Regional cooperation – a view from Nepal

30 January 2013; Siegfried O. Wolf

Regional integration in South Asia has reached a pivotal point in time. There is no doubt, that the states and societies of the respective region have made only little progress towards cohesive, purposeful action directed towards regional cooperation. Having the reputation of being a part of the worldwide ‘Arc of Crisis’, there was a general tendency among political analysts to attest only dramatic, grim prospects to the South Asian Association of Regional Cooperation (SAARC), the regional pendant to the European Union (EU). The critics got even more confident as Europe, which was commonly understood to be the area with the strongest dynamics of regionalism, the world’s spearhead for political and economic integration, appears to disintegrate and to fall back into the logic of fragmented national interests and conflicts. Political observers witnessed that the architecture of the European Union is increasingly being challenged; internally as well as externally. One major area of concern is the lack of effective fiscal/budget management instruments in the presence of a common currency. Furthermore enlargement has outpaced the processes and institutions for decision-making, only slowly adapting and contesting the consensus principle. Besides the growth of a remarkable global and cosmopolitan perspective among the Europeans, there is a return of a presumably ousted notion of nationalism; a phenomenon which is accompanied by a strong sense of euro scepticism. The tensions between Northern and Southern entities are obvious, finding their expression in mutual accusations and misperceptions regarding economic performance and attitudes towards necessary socio-political reforms. Having this in mind, several commentators are allured to portray the EU as a political artefact. Especially in South Asia with its most dominant player India which is looking increasingly beyond the region some claims are made that the EU has lost its attractiveness to serve as a model for the South Asian Cooperation for Regional Cooperation (SAARC). However, proponents of this standpoint ignore two essential facts. First, with the financial turmoil the EU is doubtlessly facing one of its most serious challenges ever. The fact that the EU was able to agree on and sign a much needed fiscal pact proves that collective decision-making is still well alive in the EU. Second, overtly critical commentators tend to ignore the vast achievements regarding European success in (regional) integration. The vision of a common political and economic future turned former arch enemies, France and Germany, into strong allies. Furthermore, their relationship is seen today as the engine of regionalism in Europe, transforming the continent into a zone of peace. Essential for this process was an exceptional combination of co-operation, co-ordination and supranational integration by a ‘coalition of willing elites’ to transfer parts of national sovereignty. The subsequent increase in trust and transparency of state behaviour helped to bridge the traditional political and economic disunity. Having this in mind, one has to understand that regional integration is not a linear process; it is an evolutionary path marked by up and downs. Several setbacks like the rejection of the Euro by Denmark in the year 2000 and a successful Anti-Europe campaign in Ireland in 2008 which led to an electoral condemnation of the Lisbon Treaty contested the resilience of the EU. The EU project did not however succumb to these stepping stones. The EU is more than just an economic endeavour; it is a value in itself, and not just an artificial, supranational political institution. Having this political vision as well as the economic merits in mind, European leaders make great effort-and are convinced that they are able- to overcome these existential challenges in order to hold the EU on the track.

Compared to Europe, due to several reasons the respective governments and elites of South Asia were neither able to develop a common political vision nor did they feel the necessity to respect rational, economic arguments in their decision-making processes to push bilateral relations as cornerstones for regional cooperation. However, it seems that things are changing. Voices from within the region are increasingly advocating the break with past trajectories in order to achieve security, welfare, as well as to solve the several, multi-layered identity crises of South Asian states. But what could the driving factor(s) for regional cooperation be? Having the success stories of the EU as well as other regional entities in mind, it is obvious that in most cases of area related cooperation and integration, these were all exclusive processes which were initiated and supported by elites. However, one must state that the elites cleared the way for opportunities and (challenges) of regional cooperation only after exposure to extra-ordinary critical junctures in their respective regions, e.g. the experiences of the Second World War in Europe, South Asia has not reached this level yet. The departure of colonial rule from the Indian subcontinent and the subsequent collateral traumatic events of two partitions (British India into India and Pakistan in 1947 and the break-up of East from West Pakistan leading to the birth of Bangladesh in 1971) did not only lead to enduring conflicts and mistrust, but also created a political unwillingness and ignorance among some South Asian governments regarding collective regional efforts. In this context, it is obvious that the troubled India-Pakistan relations are doubtless the core problem of regionalisation in South Asia. But even if the hostility between Islamabad and New Delhi is the major roadblock, other bilateral relations in South Asia did not do much in order to enhance regional cooperation; especially when it comes to the relationship between India and its smaller neighbours like Nepal. Also in this direction, it turned out that inter-elite negotiation, or in other words – that the European top-down approach does not work in the South Asian context, definitely not as a ‘self-full-filling prophecy’. But before shedding some light on current trends in the opinion of Nepal’s people on its neighbours, on regionalisation, SAARC, as well as related opportunities and challenges, one should first contextualise the country’s position in South Asia and beyond.

