MonitorsPublished on Nov 25, 2020
South Asia Weekly Report | Volume XIII-47

Nepal: Is Biden’s win win-win for the Himalayan Republic?

Sohini Nayak

The inception of the bilateral diplomatic relationship between the US and the small land-locked Himalayan country of Nepal was in 1947. Through the years, subsequent bilateral ties have been cordial. Since the first bilateral donor-agreement in 1951, more than $ 1.6 billion worth assistance has been provided to Nepal for developmental purposes -- primarily focusing on education, elimination of extreme poverty, building resilience, increasing human capital. Relatively recent additions to the list include the US  economic help for the post-earthquake reconstruction and the maintenance of inclusive democracy in Nepal. In this regard, special mention must be made of the United States Agency for International Development (USAID) that has been assisting Nepal in reinforcing and fortifying security and economic prosperity.

The US indeed understands the vitality of the congenial geopolitical location of Nepal as an important ‘buffer’ in South Asia, strategically placed between India and China. The country also understands that in order to maintain its presence in the region, the role of the landlocked countries can be equally important, as they hold within themselves the potential of either making or breaking the game.

During the past few years, issues like the Indo-Nepal blockade of 2015, the political map conundrum of 2019 are all incidents that have inadvertently pushed Nepal into the arms of China, much to the dismay of both India and the US. Though no specific strategy has been observed during the four-year-term of the outgoing US President, Donald Trump’s administration towards Nepal, many controversies had resurfaced, requiring  early resolution.

With a win-win situation on the China front, and India trying its best to play along, Nepal is now waiting to see how the US handles bilateral relations, particularly in the context of Washington’s  Indo-Pacific strategy and the like. While Nepal will undoubtedly enjoy the fruits of benefit, it must acknowledge the importance of making it a stepping-stone for creating a niche for itself in global politics and not end up feeling upset over a ‘missed opportunity’.

Country’s compulsions  

Just like the rest of the world, Nepal also had been keeping a keen eye on the recently-held US presidential elections. Nepalese President Bidya Devi Bhandari and Prime Minister K. P Sharma Oli were among the first few world leaders to congratulate the US President-elect, probably with the hope of refurbishing the several controversial aspects of the bilateral tie.

Ranging from issues like the Millennium Challenge Corporation (MCC) Compact and the participation of Nepal in the Indo-Pacific to the relationship that Nepal shares with China, an inadvertent hope is obvious on part of Nepal -- the country that has not been able to garner positive attention in the past. Therefore, the situation now seems to be ripe to reorient the relationship by instilling new foreign policy mechanisms that can be helpful for not only the US and Nepal but the whole of South Asia, which is undoubtedly one of the most dynamic regions of the world in recent times.

Given the proximity that Nepal shares with China, one of the foremost tasks of a Biden administration should be to establish a comprehensive action- oriented framework that would be as constructive as the Belt and Road Initiative (BRI) of China. Rather than outrightly projecting China as a ‘revisionist power’ in state doctrines, the US must understand that using Nepal as a buffer in the Indo-Pacific against China would not be an easy task.

Washington must not forget that Nepal was overtly dissatisfied with its mention in the Indo-Pacific strategy doctrine of the US, reiterating a position of non-alignment. This has been a very controversial and sensitive issue for the country which does not want to be a part of any military alliance as such.

Similar connotations are also applicable to the MCC Compact as well. Nepal has been always skeptical about the ratification of this compact because of the direct link it has with the Indo-Pacific doctrine. The MCC has been allegedly being promoted as a part of the Indo-Pacific Strategic Report of the US, as mentioned by David J. Ranz, the assistant Secretary for South Asia at the US State Department.

Though economic alliance does not necessarily denote military alliance, the scepticism prevails. If Nepal becomes an active participant in the Indo-pacific, within a strategic nexus led by the US, it would send a wrong signal to both India and China regarding its ambitions, which the country at this moment cannot afford.

Moreover, the compact also states that it would prevail over Nepal’s existing laws in the case of conflicts that have furthermore created a sense of negativity towards it despite the aid it provides. However, the fact remains, Prime Minister Sharma Oli has been quite keen to sign the compact and get it ratified by Parliament which is reflective of Nepal becoming a part of the MCC for sure in the long run. Foreign Minister Pradeep Kumar Gyawali has even negated the Indo-pacific confusion despite what officers have come and said.

