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After mounting criticism of its ‘debt trap’ diplomacy, the Chinese leadership seemed keen to emphasize ‘debt sustainability’ for all BRI participant countries, at the just-concluded second BRI Forum in Beijing. It also commit­ted to more transparency in BRI projects. This is music to the ears of the advocates of greater connectivity with China, which is essential if Nepal is to shed its ‘India-locked’ status. Yet in this corruption-ridden and foreign-dependent country there is also a strong case for transparency and sustainability of any kind of external debt, from China or any other country or institution.

Most notably, neither India nor the US took part in the BRI Forum, in any capacity. (Attending the forum were 37 heads of state and representatives from nearly 100 countries.) In the lead-up to the second forum, concerns over a debt trap filled Indian and US media outlets, if sometimes with a grudging acceptance of BRI’s benefits. The Americans maintain Nepal should resist Chinese financing unless it’s clearly in Nepal’s interest. This worries China. For the Chinese, the Ameri­can involvement in Nepal is strategic and aimed at undercutting China’s rise. This is why the ‘US-spon­sored Free Tibet activism’ in Nepal is again a growing concern for Beijing.

Any support Nepal gets via the BRI may be contingent on Nepal’s ability (or lack thereof ) to deal with this core security issue for China. Yet the Chinese gave President Bhandari’s visit the highest impor­tance, notwithstanding that it had to host so many high-level dignitaries all at once. Bhandari’s coverage in the Chinese media was lavish. Particularly notable was how Nepal was portrayed as an integral part of the BRI. During the trip the all-important protocols to the transit and transport treaty were signed too. A full-fledged feasibility study of the Key­rung-Kathmandu rail should soon start. It would be a surprise if these developments didn’t worry New Delhi. Many believe a new, more muscular Indian policy, one aimed at limiting China’s growing clout in Nepal, is in the cards.

When President Xi comes to Kathmandu, most likely around October, Indian and western concerns will reach new heights. The Oli government’s central foreign policy plank of ‘diversification’ away from India, to avoid another blockade ‘at all cost’, is the right one. Yet with India, China and the US all tugging in different directions, it will also be devilishly difficult to pull off.

The concept of a ‘debt trap’ vis-à-vis the Belt and Road Initiative (BRI) has been gaining traction in Nepal. It is hard to say whether the reports and views that have come out in the popular media reflect genuine worry over the BRI’s possible harms on Nepal, or whether they aim to deliberately portray China in a bad light.

Not that Nepal should brush aside all concerns of a debt trap. In fact, a close examination of this concept based on evidence from abroad is vital. But, at the same time, should we uncritically imbibe the western views on the BRI and a debt trap? Instead, why not examine Nepal’s own history of dealing with western institutions like the IMF and the World Bank, or with bilateral partners like India, China and the US? Who has wronged us the most? Were it the Chinese who prescribed the disastrous wholesale privatization of state institutions back in the early 1990s? Or have they imposed debilitating blockades on the landlocked country?

It is naïve to assume democratic countries also have democratic foreign policies

It is naïve to assume that democratic countries also have democratic foreign policies. The disastrous American inter­ventions in the Middle East for oil, India’s hardball ‘blockade’ diplomacy, the refusal of the Japanese to atone for their sins in China and Korea, the recent history of western colonization—all suggest democratic countries sel­dom practice abroad what they preach at home. This isn’t surprising. Interna­tional interactions are guided primarily by what modern nation-states define as their national interests, which may not always align with democratic values.

This is not at all to suggest Nepal will be better off swearing unwavering faith to an undemocratic China. That would be another naivety. Again, to restate a cliché, in international relations there are no permanent friends or foes. China has traditionally appeared good to Nepal because unlike India its interactions with us have been limited. Perhaps we can gain much more by closely cooperating with it, which is also essential for the success of a vital national interest of Nepal: diversification. Our new National Security Policy also rightly prioritizes preventing another blockade “at all cost”—which can only happen with greater connectivity with China. Yes, definitely, let us look to safeguard our national interests in our dealings with the northern neighbor too. But let us also learn to draw our own conclusion.

 Why does China see the US-backed concept of Indo-Pacific as a ‘strategic threat’? For the Chinese, “the term ‘Indo-Pacific’ is less the acknowledge­ment of an ineluctable political geography than an initial, inchoate move to create a political initiative, one intended to rival China’s Belt and Road,” Bruno Maçães of the Hudson Institute writes in his perceptive new book Belt and Road: A Chinese World Order.

