They say you can choose your enemies, but not your neighbours. This rings true especially for small nation states bordering much larger ones.
And that is also what Mao Zedong told King Mahendra in Beijing in 1967, and it is the message successive Chinese leaders have given to Nepal’s rulers ever since: be clever, don’t rock the boat, learn to live with India.&nbsp;
In Beijing in 1988, Deng Xiaoping and Rajiv Gandhi demarcated each other's &nbsp;spheres of influence: south of the Himalaya India calls the shots, and north of it (including Tibet) China does.&nbsp;
Lila Nyaichyai, who did her PhD on Chinese Public Diplomacy in Nepal from Yunnan University, says China’s main concern in Nepal is stability.
“As a country grows to become a global power, its aspirations do too,” she says. “But China hasn’t cared much about whether Nepal is a monarchy, a democracy, or a federal republic as long as it is politically stable for development.”
Nepal’s royal rulers navigated the Cold War between the Soviet Union and the United States successfully, getting both to contribute to the country’s development. But the dramatic rise of India and China as global powers, and the fact that they are rivals in Nepal’s immediate neighbourhood has made the need for balance much more critical now.&nbsp;
A template could be the way Finland survived the Cold War between next door Soviet Union and the West. It did not join the Warsaw Pact, but its reference group was the other Nordics. The country decided to keep Moscow at arms length by appeasing it — a strategy that came to be called ‘Finlandisation’.
“Finlandisation was this attitude of yielding to pressure from a big brother,” Finnish journalist and author Katri Merikallio explained to me during a recent visit to Helsinki. “Finland remained independent, but its sovereignty was narrowed. There was a price to pay. We must acknowledge the risks that such a balancing involves, both for the sovereignty of a nation but also for internal politics.”
It was a survival tactic that saved Finland from being arm-twisted by the Soviet Union, like Hungary in 1956 and Czechoslovakia in 1968. But today with the Russian invasion of Ukraine, ‘Finlandisation’ is not in vogue anymore and Finland has joined NATO.
Nepal’s strategy of ‘equidistance’ between New Delhi and Beijing is somewhat similar to how Finland survived the Cold War. But it is a little more complicated than that. Indian strategists do not like the term ‘neutrality’ to characterise Nepal’s dealings with its regional rivals China and Pakistan.&nbsp;
South Asia is now in America’s blindspot with Trump’s turbulent second term, and without Washington’s countervailing presence geopolitics has become much more slippery than Prithvi Narayan Shah’s yam analogy.&nbsp;
Back in Kathmandu, former Foreign Minister Bimala Rai Paudyal of the UML contends that despite their differences, bigger countries do come to an understanding, often at the expense of smaller neighbours. An example of this is China’s refusal to get involved in Nepal's Limiyadhura dispute with India.
“It will not be easy, but we must maintain our policy of equidistance in dealing with India and China,” Rai Paudyal told us. “We must assure both that we are not a security threat, and that Nepal’s prosperity and stability is in their national interest as well.”
Nepal is the oldest nation state in South Asia, and has survived invasions, expansionist empires, and neighbours who do not see eye to eye with each other thanks to master strategists like Jang Bahadur Rana, Chandra Shumsher and King Mahendra.
Today, Nepal is one of the few remaining open societies in Asia with a free press, and a fragile yet rambunctious democracy. Yet feckless governments with leaders unskilled to steer a safe course in a volatile region means Nepal has never been as vulnerable to outside interference as it is today (page 1).
Here in Helsinki, NATO membership has finally finished off Finlandisation. It is a lesson for Nepal about how quickly the geopolitical terrain can shift and upend a nation’s established foreign policy doctrine. &nbsp;
Nepal needs to be supple and agile, pragmatic and self-confident. This will require monumental political reform marked by greater accountability, transparency, and good governance at home.&nbsp;
In other words, secure relations with our two giant neighbours needs sturdier domestic politics.
Sonia Awale in Helsinki

original

674x448

610x380

500x500

400x266

400x240

400x203

301x200

1250x600

1084x550

thumbnail

viewImage

Love thy neighbours

In late December, as police arrested a protester at Mandala into a police van with some force, a tv camera caught a voice from the crowd yelling at the van as it drove away: “Don’t kill him!”
This was not an exaggerated exclamation but one from genuine fear of harm because it followed the killing of two protesters outside a Korean labour recruitment office the previous day.&nbsp;
The Mandala is like Kathmandu’s Hyde Park, and has over the years been the epicentre for all victims of the state machinery who have been denied justice. But after fears that pro-monarchy rallies would escalate, the government designated this and other areas restricted.
Since the ban, police have also arrested health and justice activist Govinda KC as well as human rights activists demanding transparency into the Ncell share acquisition case.
Then on Tuesday, protesters from the National Student Union were arrested for demanding that the ban on assembly at the Mandala be repealed and Nepalis “be given back their civic space”. Interestingly, the student union is affiliated to the ruling Nepali Congress, the largest party in Parliament and a coalition partner to the Maoist Centre.
The other gathering place for mass rallies used to be Khula Manch, which Kathmandu’s Mayor Balen Shah had been trying to turn into a three storey underground parking. After public outrage, he backed down but is now trying to turn it into an astroturfed football ground. &nbsp;&nbsp;
The current coalition is squeezing the right to freedom of assembly and expression in installments. It throttled social media with a ban on TikTok last year. A slew of corruption scandals, impunity and lack of delivery has made the ruling coalition insecure, and its knee-jerk reaction has been to muzzle the messenger(s).
If only the coalition partners learnt from history that freedom of expression is a safety valve that lets the citizens let off steam. But that would be expecting too much wisdom from them. Clamping down can build up the pressure allowing civic outrage to take a dangerous and violent turn.
Even as Nepal’s leadership makes public spaces out of bounds, the opposition UML is preparing to take to the streets in a movement from February onwards to try to topple the fragile coalition.&nbsp;
C K Raut’s Janamat Party this week withdrew support for the Madhes Province government following a power struggle with Upendra Yadav of the JSP. The coalition at the centre is now shakier because Raut has been dissatisfied at his party not being given any National Assembly seats. Elections for 19 seats of the Upper House took place on Thursday.&nbsp;
But while Nepal’s leadership alienates itself further from its citizens at home, it has been tilting southwards on the geopolitical front. Nepal’s recent hydropower and investment agreements with India are emblematic of a significant shift in foreign policy. It seems Nepal’s traditional foreign policy of equidistance between India and China is askew.&nbsp;
Nepal and India signed a 25-year energy trade deal during Indian External Affairs Minister S Jaishankar’s visit to Nepal in early January for ‘Nepal’s electricity to get a market in India’. But it is clear to just about everyone in Nepal (except, it seems the government which is trying its best to keep everything hush-hush) that India’s intentions lie not so much in importing electricity from Nepal as getting free regulated water.&nbsp;
India also increased its assistance through High Impact Community Development Projects (HICDP) from Rs50 million to Rs200 million. Grants like this can help spur Nepal’s development, but there are loud misgivings that the funds will not be channeled through the Finance Ministry, as it should, but via the Indian Embassy. It will be entirely up to India to choose who and what to fund, which actually is against the Constitution and federal policy on international cooperation.&nbsp;
Unlike India-baiters in Nepal, we are not blaming New Delhi for flexing its muscle. Any large country will do the same to secure its long-term national interest. The blame lies in Nepal’s feckless leadership that is shamelessly kowtowing and selling our national interest down the river.&nbsp;
Prime Minister Pushpa Kamal Dahal seems either unaware or indifferent to the long-term consequences of the decisions he has acquiesced to – so focused is he on keeping his coalition intact so that he can remain in the Prime Minister’s seat beyond the term limit he agreed with the NC’s Sher Bahadur Deuba.&nbsp;
Nepal’s foreign policy must not be seasonal, or be determined by domestic political survival considerations. It must not be beholden to the whims of who is leading the country at a particular period of time.&nbsp;
Shristi Karki