As a small, land-locked country positioned between two vast neighbours, China and India, Nepal’s foreign policy has centred on the not always reconcilable task of maintaining friendly relations with both and safeguarding its national security and independence. The long, permeable border with India has necessitated a close yet sometimes acrimonious relationship between the two countries, with Nepal’s economy functioning as an appendage to India’s. Formal relations with China were established in 1956 and China has provided significant support to Nepal’s development. In return, Nepal has been non-critical of China’s Tibet policy, with Nepalese authorities constantly repatriating refugees fleeing from Tibet. The intensification of the Maoist insurgency since the late 1990s led to hopes of strategic co-operation with major powers. India, the USA and the United Kingdom have provided substantial levels of arms, training and other military assistance to Nepal over the past decades, although this has changed with the emergence of China as the major player in Nepal’s foreign relations under King Gyanendra. Since the royal takeover on 1 February 2005, China has provided the then ‘Royal’ Nepal Army with arms and ammunition, while India, the United Kingdom and the USA suspended their dealings with Nepal. It is speculated that in return for China’s support of the royal takeover, Nepal lobbied successfully for China to be granted observer status in the South Asian Association for Regional Co-operation (SAARC).

On the other side, sharing a 1,751-km border, relations between India and Nepal have been influenced by cultural and historical links, characterized by cooperation and common interests, as well as suspicion and resentment. India’s role as the midwife of Nepal’s democracy was formally acknowledged in the 1950 ‘Peace and Friendship’ treaty signed by the Ranas, which is commonly regarded as an attempt by the Ranas to save their position of power. The treaty agreed on cooperation in security issues, and the granting of reciprocal economic privileges. However, in the late 1950s and 1960s under King Mahendra Nepal’s foreign relations were extended to include China, in an attempt to reduce dependence on India as already mention above. Following the royal coup of 1960 and the official ban on political parties, India supported the National Congress in exile which launched an insurrection from the border areas. This changed after the 1962 India-China border war and India switched to improving relations with the King’s government. Trade and transit rights were established and India secured, through a secret agreement, a monopoly on arms sales to Nepal. In the 1970s and 1980s there was economic co-operation between the countries, as well as friction over India’s support for the Nepalese opposition and Nepal’s persistent feeling of vulnerabilitywith India as regional hegemon. King Birendra’s secret conclusion, in June 1988, of an arms treaty with China and the ensuing Trade and Transit dispute marked a lowpoint in relations. However, relations improved significantly after a democratically elected government came to power in May 1991, although India’s security-related concerns remained. Political instability in Nepal has added to fears of possible anti-India activities (backed by Pakistan’s Inter-Services Intelligence) being launched from Nepal. Furthermore, both countries are wary of spill-over effects facilitated by the open border between the two, India being concerned about support cells for India’s north east insurgencies generated by the Maoist movement and Nepal by suspicions of co-operation between Indian and Nepali Maoists.

