By TON Nepal Desk

As US-China fight escalating since the incumbent Chinese President began challenging US domination in the Asia-Pacific region, the US is trying to connect and engage Nepal in one way or another in a bid to annul China’s growing influence there. Both China and the US are using the financial arrangements as a maneuver to penetrate and influence the system in Nepal. And both are hoping to add a military or a security measurement regarding their relationship with Nepal as quickly as possible.

As India siding with the US in the Asia-Pacific arena, the challenge of China is much greater to cope and wooing Nepal economically is much more necessary. Nepal is caught in a quagmire between US and China. While the US is a worldwide force with an intense interest in preparing its defenses in every area of Asia which has been supposedly endangered by China in this scenario, the Nepalese government wonder if their “strategic location’ is a benefit or a misery”.

Due to the terrestrial contiguity of Nepal, China is certainly the first to create major economic inroads into Nepal. Beijing put in US$188 million in FDI in Nepal in the fiscal year 2020–21, more than any other country. China and Nepal had signed a transportation agreement in 2016.

This gave Nepal an outlet other than the ones on the Nepal-India border, which could be closed to Nepal’s disadvantage if it falls foul of India. In May 2017, Nepal officially became part of China’s Belt and Road Initiative (BRI), perturbing Washington which sees the BRI as a dominant threat to its monopoly in the indo-specific.

It is also a fact that the Nepalese were against the MCC's US$ 500 million because some of its provisions disrupted Nepal’s independence. According to MCC’s guidelines Clause 7.1, “it will prevail over the domestic laws of Nepal”. Sec.6.8 provided protection for MCC staff in “all courts and trials in Nepal”.

However, the MCC was considered to be part of the anti-China Indo-Pacific Policy by the US government. It is has been also mentioned in the US State Department document titled: “A Free and Open Pacific: Advancing a Shared Vision” by acknowledging the MCC as the economic pillar of the Indo-Pacific Strategy. The MCC Compact was supposed to supersede Nepal’s constitution and laws.

The Nepalese government was fearful that this will irritate China and kept shelving the endorsement of the MCC. Finally, Nepal and the US entered into conciliation and parliament approved the MCC on February 27, 2022. It was decided that Nepal will not be part of the US Indo-Pacific Strategy or any strategic, military, or security alliance between the US, and Nepal.

Encouraged by the success in getting Nepal to yield, notwithstanding after giving concessions, the US invigorated the State Partnership Program (SPP) pending since 2015. The SPP had disaster mitigation overtones but had defense and geostrategic connotations.

In the event of natural and other disasters, ranging from hurricanes to earthquakes, floods, and fires, the United States seeks to share the best practices and capabilities of its National Guards the first-line responders. SPP can be an effective means of facilitating this type of cooperation.

Although, the “State Partnership Program (SPP) apparently looks like an exchange program between an American State’s National Guard and a partner foreign country with dealing with natural disasters, such as earthquakes, floods, and wildfires but the reality is altogether different practically.

As the SPP is administered by the National Guard Bureau, guided by State Department foreign policy goals, and executed by the state Adjutants General in support of the Department of Defense policy goals.

Through SPP, the National Guard conducts army-to-army engagements in support of defense security goals but also leverages whole-of-society relationships and capabilities to facilitate broader interagency and corollary engagements spanning military, government, and economic and social spheres,” a US government website says.

In other words, the SPP is a multi-purpose vehicle to advance wide-ranging US political and strategic objectives under the overall cover of humanitarian arrangements. Accompanying the push for SPP, there were high-profile US visits which increased the rumors about America’s strategic goals against its giant foe China.

Under Secretary of State for civilian security, democracy, and human rights, and US Special Coordinator for Tibetan issues, visited in May and talked to Tibetan refugees. She took up the refugees’ undocumented status in 1995 and urged documentation. To encourage Nepal towards this end, the undersecretary offered a developmental sop of over US$ 600 million. However, her demand was not accepted by Nepal because China wants Nepal to send the refugees back to Tibet.

As the Nepalese side was worried about the militarization of their county by outside powers in the pretense of helping progress and disaster control. The US wants to turn Nepal into a theatre of conflict and war between its economic fight vis-à-vis China and over the Tibet issue. This made Nepal alert to not join the SPP as it would perturb Nepal’s solidarity. This is the main reason for Nepal that its territory should not be allowed to be used against any friendly nation like China.