At home and abroad

<figure><img width="1540" height="994" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221109181124/636be27c9c7e80680e083eaejpeg.jpg" alt=""/><figcaption>Illustration: DIWAKAR CHHETRI</figcaption></figure>Kathmandu’s cognoscenti suffer from low esteem about Nepal’s geostrategic importance. However, the international community also does not give the Nepali state due recognition.
It is time to change the narrative. True, Nepal’s world standing suffered during its internal conflict, which unfortunately got dubbed a ‘civil war’ by ill-informed foreign journalists and scholars. The United Mission to Nepal (UNMIN) painted an exaggerated picture of the Kathmandu establishment as regressive, oppressive and status-quoist. That vision still colours the West’s outlook.
While this bias is distressing, it is the role of our colossal northern and southern neighbours that have a direct bearing on Kathmandu’s self-perception and its sense of agency. Unfortunately, escalating tension between Beijing and New Delhi constricts the wriggle room for Nepal’s diplomacy, with its two major political parties required to take sides.
New Delhi’s nervousness regarding Beijing’s plans in Nepal is leading to a dumbing down of foreign policy in Kathmandu as well. And Beijing’s intentions to become a player in Nepal’s domestic politics needs to be checked by Kathmandu’s commentators, diplomats and politicians.
Much of Nepal’s politics of the modern era has been spent trying to ward off New Delhi’s interventionist arm. Faced with <a href="https://www.nepalitimes.com/review/two-takes-on-the-nepal-india-nexus/">India’s overwhelming presence</a>, Kathmandu over past decades has leaned over backwards to exaggerate China’s importance. But things have changed in the past five years, as the influence of a rising China becomes palpable.
The arrival of the <a href="https://nepalitimes.atavist.com/the-tibet-train">Tibet Train</a> in Kerung and the prospect of <a href="https://www.nepalitimes.com/banner/which-way-will-the-tibet-nepal-railway-go/">cross-Himalaya connectivity</a> have suddenly brought mainland China closer. At the same time, Beijing has jettisoned the Himalayan spheres of influence policy that had existed since Chou En-lai, who sagaciously told Nepali leaders to maintain good relations with New Delhi.
<a href="https://www.nepalitimes.com/latest/is-china-now-micro-managing-nepal-politics/">China’s current ambassador in Kathmandu Hou Yanqi</a>, obviously acting upon instructions, is on overdrive trying to convince leaders of the Nepal Communist Party (NCP) to stay together, and the Nepali polity has been lax in alerting her that this activism is inappropriate. If such direct political involvement continues, Beijing is sure to face a <a href="https://www.nepalitimes.com/latest/the-india-nepal-china-geopolitical-tri-junction/">backlash similar to the one New Delhi has had to deal with</a>. China should learn from India’s mistakes in Nepal.
For its part, Kathmandu should appreciate its own international standing because it may be surprised to learn that there is little to be embarrassed about. We just need to abandon our constant social media-led self-flagellation about how inept and feckless we are.
Look where we are at: Nepal has managed a peace-process that is more or less homegrown. In all likelihood, the country will get its first full-term prime minister since the Rana regime ended in 1950, and this relative stability had a healing effect, even if Prime Minister K P Oli’s government keeps goofing badly on governance.
Nepal is one of the few countries in the modern era which has succeeded in adopting a progressive Constitution through a Constituent Assembly, with the main challenge lying not in its provisions but in its implementation. Figures tell us that the quality of representative democracy is better in Nepal than in the neighbourhood, though it will take stringent watch-dogging to keep it so.
Nepal is deeply engaged in international peacekeeping, and in a region with so many ongoing and just-past internal conflicts, it is the only country which has an ongoing truth and reconciliation process – even though transition justice remains a mirage. Nepal’s ‘soft power’ potential is as yet un-recognised by its own citizens, let alone deployed for the good of self and others.
Commentators tend to look at the sudden downturn in relations between global and regional powers as a zero-sum game, as if Kathmandu can do nothing but be trampled. There is another way to look at it. Nepal is a country to be reckoned with as the <a href="https://www.nepalitimes.com/opinion/the-india-us-nepal-china-quadrangle/">US, China, India and others</a> at the global high table seek to carve out their spheres of influence.
Nepal’s position amidst this push and pull must be one of self-confident independence – publicly rejecting demands to take sides, refusing to accept that an enemy of an enemy is a friend. Through its long history of non-colonised independence and geopolitical neutrality, Nepal is capable of charting a course of geopolitical equidistance and socio-economic engagement.
Indeed, resisting both Beijing’s and New Delhi’s urgings to take sides, <a href="https://www.nepalitimes.com/latest/political-geography-of-india-nepal-china-ties/">Kathmandu must take the lead on the true ‘middle path’</a>, emanating not from frightened neutrality but a disavowal of the need to prove loyalty to any one power. 
While we should be happy about the flurry of visits to Kathmandu from the North and South, not all the arrivals have been welcome. Indian Prime Minister Narendra Damodardas Modi might have sought to embarrass Prime Minister Oli by sending the <a href="https://www.nepalitimes.com/editorial/covid-19-and-the-new-great-game/">head of his spy outfit as a special emissary</a>, but the overture ended up insulting the Nepali state and people. The Indian Army Chief who arrived for the traditional courtesy visit had <a href="https://www.nepalitimes.com/latest/gorkhas-on-the-frontline-between-india-and-china/">earlier implied that Nepal’s stance on Limpiyadhura was at the ‘behest’ of China.</a>
Not to be outdone, on 29 November the Chinese are sending State Councillor and Defence Minister Wei Fenghe to Kathmandu. What was wrong with sending State Councillor and Foreign Minister Wang Yi? To both New Delhi and Beijing, Kathmandu’s message should be: ‘We have had enough of being perceived only through your security lens.’
<a href="https://www.nepalitimes.com/here-now/new-delhis-new-dealings-in-nepal/">After dispatching a spy and a general</a>, India is finally sending its Nepali-speaking Foreign Secretary Harsh Shringhla to Kathmandu this week. New Delhi will find a trustworthy friend in Kathmandu when it ends its trail of intervention. Nepal can and will never be part of any anti-India cabal, but Nepal’s foreign policy is its own.
The newfound confidence in Kathmandu despite the ongoing political shenanigans within the ruling NCP means that Nepal is able to stake its position. The message that Harsh Shringla can take back from Kathmandu is that it is time for Prime Minister Modi to make a conciliatory visit to Nepal to start mending the frayed relationship. Beijing is invited to take notes.

No binary foreign policy

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131140/636a4ecf9c7e80680e04fcd6jpeg.jpg" alt="" width="1400" height="933"/><figcaption>Pic: BIKRAM RAI</figcaption></figure>When Nepal’s politicians were asked to list their assets, many disclosed property, bank balances and jewelry. Among his possessions, Nepal’s well-read Foreign Minister Pradeep Gyawali declared that he owned 2,500 books. The soft-spoken Gyawali now has the responsibility of steering the country’s foreign policy at a time of heightened geopolitical polarisation in the region. Sound bites from an interview this week:<ul><li>Nepal used to be a back-bencher in international fora. Now we are being seen and heard. <a href="https://www.nepalitimes.com/here-now/to-davos-with-hammer-and-sickle/" target="_blank" rel="noopener">The Prime Minister’s participation at Davos</a> and hosting the <a href="https://www.nepalitimes.com/banner/bimstec-facelift/">BIMSTEC Summit</a> in Kathmandu has raised Nepal’s international profile.</li> <li>It could be that some cannot digest Nepal’s higher international engagement and are uneasy about it. But there is no question of Nepal ever joining any strategic alliance.</li> <li>We look at our own national interest, and we also try to make sure that our decisions and involvement do not hurt the interests of our neighbours, development partners or other friendly countries.</li> <li>Our long-term foreign policy goals have not changed, but we are trying to adapt to new geopolitical realities by analysing them and formulating new policies of engagement.</li> <li>We want to benefit from the economic growth and development of our two neighbours.</li> <li>We are conveying to China and India that a prosperous and stable Nepal is also in their interest.</li> <li>We are telling our development partners that Nepal is a safe country for foreign investment, from where it is easy to export to other countries.</li> <li>We are very sensitive to the fact that 4 million of our young men and women are working abroad and through diplomacy we want to ensure their security, rights and respect.</li> <li>In the 1990s and 2000s many Latin American countries went nearly bankrupt and had to be bailed out. It was not called a ‘debt trap’, none of them had loans from China.</li> <li>If it is in the national interest, we can take not just aid, but also loans. But if it is against our interest, we will not even take assistance.</li> <li>The suspicions about the Indo-Pacific is a storm in a tea cup. Our Chinese friends are not really worried, they are sure that Nepal will not allow anti-Chinese activities.</li> <li>We do not lean more or less on any one side. We don’t try to compare the relationship we have with our two neighbours.</li></ul>"Nepal has spread its wings"Full Interview with Minister of Foreign Affairs Pradeep GyawaliNepali Times: There have been transformative changes in international diplomacy and geopolitics. But Nepal seems to be stuck.Pradeep Gyawali: Every country has a set of long-term goals, and some flexible policies that change with the times. Nation states have permanent values like sovereignty, territorial integrity, dignity and independence. These beliefs do not change with changes in governments, they do not even change with a change in governance systems. Our adherence to the concept of panchashila, or the United Nations declaration does not change. That is why we also look into our fixed goals and immediate policies based on changes in international and regional relations. We have adapted to new realities from the standpoint of our national interest.Will this be enough for Nepal to reach its goal of being a middle-income country in the next ten years?We have to keep in mind global changes, and specifically the geopolitical, economic, demographic changes in Asia. We have to adapt to the fact that our two neighbours are moving forward rapidly. For this, we do not play favourites, or let our relations with one country be at the expense of another. We want to benefit from the economic growth and development of our two neighbours. We are conveying to China and India that a prosperous and stable Nepal is also in their interest. We are telling our development partners that Nepal is a safe country for foreign investment, from where it is easy to export to other countries. We are very sensitive to the fact that 4 million of our young men and women are working abroad and through diplomacy, we want to ensure their security, rights and dignity. And we will extend our involvement and cooperation with multilateral agencies.<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108131140/636a4ed29c7e80680e04fcd7jpeg.jpg" alt="" width="1400" height="1161">The Indian media and intelligentsia are accusing Nepal of tilting towards China.Both our neighbours are equally important for us. We are not tilting more or less in any direction. We don’t compare our relationship with either of them.  Neither of our neighbours should forget that Nepal has neighbours on both sides, and ask us to deal only with one of them.There is lot of talk about Nepal falling into the Chinese debt trap.I keep reminding people that in the 1990s and 2000s many Latin American countries nearly went bankrupt and had to be bailed out. It was not called a ‘debt trap’, none of them had loans from China. Greece still has not been able to come out of its economic crisis, and I don’t think they are in trouble because they had Chinese investments. These accusations are not based on an objective economic analysis, but a negative attitude towards the rise of China and its political system. Besides, Nepal has the ability to decide what is in its national interest and what is not.  If it is in the national interest we can take not just aid, but also loans. But if it is not in our interest, we will not even take assistance.And China seems to be suspicious of Nepal’s involvement in the Indo-Pacific Alliance. Can a Nepal that is already a member of the <a href="http://archive.nepalitimes.com/regular-columns/chinese-ambassador-addresses-bri-conference/" target="_blank" rel="noopener">BRI</a> risk being involved in the Indo-Pacific?The suspicions about the Indo-Pacific is a storm in a tea cup. Our Chinese friends are not really worried, they are sure that Nepal will not allow anti-Chinese activities. The first official visit by a Nepali foreign minister to Washington recently, and the first American visit at the level of the foreign minister to Nepal have added a new milestone to Nepal-US relations. The Japanese foreign minister visited Nepal after many years, we have also deepened our relations with India, the EU and other development partners.  Nepal has increased its involvement in the international arena. The Prime Minister’s recent Europe visit has sent the message that Nepal is no longer what it used to be in South Asia, it has spread its wings. It could be that some cannot digest Nepal’s higher international engagement and are uneasy about it. There is no question of Nepal ever joining any strategic alliance. We look at our own national interest, and we also try to make sure that our decisions and involvement does not hurt the interests of our neighbours, development partners or other friendly countries.What are the main achievements during your tenure?During the conflict, Nepal’s economic development suffered a setback, it affected our foreign policy and we became an arena for proxies. Now, with the end of the political transition and political stability, we are fixing our mistakes and moving ahead.  Nepal used to be a back-bencher in the international fora. Now, we are being seen and heard. The Prime Minister’s participation at Davos, his one-on-one meeting with G-20 leaders sent the message that Nepal should now be heard on the world stage. Recently, the head of the IFC said that Nepal was a ‘rising star’, so that must carry some weight.We have also restored our relations with our neighbours, after overcoming difficult times. Others have now realised that they must take Nepal along. Despite obstacles, we hosted the <a href="https://archive.nepalitimes.com/article/nation/connecting-Bangladesh-China-India-Nepal,2966" target="_blank" rel="noopener">BIMSTEC Summit</a> and the <a href="https://www.nepalitimes.com/here-now/labour-pain/">Colombo Process Ministerial Conference</a> in Kathmandu. I would consider the past year quite successful.Interview by Hari Prakash Chand and Binu PokhrelRead Also:<a href="https://www.nepalitimes.com/here-now/nepal-has-more-self-respect/" target="_blank" rel="noopener">“Nepal has more self-respect”</a>, Nepali Times<a href="https://www.nepalitimes.com/editorial/yam-between-3-boulders/" target="_blank" rel="noopener">YAM BETWEEN 3 BOULDERS</a>, Editorial<a href="https://www.nepalitimes.com/here-now/nepal-now-has-to-balance-not-just-india-and-china-but-also-the-west/" target="_blank" rel="noopener">Nepal now has to balance not just India and China, but also the West</a>, Bhairaja Pandey<a href="https://www.nepalitimes.com/here-now/eminently-beneficial-for-india-and-nepal/" target="_blank" rel="noopener">Eminently beneficial for India and Nepal</a>, Ajit Baral