However, since the end of the Maoist insurgency Nepal is in a process of peaceful transition towards democracy. Additionally, the king was removed from power through a major pro-democracy movement. This could also develop finally some positive ramifications towards regionalization in South Asia despite the still ongoing political and constitutional deadlock in the country. But since Nepal’s elite does not seem to function as a promoter, one has to look for alternative engines to enhance closer regional cooperation. Two major movements against the autocratic rule of the country’s monarchy proved (Jana Andolan I & II) that Nepal is characterised by an outstanding vibrant civil-society consisting of politically aware and participative citizens. There is no doubt that Nepal and its people can play an active and crucial role in the process of regionalisation in South Asia which finds its most visible expression in the fact that the country is home to the SAARC secretariat.

In this context one must mention, that besides the humble performance of SAARC, there is an enthusiastic approach towards regional cooperation of Nepalis despite the troubled history with its neighbors, not only India and China but also Bhutan (the issue of refugees from Bhutan in Nepal led to a  deterioration of the relations). A phenomenon which was confirmed by the ‘Insights South Asia’ report on Nepal, a survey by the South Asia Democratic Forum (SADF), a Brussels-based think tank, compiled in partnership with the renowned public opinion research institute Gallup Europe in 2011.[1]

Most important here is, that this report is focusing (among many other themes) especially on issues like Nepal’s connections with other South Asian countries, the emotional bonds of Nepalese with other South Asian countries as well as countries or group of countries from other parts of the world, including the EU. Furthermore, the report is analyzing potential familiarity with the South Asian Association for Regional Cooperation (SAARC) and the approval of Nepal’s membership of SAARC, hopes concerning benefits of stronger regional integration, opinions on which obstacles hamper closer regional ties, views on what issues and countries constitute the biggest threat to the South Asian region’s security.[2]

Regarding the connections of Nepali people with other South Asian countries, the Insight South Asia report offers remarkable findings which one should contextualize to point out the significance for regionalization and especially the importance of India for its smaller Himalayan neighbor. Taking into account the financial resources of the Nepali people it is remarkable that around 50% of the Nepali have visited another South Asian country. This can be seen as general improvement of the economic situation of the Nepali people as well as a growing integration of Nepal in the South Asian region. Besides this, each third Nepali has a relative abroad (33%). 95% of them are living in India. This might be due to several reasons: 1) India is the closest and most important economic partner; 2) It has the most promising job market; 3) It is the biggest country in South Asia; 4) Social affinities, 5) General lack of alternatives, at least in South Asia (going outside South Asia is too expensive, 6) Nepal is a landlocked country, etc. However, this is also a source for insecurity and problems. Nepal as a landlocked country is heavily dependent on India. Each attempt to approach China in order to reduce this dependence was sanctioned by India. Other problems are human trafficking (especially forced prostitution). Besides India, Bangladesh is the most popular country to go to for Nepalese (moderate version of Islam, geographic factors (closer to Bangladesh), political conditions (less restrictions to move to Bangladesh – here one has to take the troubled Pakistan-India relations into account which also has implications for Nepali people to a certain degree.

One of the most interesting results of the report is that despite of the political turbulences between both countries, most of the Nepali people have a positive opinion on India (84%). This is remarkable because many Nepali intellectuals and opinion makers were critical of India and their affection for this country is relative: One has to mention that the obviously close ties with India are not undisputed. There is a general threat perception of India as a “big brother” which wants to control Nepal (through undue influence). Here, India is usually blamed for each negative development in Nepal – the southern neighbor is made responsible for the rise and fall of the autocratic Rana regime, the decline of the Panchayat-system, the long lasting monarchy and its loyal Nepalese Army (both armies would maintain close ties) as well as the whole Maoist insurgency. In this context, certain sections of the Nepalese, especially the Maoists, feel that the country gets exploited by India, which was not only seen as a contradiction to Indian anti-colonial and anti-imperialistic rhetoric, but also to its ‘democratic self-perception’. Therefore, India is traditionally identified as a foe by the Maoists – a mindset which will take some time to change. However, India claims for itself a special status in Nepal which is identified as a ‘buffer state’ and will continue to critically observe all international activities of Nepal especially towards China. Nevertheless, Nepal was able to maintain a neutral position in the Indo-Pakistan relations, especially in the three Indo-Pak wars, and in the Kashmir issue. It also remained neutral in the 1962 India-China border war. This neutrality might continue to be a source for conflict between India and Nepal and increase the Nepalese threat perception. Conflicts in the past about the transit rights, or India`s position in the Nepal-Bhutanese refugee issue are confirming Nepalese anxiety. To sum up, it is not surprising that the perception of China – is very positive in Nepal (74%)- and that there are fewer anti-China then anti-India voices.

