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Nepal’s foreign policy is moulded by the turn of events of the 18th and 19th century. As mentioned by Pokharel: “Towards the end of 18th century, late King Prithvi Narayan Shah, from the house of Gorkha, brought about the unification of modern Nepal. In the initial stage after unification, foreign policy of Nepal was conducted directly under the leadership of the Shah rulers…until Nepalese had a direct encounter with the British colonial power in the subcontinent and were forced to enter into a Treaty of Sugauli, in 1816 AD causing a loss of one third of its territory.” 
King Prithvi Narayan Shan had suggested for “the need for a delicate balance of relationship between [Nepal] and its two big neighbours, a fundamental rule of Nepal’s foreign policy”  When the Ranas came into reign with the “bloody Kot massacre episode in 1846”  they deliberately swore affinity with the East India government and adjusted the foreign policy of Nepal towards India accordingly. In return, “Nepal received guarantees of protection from Britain against external aggression and interference”. 
Meanwhile, Nepal’s relation with Tibet and China was undergoing a tremulous phase. As one scholar writes describing the aftermaths of the third Nepal-Tibet war:
First, the opening of the Phari route, besides eclipsing Nepal’s monopolistic position in Trans – Himalayan trade, paved the way for a series of catastrophic disputes with Tibet. Secondly, the conversion of Tibet into a cockpit of Anglo-Russian rivalries necessitated a redefinition of Nepal’s extra-territorial rights in Tibet. Thirdly, the Anglo-Tibetan and the Sino-Tibetan conflicts made nepal’s role as a mediator a unique feature in modern Trans-Himalayan diplomacy. All this a reflection of how a small nation is at times compelled to play a big role in the vortex of international complexities. 
The turning point in Nepal’s foreign policy came “when the political situation in South Asian region, particularly India, [became] fluid and volatileâ€¦following India’s independence, Nepal was also able to free herself from the clutches of Rana Oligarchy in the year 1950.”  At the same time, Nepal witnessed her neighbour become a communist China. 
5.2 Nepalese Foreign Policy after establishment of Democracy
The establishment of democracy in Nepal saw emergence of new priorities. In 1955 Nepal started making attempts to “diversify its external relations by establishing diplomatic ties with other countries across different continents. 
The era has been termed as a period of consolidation of Nepal’s foreign policy as “Nepal took one of the most important decisions in its foreign policy chapter by becoming a founder member of Non Aligned Movement (NAM) at the height of cold war.”  King Birendra used this very forum, in its 1973 summit to propose Nepal as a ‘zone of peace’. 
1955 was a crucial year for Nepal as it obtained UN membership and also established diplomatic relationship with China.  On the other hand, Mohan Sumsher Rana had signed the indo-Nepal treaty of peace and friendship, in 1950, just before the anti-Rana movement reached its zenith.
Nepal then became “the nonâ€permanent member of the United Nations Security Council on two occasions (1969â€1970 and 1988â€1989)” 
In 1989, India put a trade embargo on Nepal, while western analysts viewed it as a classic confrontation between an emerging regional superpower and a strategic yet landlocked nation that not only lies on India’s border but also has survived economically through the years, largely through Indian generosity”. 
In 1990, Nepal found reinstatement of parliamentary democracy and the ‘two-pillars policy’ (with prime minister as the executive head and king as a ceremonial figurehead). However, “years of increasingly dire internal security challenges had undercut the country’s economic growth and reform efforts”. 
Nepal’s internal affairs took a turn for the worse with the onset of a Maoist agitation that transformed into an armed conflict. Apparently, both India and China contested to be the government’s prime supporter in the conflict. For instance, Beijing pledged “political and moral support for Nepal’s fight against the Maoist insurgencyâ€¦[in] November 2002, Beijing agreed to provide communications equipment to assist the Nepal Army in operating in mountainous terrain.”  On the other hand, in June 1997 the Indian Prime Minister paid a visit to Kathmandu and both the sides “reiterated their determination to work closely to fight violence (with reference to the ongoing tension in Nepal)â€¦Home Secretary level talks were also held and all the matters relating to security were discussed in detail.” 
