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Asia Insight

Nepal's territorial flare-ups with India and China test its finesse

Public outcries imperil Himalayan nation's development strategy

KATHMANDU -- It's David versus Goliaths in the Himalayas: Nepal, which lies at the nexus between India and China, has become embroiled in territorial spats with not one but both of its hulking neighbors almost simultaneously.

The small nation, with Mount Everest on its edge, has long relied on India to support its economy. More recently it has turned to China to reduce that reliance and soak up Belt and Road investment. But the government in Kathmandu faces the challenge of soothing public anger that, left unbottled, could endanger its whole strategy.

The dispute with India flared up in early November after New Delhi issued a new "political map," which split the state of Jammu and Kashmir into federal territories. While India's handling of the status of Kashmir has riled its nemesis, Pakistan, the map also irked Nepal by including a different swath of disputed territory.

This sent Nepalese streaming into the streets for weeks. Hundreds of protesters -- mainly from the student wings of both the ruling and opposition parties -- shouted slogans and carried signs with messages like "Back off India" and "Return the encroached land."

On Nov. 24, a civil society group called Save Border Campaign released a map of its own, showing a sliver of land jutting out from Nepal's northwestern tip. The group, which includes former top national officials and activists, submitted the map to the government.

The row with India is not exactly new. It centers on an area known as Kalapani, where the borders of China, Nepal and India intersect. Though some reports confine the dispute to a 35 sq. km tract of land, Nepal actually accuses India of encroaching on over 390 sq. km of mountain terrain, and they disagree on the source of a border river.

India says the territory is part of its northern state of Uttarakhand, while the Nepalese have long insisted the land is rightfully theirs, citing evidence including old censuses. Most of the time, Kalapani is a largely forgotten frontier, but India's map brought the dispute back to the fore.

This puts the communist government in Kathmandu in a delicate position.

On Nov. 6, Nepal's Foreign Ministry issued a statement insisting on ownership of the region. Days later, Nepalese Prime Minister K.P. Sharma Oli chaired an all-party meeting that reached a rare consensus endorsing the government's position.

But if the dispute escalates, it could jeopardize Oli's attempts to improve ties with India, his country's main trade partner. Nepal depends on India for virtually all of its oil -- over 90% -- along with the majority of other goods.

Since an "unofficial blockade" in 2015, when Nepal accused India of fomenting local protests that blocked cargo trucks at the main border crossing, Kathmandu has looked to China to diversify. But this has yet to move the needle on trade significantly, and an angry populace may be threatening the nascent China ties, too.

Nepalese students affiliated with the opposition protest against the new map of India while demanding the resignation of their own prime minister in Kathmandu on Nov. 17.   © Reuters

The issue here is a four-year-old internal Agriculture Ministry memo that was leaked on social media. The document warned that Nepal could lose hundreds of acres of land due to rapid road expansion along a dozen rivers close to the northern border with China.

The leak sparked sporadic protests in the tourist district of Kathmandu and elsewhere. Demonstrators in the south of the country burned effigies of Chinese President Xi Jinping, according to local media.

Nepal's own government downplayed the matter, with Foreign Minister Pradeep Gyawali appearing on a popular TV talk show on Nov. 12 and saying the country had no major border dispute with China. Two days later, the outcry prompted a firm denial from the Chinese Embassy in Kathmandu.

"These accusations are baseless and totally aim to confuse right and wrong and divert public attentions," the embassy said.

Anti-China protesters march on the streets of Thamel, a tourist district in Kathmandu, on Nov. 13. (Photo by Arjun Bahadur Tamang)

While Oli clearly has little interest in provoking China over this, it may be difficult for him to ignore the nationalist passions and the pressure to look tough. Dhruba Kumar, a retired professor of political science at Tribhuvan University in Kathmandu, reckons the protests are partly a manifestation of growing disillusionment with the way things are going at home.

