Submit your Article

The winds of a new cold war between the US and China have started blowing even in Kath­mandu. The latest example of it is the forewarning by an American official about Chinese investment in Nepal and the counter-remark by the Chinese Ambassador in Kathmandu. On Monday, Joseph Felter, US Dep­uty Assistant Secretary of Defense for South and Southeast Asia, had remarked that Chinese investments should be transparent, that they should serve Nepal’s interests and that Nepal should avoid falling into a debt trap. Chinese Ambassador to Nepal Hou Yanqi countered Felter’s remarks the following day, saying that the US was propagating false and irresponsible information. Although western diplomats had been whispering about the growing collaboration between Nepal and China, we hadn’t yet heard the kind of official expression Felter made this week. Now that the Americans have legitimized the China-targeted Indo-Pacific Strategy, they have started talking freely.

It was also from Felter that we heard for the first time that the American grant of $500 million to Nepal under the Millennium Chal­lenge Corporation (MCC) is part of the Indo-Pacific Strategy. It’s been quite a while since the Nepal Army has been conducting a joint military exercise named Balance Nail with the US Indo-Pacific Com­mand. Regardless of how we inter­pret the Indo-Pacific Strategy, it seems the US has started viewing, placing and dealing with Nepal under this scheme.

Such American intimation was also reflected during the bilateral meeting between Foreign Minis­ter Pradeep Gyawali and his US counterpart in Washington DC in December. The statement issued by the US State Department soon after hinted that “Nepal’s central role in a free, open and prosperous Indo-Pa­cific” had been a topic of discussion in the meeting.

 The Indo-Pacific Strategy hasn’t yet assumed the shape of a military alliance like NATO or a regional organization like SAARC

The Indo-Pacific Strategy hasn’t yet assumed the shape of a mili­tary alliance like NATO or a regional organization like SAARC. So it’s not clear how much a country needs to cooperate to be considered a part of the strategy. In fact, this strategy seems to have been advanced in a clever manner to serve long-term interests. A country doesn’t need to announce that it is a part of it, but now it seems the partnerships America strikes will mostly be under this strategy.

The strategy is similar to the Chi­nese Belt and Road Initiative (BRI) in that China has started placing all its partnerships under the BRI umbrella. But the difference is that China has begun giving the BRI a definite shape. And member coun­tries have to sign on to it and take part in its summits. For instance, President Bidya Bhandari is going to Beijing in April to participate in the second BRI summit.

By contrast, the US hasn’t given an organizational shape to the Indo-Pa­cific Strategy. But the BRI and the Indo-Pacific Strategy have emerged as weapons with which America and China are competing for world dom­ination in the 21st century.

As Foreign Minister Gyawali was conversing with US Secretary of State Michael Pompeo, the US Sen­ate was finalizing a bill that has significance for Nepal as well. US President Donald Trump signed the bill into law a few days later. That law, called the Asia Reassurance Initiative Act (ARIA), is the one that directs the Indo-Pacific Strategy.

ARIA defines the Indo-Pacific as the region that houses half the world’s population, has the most vibrant economy and poses a chal­lenge to American security strat­egy. It says the US-dominated world order is being challenged in differ­ent ways by China, North Korea and terrorist outfits like ISIS. The US goal is to overcome all such challenges and maintain its world domination.

Although ARIA’s purported goals are to enhance American security and financial interests and spread its values, its core concern is a ris­ing China. Growing US interest in Nepal—which shares a border with China’s Achilles heel Tibet and which has a direct stake in Tibetan issues—is therefore natural.

Nepal is mentioned twice in ARIA. Under the heading ‘Promoting US Security Interests in the Indo-Pa­cific Region’, Nepal, Bangladesh and Sri Lanka are labelled ‘Democratic partners’ with which the US is going to increase collaboration. (India has been called a ‘defense partner’ and given distinct importance.) As Chinese investment in Nepal’s infrastructure grows, the US is also showing an eagerness to follow suit. That donors are finally channeling investment away from seminars and toward infrastructure is good for Nepal, even though they might be doing it to compete with each other.

The second time Nepal is men­tioned in ARIA is under the head­ing ‘Promoting democracy in the Indo-Pacific Region’, which says the US is going to provide aid of over $210 million a year between 2019 and 2023 in order to ‘bring democ­racy to China’ and ‘protect Tibetan tradition, culture, environment, etc.’ It says this amount is going to be invested in NGOs working with the ‘Tibetan community’ in Tibet and ‘other Tibetan communities’ in Nepal and India. That it says ‘Tibetan communities’ instead of ‘Tibetan refugees’ raises questions as to who the definition covers and how the policy will be implemented in Nepal. Managing Chinese responses to it might well be another source of a headache.

