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The Americans have not helped their cause on the MCC compact with Nepal. First, at the start of 2019, it was then US Acting Assistant Secretary of State for South and Central Asian Affairs Alice Wells linking the MCC with the Indo-Pacific Strategy (IPS), with its central goal of containing China’s rise and preserving American economic and military supremacy in the Asia-Pacific. (The IPS document declassified by the Trump administration at the end of its term admits as much.) A few months later, David Ranz, US Acting Deputy Assistant Secretary of State for South and Central Asian Affairs, came to Nepal and confirmed that the MCC and the IPS were inextricably linked.

Strangely, the American Ambassador to Nepal, Randy Berry, speaking via a YouTube video after Ranz’s Nepal visit, admitted that the MCC compact embodies “the values and principles we broadly refer to under the [Indo Pacific] strategy”. He said even the USAID’s post-quake help and the provision of Nepali students going to study in the US were inspired by the same set of values and principles. Basically, he was admitting that all current and future American help to Nepal would come under the IPS (or one of its variants). Yet the MCC continues to insist that its compact with Nepal is not a part of the strategy. What are we missing here?  

No sovereign country gives foreign aid or invests in another country without strategic considerations. The BRI is intended to fulfill Beijing’s strategic goals that are closely tied to the continued growth of the Chinese economy. The same holds for Indian or Japanese or Danish aid to Nepal. Why have the Americans been so hesitant to openly admit that the MCC has retrospectively been made a part of the IPS but, even so, it is still in Nepal’s favor?

Nepali communist parties have always been rabid anti-Americans since their inception in the late 1940s. Even in the 1950s, they used to denounce ‘American imperialism’ and decry US-Nepal cooperation. They are doing the same now, partly because as communists they have this fealty towards the northern neighbor. China, too, has been active in fanning the anti-MCC flames in Nepal. And the Americans seem to have taken the Chinese bait—hook, line and sinker.

I believe the MCC is a part of the IPS, as indicated by many senior US officials, including the current US envoy to Nepal. Yet I am still in favor of the compact’s parliamentary endorsement as it is in Nepal’s interest. This is not because the compact’s unraveling could deter other international investors, although that is a possibility. My bigger worry is that limiting Nepal’s external engagement to India and China could pose a grave risk to Nepal’s sovereignty and independence. 

Nepal needs a strong US presence to forestall the possibility of the country’s fate being decided by (or between) its two giant neighbors. Were it not for the presence of outside actors like the US, EU, and Japan, Nepal, perhaps, would by now have been absorbed by India or China, as Leo E Rose so perceptively warned all those years ago.

For the Americans, the biggest and also the more obvious lesson from the MCC debacle should be to avoid conflicting messaging on its important foreign policy initiatives. In this age of disinformation, your opponents will not resist tweaking your words to fix their context. For Nepal, its rulers should never forget that the country has been able to maintain its independence only via the most delicate balancing between multiple international actors. Even a little disturbance in this equilibrium could imperil its existence.

Evidently, following in the footsteps of the majority of his predecessors as prime minister, the foreign policy of Sher Bahadur Deuba too is mostly based on expediency. After nearly two months in office, he is yet to appoint a foreign minister. His recent actions suggest a tilt to the south, as he soft peddles the drowning of a Nepali national by the Indian border force and the flying of Indian military choppers over Nepali territory. He has also formed a committee, on thin evidence, to investigate possible Chinese encroachment of Nepali territory. The Home Ministry led by his close acolyte then banned anti-Modi protests.

While Deuba sends all the right signals to New Delhi, he also seems intent on securing parliamentary approval for the American MCC compact. Diplomatic cables from the US Embassy in Kathmandu to Washington DC made public by Wikileaks have long described Deuba as a trusted friend of America. Deuba is bound to face a tough time getting the compact approved though; all his allies in the government are opposed to it in its current (or any other) form. The Nepal visit of the MCC head won’t change things much as most communist leaders here have long since made up their minds.