"Nepal is now seen and heard"

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101144/636a25309c7e80680e0439b5jpeg.jpg" alt="" width="716" height="1000"/><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101144/636a25329c7e80680e0439b6jpeg.jpg" alt="" width="657" height="1000">Nothing has exposed the ideological chasm between the ex-UML and ex-Maoist components of the ruling Nepal Communist Party (NCP) more than the two widely divergent statements issued on Venezuela this week.Who would have thought that the Bolivarian Republic of Venezuela would loom so large in exposing fissures in a government of a country on the other side of the world with which the Federal Democratic Republic of Nepal has no real strategic interests.Read also:<a href="https://www.nepalitimes.com/?p=20802&amp;preview=true" target="_blank" rel="noopener">Nepal now has to balance not just India and China, but also the West</a>, Bhairaja Pandey<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/?p=20801&amp;preview=true" target="_blank" rel="noopener">Eminently beneficial for India and Nepal</a>, Ajit Baral<a href="https://www.nepalitimes.com/here-now/hitching-our-wagon/" target="_blank" rel="noopener">Hitching our wagon</a>The Co-chair of the NCP and prime minister-in-waiting Pushpa Kamal Dahal fired off a statement in full support of the glorious revolutionary comrades under Nicolas Maduro, and denounced US intervention.It has to be said that the US has indeed come across, as it has in the past, as a global bully throwing its weight around with sanctions and threats against a poor and badly-governed country. When will America learn to pick someone its size?But Dahal made a boo-boo by aligning his party, and by association Nepal, needlessly in a power struggle reminiscent of the Cold War.There were two problems with the NCP statement. First was the timing: why would Dahal want to issue it while his party co-chair Prime Minister K P Oli was in Davos trying hard to make a good impression on foreign investors?Oli had admitted before he left that his job was to convince the international community and multinational companies that his government was ‘Communist’ only in name, and that Nepal was open for business. Even if Oli had been only partially successful in removing the stigma, Dahal’s communique firmly identified Nepal as an adherent of an obsolete ideology and a relic of the past.The only explanation we can give to this juvenile behaviour is that Dahal has a sad case of FOMO. By launching a heat-seeking missile aimed at no one in particular, Dahal may also have been trying to re-establish his rather frayed Communist credentials. But the unnecessarily strong language denouncing American 'imperialism' which was creating 'chaos and violence’ was inappropriate, undiplomatic and counterproductive.Oli looked uncharacteristically flummoxed when asked about Dahal's missive when he returned from Davos. The statement also came less than a month after Foreign Minister Pradeep Gyawali’s meeting with US Secretary of State Mike Pompeo in Washington DC during which the two discussed implementation of America’s $500 million assistance through the Millennium Challenge Corporation (MCC) Nepal Compact for road and power connectivity.The two are also understood to have discussed America’s <a href="https://www.nepalitimes.com/editorial/between-two-oceans/" target="_blank" rel="noopener">Indo-Pacific Strategy</a> which, together with the MCC, are seen as a counter by China as a challenge to its Belt Road Initiative (BRI) which Nepal has signed on to. Gyawali trod a tightrope to balance the geostrategic interests of the two global powers, and clarified that Nepal was not going to join any US-led alliance in the Indo-Pacific.The renaming of the US Pacific Command into Indo-Pacific Command last year, designating India as a <a href="http://archive.nepalitimes.com/regular-columns/del-ktm /obor-or-not-obor-china-india,1051" target="_blank" rel="noopener">Major Defence Partner</a>, the joint Malabar 2017 exercise in the Indian Ocean involving the navies of India, Japan and the US, the revival of the Quad Alliance of Japan, Australia, the US and India as an effort to 'contain' China, are all indications that Sino-US competition is heating up in the region.Asian countries may be nervous about <a href="https://www.nepalitimes.com/editorial/what-china-really-wants/" target="_blank" rel="noopener">China’s growing economic and political clout</a>, but Beijing feels it is being encircled by America and its allies. Still, many Southeast and South Asian countries do not want to be forced to choose between America and China.Which is what makes Dahal’s statement on Venezuela so damaging for Nepal at a time when the Foreign Ministry is trying to steer a <a href="https://archive.nepalitimes.com/article/editorial/Equidistance-or-asymmetry-nepal-geopolitics,3850" target="_blank" rel="noopener">neutral course</a> that would benefit Nepal’s trade, investment and infrastructure. The Ministry's damage control this week was with a much more balanced statement saying Nepal respected the democratic will of the people of Venezuela, and opposed foreign interference.During the war, as Chairman Prachanda Dahal famously paraphrased King Prithvi Narayan Shah to say that Nepal was “a dynamite between two boulders”. It seems he has not outgrown his penchant for hyperbole.There was a time when Nepal just had to worry about balancing its giant northern and southern neighbours, but the world is now multi-polar and getting to be a much more complicated place. Our neighbours are drawn into a global power struggle, and being <a href="http://archive.nepalitimes.com/article/nation/the-triangular-relationship,3332" target="_blank" rel="noopener">a yam between three boulders</a>, Nepal has to be careful about how <a href="http://archive.nepalitimes.com/article/nation/a-trump-world-us-nepal,3359" target="_blank" rel="noopener">America’s increasingly erratic behaviour </a>will affect its precarious equidistance between India and China.A place to start would be to forge a united and coherent foreign policy strategy that prevents outside powers from using one or other party or faction in Nepal to push their strategic agenda.<h2>10 years ago this week</h2>Just as issue of Nepali Times deals with Nepal’s geopolitical dilemma, ten years ago in <a href="http://archive.nepalitimes.com/issue/436" target="_blank" rel="noopener">issue #436 of 30 January - 5 February  2009</a> Prashant Jha <a href="http://archive.nepalitimes.com/news.php?id=15620" target="_blank" rel="noopener">reported from New Delhi</a> about how India had a ‘wait-and-watch’ policy towards the newly-elected Maoist government led by Prime Minister Pushpa Kamal Dahal. Excerpt:'India is getting increasingly concerned about the slide in Nepal, but doesn't think it warrants a policy shift just yet. Indian officials admit that they are unhappy with the Maoists: "They have not delivered on their promises,"one official told us, "their commitment to democracy seems doubtful. They are warming up to China. Not good signs."            But sources insist India continues to support the peace and constitution writing process and will not destabilise the present arrangement. "It will be good if non-Maoist actors add pressure on the Maoists. But we will not back any effort to topple the government right now," one senior official told Nepali Times.’<a href="http://archive.nepalitimes.com/issue/436"><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101144/636a25359c7e80680e0439b7jpeg.jpg" alt="" width="510" height="815"></a>