The permanent ceasefire by the Maoist insurgents in 2006 was welcomed by both India and China. The ‘tripartite relationship’ between these nations from 2006 has become intertwined with the issue of state reconstruction, from Nepal’s point of view. Nepal had its second communist party led government in the wake of a parliament cum Constituent Assembly which could have put the Indo-Nepal relations in test, yet again which would have put diplomacy on crucial issues, such as the ongoing ‘water talks’ in hiatus. However, such speculations were negated by the Nepalese Prime Minister’s 2008 visit to New Delhi during which it was “decided to inject a new dynamism by establishing a three-tier bilateral mechanismâ€¦to oversee the entire gamut of cooperation in water related issues”.  The much debated prospect of a possible entry of China into the SAARC mechanism, the role of New Delhi in shaping Nepal’s political future, Tibet’s struggle against China and Nepal’s pro-China stance on it among other issues shall continue to drive the ‘tripartite diplomatic relation’ between Nepal, India and China.
5.3 The Road Ahead
Despite political instability resulting from frequent changes in the government, the democratic state of affairs succeeded considerably to boost Nepal’s international image during this period. The country’s prestige suffered a setback in the comity of nations after the Royal takeover of February 2005.  Currently Nepal is at crossroads of its destiny.  The international community has supported and welcomed the historic April Movement 2006 and the ongoing peace process and have expressed hope that elections to the constituent assembly would usher in a new era of peace and stability with a positive impact on foreign policy apparatus of the country. 
Nepal is in the transitional phase that is the drastic change in its governance. Dispelling deeply entrenched monarchy, an institution that many in the country considered incarnation of God in a matter of decade was a great feat, in a relative terms. Nepal’s peace process is not over yet , as despite the Comprehensive Peace Accord, issues such as formulation of Truth and Reconciliation Commission, Former Maoist combatants reintegration, ascertainment of Federal states among others are to be settled.
Formulation of an inclusive new constitution that reflects the aspirations and commitments of all the Nepalese scattered across the Mountains, hills and Terai by the Assembly is very central to the peace process. Restructuring of the state to decentralize power and rapid socioeconomic transformation are equally crucial to build a progressive New Nepal and address the root-causes of the decade long conflict.  A pragmatic foreign policy is very critical for the successful conclusion of the peace process.
Nepal needs to adjust to the sea change in the global and regional politics over the past two decades. The end of cold war resulted in the emergence of a single superpower, the United States of America, and it has been pursuing its economic, security and strategic interests across the globe with perceptible implications to nations in most regions. The major world powers are largely in agreement to deal with contemporary international concerns through calculated co-operation rather than adversarial ideological approach.  The desire for containment and structuring of balance of power from purely military strength has shifted to the creation of a new world order based on globalization, free market economy, non-proliferation of weapons of mass destruction and primarily non-hegemonistic resolution of international conflicts and concerns. 
A late versatile intellectual who was instrumental in interpreting non-isolationist foreign policy  of Nepal has remarked that Nepalese view the world perfunctorily and on surface even by young generation who go abroad for various reasons.  To quote him, “How can we enlighten concerned citizens when both a demand and a need for the inter-disciplinary subject of international relation to be introduced in the university establishment have been like crying in the wilderness due to various reasons”?  It reflects the pathetic state of not making a productive insight in conceptualizing Nepali state and society in social sciences, let alone contemplates Nepalese international relation theory. 
Nepal is keen to further expand her bilateral relations with its immediate neighbours on the basis of equi-proximity, which obviously would enhance relations with both of its immediate neighbours. Thus, Nepal’s bilateral relation with India is unique, multi-faceted and extensive  and likewise its relation with China is no less friendly and is ever expanding with the passage of time to the satisfaction of both the peoples. 