In December, US President Trump also signed a separate law concern­ing Tibet. The Reciprocal Access to Tibet Act has a provision of denying a US visa to Chinese officials who deny American citizens a visa to visit Tibet. Considering all these recent happenings, it seems the US wants to revive the Tibet issue from a new angle. How will that affect Nepal? Will Nepal be made ‘a listen­ing post’ to keep an eye on Tibet? Or will it be made ‘a launching pad’? We need to think about it before it’s too late.

The foundation of ARIA is the National Security Strategy that Trump made public in December 2017. The strategy considers China a military rival and suggests ways to counter Chinese economic aggres­sion. In the cold war between the US and China, countries like Nepal have little role to play except being a spec­tator. The third actor in this rivalry among the two giants is India, which has its own expectations. Nepal has to collaborate with all three of these powerhouses; it also has to dodge their military objectives. Until recently, all we needed to under­stand was India. But now China and America have become active geopo­litical players in Nepal. If Nepal can skillfully handle the new dynamics in diplomacy, it presents an oppor­tunity. Else, it spells disaster.

As Professor Shreedhar Kha­tri said recently, Nepal needs to learn how to deal with great powers. We can neither escape from India, nor stop the arrival of China and America. We have no choice but to learn to maintain parallel relations with them.

 Since I always write quite negative things about taxi drivers—those of you on my Facebook might have noticed I am now posting photographs of license plates belonging to drivers who refuse to go on the meter or who quote wildly over-inflated prices—I thought why not write something nice for a change.

Because at long last I actually do have something nice to say. About drivers! I know, I know, please pick your jaw off the floor and continue reading. Over the past 10 years or more I have been using a car hire company when I have needed to go a bit fur­ther than Patan. Every time it seems there is a different driver. Which means none of them actually know where I live. So no picking me up from my actual door. Not very con­venient at all. During the time of doing earthquake relief in Kavre, I was driven, more often than not, by a nice man called Ramesh. After these few weeks of being driven around with a pile of teddy bears in the boot (another story!) I forgot about Ramesh.

A couple of weeks ago I was allo­cated him again by the hire com­pany. Why not take his number, I thought. So now not only do I have a driver who knows where I live, but he also lives just a couple of streets away. No more excuses about traffic jams when the car is late! So tick the box for the more complicated or far away drives. Meantime, as I posted these photos of licensed plates I jokingly wrote that taxi drivers were never going to see my somewhat cheeky taxi comments. When, lo and behold—I have a part time taxi driver on my Facebook friends list! Someone I know from a bar where he works in the evening. So now I have two people on my ‘good driver’ list! Finally.

 Lo and behold, I have a part time taxi driver on my Facebook friends list! Someone I know from a bar where he works in the evening

Since this is a positive story about drivers I find myself out of words already, with only half the column filled up! This, when normally I find my allocated number of words to be too restricting, just too damn short! So like the uncomfortable cof­fee date, I’m searching around for something to talk about. How about road conditions—pretty relevant if I say so myself. Yesterday I travelled (with my new taxi driver) along the river road that runs between Jorpati/Boudha and Pashupathi. Once, not very long ago at all, that was a green area with a decent road. Definitely better than the road running through Boudha. But time has changed and a lot of buildings, mainly workshops, have come up there. The river seems to have totally disappeared.

We wondered what was being built as we could see ghat-like steps on the far side of the ‘river’. I couldn’t imagine there would ever be enough water for ghats. We discussed the possibility of the steps leading down to a future grassed area, but then couldn’t see the builders justi­fying the cost of installing steps to a play-ground. Perhaps they were the base of a bridge? We also laughed about the time we both volunteered for Jazzmandu and had to accom­pany (horrified) visiting musicians along the parallel, but equally as bumpy, road out to the Jazz Bazaar event at Gokarna.

Laughter is definitely one of the benefits of having a taxi driver on your friends list! Yet on that day, I grew sad: the scenery and road have disappeared making this ‘rural area’ an urban jungle mess in prog­ress. It’s heartbreaking to see rural areas disappear, especially around World Heritage Sites. Which was, as Lonely Planet once described it, “a pleasant walk between Pashupati­nath and Boudhanath”.

 The Nepal government plans to construct railways for both internal and cross-border transportation of people and freight to neighboring countries, and these plans are being discussed with hope and pride at the cross-sections of the Nepali society. Among the issues regarding the development of such infrastructure, the necessity of suit­able legal regimes for the projects to materialize and operate is also a significant challenge. This needs to be discussed in the spirit of Nepal’s national interest.At present, Nepal’s Railways Act 1963, the only legislation of this type, provides some rudimentary provisions to govern the proceed­ings and operations of railways. Although the Act has been amended by several statutes over the years, it has never received the focus it deserves. It is now time for a new railways act to respond to the demand of change, emulate inter­nationally-accepted technical and operational standards, and protect Nepal’s sovereign interests, while opening up Nepal further.