A YAM BETWEEN 3 BOULDERS

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171152/636937b89c7e80680e03fe57jpeg.jpg" alt="" width="1500" height="1476"/>MADRID – Sadly, 2018 will not be remembered as a year of political and diplomatic success. Though the international order had already begun to erode in 2017, the global political environment became downright chaotic, combustible, and hostile this year. That is no coincidence, as these are perhaps the three adjectives that best describe the United States under President Donald Trump.Since January 2018, when the Trump administration announced tariffs on imported solar panels and washing machines, the year has been marked by an escalating “trade war,” waged primarily – but not exclusively – by the US against China. The ongoing tariff disputes have seriously <a href="https://foreignpolicy.com/2018/10/19/the-trade-war-has-claimed-its-first-victim/">undermined</a> the World Trade Organization and deepened mutual distrust in Sino-American relations.For its part, China this year <a href="https://www.nytimes.com/2018/03/10/world/asia/china-xi-jinping-term-limit-explainer.html">eliminated</a> presidential term limits, raising fears that President Xi Jinping’s so-called <a href="https://foreignpolicy.com/2018/10/18/i-mastered-xi-jinping-thought-and-i-have-the-certificate-to-prove-it/">new era</a> will end the period of collective leadership ushered in by Deng Xiaoping’s reforms, which were themselves a corrective to Mao’s cult of personality. This move could also herald a further deviation from Deng’s trademark foreign-policy restraint.Similarly, Russian President Vladimir Putin was reelected in March, to no one’s surprise. Under Putin, Russia has been re-emerging as a geopolitical force. And yet, its economy is essentially stagnant, owing in part to its excessive dependence on hydrocarbons. In the absence of growth, Putin has relied on foreign policy to shore up his domestic popularity.For example, Putin’s campaign press secretary welcomed the British government’s response to the nerve-agent attack on Sergei and Yulia Skripal, because it may have <a href="https://www.standard.co.uk/news/world/kremlin-thanks-britain-for-putin-s-landslide-victory-a3793546.html">mobilized</a> Putin’s supporters in the run-up to the presidential election. And the Kremlin’s recent decision to blockade Ukrainian ports in the Sea of Azov may also have been <a href="https://www.washingtonpost.com/world/2018/11/26/is-there-link-between-putins-approval-rating-aggressive-russian-foreign-policy/?utm_term=.7f850b68f13d">designed</a> to boost Putin’s domestic approval rating, among other goals. The danger now is that both the US and Russia will cease to implement the 1987 Intermediate-Range Nuclear Forces Treaty, posing a new and acute <a href="https://www.brookings.edu/blog/order-from-chaos/2018/12/13/will-europe-try-to-save-the-inf-treaty/">threat to Europe</a> in particular.Meanwhile, the Middle East has continued to serve as a battlefield for some of the world’s most violent conflicts. Though the Islamic State (ISIS) has continued to <a href="https://bigthink.com/strange-maps/22-months-of-war-condensed-in-a-1-minute-video">lose ground</a>, it is far from defeated – contrary to what Trump <a href="https://twitter.com/realDonaldTrump/status/1075528854402256896">has claimed</a> – and the death toll in Syria’s civil war continues to climb. Likewise, the humanitarian calamity in Yemen has deepened, though negotiations that ran aground in 2016 have at least resumed and made <a href="https://www.crisisgroup.org/middle-east-north-africa/gulf-and-arabian-peninsula/yemen/making-yemens-hodeida-deal-stick">some progress</a>. In Afghanistan, what is widely regarded as the longest-running war in US history continues, and <a href="https://thenewsrep.com/109943/is-afghanistan-a-lost-cause-taliban-control-more-territory-since-2001/">it is estimated</a> that the Taliban now controls more territory than at any time since their government was overthrown in 2001.Despite some recent developments in the aforementioned conflicts, the underpinnings of the Trump administration’s general strategy in the Middle East remained intact in 2018. The US has reaffirmed its <a href="https://www.newyorker.com/magazine/2018/06/18/donald-trumps-new-world-order">support</a> for the axis of Israel, Saudi Arabia, and the United Arab Emirates, which it regards as a bulwark against Iran. In May, the Trump administration moved the US embassy in Israel to Jerusalem. That same month, it abandoned the 2015 Iran nuclear deal and announced an abusive re-imposition of extraterritorial sanctions, which reflects the increasing <a href="https://www.project-syndicate.org/commentary/trump-secondary-sanctions-eu-iran-by-mark-leonard-2018-10">weaponization of the US dollar</a>.Moreover, by siding with the Saudi government over his own intelligence agencies in the <a href="https://www.project-syndicate.org/commentary/confronting-saudi-policies-free-speech-yemen-syria-by-leon-willems-2018-12">murder</a> of journalist <a href="https://www.project-syndicate.org/columnist/jamal-khashoggi">Jamal Khashoggi</a> in October, Trump has made clear that opposing Iran and purchasing US arms is one of the quickest ways to his heart. The result of his broad approach to the Middle East has been to empower military hardliners throughout the region. In fact, Israel and Iran this year engaged in their first-ever <a href="https://www.theguardian.com/world/2018/may/11/iran-israel-little-incentive-hurry-down-path-war">direct military encounter</a>.Trump has also contributed, in one way or another, to the advance of populism around the world in 2018. In Latin America, Mexican President Andrés Manuel López Obrador (AMLO) and Brazilian President-elect Jair Bolsonaro have shown that “<a href="https://www.theguardian.com/news/2018/dec/03/what-is-populism-trump-farage-orban-bolsonaro">populism</a>” can encompass diverse ideologies. While both claim to speak for “the people” against “the elites,” the leftist AMLO was elected partly as a <a href="https://www.politico.com/story/2018/07/01/mexico-election-trump-populist-lopez-obrador-664243">rebuke</a> to Trump, whereas Bolsonaro embraces a Trump-like brand of right-wing nationalism, and enjoys the <a href="https://www.politico.com/story/2018/07/01/mexico-election-trump-populist-lopez-obrador-664243">support</a> of many Brazilian elites.The Russian philosopher Aleksandr Dugin, often regarded as one of the Kremlin’s main ideologues, <a href="https://www.politicaexterior.com/actualidad/trump-paso-hacia-objetivo-insuficiente/">argues</a> that “populism should unite right-wing values with socialism, social justice, and anti-capitalism.” This “integral populism,” he believes, is perfectly illustrated by Italy’s current governing coalition, which comprises the anti-establishment Five Star Movement and the nationalist League party.In October, Italy’s government instigated a conflict with the European Union (which has fortunately <a href="https://www.theguardian.com/world/2018/dec/19/italy-avoids-eu-sanctions-after-reaching-2019-budget-agreement">subsided</a>) by proposing a budget that defied EU fiscal rules. Italy’s leaders justified their policies in the name of an outdated interpretation of “<a href="https://www.theatlantic.com/international/archive/2018/10/eu-rejected-italy-budget-populists/573742/">sovereignty</a>,” one similar to that of the United Kingdom’s Brexiteers, whose haphazardness has left the UK’s future shrouded in uncertainty.There were a few positive developments in 2018. Certainly, the easing of tensions between the US and North Korea, and the even deeper rapprochement between North and South Korea, should be welcomed. Much credit belongs to South Korean President <a href="https://www.project-syndicate.org/columnist/moon-jae-in">Moon Jae-in</a>, who used the occasion of the Winter Olympics in Pyeongchang to reach out to North Korean leader Kim Jong-un. Trump’s subsequent turn toward diplomacy – which led to his historic summit with Kim – should also be applauded, though his administration has <a href="https://www.washingtonpost.com/world/asia_pacific/north-korea-rejects-denuclearization-unless-us-nuclear-threat-is-eliminated/2018/12/20/fcf642a2-0438-11e9-b5df-5d3874f1ac36_story.html?utm_term=.c0a8c770d20f">yet to achieve</a> anything more than symbolic progress toward denuclearization of the Korean Peninsula.The result of the US midterm elections was also good news. Democratic control of the House of Representatives means that, from January 2019, there will be more checks on Trump’s policies. And there have been welcome developments in the Republican-controlled Senate, where a recent resolution condemning Saudi Crown Prince Mohammed bin Salman for the murder of Khashoggi, and another to end US support for the Saudi campaign in Yemen, <a href="https://www.nytimes.com/2018/12/13/us/politics/yemen-saudi-war-pompeo-mattis.html?module=inline">passed</a> with bipartisan support.In Europe, the prospects for 2019 will depend primarily on three factors: Brexit, German Chancellor Angela Merkel and French President Emmanuel Macron’s push for <a href="https://www.ft.com/content/826a4986-f7ac-11e8-af46-2022a0b02a6c">EU reform</a>, and the European Parliament election in May. In each case, one hopes that the supporters of democracy, the rule of law, European integration, and multilateralism will prevail.Those who oppose these principles have had a rather good year. But they would be mistaken to think that those who uphold them have lost the will – and the ability – to cultivate a spirit of cooperation and harmony.     © Project SyndicateJavier Solana was EU High Representative for Foreign and Security Policy, Secretary-General of NATO, and Foreign Minister of Spain.

