Nepal in the New Geopolitics of Asia

Current state of play

Even as dynamic geopolitical and geo-economic initiatives are at stake, domestic political conflict and instability continue to hold Nepal from taking full benefit of the economic opportunities. A theme that came out strongly among the participants. In turn, there was a view among participants that the China-India rivalry also held back the country positing itself as a land bridge and a link between these two economies.

Even though there was concern among lab participants that the regional rivalry could escalate into a regional hegemonic contest that threatens Nepal’s historical status as a neutral player, there is a need to double down on enhancing connectivity and regional integration processes. Nepal also finds itself at an economic crossroads where it is in the process of finding ways to hasten growth, tap on natural resources, address social inequalities and recalibrate its workforce. 

Emerging trends

Concerns around the erosion of an international rules-based order on the geopolitical space on one end, and the impact of automation and its impact on low-skilled workers on the other hand represent two ends of the emerging trends for Nepal. The former is in the context of the regional rivalry and the larger US-China rivalry, creating a complex India-US-China trio that Nepal would have to navigate through. Some participants were of the opinion that this would give way to trends and opportunities for middle powers and small powers to work together with actors such as the EU. Greater cooperation among them was seen as crucial to deal with many other challenging trends, including climate change and resulting regional water disputes, the rise of disruptive technologies and regional migration flows.

Strategic options and policy recommendations

When the discussions turned towards the best set of policy choices for Nepal, the spotlight reverted to the country’s domestic front and the need to craft foreign policies that are rooted in a continued non-aligned regional stance, harnessing Nepal’s soft power and diversified partnerships. The full implementation of the constitution – that has taken time and is still debated – is seen as a key factor that can bring stability. Many emphasized their aspiration for Nepal to play an active and important part in fostering regional cooperation across the board, spanning from climate cooperation to economic connectivity. This way, Nepal can use its geopolitical position to its own advantage and turn from a landlocked position to an important bridge and a land-linked country in Asia.