Nepal’s unique geo-strategic location has shaped and guided the country’s foreign policy formulation and implementation ever since the ‘Yam between two boulders” strategy was adopted more than two centuries ago. Situated as Nepal is between two Asian giants, India and China, as her immediate neighbours, the need for this country to maintain balanced, cordial, friendly and cooperative relations with these two most populous neighbours cannot be over emphasized. 
CHAPTER – VI
6. DEMOCRACY IN NEPAL – THE SERPENTINE PATH TOWARDS UNKNOWN DESTINATION
Before one can think about the causes of democratization one has to have an understanding of what democracy means-for one needs to have an idea of the nature of the phenomenon one wants to explain. In its literal meaning, ‘government by the people’, democracy is about the institutionalization of people power. Democratization is the process by which this happens. People power is institutionalized through civic freedoms that entitle people to govern their lives, allowing them to follow their personal preferences in governing their private lives and to make their political preferences count in governing public life. 
The question: which political regime prevails in which society, and why, has been at the heart of political science since Aristotle’s first treatment of the problem. And so is the question as to when and why societies democratize. Democratization can be understood in three different ways. For one, it is the introduction of democracy in a non-democratic regime.  Next, democratization can be understood as the deepening of the democratic qualities of given democracies. Finally, democratization involves the question of the survival of democracy.  Technically speaking, the emergence, the deepening, and the survival of democracy are strictly distinct aspects of democratization. But they merge in the question of sustainable democratization, that is, the emergence of democracies that develop and endure. Democratization is sustainable to the extent to which it advances in response to pressures from within a society. 
The overall principle and goal of democracy assistance are well captured in the following characterisation of the international relations at the turn of the millennium: “First, democracy’s status as the predominant form of political governance within the Westphalian nation-state system and second, the emergence of an international norm that considers democracy promotion to be an accepted and necessary component of international behaviour.”
6.2 Nepali State Fledgling towards Democratisation Process
Nepal witnessed an explosion of contentious activities, both violent and non-violent, after the restoration of democracy in 1990. Why did the democratic years witness so many collective public protests? Did those activities promote or hinder the democratization process, which had, ironically, provided space for them? Often the Nepali state and the fledgling democracy appeared to be overwhelmed by those activities. Can the fundamental democratic rights to dissent, mobilize and protest work against new democracies? 
Democratization of a polity, on the other hand, means extending the political rights and civil liberties to more citizens as well as increasing the responsiveness of rulers. In McAdam and colleagues’  words, democratization ‘means any net shift toward citizenship, breadth of citizenship, equality of citizenship, binding consultation, and protection.’ At an operational level, it could mean several things. First, all adult citizens should be included in the polity as equals. All should enjoy full political rights and civil liberties, including unhindered rights to express themselves and to form associations. Second, contestation for public offices should be open to all, in principle as well as in practice, so that all citizens have equal opportunity to reach the decision-making bodies.  Third, the public officials should be responsive to the needs and aspirations of citizens and accountable to them as well, not only during periodic elections but throughout their terms. Fourth, no elected individuals or groups should have special privilege over any public policy realms. Public policies should be made by elected officials.  Fifth, the rule of law should exist so that citizens’ lives and rights are protected and elected officials are held accountable for their actions. After getting power to the people (represented by the elected officials), which is the first step in democratization, the next challenge is to ensure that elected officials are held accountable if and when they abuse power.  Sixth, in multicultural societies, the tyranny of the majority should be prevented. Not only does a majority not have the right to take away the political rights  and civil liberties  of an individual but it also does not have the right to constrain the cultural rights of minorities 
6.3 Interrelation of Democratization and Foreign Policy
Hardly could we find a more appropriate issue in this age of globalization than the relationship between foreign policy and democracy, a relationship that can only be properly analyzed in the perspective of the theoretical contributions that link international and domestic politics. 