Good riddance to 2018

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171136/636934219c7e80680e03dfdajpeg.jpg" alt="" width="720" height="720"/>NEW YORK – The drama of Donald Trump’s presidency has centered around whether an extremist president would be able to carry out an extremist policy agenda against the will of the majority of Americans. So far the answer has been no, and the midterm elections make it far less likely. Yet Trump’s rising frustrations could push him over the edge psychologically, with potentially harrowing consequences for American democracy and the world.None of Trump’s extremist policy ideas has received public support. The public opposed last year’s <a href="http://www.pewresearch.org/fact-tank/2017/09/27/more-americans-favor-raising-than-lowering-tax-rates-on-corporations-high-household-incomes/">Republican-backed corporate tax cut</a>, Trump’s effort to <a href="http://www.pewresearch.org/fact-tank/2017/02/23/support-for-2010-health-care-law-reaches-new-high/">repeal the Affordable Care Act</a> (Obamacare), his <a href="http://www.pewresearch.org/fact-tank/2017/02/24/most-americans-continue-to-oppose-u-s-border-wall-doubt-mexico-would-pay-for-it/">proposed border wall with Mexico</a>, the decision to <a href="http://cdn.cnn.com/cnn/2018/images/05/07/rel5c.-.iran.pdf">withdraw</a> from the Iran nuclear agreement, and the imposition of <a href="http://www.pewresearch.org/fact-tank/2018/05/10/americans-are-generally-positive-about-free-trade-agreements-more-critical-of-tariff-increases/">tariff increases</a> on China, Europe, and others. At the same time, contrary to Trump’s relentless promotion of fossil fuels (coal, oil, and gas), the public favors <a href="http://www.pewresearch.org/fact-tank/2017/01/23/two-thirds-of-americans-give-priority-to-developing-alternative-energy-over-fossil-fuels/">investments in renewable energy</a> and <a href="http://climatecommunication.yale.edu/publications/paris_agreement_by_state/">remaining</a> in the Paris climate agreement.Trump has tried to implement his radical agenda using three approaches:<ol><li>To rely on the Republican majorities in the two houses of Congress to pass legislation in the face of strong popular opposition. That approach succeeded once, with the 2017 corporate tax cut, because big Republican donors insisted on the measure, but it failed with Trump’s attempt to repeal Obamacare, as three Republican senators balked.</li> 	<li>To use executive orders to circumvent Congress. Here the courts have repeatedly intervened, most recently within days of the election, when a federal district court <a href="https://www.nytimes.com/2018/11/09/climate/judge-blocks-keystone-pipeline.html">halted work on the Keystone XL Pipeline</a>, a project strongly opposed by environmentalists, on the grounds that the Trump administration had failed to present a “reasoned explanation” for its actions. Trump repeatedly and dangerously oversteps his authority, and the courts keep pushing back.</li> 	<li>To rally public opinion to his side. Yet, despite his frequent rallies, or perhaps because of them and their incendiary vulgarity, <a href="https://news.gallup.com/poll/203207/trump-job-approval-weekly.aspx?g_source=link_newsv9&amp;g_campaign=item_203198&amp;g_medium=copy">Trump’s disapproval rating</a>has exceeded his approval rating since the earliest days of his administration. His current overall disapproval rating is 54%, versus 40% approval, with strong approval from around 25% of the public.</li></ol>In the midterm elections, which Trump himself described as a referendum on his presidency, the Democratic candidates for both the House and Senate <a href="https://elections.huffingtonpost.com/2018/results/hq">vastly outpolled</a> their Republican opponents. In the House races, Democrats received 53,314,159 votes nationally, compared with 48,439,810 for Republicans. In the Senate races, Democrats outpolled Republicans by 47,537,699 votes to 34,280,990.Nonetheless, the Republicans hold a slight majority in the Senate, where each state is represented by two senators, regardless of the size of its population, because they tend to win their seats in less populous states, whereas Democrats prevail in the major coastal and Midwestern states. Wyoming, for example, elects two Republican senators to represent its nearly 580,000 residents, while California’s more than 39 million residents elect two Democratic senators. Democrats win more votes, but Republicans win more seats.Without control of the House, however, Trump will no longer be able to enact any unpopular legislation. Only policies with bipartisan support will have a chance of passing both chambers.On the economic front, Trump’s trade policies will become even less popular in the months ahead as the American economy cools from the “sugar high” of the corporate tax cut, as growing uncertainty about global trade policy hamstrings business investment, and as both the budget deficit and interest rates rise. Trump’s phony national-security justifications for raising tariffs will also be challenged politically and perhaps in the courts.True, Trump will be able to continue appointing conservative federal judges and most likely win their confirmation in the Republican-majority Senate. And on issues of war and peace, Trump will operate with terrifyingly little oversight by Congress or the public, an affliction of the US political system since World War II. Trump, like his recent predecessors, will most likely keep America mired in wars in the Middle East and Africa, despite the lack of significant public understanding or support.Nonetheless, there are three further reasons to believe that Trump’s hold on power will weaken significantly in the coming months. First, Special Counsel Robert Mueller may very well document serious malfeasance by Trump, his family members, and/or his close advisers. Mueller kept a low profile in the run-up to the election. We will most likely hear from him soon.Second, the House Democrats will begin to investigate Trump’s taxes and personal business dealings, including through congressional subpoenas. There are strong reasons to believe that Trump has committed serious tax evasion (as the New York Times <a href="https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html">recently outlined</a>) and has illegally enriched his family as president (a lawsuit that the courts have <a href="https://edition.cnn.com/2018/11/02/politics/donald-trump-emoluments-clause-dc-maryland/index.html">allowed to proceed</a> alleges violations of the emoluments clause of the Constitution). Trump is likely to ignore or fight the subpoenas, setting the stage for a major political crisis.Third, and most important, Trump is not merely an extremist politician. He suffers from what author Ian Hughes has <a href="https://www.amazon.com/dp/B07H44BMM6/ref=dp-kindle-redirect?_encoding=UTF8&amp;btkr=1">recently</a> called “a disordered mind,” filled with hate, paranoia, and narcissism. According to two close observers of Trump, the president’s grip on reality “<a href="https://www.politico.com/magazine/story/2018/07/27/inside-the-mind-of-donald-trump-219074">will likely continue to diminish</a>” in the face of growing political obstacles, investigations into his taxes and business dealings, Mueller’s findings, and an energized political opposition. We may already be seeing that in Trump’s <a href="https://www.nytimes.com/2018/11/09/us/politics/matthew-whitaker-donald-trump.html?smid=fb-nytimes&amp;smtyp=cur&amp;fbclid=IwAR0MxF9dqRt5w1M5HT6Gy6syoaqbsJjfg6SRlN4JhcdURUrV-btCv_pHgt4">erratic</a> and <a href="https://www.youtube.com/watch?v=zdFe-LmFRV8&amp;t=1s">aggressive</a> behavior since the election.The coming months may be especially dangerous for America and the world. As Trump’s political position weakens and the obstacles facing him grow, his mental instability will pose an ever-greater danger. He could explode in rage, fire Mueller, and perhaps try to launch a war or claim emergency powers in order to restore his authority. We have not yet seen Trump in full fury, but may do so soon, as his room for maneuver continues to narrow. In that case, much will depend on the performance of America’s constitutional order.  © <a href="https://www.project-syndicate.org/commentary/weaker-trump-more-unstable-and-dangerous-by-jeffrey-d-sachs-2018-11?utm_source=Project+Syndicate+Newsletter&amp;utm_campaign=8154a24117-sunday_newsletter_18_11_2018&amp;utm_medium=email&amp;utm_term=0_73bad5b7d8-8154a24117-93570157##" target="_blank" rel="noopener">Project Syndicate</a>Jeffrey D Sachs is Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University and his books include <a href="http://jeffsachs.org/books/the-end-of-poverty/">The End of Poverty</a>, <a href="https://www.amazon.com/Building-New-American-Economy-Sustainable/dp/0231184042" target="_blank" rel="noopener"> Building the New American Economy</a>, <a href="https://cup.columbia.edu/book/a-new-foreign-policy/9780231547888">A New Foreign Policy: Beyond American Exceptionalism</a>.

