M Zafar Haider Jappa
ARTICLE (May 29 2009): Nepal is a tiny landlocked state; given the gigantic size of India and China, the two bordering but never friendly countries. If Sri Lanka is India's tear, Nepal must be a droplet of Indian- Chinese mouth fog, emitted by hegemonic anger and lust. In South Asian political context, Nepal is by no mean less important than Pakistan when one focuses India-Sino political wrangling.
Historically, Nepal is more attached with India than any other country, being a neighbour, predominately Hindu state and culturally contiguous. But things were not so straight and simple. India and Nepal relations are based on two core treaties. In July 1950 India signed "The Treaty of Peace and Friendship" and in October of the same year inked "Treaty of Trade and Commerce" with Nepal. Under the latter arrangement India agreed to allow Nepal to use its territory and seaports for exports and imports with no customs duties on transiting goods.
Nepal was a crucial neighbour for India being its bordering with china too. In 1954 Indian military mission was set up in Nepal, an accord had been signed for well co-ordinated foreign policy and Indian security posts were established in Nepal's northern frontier to quell anything from China.
India's growing influence compelled Nepal monarchy to pursue a non-aligned policy and it distanced itself from India.1962 Sino-India war brought bounties for Nepal. India had to suspend the support of Indian based Nepali opposition, had to grant Nepal transit rights with other countries through India and access to Indian markets. In response India gained monopoly of arms sale to Nepal.
The honeymoon was not long. Nepal pressured India to withdraw its army check posts and liaison groups from the soil of Nepal. India had to repulse on both but kept the so-called Treaty of Peace and Friendship intact. Things registered a better face in 1978 when India signed a pretty favourable transit trade agreement with Nepal. Long feared China-Nepal relationship was now a reality when Nepal contracted China for arms purchase.
It was not less than a bolt from the blue for today's 'largest democracy". Unmindful of the GAAT Article V which gives an inborn right to the landlocked countries to use neighbouring coastal country territory and sea, India imposed trade embargo and stopped Nepal for using its seaports and territory anymore on 23rd March 1989, a "cordial" message for another neighbour Pakistan in connection with its independence day.
India is the only country that inflicted any neighbour landlocked country with economic blockade after the Second World War - Nepal decoupled its rupee from India's and agitated trade embargo world-wide. Nepali trade and investment bore the heaviest toll. India could not sustain world pressure and unchoked Nepal in June1990. Normalcy prevailed.
Indo-Nepal Treaty of Peace and Friendship in itself remained and still a stumbling block in the way of cordial relations between India and Nepal. In the presence of such a treaty, the sovereignty, independent foreign policy and equality of Nepal will be held hostage to its inimical clauses. In 2008 the officially visiting prime minister of Nepal stated that the treaty needs a "clear revision".
Nepal realises that Indian Kolkata seaport is the nearest and is just 1150 kms away from its territory, so Nepal's dependence on India as a transit country is obviously natural. However, Indian offer of a single Kolkata seaport, administrative hassles and time consuming tactics of Indian customs are some of the irritants going against Nepal. Bangladesh is just 15 kms away from Nepali territory separated by Indian territory in south-east but India has many questions to open this route involving Bangladesh.
Bangladesh has offered Nepal its three seaports of Chittagong, Khulna and Chalna.UNCTAD in its 2004 report applauded Bangladesh that it was one of 22 countries which have been able to reduce poverty through effective implementation of liberalised trade policy and securing gender parity in enrolment in primary and secondary education level of education, ensuring supply of drinking water to 97% of its population and reducing child mortality rate by two thirds.
However, Bangladesh's ambition to gain access through Indian territory to Nepal is nullified by Indian objections. Chinese heartland industry is away 5000 km from Nepal. Though China is building roads, air and rail services to ensure a better access to Nepal, even then India will be somehow the natural choice to Nepal at least for a transit trade corridor. Nepal's trade with China is also on the increase despite Nepal's dependence on India for 70% of its trade and markets.