A scholar has made following analogy of Indonesia, Philippines and Thailand with regard to the influences democratization has foreign policy:
In all three instances, Indonesia, Thailand and the Philippines, the process of democratization has had not only a far-reaching impact on the respective domestic order but also on the structure, actors and issues in foreign policy-making… The new democratic environment in all three states has opened up the foreign policy arena and gives access to a larger number of actors compared with the days of authoritarian rule, mainly to the bene¬t of ministries, other government of¬cials and a civilian diplomatic service…it can be established, however, that the wider spectrum of actors and the multiplication of special interests pose a major test to the often inexperienced executives in newly (re-)emerging democratic systems as far as the making of foreign policy is concerned. 
The democratic sphere can also be enhanced by partnership between democracies. It is, therefore, important…to promote relationships with both developed and developing democratic states. This collaboration should be based on the principles of equality and complementarily. It is also imperative to develop cooperation with the emerging democracies. The emphasis should be given to capacity building cooperation in order to consolidate the on-going democratization. 
Any discussion on Nepal’s foreign policy has to take into account two separate, but inter-related challenges. The first is the difficulty in formulating and implementing a coherent foreign policy in a democratic, fragmented and unstable political setting marked by poverty in strategic thinking. The second challenge is dealing with a fluid and rapidly evolving regional context with shrinking space for an autonomous approach. 
The democratization of Nepal would require the country to reassess its conventional foreign policies. The process has placed upon the leaders of a ‘new Nepal’ the responsibility to readjust the country’s standing on both regional and global front. This requires the leaders to acknowledge that foreign policy is in fact a part and parcel of national policies, which cannot be given a different treatment than other policies of paramount important. By implication, while the leaders are accountable to respect public interest while framing policies on issues of women and children, infrastructural constructions, health facilities, social service schemes, they are also accountable to bear those interests in mind while on diplomatic missions with Nepal. One pertinent example is the question posed by many nationals today is that Nepalese leaders are seemingly lethargic on necessary preparations for getting in talks with New Delhi on revision of the 1950 friendship treaty.
As Jha points out, the problem lies on the understanding of the nexus therein, as succinctly put by a scholar, “the study of foreign policy serves as a bridge by analyzing the impact of both external and internal politics on states’ relations with each other. Leaders cannot forge effective foreign policies without being aware of these connections.” 
“The primary challenge thus is building up broad consensus, through inclusive and democratic discussions, on certain core principles of foreign policy, especially with regard to the states and issues that have an impact on the lives of the citizens. Once there is an agreement on the need for such a consensual approach, specific themes can be addressed.” 
CHAPTER – VII
7. RECOGNIZING AND SETTING UP FUTURE PRIORITIES IN GEARING FUTURE FOREIGN POLICIES OF NEPAL
According to Shrestha, there are five areas which need to be worked out for a “forward looking and a proactive foreign policy”  .
Nepal should have a minimum 10 years vision and a 20 years plan for formulation of its policies while also develop foreign policy guidelines that it can strictly comply with in the future. Insertion of such guidelines in its Constitution can be done for the compliance.
While resources can be exchanged between the nations in forms of goods and services, in which Nepal, as an upper riparian would help India avail its water rights as a lower riparian, in return India would allow river navigation in Nepal with consideration to the transit rights of the latter. This reciprocal arrangement could aid in economic enhancement of both the states.
Nepal is in dire need to upgrade its diplomacy skills. The previous experience of ineffective negotiations created hurdles in furthering national and collective interests represented by the country, not just in its neighboring lands but in other International as well. Shrestha has suggested “development of a research base on international relations and diplomacy” 
Any flaws in Nepal’s inland security could be perceived as a security threat by India, as was in the Air India plane hijack case. India’s faith in Nepal could dwindle if Nepal does not tighten its security. Same holds good with regard to China. Since Nepal’s border with China consists of treacherous landscape, it largely goes unmonitored, in sheer contrast to the simple and open border with India. Concerns on security measures at those ends were raised by Beijing when Tibetans were allegedly smuggled out of their homeland to Nepal in increasing number after the Lhasa uprising, that caused the problem of Tibetan refugee in Nepal and India. The border still goes invigilated to a great extend. On the onset of new trade routes with China and reconstruction of existing closed trade routes, border security with China cannot be taken as a petty business.