Trump’s diminishing power and rising rage

This is the first instalment in a new limited series in Nepali Times on the historic transportation infrastructures of Nepal. Nepal’s Forest Railways As<a href="https://nepalitimes.com/here-now/india-s-border-trains-that-connected-nepal"> India’s railway network </a>expanded in the 1890s and 1900s, the demand for wooden railway sleepers, called ‘ties’ in America, likewise increased. The <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/the-rana-reign-a-recap-of-history,3751">Rana regime</a> realised that western Nepal’s dense forests, from which sal trees could be extracted and sold, represented a valuable source of revenue. There was a problem of accessing large tracts of <a href="https://nepalitimes.com/here-now/the-tarai-s-shrinking-forests">Tarai forests</a>. However, once Indian railway lines are extended to Nepal’s border in several places, this issue could be resolved by constructing logging railways, also known as ‘tramways’ or ‘light railways’. The Nepal Government awarded a contract to Punjabi timber contractors to supply 15,000 sal sleepers to Chandan Chauki station of India’s Oudh &amp; Rohilkhand State Railway in 1908. The contractors also received a concession to construct a steam tramway to run 48km into <a href="https://nepalitimes.com/banner/reviving-nepals-community-forestry-success-story">Nepal’s forests</a> for cutting and transporting trees. The author found no records, however, indicating that such an ambitious tramway was built in 1908. The hewn logs were probably carried into India by bullock carts or <a href="https://nepalitimes.com/news/elephants-become-white-elephants">elephants</a>. The earliest known forest railway in Nepal was built in 1914 in the southwestern corner of the present-day Parsa district. A British engineer went to the Indian border town of Bikna Thori to plan a 4-mile portable light railway for the transport of timber from <a href="https://nepalitimes.com/here-now/on-the-tri-junction-of-wildlife-conservation-conflict-and-co-existence">the forest of Chitwan </a>to the Thori depot on the Bengal &amp; Northwestern Railway. This short line was laid upon wooden sleepers, and its rails could be taken up and repositioned when logging in one section of the forest was completed. This forest railway was in operation at least through 1917.&nbsp; A few year down the line in 1923, J V Collier of the Indian Forest Service built a narrow-gauge railway in Kailali district also to export of timber to India. This line, the Nepal Government Forest Railway, departed Chandan Chauki in Uttar Pradesh and ran 48km northwest into Nepal.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd.jpg" data-media-id="editor_6" data-image-id="20250824150820_84ddef57433c2f847b2c7e56c2d9c924084b6e6a504bbca905d2c593fac8eabd" data-rendition-name="original" width="1130" height="689" loading="lazy" alt="Nepal's little railways"> <figcaption>A Nepal Government Forest train in Kailali District hauling sal sleepers in 1925. Photo: DAVID CHURCHILL </figcaption> </figure>  It was a 2-foot railway supported by 11kg rails. The line was ‘temporary’ in that as sal trees were thinned out in one area, railway tracks were shifted to uncut areas of the forest. The railway crossed seven small <a href="https://nepalitimes.com/here-now/saving-what-is-left-of-himalayan-rivers">rivers</a>, but the bridges were taken down during the summer and monsoon. Trains ran only from November to April. This forest railway purchased four 4-6-0T ‘tank’ engines built in Leeds, England. Each bogie could carry 100 broad-gauge sleepers, and two engines were needed to haul a 21-car train loaded with 2,100 sleepers. This huge commercial forest operation once employed about 14,000 men, most of them Indians. During one season, nearly 800,000 broad and metre-gauge sleepers were exported to India. When India suffered a depression in 1930, large scale operations came to an end. Read also: <a href="https://nepalitimes.com/news/rust-in-peace?fbclid=IwAR1_eg88TCOS6RGRW1af7WvaWx5mzh_rY8-vT1MnJxSs41QtCpaA988oXk8">Rust in peace</a>, Daniel W Edwards  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5.jpg" data-media-id="editor_9" data-image-id="20250824150828_13a0b894b9ea0c478904d358028f0c976d84f284432ee25106787366598d38e5" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>Rails extended north from this spot into the virgin sal forests of Bardia in western Nepal 100 years ago.  DANIEL W EDWARDS</figcaption> </figure>  A third railway was built in <a href="https://nepalitimes.com/here-now/the-big-bulls-of-bardia">Bardia </a>where some scattered rails and signs of an old roadbed were seen in the 1960s. It ran from Nishangada in India to Khairbhatti in Nepal. From there, stations heading south were Ranipur, Karmak, Taratal and Madhuwan. Collier likely <a href="https://nepalitimes.com/here-now/nepal-train-project-struggles-to-stay-on-track">built this railway </a>as well in the 1920s. An elderly man in Bardia in 2022, whose father had worked on this forest railway, was interviewed for this account. Kathmandu Valley’s Motor (Trolley) Railway Merchants importing goods from India via the<a href="https://archive.nepalitimes.com/article/business/ropeways-connecting-nepal,1749"> ropeway</a> Chandra Shamsher built in 1927 had to go to the ropeway’s terminus at Matatirtha near Thankot to claim their goods and then haul them 6km to the customs house Bhansar Adda at Teku for clearance and payment of customs duties. The Motor Railway was built to carry goods from the<a href="https://archive.nepalitimes.com/news.php?id=16839"> ropeway station </a>directly to the customs office, making it cheaper and more convenient for merchants to receive their shipments. In December 1931, Prime Minister Bhim Shamsher issued an order (sanad) putting Lt Gen Singha Shamsher Rana in charge of building this rail line to Teku and on to ‘Nabalak Khana’ in Tripureswar, a distance of 10km. The project was subdivided into four sections or ‘phant’, and for each, budgets and timelines were established. There was bato phant (constructing the roadbed), lik sleeper and jordne phant (laying sleepers and joining the rails), culvert phant (installing culverts) and pul phant (building bridges). Colonel Kishore Narsingh Rana was put in charge of the sleeper and rail section, while Colonel Dilli Jung Thapa, an engineer at Ghar Kaj Adda, also was involved. The Motor Railway was completed by the end of 1933. In the beginning, the railway’s small wagons may have been pulled and pushed by men and bullocks. However, in 1938 a British railway manufacturer sent Nepal a four-wheel, 5½ ton, 2-foot narrow-gauge diesel-powered locomotive with mechanical transmission, hence the name motor railway. Read also: <a href="https://nepalitimes.com/latest/nepal-railways-janakpur-test-drive?fb_comment_id=3554227181262227_4263866616964943">Nepal Railways Janakpur test drive</a> Leaving Matatirtha, the trains passed Satungal, Naikap, the Bishnudevi Temple, crossed an iron bridge over Balkhu Khola, then to Ghattepakha, Sunagau, through what is now a section of Kuleshwor (‘Lik Marg’) to the Customs Office at Teku.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9.jpg" data-media-id="editor_15" data-image-id="20250825020852_033f0cee9775d7dadde7811132f84da876f614c386e3677e560ba7aed79909d9" data-rendition-name="original" width="2000" height="1333" loading="lazy" alt="railways in Nepal"> <figcaption>Lik Marg in Kuleswor, the former route of the Motor Trolley Railway. Photo: DANIEL W EDWARDS</figcaption> </figure>  In 1945, Motor Trolley had four engines, but spare parts was badly needed. The charge for transporting one maund (about 40kg) of cargo from Matatirtha to Teku was 50 paisa. Even though the trains ran slowly and only for a short distance, <a href="https://nepalitimes.com/news/fatalism-and-fatalities">accidents were not unknown</a>. A train loaded with rice, salt and cotton derailed on a curve in July 1946, and two railway employees were crushed under the cars and killed, five others were injured. Besides the driver and a brakeman, guards rode the trains to prevent theft of goods.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060.jpg" data-media-id="editor_17" data-image-id="20250824150836_63a327d4db3b067a23dd5c6cf17a31ffe811ffd4a8429bc31011d62298a90060" data-rendition-name="original" width="6000" height="4000" loading="lazy" alt="Nepal's railways"> <figcaption>The author by the remains of the Balkhu Khola bridge built in 1932 with American steel. Photo: JEEVAN NEPAL</figcaption> </figure>  By 1953, government budget estimates indicated the Motor Railway would break even with an income of Rs70,000 against Rs71,000 in expenditure. It appears the railway stopped service around 1957 with the opening of the Raj Path and the extension of the ropeway from Matatirtha to Bhansar Adda. Bent steel beams of the bridge across Balkhu Khola and two plaques recovered from the river a few years ago are the only remains of this railway today. Photos of the Motor Trolley Railway in operation are hard to come by.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b.jpg" data-media-id="editor_18" data-image-id="20250825020848_3a7cd17d0ffc36bbf5fdad404f5f6e91c7aa0e4f4ed729ed2c7e9c186f32ca9b" data-rendition-name="original" width="5189" height="1979" loading="lazy" alt="railways in Nepal"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The Kosi Project Railway (KPR) As early as 1941, India and Nepal considered building a dam on<a href="https://nepalitimes.com/here-now/the-kosi-s-sorrow-and-scope"> the Kosi River</a> to prevent destructive floods caused by <a href="https://nepalitimes.com/editorial/when-it-rains-it-pours-ksqprbu3">monsoon rains</a>. Floods in 1950 inundated 500 villages in Bihar and left 500,000 people homeless. The two governments signed an agreement in 1954 to build a barrage on the Kosi, and King Mahendra and Prime Minister Nehru laid the foundation stone in April 1959. To transport stones from a quarry near Dharan to use in mixing concrete at the construction site, the Indian government, in charge of building the barrage, made plans to build a narrow-gauge railway linking Bihar and its border town of Bhimnagar with Nepal’s settlements at Chakraghatti, Chatra and Ghopa, the outskirts of Dharan.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7.jpg" data-media-id="editor_21" data-image-id="20250824150816_fc5e13b01022c63c64f1e83589da0015eee7ecd002bdd3d97b88c98c1f3d45b7" data-rendition-name="original" width="4011" height="2645" loading="lazy" alt="Nepal's railways"> <figcaption>Steel plaque commemorating the construction of a Motor Trolley bridge across the Balkhu Khola. Photo: DANIEL W EDWARDS</figcaption> </figure>  The section of the KPR in Nepal totaled 66km — the country’s longest railway to date. The stations south of Chakraghatti were Rajabas, Maduhuwan, Kushaha, Haripur and Bhantabari. The line built, operated and owned by the Indian Government, was opened in 1958 and known locally as Dhunge (stone) Rail. Procuring locomotives, wagons and other materials was a challenge. India’s Railway Board searched the country for old 41 lb rails, and located steam engines, most built around 1910, in poor condition, and stored in ‘retirement’. These decrepit locomotives were later cannibalised for parts to keep the remaining engines running, and six newer locomotives built in Yugoslavia were sent to the KPR in 1960 to prevent the railway from shutting down and halting construction of the barrage.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b.bmp" data-media-id="editor_22" data-image-id="20250824150832_fd644f9e2674c5047a531de5dfeb2c8860b0f93dddc7a2df3db867bf31b2c94b" data-rendition-name="original" width="3171" height="2069" loading="lazy" alt="Nepal's railways"> <figcaption>KPR locomotives, water tank and staff at Chakraghatti in Nepal. Photo: JOHN BENSON</figcaption> </figure>  Used bogie-wagons (gondolas) came from <a href="https://nepalitimes.com/here-now/india-nepal-rail-diplomacy">Indian railways</a> that had been converted to metre-gauge, others were manufactured in Muzaffarpur without couplers due to the non-availability of steel. A hundred new wagons arrived from Japan, but only half could be put in service, as couplers from the other 50 were removed and attached to the Muzaffarpur wagons. This smorgasbord of equipment kept shop mechanics and work crews busy, but now-abandoned railways in Nepal always operated under less-than-ideal conditions. Although the purpose of the KPR was to transport gravel, stones and boulders to the site of the barrage, photographs show people riding in loaded wagons. Excluding Dharan, there was no bus service through the wild animal infested jungle between Dharan and Chakraghatti or along the dusty paths linking other small villages on the KPR, so patient locals sat in wagons at Dharan, waiting perhaps for hours for trains to depart.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6.jpg" data-media-id="editor_24" data-image-id="20250825020852_7d011dcc8e9b8cb0fe745b352486ebc4a84dac99419eadb35875333db20837c6" data-rendition-name="original" width="3965" height="2659" loading="lazy" alt="railways in Nepal"> <figcaption>Ticketless riders on a train of gravel and stones in the forest between Dharan and Chakragatti in 1966. Photo: JOHN BENSON</figcaption> </figure>  Sons of former railway workers in Chakraghatti say that there were no fixed schedules, three or four trains ran both ways daily in the early 1960s. Southbound trains carried gravel, stones and boulders, while northbound trains would carry coal, cement and provisions, including sacks of coins to pay the workers. Trains even ran at night, and the crews worked long hours. Workers received free housing in project-built tenements but had to buy food supplies and items for personal use. The Babu Saheb or the superintendent lived at Chakraghatti, and at one time supervised more than 1,000 employees, nearly all of them from India. The barrage was completed in 1964, but by 1970, the Kosi Project Railway had passed into history. Daniel W Edwards was a Peace Corps volunteer in 1966 and is the author of several books on Nepal.

Nepal’s five little railways

Turkish Airlines is official airline partner for the second edition of the Vatsalya Everest Women’s Volleyball League (EWV). The league, scheduled for 5-13 September, will take place in Pokhara and feature 18 international players alongside elite Nepali volleyball talent. The agreement was signed by Turkish General Manager Serkan Başar, and EWV CEO Snevy Chapagain. “Turkish Airlines’ support ensures a seamless journey and adds immense prestige to the league’s goal of women’s empowerment through sports as well as the agenda of sports tourism,” said Chapagain. “We are thrilled to partner with Vatsalya Everest Women’s Volleyball League as the official airline. With this association, we aim to support women role models in sports. We believe this association will connect countries to Nepali volleyball,” remarked Basar.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4.jpg" data-media-id="editor_0" data-image-id="20250825030844_36df66612152abbea71f15579358a2bb0fe797f21cbe7e7c7f28e3fe91655ae4" data-rendition-name="original" width="1920" height="1280" loading="lazy" alt="Turkish"> </figure>