Perhaps Deuba wasn’t that pleased when, upon assuming office, China’s Global Times called him a ‘pro-Indian leader’. Deuba has never had a comfortable relation with Beijing, not the least because of his western proclivities. Ironically, this is also why many in New Delhi mistrust him. The constituency in India for closer strategic ties with the US continues to build in light of the recent India-China border tensions. Yet that doesn’t mean strategic thinkers there are comfortable with the idea of the Americans calling the shots in Nepal, India’s traditional backyard.

Going into the next Nepali Congress general convention, Deuba believes his interests will be best served by being in India’s good books—the country’s age-old need for a delicate balance between India and China be damned. In fact, Deuba was reluctant to become the prime minister by displacing Oli, whom New Delhi was warming up to. Only when domestic politics turned firmly in favor of his prime ministership did he change his mind. The leader of the country’s most illustrious democratic party relying on India to get re-elected as party chair says as much about India’s old interventionist tendencies as it does about our leaders’ utter lack of shame.

Most interesting will be to watch how the Chinese deal with Deuba in the days ahead. They have cultivated a sizable political section in Nepal, which they are sure to use to minimize American presence and to push for expeditious implementation of the nine BRI projects identified for Nepal. Besides, a huge constituency in Nepali Congress is still strongly in favor of closer ties with Beijing; such a ‘nationalist’ stand goes down well with many voters.

The Chinese are in a position to make Deuba’s life difficult if he continues to be seen as pushing the American agenda in Nepal. The kind of misinformation about the MCC Compact circulating on YouTube and the spontaneous anti-MCC rallies from obscure groups are a bitter foretaste of things to come for Deuba.

This again shows the importance of having a foreign policy based on broad political consensus, which will be the starting ground for negotiations with all international actors. It will then be difficult for foreign actors to push their agenda through their divide and rule strategy. But Deuba, again like most of his predecessors, is going the exact opposite way. 

It’s striking how little Nepal’s foreign policy outlook has evolved in over 70 years since the 1950 democratic change. The national debates of that tumultuous decade (1950-1960) bear striking resemblances to foreign policy issues under current discussion. Even in 1951, those outside the government fulminated against the ‘unequal’ 1950 Nepal-India treaty, and there was no greater slur than to accuse the rulers of ‘pro-India’ bias. And just like now, among the elite class, there was back then a large constituency pitching for closer ties with China to balance India.

That is not all. Right now, those on the left have a field day criticizing the ‘imperial’ American MCC compact. Back then, too, they spoke against the American ‘grand designs’ against the communist Soviet Union and China, a charge that only got louder when the ban on communist parties was lifted in 1956. Except for BP Koirala, no other political party leader of the time could resist the temptation of invoking the threat to Nepali sovereignty from India for political gains, none more so than the wily Tulsi Giri, the three-time de facto[ARJ1] [ARJ2]  prime minister.  

After the 1962 India-China war, New Delhi was in a mood to reconcile with the Nepali monarch, and King Mahendra no longer needed the help of politicians to constantly needle India. When the war broke out, at India’s call, Nepali Congress abandoned its armed revolt against the autocratic Nepali monarchy, to the king’s great relief. He subsequently used his new leverage with India to remove the Indian army checkpoints from the Nepal-China border and to build a highway connecting Kathmandu with Tibet. Just in case, politicians like Giri continued to be handy to keep the Indians honest.

But if Giri was an uber-opportunist, so was KP Oli some decades down the line. Oli didn’t think twice about ditching New Delhi, his erstwhile all-weather friend, when he espied a chance to rise to power by cultivating closer ties with China in the wake of the 2015-16 Indian blockade. He opened up new trade routes via China. But when the Chinese started trusting him, he stabbed them on the back by deliberately delaying BRI projects just to please India.