Nepal’s relation to Bhutan is still partly determined by a large-scale expulsion of ethnic Nepalese in the 1990s, termed ‘illegal immigrants’ or ‘non-nationals’ by the Bhutanese government. This caused a substantial deterioration of the relation between both countries and remains an unresolved issue. However, it cannot be seen as a remarkable hurdle for regional integration. The fact that 40% of the Nepalese are seeing Bhutan in a positive light despite the tensions is an indicator that the refugee issue will lose its significance as source for conflict in future. This is a fact which is surprising and not discussed by many political observers. Only 16% have a negative opinion on Bhutan. The major reason for this development might be the democratic development in the recent years, especially the 2008 elections which made Bhutan a constitutional monarchy, as well as some positive developments regarding the refugees.

Regarding Pakistan, the results are not surprising: more than one third of the Nepali is negative on Pakistan due to emotional ties with India, and the view of Pakistan as a host for terrorism. Furthermore, Pakistan with its feudal structures and decades of military regimes which were suppressing all kind of leftist policies were seen critical also among the Maoists.

Interestingly, (Islamic) Bangladesh is seen in a positive light. One of the reasons therefore might be the fact that both countries experienced major movements towards the re-introductions of democracy (e.g. Jana Andolan I & II in Nepal and 1989/90 movement against military rule of General Ershad and against the latest military-backed caretaker government between 2006 and 2008 in Bangladesh. Political awareness and a general open-minded Bangladesh society seem to attract the Nepalese. However, here one also has to state that it is also the economic opportunities in Bangladesh which is alluring to the people of Nepal. The affection towards Sri Lanka, which since the military victory against LTTE is drifting into an autocracy, can only be explained on the basis of the solidarity between small South Asian states and Sri Lanka’s ambiguous relation with India. It seems that especially Sri Lanka`s current foreign policy maneuvering between India’s and China`s interests seems to attract certain Nepalese elites too.

Finally, the results of the Insight South Asia Survey regarding SAARC are also of great interest. It is remarkable that only around 1/3 do not know SAARC. Nevertheless there is an overwhelming conviction about the benefits of regional integration and cooperation. 98% believe that Nepal’s membership in SAARC is an asset. Furthermore, the Nepalese that are aware of SAARC more often had a positive view of other South Asian countries, with the exception of India. Until today, the SAARC did not reduce Nepal`s economic dependence on India. The major problems are asymmetry and Indo-Pak relations. Furthermore, due to the landlocked situation of Nepal there is no real alternative to economic cooperation with India. Otherwise, like in other smaller South Asian states, it seems that there is still a persistent threat perception of an Indian dominance in the South Asian region, in political and economic terms. Therefore one must state that India was not yet able to abandon its image as ‘regional bully’, unable to appear as an integrative force in its own neighborhood. However, the enthusiasm of the Nepali people is very promising, as it could function as an engine for regional integration.

[1]‘Insights South Asia’ is introducing a new series of surveys on South Asian (SAARC) countries with the aim to push the dialogue between South Asian and European thinkers and decision-makers in order to support the South Asian integration process. Therefore, it is analyzing the public opinion in the respective countries on the prospects of enhancing regional cooperation (SADF/Gallup, 2011, 3).

[2] Other issues are views on which issues the Nepali people consider most important for their personal lives, their rating of the current economic conditions and living standards, assessment of other countries’ economic impact on Nepal, plans to migrate and preferred destinations, and last but not least some perceptions of the Nepalese on their political leadership and governance.

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Regional cooperation – a view from Nepal