For Nepal, the challenge is to achieve connectivity with international allies

As Nepal has already subscribed to China’s Belt and Road Initiative (hereinafter, “BRI”), cross-border rails are no longer a matter of ambi­tions alone. Investments in BRI infrastructures like long distance roads and rails are meant to enable connectivity among Asian, African, and European countries. According to the Global Construction Review, just in 2019, China has committed $125 billion in investments in rail. This investment will supposedly add 6,800 km of railway, of which 3,200 km will be high speed. Trade via rail­ways has flourished between China and its neighbors and is predicted to grow through projects under the BRI. Apart from this, Nepal has its own reasons to aspire for such infra­structural connectivity.

Outstanding issues

Nepal aims to connect with both India and China through railways. With differing jurisdictions, forms of government, and rules and regu­lations, many legal issues specific to the construction and operation of railways will arise.

According to the first edition of the publication Monograph Series on Transport Facilitation of Interna­tional Railway Transport in Asia and the Pacific by the United Nations Economic and Social Commission for Asia and the Pacific (hereinaf­ter, “ESCAP”), some generic issues that arise with the construction of international railways that can be addressed through legal mecha­nisms are: border procedures, lack of unification between required documentations (legal and other­wise), differing operating and tariff structures, contrasting customs and border regulations, safety and tech­nical standards, and a lack of human resources.

Land acquisition will be a major issue for railway projects connect­ing Nepal with China and India. Nepal has a Land Acquisition Act, but the problem of implementation delay has been insurmountable. In July 2018, Nepal and India reached agreements to resolve land acqui­sition issues and remove physical obstacles, like electricity poles, in order to complete a railway line from Jayanagar (India) to Janak­pur-Kurtha (Nepal) and from Jog­bani (India) to Biratnagar Customs Yard (Nepal).

Accounting for the higher pop­ulation density in southern Nepal, land acquisition from private own­ers could be a major hurdle in the proposed China-Nepal-India rail­way line. A possible solution would be for the government to embrace the policies of land pooling, under which small land-owners would pool together their land and, as stakeholders, hand it to the pooling agency for infrastructural develop­ment.

China has plans for a pan-Asian rail that will extend from Kunming, China to Laos, Thailand, Malaysia, and finally, end in Singapore. With investments in railway, cross-bor­der disputes are sure to arise, and experts argue that a less formal, mediation or arbitration resolution process will be favored by both Chi­nese and international legal pro­fessionals. Some countries may develop their own legal systems to address disputes through arbitration or mediation.

Legal mechanisms

From a legal perspective, cross-border agreements (multilat­eral or bilateral) between states and companies responsible for commer­cial projects could be a solution. Additionally, parties will need to ensure a cohesive, standardized approach to technical compatibil­ity along the constructed railways, including the infrastructure, sig­naling processes, licensing require­ments, and other laws and regula­tions. In this regard, for example, the UN Economics Commission for Europe (hereinafter, “UNECE”) guides the process of harmoniz­ing and simplifying border crossing procedures for inland transport and includes an overview of the interna­tional UNECE Transport agreement.

Currently, as reported in the Study on Border Crossing Practices in Inter­national Railway Transport by the ESCAP (Bangkok, 2018) (hereinafter, “ESCAP Border Crossing Practices study”), there are two international legal regimes on international rail­way transport: the Organization for Cooperation between Railway and the Convention concerning Interna­tional Carriage by Rail. They provide comprehensive legal frameworks for various aspects of railway transport.

Other conventions, such as the Customs Convention on Container of 1972 and the Convention on Inter­national Customs Transit Proce­dures for Carriage of Goods by Rail under Cover of SMGS Consignment Notes of 2006, provide guidance for railway-related requirements, such as transport documents require­ments, customs offices procedures, and the standardized markings of freight.

The Rail Services Agreement between Nepal and India (2004) attempts to harmonize standards across India-Nepal railways. The agreement provides details regard­ing train schedules, maintenance of tracks and wagons, and offensive or dangerous goods. Additionally, the Memorandum to the Protocol to the Treaty of Transit between Nepal and India outlines that, for transit through India, Nepali import licenses, letters of credit, or offi­cial Nepali certification on Customs Transit Declaration is required. The ESCAP Border Crossing Practices study suggests that because the “transit procedure is paper based and heavily burdened with doc­ument requirements,” an “intro­duction of electronic information processing and electronic data exchange between customs stations in India as well as between the cus­toms authorities of India and Nepal could be considered.”