Turkish to sponsor women’s volleyball league

India and China have a long-standing border dispute along their Himalayan border which has erupted in violent skirmishes. But Indian and Chinese officials last week agreed to ignore Nepal’s own border dispute with India to facilitate trade. The Indian Ministry of External Affairs this week flatly rubbished <a href="https://nepalitimes.com/editorial/territorialism">Nepal’s territorial claims</a> to the Lipulek Pass and the Kalapani Region, including Limpiyadhura, which Nepal considers as the source of the Mahakali River that forms Nepal’s western border with India. The latest episode in this dispute has come as Sino-Indian relations have thawed after US President Donald Trump slapped <a href="https://nepalitimes.com/news/nepal-and-the-us-india-tariff-tiff">sanctions on Indian exports</a>. The joint communiqué in Beijing said India and China had agreed to resume their border trade through the Nathu La, Sipki La and Lipulek during Chinese foreign minister Wang Yi’s visit to New Delhi. Lipulek is a pass 10 km north-east of <a href="https://nepalitimes.com/news/there-is-precedent-to-settling-kalapani">Kalapani</a> which has been disputed ever since the Survey of India published its 1879 map, where the source of the Mahakali was suddenly shifted from Limpiyadhura to Lipulek.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd.jpg" data-media-id="editor_3" data-image-id="20250826060824_4e68dd5964e0995b91148de9978a1de52b19691e1b01f52a405924fd130c22bd" data-rendition-name="original" width="2000" height="2083" loading="lazy" alt="Lipulek dispute explainer"> </figure>  This tributary of the Mahakali was called the Kali on this map, and is a fordable tributary and not the main channel of the border river. The main Kali River was renamed Kuti Yangdi, and this happened while the British were still in India presumably to gain access to the Lipulek in contravention of the 1816 <a href="https://nepalitimes.com/banner/borderline-disorder">Sugauli Treaty</a>.&nbsp; This subterfuge continued even after India gained independence in 1947. Nepal has maintained that the main channel of the Kali is the border as per the 1816 treaty, when Nepal lost a third of its territory to British India. It is all well and good that India and China are now friendly enough to <a href="https://archive.nepalitimes.com/news.php?id=19447">open border trade</a> routes, but it should not be in violation of Nepal’s territorial integrity. Nepal should be called for diplomatic and political negotiations regarding the Lipulek pass and the Kalapani region comprising Limpiyadhura.&nbsp; Read also: <a href="https://nepalitimes.com/opinion/comment/when-xi-meets-modi-and-oli">When Xi meets Modi and Oli</a>, Kanak Mani Dixit China and India, but especially the latter, should invite Nepal to discuss these issues and iron out the disputes based on facts and evidence and maps. Nepal had sent seven diplomatic notes to India and three to China so far regarding the Lipulek and Kalapani. India has not responded to any of them. China replied once saying that Nepal and India should sort out their border disputes first before voicing their opinions. Nepal welcomes the recent talks between India and China that it hopes will positively impact on settling border disputes that are mostly stalled since the 1962 Sino-Indian war, the 73-day military standoff over the disputed Doklam region between China and Bhutan, and the 2020 Galwan clash in Ladakh. Nepal’s two large neighbours seem to have come to their senses and realised that it is in their interest to collaborate rather than confront each other when President <a href="https://nepalitimes.com/opinion/trump-s-first-month">Trump is acting erratically</a> with threats of sanctions and tariffs.&nbsp; Prime Minister K P Oli should bring up Nepal’s grave concerns about the Lipulek during his state visit to India next month when he will meet Prime Minister Narendra Modi in Bodh Gaya. The two are also expected to meet next week at the Shanghai Cooperation Organisation summit in Tianjin when Chinese President Xi Jinping will also be present. But even before that Nepal should send diplomatic notes to both the Indian and the Chinese governments regarding their agreement to resume border trade through the Lipulek.&nbsp; Here is a timeline of the developments regarding the Lipulek: Sino-Indian Agreement of 1954 This 8-year Agreement on Trade and Exchange between Tibet and India was signed in Peking on 29 April, 1954 by the Chinese Vice-Foreign Minister Chang Han Fu and the Indian Ambassador Nedyam Raghavan.&nbsp; There was no explicit mention on the border settlements either on the Line of Actual Control (LAC) or on Ladakh, although trade and pilgrimage through Lipulek and other 5 passes (Sipki La, Mana Pass, Niti Pass, Kungri Bingri Pass and Dharma Pass) were agreed upon.&nbsp; Trade between Uttar Pradesh state and the Tibet Autonomous Region was through ‘border &nbsp;point of the agreement states: ‘With a view to facilitating the visits of persons engaged in border trade and the exchange of commodities and means of transportation, (India and China) have decided that Lipulek (Qiangla) be the border pass for the entrance and exit of the said persons, commodities and means of transportation from the two sides.’ The agreement expired on 6 June 1962 during the Sino-Indian war, and the two sides did not renew it. Bilateral ties started to normalise only in the 1990s with the Indian decision in 1988 to abandon its policy of settling ‘territorial issue’ for ‘normalisation of relations’. India There was no reaction from Nepal to the 1954 agreement since Nepal did not have diplomatic relations with China yet at the time. Sino-Indian Agreement of 2005 The Political Parameters and the Guiding Principles for the Settlement of the Sino-Indian Boundary Question is detailed in 11 Articles, which outline the steps to be taken for a Peaceful and Tranquil Border. The agreement was a direct outcome of the Special Representatives mechanism that had been set up through a 2003 agreement. It also incorporated the Confidence Building Measures in Military Field along the Line of Actual Control (LAC) in the Sino-Indian Border Areas signed in 1996.&nbsp; A protocol on Modalities for the Implementation of Confidence Building Measures in the Military Field along the Line of Actual Control in the India-China Border Areas signed during Chinese Premier Wen Jiabao’s India visit, which stated in Clause 2 of Article 5: ‘Both sides agree to extend in principle to expand the mechanism of border meeting points to include Kibithu Dhamal in the Eastern Sector and Lipulek Pass (Qing La) in the Middle Sector. The precise locations of these border meeting points will be decided upon mutual consultations.’ Nepal’s Foreign Ministry issued a statement in 2005 stating that Nepal had asked China about the issue and the Chinese Embassy clarified that the agreement had nothing to do with Kalapani. This was perhaps the first time that Nepal had objected to the Sino-Indian agreement on Lipulek. King Gyanendra had staged a coup d’état on 1 February 2005, just two months prior to this agreement. The Nepali press voiced criticism of China in particular for disregarding the country’s sentiment.&nbsp; Sino-Indian Agreement of 2015 India and China signed several documents during the state visit of Chinese President XI Jinping to India on 18 September 2011. Number one on the list was: ’Opening a New Route for Indian Pilgrimage (Kailash Mansarovar Yatra) to the Tibet Autonomous Region of the People’s Republic of China’.&nbsp; The Indian foreign ministry stated: ‘The MoU provides for conducting the annual Kailash Mansarovar Yatra through Nathula Pass in Sikkim in addition to the existing Lipulek Pass in Uttarakhand’. On May 15, 2015, China and India issued a Joint Statement during Indian Prime Minister Narendra Modi’s visit to China. Point 28 under the ‘Trans-border Cooperation’, states that the two sides agreed to ‘hold negotiation on augmenting the list of trades commodities, and expand border trade at Nathu La, Quingla/Lipulek Pass and Sipki La Pass’. Nepal’s objection to the 2015 agreement was stronger than in 2005. Prime Minister Sushil Koirala called up Narendra Modi to express Nepal’s displeasure It was not until 2020 that Nepal’s Foreign Minister disclosed that ‘Nepal had expressed its disagreement in 2015 through separate diplomatic notes addressed to the governments of both India and China … including Lipulek Pass as a bilateral trade route without Nepal’s consent.’  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea.jpg" data-media-id="editor_8" data-image-id="20250826060824_d4497e2620bba81211d27e427393974877e09006abc26e13055508996e5b29ea" data-rendition-name="original" width="1108" height="1550" loading="lazy" alt="Lipulek dispute explainer"> </figure>  The new political map of India published by the Survey of India in November 2019 that incorporated areas east of the Kali River including Kalapani as Indian territory sparked renewed public, and political, attention to the Mahakali dispute. The Nepal government then countered by formally approving the publication of the new Political and Administrative Map of Nepal including all territories lying to the east of the Mahakali River on May 18, 2020. In June, the House of Representatives unanimously endorsed the second amendment to the Constitution of Nepal to update the country’s new political map in the national emblem. Sino-Indian Consensus of 2024 A 6-point Consensus on Peace and Tranquility on the Line of Actual Control (LAC) was agreed on December 18, 2024 between the Special Representative of the People’s Republic of China, Wang Yi, and the Special Representative of the Republic of India, Ajit Doval.&nbsp; India has not denied that this is a consensus, while China made it clear that this was not a Joint Statement. This Consensus is in line with the 2005 agreement, and was agreed during the 23rd round of the Special Representatives talks held after a gap of five years aimed at restoring bilateral ties frozen because of the military standoff in Ladakh. The agreement included: cross-border communication and cooperation, promoting the resumption of pilgrimages by Indians to Xizang, cooperation on crossborder rivers, and trade at the Nathu La Pass. Nepal made no reaction to the statement despite Lipulek being the pilgrimage route for Mansarovar and Kailash.&nbsp; Prabhakar Sharma is a construction engineer and an international border expert who has worked as a survey engineer for the Cameroon-Nigeria border demarcation by the United Nations.