His antics are not so different from those of another colorful character from the 1950s and 1960s: KI Singh, or the ‘Robin Hood of the Himalayas’. No one knew what Singh believed in. He was supposedly a communist (although he denied it) who even escaped to China to save his skin when his plot to take over Singhadurbar failed. The 20th prime minister of Nepal was also an expert at switching between India and China as was politically convenient. This does sound a touch like Prachanda, the 33rd, doesn’t it?

Could it be that as the geopolitical map is permanent, you can’t change a country’s foreign policy priorities, especially of one as precariously placed as Nepal? Every ruler since King Prithvi Narayan Shah has counseled balance between the north and the south. The presence of a strong third actor like the US has also always been vital to prevent India and China from settling Nepal’s fate between them. Whatever its level of development, for a relatively small country like Nepal (at least compared to its two giant neighbors), the priority of the ruling elite will always be the preservation of national sovereignty and independence. So, perhaps, it is wrong to say that our foreign policy has not evolved over the past seven decades. Maybe there is only so much room to maneuver.

For many observers, the Taliban’s takeover of Afghanistan is another vindication of China’s ‘strictly-business’ approach to diplomacy. Be they legitimately elected government ministers or mullahs who have killed their way to the top, if China can do business with them, it will. Earlier, the Chinese limited their engagement to those in power. Now they cultivate ties not just with the central governments but also all prospective claimants to the throne. 

This is certainly the case in Nepal, where these days the Chinese—their recent efforts at helping build a strong ruling communist party notwithstanding—don’t just back the communists, but are as comfortable dealing with Nepali Congress or Madhesi outfits. In Afghanistan, Beijing was offering the Ashraf Ghani government plenty of bilateral aid even as it was cultivating ties with the Taliban, knowing full well that their return to power was imminent. 

In Myanmar, Beijing maintained good relations with the junta, which is now back in power. But it was also a close ally of the deposed National League for Democracy under Aung San Suu Kyi. This kind of non-ideological, business-like and broad-based nurturing of relationships has some distinct benefits. Unlike the Americans, whose recent efforts at imposing democracy and human rights on countries like Afghanistan and Iraq have been disastrous failures, the Chinese don’t carry the baggage of forceful military intervention anywhere on the planet in recent memory. 

In fact, while the Americans like to lecture others on democratic values, the way they have destroyed one country after another on the pretext of doing so has disillusioned even its once ardent backers. How are the human rights of common Afghans, Iraqis, and Libyans protected by destroying their homelands and then leaving them to fend for themselves? Increasingly, this kind of hypocrisy is starting to gall outside observers. 

Instead of dealing with such hypocrites, who, in the name of promoting democracy and human rights, trample on the very values they champion, why not rather do business with the more straightforward Chinese? They have no truck for democratic values but then they never pretended they cared about them. The devil you seemingly know is better than the friend you don’t. 

The reality is more nuanced. China is an autocracy and it too doesn’t desist from coercive action when it is displeased with other countries, as South Korea, Japan and India will attest. Yet, when contrasted with the gung-ho Americans who come with seemingly many hidden motives, the Chinese have, by and large, managed to project an image of peace-loving, non-ideological businessmen. And in diplomacy, perception is often as important as reality. 

The Chinese approach has other advantages too. For instance, China is the country most likely to nudge the Taliban to, say, respect girls’ right to education. On the one hand, China has ample interest in moderating the Taliban’s extremist instincts, lest it imports Islamic extremism from across the border. On the other hand, the Taliban don’t even want to hear of an extension of the US deadline to pull out its troops beyond August 31 if the evacuation of all Americans remains incomplete by that date. No wonder that despite all the hullabaloo surrounding the ‘debt trap’ diplomacy, the Chinese stock in the region remains high. The Americans, in the aftermath of their hasty withdrawal from Afghanistan, meanwhile, have never been so unpopular. 

The Americans have left South Asia most vulnerable to terrorism than at any point in recent memory. Good intent counts for little if you fail to see the possible consequences of your actions. It will take a long time for America’s image in the region to recover. The American ‘value-based’ world order faces its greatest crisis in a generation, and nowhere more so than in South Asia.