For its part, the US, Maçães writes, wanted to promote the concept of ‘Free and Open Indo-Pacific Strategy’ as a “push back against the notion that Western values are doomed to lose influence in the core regions of the Belt and Road.” The Americans may deny their recent activism in the Asia-Pacific region is aimed at countering China’s BRI all they like. Yet it has become a truism in this part of the world. With the recent decision of the Indian foreign ministry to set up a separate Indo-Pacific unit, the BJP government has also made its pref­erence for the American Indo-Pacific over China’s Belt and Road crystal clear.

 Expect little of substance from President Bidya Devi Bhandari’s visit

 India again refused to take part in the high-level BRI Forum in Beijing, the second edition of which is being held in Beijing this month. Represent­ing Nepal at the event will be President Bidya Devi Bhandari. Besides addressing the summit, she could sign agreements with her Chinese counterpart Xi Jinping on finalizing the protocol to the 2016 trade and transit agreement and on expediting construction of the Keyrung-Kathmandu rail link. The visit will aim to further integrate Nepal into the BRI framework and to give impetus to long-stalled Chinese projects in Nepal.

PM Oli is sending the president instead of going himself as he wants to dispel the default assumption in New Delhi, and in many western capitals, that he is ‘pro-China’. With Indo-Nepal ties finally back on an even keel and Nepal look­ing to cultivate the US as a part of its diversification strategy, Oli does not want to be seen as cozying up to Beijing. He knows there is always the danger of his ever-unreliable com­rade Pushpa Kamal Dahal using changing geopolitical winds to tack his way back to Singhadurbar. Putting all his eggs in a single basket could be dangerous.

Expect little of substance from President Bhandari’s visit. As the Chinese economy slows, their generosity will have a limit. Nor does China want to buttress the western accusa­tion that it is looking to trap smaller countries in the region under a mountain of debt. Yet it will do just about enough to keep Nepal in the BRI orbit, and at a safe distance from the ‘meddlesome’ Americans. The Indians have never been their real problem.

There is a notable difference in the election manifestos of the ruling BJP and the opposition INC in India over the Indo-Pacific Strategy. While the INC manifesto is silent on this, the BJP’s states that the goal of “ensuring an open, inclusive, prosperous and secure Indo-Pacific will be pursued vigorously”. The BJP manifesto is in line with the BJP government’s rejection of China’s proposal to take part in the second high-level BRI Forum this month. India had also boycotted the inaugural event in 2017.

There is a deep divide in New Delhi over India’s role in the American Indo-Pacific Strategy. China hawks see it as a coun­terweight to an overbearing Middle Kingdom in the South China Sea. But many on the left believe India should rather work closely with the next-door China, a fellow developing country, rather than with the distant and ‘unreliable’ US. Yet the right-leaning BJP’s manifesto suggests a clear support for the US strategy, and if reelected, PM Modi seems keen on working with the Americans to contain China’s rise.

The INC is more skeptical of the US but if it comes to power, it too may feel compelled to support the strategy as the gaps between the economic and military heft of India and China widen. Then there are those who see no reason the BRI and the Indo-Pacific cannot go together. But that is easier said. More likely, because of its calculus on Pakistan, India will continue to shun the BRI and support the Indo-Pacific. Smaller countries in the region will not remain untouched by this development.

Recently, the ruling NCP co-chairman Pushpa Kamal Dahal visited the US, ostensibly to treat his wife. The hush-hush trip and the American government’s iron-clad guarantee against his arrest for war crimes set the tongues of strategic thinkers in Kathmandu wagging. Even in the past, Dahal has flown to Singapore and Hong Kong, often on the pretext of treating a loved one, to keep his secret rendezvous with security officials abroad. How did Sita Dahal get better so soon after landing in the US? Could it be that the real purpose of the trip was that the Americans wanted to talk to her husband about his possible role in enforcing the Indo-Pacific Strategy in Nepal? That they, and the Indians, still doubt the loyalty of the Beijing-friendly KP Oli and would like to see him gone as soon as the option of tabling a no-confidence motion against the PM opens up in less than a year?

As the American presence in South Asia increases as part of their new strategy, Nepalis, used to seeing their country as a playground for India-China geopolitical rivalry, will have to grapple more and more with a third power. Not that this power was entirely absent earlier.