Conclusion

Most of the issues discussed above have ramifications. For example, increased connectivity and an open border with India over the decades have resulted in an influx of Indian population in Nepal, demanding settlement and citizenship. For Nepal, the challenge is to achieve connectivity with international allies without the “Indianization” or “Chinisation” of Nepal. Without immigration procedures and the introduction of work permit laws in Nepal for foreigners, like Indians, connectivity will not help Nepal in the long run. This is a core issue.

Above all, it is important to understand that the development of cross-border railways means some essential sovereign functions of the state have to be performed in a way that assists in creating symbiotic relations with the railway systems across the border from Nepal. The issues of inland security and information sharing are important in this regard. They must all be discussed and considered when creating a legal regime to enable infrastructural connectivity.  

Bipin Adhikari is a constitutional expert and currently associated with the Kathmandu University School of Law. Bidushi Adhikari is associated with Nepal Consulting Lawyers, Inc as a research assistant

Read full article here: Legal issues related to the cross-border rails in Nepal​

Much has been said about Comrade Prachanda’s “anti-imperialism” state­ment on Venezuela and Nepal’s reluctance to join the US-led Indo-Pacific Strategy and their collective impact on Nepal’s relations with the US, and India and China. In light of global and regional events, the three powers won’t let us off the hook easily. No matter what our wishy-washy leaders and intellectuals believe, there is no way to sweet talk our­selves out of the new Cold War. India and China have invested heavily here and now we are on the US strategic radar again after almost 60 years. Therefore, the chance of Nepal having to deal with one of the following three scenarios is very likely. Scenario A: India and China, despite their geopolitical rival­ry, will be on the same page on Nepal, i.e., keep the US out of it. Each of our neighbors believes that given its influence in Nepal, it will be able to use the country as a bargaining chip in its dealings with the other. Neither would want Nepal to have any US back­ing as it will lead to a confident Nepal, which makes it harder for them to view it as their own exten­sion/satellite.

Scenario B: The US will make “further inroads” here with India’s help. Since India finds itself sur­rounded by China in South Asia, it could very well be open to the US’s idea of roping Nepal into its strategy. As India and the US are “allies”—maybe difficult ones, but allies nonetheless—India probably won’t see the US as infringing on its interests in Nepal, but rather acting on its best interest by keep­ing China out. The two will think their partnership in Nepal helps curb Chinese activities, interests and influence in Nepal.

It will signify a major diplomatic victory for India because China then won’t be able to play the Nepal card in its dealings with India. And the US can prove to the Chinese that it still has influence worldwide including in China’s “strategic backyard.” Further, if the Indo-US partnership is suc­cessful in Nepal, the model can then be applied to other South Asian countries that too face a difficult choice between India and China.

Scenario C: The US will go solo in Nepal. From the US strategic perspective it makes a lot of sense too. It knows the country well, enjoys immense soft power, and the American intelligence has already used our terrain against China 60 years ago. Now imagine being the most influential play­er between the two major Asian powers and with all the latest in surveillance and monitoring technology! Given our location, we could be an excellent listening post for the US to gather intel on missiles and other strategic pro­grams of both India and China— and to mobilize its field agents— just as China’s Xinjiang was used in the 80s to gather intel on the soviet missiles program.

The US can then play the Nepal card to coax India into going with it on many global issues. If things blow out of proportion in the South China Sea or the Indian Ocean between China and the US, it can also thwart any Chinese strategic plans against India in or through Nepal—in case India sides with the US against China. Alternately, a strong US presence in Nepal will restrain India and China and make them seek peace­ful ways to resolve their “issues,” thereby sparing it a significant military adventure or cost as India’s ally.

The only option left for us is to decide who we choose as our ally and set terms favorable to us before any of the three decides for us. Therefore we need to ask each power what’s in it for us if we side with them. Whoever provides us more, we selfishly and shameless­ly side with it, just as many third world countries have done for their development—and survival and security. Without a firm com­mitment to one of the powers we will only be getting paltry sums that neither significantly aid our development at best and are det­rimental to our survival at worst.

Just as my good friend Bhaskar Koirala, the director of Nepal Insti­tute of International and Strategic Studies, recently said, “The US MCC grant of 500 million dollars although previously part of the Asia pivot is now being channeled through the Indo-Pacific strate­gy.” We need to acknowledge it as such and accept that the money we receive from India and China is also part of a named or unnamed strategy. Then decide on where the big money—and less micro­management— is and be part of it.

If we want stability, peace and development, we need to be cold, calculating and objective—and that can only be done when we shed the useless peaceful and neutral cloak. It’s time to imagine the worst and ask very difficult— and impolite—questions.