Non-governmental actors such as “chambers of commerce, trade bodies, tourism organizations, sports, arts and cultural groups “should be involved in dealings with foreign government. 
7.1 Indispensible Determinants of Future Nepalese Foreign Policy
Foreign policy shift must balance continuity with changes to benefit from fast moving neighbours, India and China, and the world as a whole. Preserving national independence, sovereignty and territorial integrity, enhancing friendly and mutually beneficial relations with nation states and international organizations, and building good image will have to be the central objectives. In addition, attracting adequate resources to build sustainable, inclusive and prosperous post-conflict Nepal will be equally crucial. 
Globalization, instant communication, advanced technologies such as Google, Yahoo, Spyke, Face book and Twitter have changed the way we perceive things, conduct business and interact with each other – among nations, groups, families or friends. These amazing scientific and technological advancements have presented both opportunities and challenges to everyone. How does a developing nation like Nepal conduct itself in this changing world? What should be its focus and priorities? 
Nepal’s trade and transit situation has changed drastically due to China’s focus on Tibet’s development. Tibet has seen phenomenal changes in recent years in terms of industrial and infrastructure development. As stated earlier, the possibilities of opening to northern frontier and through it to the rest of the world are growing. 
Nepal has been suffering a huge trade deficit for the want of prioritizing the areas of investment of our natural and human resources so that the national economy does not depend on just remittance and foreign aid. The future foreign policy of Nepal will depend on it sorting out issues like what are its priorities? What are its comparative advantages? It will have to choose and make the best from areas like tourism, hydropower, agriculture, health and education and focus on overall socioeconomic development of its people. 
CHAPTER – VIII
8. ASSESSING THE INTERNATIONAL RELATIONS BETWEEN AND WITH “THE TWO BOULDERS” AND WHAT IT MEANS AND SHOULD MEAN FOR THE FOREIGN POLICY OF NEPAL
8.1 Nepal in the various scenarios of Sino-Indian International Relation
How Nepal handles Nepal-India and Nepal-China relations in the backdrop of the unfolding Sino-Indian relations will be the test of Nepalese foreign policy in the days to come. The continuous and frequent influx of Chinese officials to Nepal has raised doubts, suspicion and concerns in India. The test of the strength and agility of its diplomacy will lie in how successful it is in convincing both of its neighbours that its policy is guided solely by its national interests without any intent to harm either’s interests.  There are challenges and it is not always easy but it has to learn to walk the tight rope in dealing with either of its neighbours. All said and done, it cannot remain an island of poverty amidst this growing affluence all around it and only a sound foreign policy and the diplomatic tact and skill to implement it will help it to rise from this dismal position. 
China surpassed the U.S. to become the world’s biggest trading nation in 2012 as measured by the sum of exports and imports of goods, official figures from both countries show.  It has been speculated that “at this kind of pace by the end of the decade many European countries will be doing more individual trade with China than with bilateral partners in Europe.”  It has also been speculated that in 2040, the Chinese economy will reach $123 trillion, or nearly three times the economic output of the entire globe in 2000. China’s per capita income will hit $85,000, more than double the forecast for the European Union, and also much higher than that of India and Japan. 
India must be well aware about the growing dominance of China in regional market. It has alleged China of an ‘encirclement’ strategy since the Chinese focus on the sector of transportation can be observed in the Nepal, Bangladesh, Bhutan, Burma, Sri Lanka and Pakistan and all of these countries have one significant commonality- they surround India.
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