Views of a Nepali Economist

The current crisis has brought about an unflattering portrayal of the Indian media, political leadership, and diplomacy. The Indian media is chock-full of misinformation about Nepal. The political leadership is on its way to sacrificing centuries of fraternal relationship for what appears to be a short-term gain in Bihar elections, and lobbying on behalf of an ethnic movement in the neighborhood. And, seasoned Indian diplomats have come across as ‘crass’ in their diplomatic manoeuvers. In short, the current crisis has been a disaster for India.

The Indian media is busy portraying Nepal’s latest efforts to bring fuel from China as “Tibet-ization” of Nepal, and how this means a rise of Maoism in Nepal, which they claim is a threat to India. The Indian media fails to realize that Maoism had already risen in Nepal when the Maoists won the 2008 election. They also fail to realize that Nepal’s current negotiations with China to ease fuel supplies is purely driven by economics—the economics of scarcity as a result of the Indian blockade. When a neighbor that surrounds you from three sides refuses to send fuel to you, it is only logical to approach the neighbor that lives on the fourth side for help. Their inability to grasp this very simple concept of markets, demand, and supply is baffling. Their belief that Nepal trying to increase trade with China is somehow a signal of growing Maoism in Nepal is equally laughable. If they want to see signs of growing Maoism, they simply need to look within their own borders.

Nepal’s current negotiations with China is a sign that our leaders finally appear to have grown some sense—and some spine—and realize that India should not have a monopoly over our fuel supplies. However, our current negotiations with China only targets the fuel crisis, if at all. The other crises still remain. The blockade continues to cause a shortage in medical supplies. So, our hospitals, labs, and clinics are struggling to function. Our people were also denied an opportunity to gather with their loved ones during the Dashain holiday, especially after the horrors of the recent earthquakes. And, the winter is coming. The blockade will starve many earthquake-affected folks in the hills and mountains in coming days. They are being denied warm clothes, food, and shelter that they deserve after losing everything in the earthquakes.

The Indian media is also misinformed about the new Nepali constitution. They keep reporting that madheshis have been reduced to second-class citizens in Nepal. That is incorrect. Every Nepali citizen, including all madheshis, enjoys the same citizenship perks. The Indian media appears to be speaking up for “naturalized citizens”—such as Rajendra Mahato—who cannot hold top elected posts or top posts in the Nepali Army. However, they fail to realize that the naturalized citizenship limitations are the same in India as in Nepal—that they cannot hold the nation’s top posts. Their ignorance on the issue, again, is baffling.

Like the Indian media, India’s political leadership fails to realize that the blockade is not only hurting Nepalis, but is also hurting the Indian bottom-line. For example, in 2014/15, Nepal imported 290 million liters of petrol, 922 million liters of diesel, 20 million liters of kerosene, and enough LPG gas to fill 8.7 million cylinders. We paid India Rs 26.5 billion for petrol, Rs 65.5 billion for diesel, Rs 1 billion for kerosene, and Rs 12 billion for LPG gas. That is a total of Rs 105 billion in fuel for household consumption only. This figure does not include aviation fuel and electricity that we also import from India. Also, this figure does not account the fact that many Nepalis in border towns purchase fuels from across the border in India, where they are cheaper. Any fuel supply agreement that Nepal signs with China will mean the Rs 105 billion pie—that India currently has a monopoly on—will shrink.

China is also showing an interest in a power-sharing agreement with Nepal, and wants to support Nepal’s hydropower ambitions. It also wants to extend its railway line from Lhasa to Kathmandu—despite the challenging geography—at no costs to us. If those come to fruition, it will further dent India’s influence in Nepal and its bottom-line.

The bigger surprise during this blockade, however, has been the absence of common sense diplomacy from Indian diplomats. Unlike the Indian media, India’s seasoned diplomats are aware of the nuances at play in the current crisis. They understand Nepal well. Yet, Indian diplomatic response—as evidenced by Ranjit Rae’s blunt statement that the “unofficial” blockade would officially continue despite the developing Nepal-China fuel negotiations—has been very undiplomatic. Perhaps, the current Indian diplomatic arrogance is because they know us too well.

Indian government and diplomats, perhaps, believe that un-blockading Nepal now—with the Madhesh issue still unresolved, which was the excuse for initiating the blockade—would be akin to bending backwards to satisfy Nepal. However, they fail to realize that the same applies to Nepali leadership. Nepali government’s current dillydallying about meeting and engaging with Madheshi leaders could be because they fear that doing so would appear to appease India. And, in the current blockade climate—when anti-India sentiments have risen among Nepalis—the last thing any Nepali politician wants to do is to appear appeasing India. India needs to realize that un-blockading and resumption of normal India-Nepal relations is first needed to make it easier for Nepali government to engage Madhesh leaders.

India has failed to play the situation well, and has made a mess. As a result, there is growing anti-India sentiments in the current population, especially the youth. Many of today’s Nepali youth will eventually run the country in the future. However, an entire generation of today’s Nepali youth will carry this memory forward, and will find it difficult to trust India in the future. India’s blunder of trying to drive our political process—like the recent forced candidacy of Sushil Koirala for Prime Minister—has resulted in the election of hardline nationalists in the government, election of a supposedly pro-China politician as the Prime Minister, and a thoroughly discredited Nepali Congress and Madheshi Morcha leadership. This last factor was further costly. It resulted in the election of UML and Maoist-backed candidates in all top posts—President, Vice-President, House Speaker, and House Deputy Speaker. To say that India’s interventions were completely nullified by a raging Nepal is an understatement.

These past few weeks have, therefore, been a disaster for Indian foreign policy. India has come across as a regional bully. There is much that the Indian media, politicians, and diplomats can learn from their failure. However, everything is still not lost. India and Nepal still share an exceptional fraternal, cultural, and historic relationship. And, broken relationships can always be restored. India has to get off the high horse, and engage in common sense diplomacy.

Labels: blockade