Challenge for Nepal's new leader: balance China, India

Earthquake recovery and building support for the new Constitution will occupy Prachanda's agenda. But a central issue is growing India-China rivalry in the small nation.

 As he starts his second term in office, Nepal’s newly elected prime minister faces a formidable task: balancing Beijing’s and New Delhi’s increasingly conflicting interests in Nepal.

Prachanda, whose real name is Pushpa Kamal Dahal, became Nepal’s eighth prime minister in eight years Wednesday. The former guerrilla leader’s eight-month tenure in 2008 ended in humiliation after his bid to control the national Army by sacking the Army chief failed.

This time, he will be expected to build wider support for the Constitution that was adopted in September. He will also be under pressure to expedite reconstruction after last year’s massive quakes that left nearly 9,000 dead, a tough task given that he faces the same challenges as his predecessor, whose performance he sharply criticized: poor road access to quake-affected areas, strict conditions set by donors for disbursement of housing grants, and a lethargic bureaucracy.

But Prachanda will also have to mend soured ties with India, which has grown increasingly concerned about the influence of a China that made significant economic and political inroads under Prachanda’s predecessor.  

“Until a year ago, China was content at being a well-wishing neighbor that only wanted to increase its access, via Nepal, to the South Asian market. After India blockaded Nepal last year, China also became an active player in Nepal’s politics,” says Kiran Nepal, editor of Himal Khabar, a respected weekly news magazine. 

That has challenged longstanding Indian interests in the sliver of a nation sandwiched between the two giants.

 “India has a natural security interest in Nepal because we share an open border. There also is a mistaken belief in New Delhi that because of our historical ties, India has legitimate claims over the use of Nepal’s natural resources,” Mr. Nepal says.

A key concern for Beijing, analysts say, is that an unstable Nepal could offer a breeding ground for anti-China activities by Tibetans. Meanwhile, India, which hosts the Tibetan government-in-exile, sees controlling the flow of the Himalayan nation’s snow-fed rivers as key to meeting irrigation needs of some of its most populous states and to controlling floods that cause massive loss of life and property there every monsoon. 

Resurrecting the Maoists

Reduced from the largest party in parliament after 2008 to a distant third in 2013, Prachanda’s Maoist party has come a long way from a gun-wielding insurgent force to an unarmed but ideologically far-left political party reluctantly participating in multi-party politics.

Prachanda’s ascension to power was paved by a no-confidence motion he brought against erstwhile coalition partner and outgoing premier Khadga Prasad Sharma Oli. Mr. Oli, who resigned ahead of the vote, became widely popular for his nationalist stand against a nearly five-month-long Indian trade blockade. The blockade was India’s response to Nepal’s new Constitution, which New Delhi claims treats Madhesis, who have cultural, linguistic and family ties with Indians across the border, unfairly. 

In the wake of the trade blockade, which caused crippling shortages of fuel, cooking gas, and medicine in quake-ravaged Nepal, Oli’s nine-month tenure saw a break from total transit dependence on Indian ports, upending India’s time-tested political weapon against landlocked Nepal. The recent blockade was the third Nepal has faced. 

Instead, Oli looked north, securing sea access via Chinese territory, inking a free trade agreement, landing a concessional loan to build Nepal’s second international airport and an agreement to explore oil and gas reserves in Nepal. It also established a plan to extend the Qinghai-Tibet railway to Nepal’s Lumbini, the birthplace of Buddha. 

Many in Nepal worry that progress on these agreements could suffer under a new government, widely believed in Nepal to have been cobbled together to serve Indian interests.

However, addressing parliament Wednesday, Prachanda insisted, “I am fully committed to implementing agreements on infrastructure development Nepal has reached with China or India.”

Not surprisingly, the Indian media celebrated Oli’s resignation as “good news for India,” with the Times of India calling it “a blow for China and its interventions in Nepal,” and the Hindustan Times terming it “an Indian comeback.”

Such coverage only bolstered the belief in Nepal that the fall of Oli’s government was covertly engineered by New Delhi. That is bad for Prachanda, especially because anti-India sentiments in Nepal are at an all-time high because of the recent blockade.       

“It is no secret that New Delhi wanted Oli out of power. The first challenge for Prachanda is to prove to the Nepalese people that he isn’t India’s yes-man,” says Gunaraj Luintel, editor of Nagarik, a daily. “The best way to do that is to fast-track progress on agreements signed with China.”