On the dispute with India, Kumar said, "The street protests occurred not only because of anger against Indian doings, but were also caused by the frustration against the moribund Oli government."

Yadu Kumar Lamichhane, a 55-year-old former schoolteacher, said the country was headed in the wrong direction. "The government promised us prosperity and economic growth. But two years down the line, it is still struggling to provide us basics such as health care," he said. "It has failed to deliver on its promises."

Dhruba Kumar said political parties tried to capitalize on the frustration ahead of by-elections held on Saturday, by invoking nationalism. He referred to a speech by an opposition party leader who accused Oli of being complicit with Indian Prime Minister Narendra Modi in publishing the contentious map.

Regarding China, meanwhile, other geopolitical analysts warn Nepal may have already let the protests go too far.

"By letting the public outburst go on too long amid political dithering, and striking equivalence between India and China in the dispute, we may have overplayed our hand," said Sanjay Upadhya, author of "Nepal and the Geostrategic Rivalry Between China and India."

"While the Indians are used to public protests, the Chinese are more sensitive," Upadhya added. "Coming on the heels of the Hong Kong protests, there is a real risk of Beijing reading too much into the burning of Xi's effigies, much to our detriment."

It remains to be seen what the price will be, if any.

China has come to see Nepal as an important piece of its Belt and Road Initiative, not to mention a strategic buffer against India. So while New Delhi looks to maintain its influence over its neighbor with hydro power and road projects, Beijing has dangled financial assistance for airports and railways.

Xi was just in Nepal in October, when the two countries signed a total of 20 agreements, including pacts on trade and investment, security and border management. They also elevated their ties to a "strategic partnership."

Though most Chinese-backed projects are still in the early stages, and Nepal continues to do the bulk of its trade with India, China is rapidly catching up in foreign direct investment. Experts agree that if China were to truly gain the upper hand in Nepal, it would have huge implications for India's security posture.

Seen from this perspective, both India and China have a great deal at stake in Nepal. This has raised the prospect that the country of around 30 million people might be able to play the two larger powers off each other, extracting concessions to help build its economy.

The territorial friction, however, is a reminder that this position comes with both promise and peril.

Nepalese experts would like to see the government try to resolve the dispute with India once and for all. But they also doubt Kathmandu is capable of pulling it off. "Nepal is not in a position to negotiate from a position of strength and pursue a policy to convince India to resolve the problem to the best of their mutual interests," said Kumar, the retired professor. "Map or no map, nationalism or treachery, the ground reality speaks a lot. Nepal is not powerful enough to alter this situation."

Geja Sharma Wagle, a geopolitical analyst in Kathmandu, argues that as India and China both become more "assertive," Nepal needs to adjust. But he worries about whether the smaller country's leaders have the chops. "I don't think [Nepal] has the deftness required to handle the new dynamics. Our diplomats lack the skills to deal with their counterparts at the negotiating table. They also lack knowledge and expertise on the issues at hand."

If the diplomatic challenge is too dicey, an alternative might be to follow the example of fellow Himalayan nation Bhutan, which has avoided official relations with China and leans on India even more than Nepal. But most Nepalese still believe that striking a balance between the two powers remains the best hope for a brighter future.

Experts like the author Upadhya are even optimistic that India and China recognize the need for peace and stability. "India and China both seem to have realized the imperative of joint action to stabilize the Nepali base of what is an unstable strategic triangle," Upadhya said.

But as Kathmandu attempts to walk this tightrope, it might at least draw lessons from history -- specifically, India's annexation of the neighboring Kingdom of Sikkim in 1975.

The Indian army converged on the royal palace and seized control, partly over doubts that the kingdom intended to ditch India in favor of China. Nepal's task, then, may be to maintain continuous, close communication with both regional giants to keep their doubts -- as well as their ambitions -- in check.

If nothing else, November's tensions have given Nepal's leadership an opportunity to assess and fine-tune its policy priorities.

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