Last five years data shows that Nepal has always registered a negative balance of trade in its accounts with India. The figure rose from $1172.5m in 2003-04 to $2542.7m in 2007-2008). In 2007 China-Nepal trade volume registered 36% growth corresponding to the previous year and touched $300m. Some of the recent political developments will draw the future path of India-Nepal trade relations.
Nepal is considering a proposal of waiving visas to Chinese nationals visiting Nepal, some thing that has raised hackles of Indian government. India became highly concerned when on 27th December 2007 the Chinese Ambassador in Nepal Gouhong said, "we are thankful to Nepal that it helped build a bridge between China and South Asia.
We hope that Nepal will help China establish economic relations with other countries as well. Nepal-China relations are higher than the Mount Everest and that the tallest peak in the world even cannot stop China and Nepal coming closer in the days ahead and Nepalese and Chinese citizens can visit each others' countries without visa".
India is paranoid of Nepal-China-Pakistan troika presence in Kathmandu. Parachanda, who recently resigned as Prime Minister of Nepal, hinted towards India by saying "some external" factors responsible for his downfall. He had visited last year China on the eve of Olympics. His tilt towards China at the cost of India was visible. China is mainly drawn to Nepal on the issue of Tibet. Many Tibetan "dissidents" come across India through Nepal.
Indian air force chief's interview to Reuters on May 24, 2009 in which he declared "China as a bigger threat than Pakistan", is being seen in China with profound suspicion. It came at a time when India-China trade is booming. South Asian political economy is artless unless it brings into light the role of Bhutan that it has in the region.
Bhutan is perhaps the only country in the world which is bound to seek prior approval from neighbouring but coastal India either for purchasing arms and ammunition and establishing diplomatic relations with any country of the world under article 2 of the so-called Peace and Friendship Treaty signed in 1949 between the two countries. Being a landlocked and 80% dependent on India for bilateral trade and almost 95 % for transit trade, Bhutan's sovereignty is compromised in the presence of Treaty of Peace and Friendship.
Understandably, Bhutan's heavy dependence on India for trade compelled it to agree to such unacceptable clauses. Probably that was the reason when Bhutan became the 2nd country after India recognised Bangladesh as an independent country. Bhutan has always recorded a negative balance of trade with India without its largest export to India that is electricity.
India and Bhutan signed a protocol in 2006 by which Bhutan will export 10000-mw electricity to India by 2020.Bhutan has huge hydropower potentials. Although Bhutan has eligibility for duty free access to European Union's markets under "Everything but Arms" initiative for least developing countries. However, being landlocked, its foreign direct investment is just 1%of its GDP.with Bangladesh Bhutan has a positive balance of trade of $2.8m.
World Bank and the IMF's joint report "Doing Business in Landlocked Economies 2009" is a running commentary on the economic helplessness of the landlocked 38 countries of the world. Three fall in South Asia - Afghanistan, Nepal and Bhutan. The latter two border India. On the basis of the number of domestic regulations and investment friendly environment, the report assigns rank to each country.
Among top 20 countries, not a single landlocked country is placed. Pakistan with 77 ranking is better placed than India with 122. Bangladesh is 110, Nepal is at 121, Bhutan is 124, and Afghanistan is at 162. Among top three landlocked, Switzerland is first followed by Austria and Azerbaijan.
India is expected by neighbouring countries to act like a "Gentle Giant", not a "Big Bully Brother". Indian record with neighbours has always been strewn with suspicion and mistrust. India has fought three wars with Pakistan and one with China. India has several border skirmishes with Bangladesh.
India fuelled mutiny in Sri Lanka by backing Tamils.Rajive Gandhi had to give his life in May 1991 in a backlash. India has not learnt a lesson even from Pakistan. India, by supporting Taliban in Pakistan, is repeating the same mistake that Pakistan did in 1970s in Afghanistan. If India continues to pursue this policy, it must be ready to face repercussions in near the near future.
.India will definitely continue to have good relationship with Nepal. This will be really unfortunate if like other bordering countries ,Prachanda also takes India issue to win election. But if he does so and people of Nepal elect him in the next elect this is the bitter truth but for sure Nepal cannot progress and will continue to be performing bad like other countries around us .