Lipulek dispute explainer

It was 30 years ago this month that investment into ‘Baby Arun’, the 201MW first phase of the run-of-river Arun III project, was brought to a screeching halt when the World Bank officially withdrew its support. This brought about profound and fundamental changes in the way Nepal’s power sector subsequently developed. Nepalis suffered debilitating power outages between 2008-2016 due to shortages attributable to the cancellation. At the same time, the gap left by Baby Arun was filled by private sector investment in ways that were not obvious in 1995. It took 30 years, but in many ways Nepal’s power sector is more healthy today than it has ever been, and likely better than if the project was built as planned. At a projected budget of $1.08 billion, Baby Arun would have cost the equivalent of Nepal’s entire annual government expenditure in 1995. It was to be funded by concessional grants and loans from multilateral and bilateral funders, including the World Bank, Asian Development Bank (ADB), KfW, and investment by the government itself. At the time, Nepal’s total electricity generation capacity was only 230MW, and the trajectory of the power sector changed dramatically following the cancellation. In the past 30 years, $5.4 billion has been invested in the power sector led by private investors, and much of it from domestic banks and pension funds (table, right).  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0.jpg" data-media-id="editor_0" data-image-id="20250829150840_c13d6f9f34d7163832b3089eabdad6f20d2d5cef3a53039e0432add2be6c32f0" data-rendition-name="original" width="984" height="521" loading="lazy" alt="30 years after Baby Arun"> </figure>  Nearly 70% of the new megawatts generated were by private independent power producers (IPP) in the past 30 years, while the Nepal Electricity Authority (NEA) and its subsidiary companies added 30% of new capacity. Almost 80% of total debt financing came from domestic banks and employee retirement funds. International assistance for power generation dropped dramatically over this time, accounting for only about 15% of investment. Before 1995 new power projects used to be entirely dependent on foreign aid. Since 1995, 63% of new generation came from 171 small hydropower projects with an average capacity of 12MW, while 4% was from 21 solar photovoltaic and biomass projects developed by local IPPs.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097.jpg" data-media-id="editor_1" data-image-id="20250829150844_5bc299fc78be90b95ce4727b0b3bdaa4542e17e126718cc8725d136630ffc097" data-rendition-name="original" width="988" height="503" loading="lazy" alt="30 years after Baby Arun"> </figure>  Over three decades, investment in Nepal’s power supply came primarily from new actors that had never before been involved in this sector. The rate of electrification rose from 10% to close to 100% -- sufficient to meet domestic needs during most of the year, and in 2024 made Nepal a net exporter of power to India for the first time in its history. As practically all the new investment in this period went into run-of-river hydro and solar projects, rather than into hydropower reservoirs with seasonal storage, Nepal continues to rely on imports from India during the dry winter months. Surplus electricity generation for export during the monsoon is slated to grow rapidly as another 200 solar and hydro projects are nearing completion of construction, with over 5,000MW of power capacity. Private Power The cancellation of Baby Arun inadvertently accelerated the entry of the private sector into Nepal’s power generation. The government enacted the Electricity Act in 1992 to attract private IPPs and diversify away from total dependence from international aid, but had been struggling for several years to conclude the first agreement with the 60MW Khimti Project. There remained a large gap between the tariff that the government thought was reasonable versus what was demanded by the Norwegian investor Statkraft, and the private sector arms of the World Bank and ADB that were financing the project. The shock of World Bank withdrawal from Baby Arun put tremendous pressure on the government, then led by the UML as it is now. The Bank’s decision to terminate its involvement was ostensibly, at least partially, taken in response to a letter critiquing the project sent by the UML while it was in the opposition.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347.jpg" data-media-id="editor_2" data-image-id="20250829150848_7fb3641d776fe86a09ad60a758f7e16660a409fdb15e541644f13646b0894347" data-rendition-name="original" width="949" height="446" loading="lazy" alt="30 years after Baby Arun"> <figcaption>BAD NEWS: Newspaper clippings from the early 90s on tender announcement ahead of loan approval (left) and secrecy surrounding environmental assessment (centre) of Arun III before its eventual cancellation in August 1995.</figcaption> </figure>  The government was forced to soften its position and agree to the investors’ terms following the cancellation of Baby Arun. It directed NEA to sign a power purchase agreement (PPA) with Khimti. It was concluded in January 1996, and this was followed by a second PPA in July 1996 with Panda Energy, the American developer of the 45MW Upper Bhotekosi project. The expensive USD-denominated agreements to buy power from two international private producers, with price escalation clauses tied to the New York Consumer Price Index, sent alarm bells ringing. There was worry that the country was heading towards unaffordable tariff rates for the consumer and potential bankruptcy for NEA as a result of inevitable future weakening of the Nepali Rupee. The government had strong-armed NEA into signing these agreements, and realised that concessionary financing terms that Nepal was used to receiving for public sector projects such as Baby Arun and Kali Gandaki A, that included below-market interest rates and 40 years repayment period with a 10 year grace period before starting repayment, were not the norm for private sector investors. Nepal’s status as a less than attractive destination for foreign investment meant that the country had few options but to accept expensive dollar PPAs from international developers with the high commercial interest rates and short repayment periods imposed by their banks because of high investment risks. In the end, the government ended up having to additionally provide a sovereign guarantee in order to close the deal at the insistence of the lenders – committing it to repayment in case NEA defaulted on paying the IPPs. It is reasonable to assume that the extraordinarily high political cost of agreeing to the PPA terms would have meant that no government would have willingly agreed to them in 1995 had it not suffered the trauma of the loss of concessionary-financed public sector projects as large as the Baby Arun. It has taken NEA 25 years to consider offering dollar-denominated PPAs again: to cover the foreign exchange portion of the investment in the 216MW Upper Trisuli-1 and 120MW Rasuwa-Bhotekosi Hydropower projects. It seemed unlikely at the time, but it turned out that the dire situation Nepal found itself in 1995 planted the seed to mobilise investment for affordable power from within the country. Double Whammy After the dual shock of first losing investment in Baby Arun and having to sign expensive power purchase agreements with international IPPs, the first proposal for an alternative strategy to mitigate the risk of foreign currency investment into hydropower projects came from a group of engineers within the Arun III team at NEA. Led by <a href="https://archive.nepalitimes.com/news.php?id=4900">Deputy Director Damber Bahadur Nepali,</a> engineers convinced the leadership that NEA needed to invest in a subsidiary company to build a series of locally-designed and domestically-financed projects that would have lower cost with rupee-denominated PPAs. They registered the Chilime Hydropower Company Limited (CHCL) in October 1995 with 51% shares from NEA, 25% from its employees, and 24% available for the general public, 10% of which was prioritised for local residents at the project site. The 22.1MW project is in Rasuwa on a tributary of the Trisuli, and mobilised debt financing from the Employee Provident Fund, which manages retirement savings for employees of the government, public enterprises, and private sector institutions. CHCL’s experience showed that NEA employees themselves believed that individual hydropower projects with operational independence from NEA could be developed profitably in Nepal by its own engineers -- and they were willing to put their own money on the line. Chilime also demonstrated that there was money in the country, particularly with retirement funds, looking for opportunities for long-term investments. Following completion of Chilime in 2003, CHCL led the formation of three other NEA subsidiary companies that completed construction in 2023 and 2024, producing 168.3MW using fully rupee-tied investment. NEA’s largest subsidiary, the Upper Tamakosi Hydropower Limited, completed construction of its 456MW plant in 2021.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3.jpg" data-media-id="editor_4" data-image-id="20250829160812_ce9ab8b49c598970db3f5bf0a079061ef52f153b28d9f4ead2bb1b26bfd7c2f3" data-rendition-name="original" width="3000" height="1571" loading="lazy" alt="30 Years after Baby Arun"> <figcaption>DAMNED: The $700 million 456MW Upper Tamakosi built entirely with domestic funds before it was destroyed by the September floods last year. </figcaption> </figure>  There were some delays and cost overruns on this run-of-river project, the largest in the country with a final cost of over $700 million -- all of it sourced domestically. The five subsidiary companies launched by NEA have produced almost two times as much new power as NEA has over the past 30 years. Seven other NEA subsidiaries are currently constructing projects to add another 474MW to the national grid. But even more important than NEA subsidiaries have been local IPPs: Nepali companies which have over the past three decades enthusiastically entered the hydropower sector. From a regulatory perspective, the credit for mobilising domestic private investment to engage in power generation goes to Minister of Water Resources Shailaja Acharya, who in 1998 offered a flat feed-in-tariff of Rs4/kWh for hydropower projects under 10MW. This upfront offer removed a major barrier that early developers had faced of having to spend money to carry out a detailed feasibility study before they could even start tariff negotiations with NEA. She had laid the foundation stone of the Chilime project, and proved to be the champion of opening up the sector for domestic IPPs. The guarantee of a PPA with a fixed tariff, irrespective of project specifications, gave small power developers the confidence to apply for survey licenses and invest in feasibility studies so they could directly approach commercial banks and make a case for their project producing required revenue to repay loans. Domestic IPPs started adding power to the national grid in 2002. Their contribution was initially modest, and first projects were small and commercial lenders who took time to be confident about providing debt financing to a sector which had previously not been considered suitable for private sector investment. While the first 10 years were slow, with less than 10MW being added to the grid each year, this increased twenty fold over the following ten years, resulting in the equivalent of a Baby Arun being added by Nepali IPPs to the grid each year. A total of 84 IPPs added 232MW, 328 MW, 454MW, and 400MW of new generation to the grid in 2021-2024 (graph). There was explosive, exponential growth as domestic developers have surged ahead to account for 76% of the new megawatts added to the grid since 2020, compared to 24% by NEA and its subsidiary companies. The megawatts that IPPs are adding have followed the classic ‘hockey stick curve’ with the ‘breakout point’, signaling the rapid growth phase in 2020. Private producers are expected to accelerate new generation in the coming years with 300 solar and hydropower projects adding 11,000MW. Another 166 hydropower and 96 solar projects are currently in the survey stage, and are in line to add another 11,000MW to the construction pipeline. One major challenge is finding financing required for the projects. Domestic investment will no longer be sufficient to finance this ambitious pipeline of renewable energy projects. Project developers as well as NEA and the Electricity Regulatory Commission will have to leverage their substantial experience accumulated through the construction of over 200 projects to attract regional and international investment and hedge the risks of dollar-denominated PPAs. Following the cancellation of Baby Arun, <a href="https://nepalitimes.com/opinion/people-power/decentralising-power-in-nepal">Nepal developed a highly distributed power sector</a>. The national electricity grid is currently supplied with power from a remarkably decentralised array of hundreds of hydropower and solar photovoltaic projects spread across 43 districts and all seven provinces.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b.jpg" data-media-id="editor_6" data-image-id="20250829150848_0c3aa66b34bfb08380a624f397bf3ebb4126f4d6b41a26115848b496876f501b" data-rendition-name="original" width="1228" height="867" loading="lazy" alt="30 years after Baby Arun"> </figure>  This presents a sharp contrast to the pathway of a few large public sector hydropower projects with a sprinkling of private sector projects that was envisioned as part of NEA’s investment planning when Baby Arun was being considered the front runner for investment. The strategy then was to allow public sector investment in a few large hydropower projects with thermal plants to fill the gap. Knowing what we know now about acceleration of climate change impacts and increased extreme weather events, following this path would have made Nepal’s power sector highly vulnerable. Decentralised generation greatly improves the resilience of Nepal’s power supply as damage to power plants in one part of the country need not affect other areas that have their own generation. Following the investment plan where over two thirds of the country’s power supply would have come from power plants on the Arun River, would have greatly imperiled Nepal’s energy security. All rivers in Nepal are susceptible to flooding from cloudbursts made more frequent by climate change. The Arun River which is fed by glaciers in Tibet is also at risk to glacial lake outburst floods. Bikash Pandey is Director of Clean Energy and Circular Economy at Winrock International. People Power is his regular column in Nepali Times on global energy issues relevant to Nepal. <h2>Decentralised and Diversified</h2> In the 30 years since the cancellation of ‘Baby Arun’: Hydropower projects constructed cover capacities ranging from less than 1MW to 456MW and developed by IPPs from across the country with strong local involvement in purchasing equity shares. Renewable energy sources contributed to the generation mix through solar IPPs that further contribute to climate resilience, and cover shortfalls during low rainfall. The government is committed to solar contributing 10% of the power on the grid. Increasing solar beyond this target and providing incentives to project developers to invest in utility-scale battery storage would further improve resilience. BIG ARUN: The 900MW Arun III project under construction since 2018 at Num in Sankhuwasabha (pictured, below) is a separate initiative by a different project developer using a different financing modality. The ‘Baby Arun’ version of Arun III was cancelled in 1995.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb.jpg" data-media-id="editor_7" data-image-id="20250829150852_df534df5166eb5a9bb4cbe101627bdec7ac1df2a405a9d3988d1c86fcc8ecdeb" data-rendition-name="original" width="1750" height="1312" loading="lazy" alt="30 Years after Baby Arun"> </figure>