Why Nepal's new power brokers should worry India and China

Karishma Vaswani for The Bloomberg

A new political generation is reshaping Nepal’s future. For decades, the Himalayan nation has been caught between India and China, both vying for influence through patronage and investment. But those familiar formulas may no longer work.

Nepal’s location has long made it a geopolitical prize for New Delhi and Beijing. Landlocked between the two, it has been the object of endless courtship, but also manipulation. Successive governments have often tilted toward one giant neighbor or the other, but the country’s deepest political crisis in years is disrupting that playbook.

Cities across the country were scenes of chaos last week. Young and angry protestors ransacked and burned down government buildings, including the parliament. The immediate catalyst for their rage was a short-lived social media ban imposed by Prime Minister KP Sharma Oli’s government, but grievances run much deeper. This generation is fed up with what it views as endemic corruption and a lack of economic opportunities in a country run by long-entrenched elites.

Oli resigned, and the former Supreme Court Chief Justice, Sushila Karki, was sworn in as the interim leader, the nation’s first female prime minister. Both India and China were quick to congratulate her, but have refrained from commenting further.

Patience is wise. There is nothing to gain by meddling at a time of instability.

India and Nepal are bound by trade, geography and history. The two share South Asia’s only truly open border, with visa-free movement and deep people-to-people ties, notes Bloomberg Economics. Political goodwill with Kathmandu is crucial for Indian security, with New Delhi wary of cross-border drug flows, terrorism and other threats. Nearly all of Nepal’s third-country trade and petroleum supplies flow through India, which also provides significant development aid.

New Delhi shouldn’t mistake proximity for power. This generation of Nepalis doesn’t feel unduly indebted to their more powerful neighbor. Instead, their memories are laced with resentment. India’s 2015 blockade, which resulted in huge shortages of fuel and medicine, despite conflicting accounts on both sides over who was responsible, is just one example.

India’s missteps were a boon for China, which has positioned Kathmandu as a critical link in its massive overseas infrastructure investment program, the Belt and Road Initiative. A shared border is also critical for Beijing because of Tibet, which it annexed in the 1950s. Beijing is particularly sensitive to more Tibetan refugees in Nepal, as its worried about any threat to its claims on the autonomous region.

To extend its influence, China has been investing in projects like road construction, tunnel development, hydropower, and communication initiatives. The strategy appeared to be working, up until this latest bout of political turmoil at least. Last December, in a break from tradition when newly appointed leaders typically go to India on their first state visit, former leader Oli made a four-day trip to China.

These tactics won’t work with a generation fed up with the old power structures and a flagging economy. Youth unemployment is estimated at around 20%, while Transparency International consistently ranks Nepal poorly — it’s no surprise that young people feel the system is stacked against them.

If India and China continue treating Nepal primarily as a geopolitical pawn, they risk alienating future leaders. They need to understand the new power brokers will require a different approach, notes Puspa Sharma, a visiting senior research fellow at the Institute of South Asian Studies at the National University of Singapore. “They should remain disengaged in the political discourse,” he told me. “Instead, focus on aid, reconstruction, any kind of job-related support they can provide.”

Stepping back from political meddling, and focusing on tangible benefits would be prudent. New Delhi could lean into its traditional advantages, and continue with uninterrupted fuel and food flows. It could also offer more youth apprenticeships and exchange programs, and speak directly to the kinds of issues that this generation of Nepalis say are important.

Beijing could offer smaller job-rich projects, to deflect criticism that its infrastructure program is exploitative. It could also align scholarships in sectors young people want, like technology, medicine and renewable energy.

Nepal’s immediate task is to prevent the political dynamism from turning into prolonged chaos. This new generation needs stability, jobs and accountability. For India and China, the temptation to interfere will be strong. Restraint is far more productive.

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.