassador to several countries.