Middle-income status

The US must treat Nepal as an entity by itself. It has been clearly mentioned in the USAID documents that the US is committed to help Nepal achieve middle-income status by 2030. As Nepal has a more or less slow growing economy along with a history of earthquake (2015) and a decade long insurgency that ended in 2006, US can prove to be a partner leading the country towards self-reliance. From disaster risk reduction to reconstruction, food security, management of natural resources, healthcare and making connectivity opportunities more viable, it is important for Nepal to not let go off the opportunity in this new Biden administration, which is yet to conform to new set of foreign policy directives towards South Asia.

However, Nepal must be very clear that this association is majorly from the economic forefront and has nothing to do with any traditional security association that might jeopardise its relationship with its immediate neighbours. As the country has to survive within this particular region with the usage of aid and facilities from its surrounding as well, the better idea would be to help create a balance between the extended and immediate neighbourhood.

Also, Nepal must have one foot forward towards the Indo-Pacific region as well because that is the most dynamic theme in International relations today. The only point to be considered is the idea of being slow and steady that can only come from financial stability and better connectivity.

Pakistan: Why has China halted CPEC projects

Ayjaz Wani

The timelines of the China Pakistan Economic Corridor (CPEC), the flagship programme under China’s ambitious Belt and Road Initiative (BRI), is facing hurdles in Pakistan. Owing to certain differences on some of the agenda items, the unexpected deferment of the crucial 10th meeting of CPEC’s Joint Cooperation Committee (JCC) has made China halt work on some aspects of the CPEC.

Co-chaired by Pakistan’s minister for planning and development and chairman of China’s National Development and Reforms Commission (NDRC), the JCC is highest decision-making body on CPEC projects. The reasons for the adjournment of the JCC meeting are believed to be disagreements between the two countries on the future roadmap for industrial cooperation and also on the Industrial Parks and Special Economic Zones (SEZs) earmarked under the CPEC.

According to Asim Ayub, the project director of the CPEC Industrial Cooperation, the Board of Investment (BOI), Islamabad, forwarded the draft of the proposed industrial cooperation in April 2020. However, it was received with a lukewarm response by the Chinese. The Chinese officials have demanded deferment of some agenda items and have stalled the JCC meeting. The much-hyped CPEC made progress in the first four years. However, after 2018, political fragility, increased insurgency in Baluchistan and other areas, corruption and economic recession in Pakistan has decelerated the progress on nearly all the CPEC projects.

Political fragility and corruption

Beijing has sought to invest over US$62 billion in infrastructure and energy projects in Pakistan through the CPEC. The Chinese Communist Party (CCP) has maintained that these investments will bring political stability and economic resilience to Pakistan, and help Beijing secure its domestic energy supplies.

According to Chinese officials, the CPEC will create around 2.3 million jobs in Pakistan by 2030 and will provide an alternative pathway for exports and energy imports from West Asia to China, linking China’s western provinces to key global sea lanes through Pakistan’s Gwadar port. However, political fragility, increased interference of security agencies and the army establishment in the matters of civilian administration and even CPEC projects have made Beijing rethink on the CPEC’s outcomes.

Over the past seven years, the CPEC has also been abused as a political tool by the opposition parties in Pakistan to serve their ends. It may be recalled that before being elected to form the national government, the Imran Khan-led PTI was a staunch critic of the CPEC. Now the calling card of criticising the CPEC is being held by all the major opposition parties, which have come together under the umbrella of Pakistan Democratic Movement (PDM) alliance against Prime Minister Imran Khan.

In 2018, the World Bank had cautioned the participating countries in the BRI projects about the impending debt risks, stranded infrastructure, social risks, and corruption. All these risks propounded by the World Bank seem to be coming true for the CPEC, which has been marred in recent years by continuing the political instability and growing interference of the all-powerful military establishment, especially after the alleged rigged elections in favour of Imran Khan.

A puppet of the army establishment, the Imran Khan-led PTI government has refused to investigate the corruption charges in the CPEC projects, which ironically was included by Imran Khan in his party’s election manifesto. The active and retired top brass of the army, who have been appointed on crucial positions on the CPEC projects, have allegedly amassed huge wealth by mishandling the project funds.

Former army official Lt. Gen. Asim Saleem Bajwa, who is chairman of the CPEC Authority, was also appointed to head the Prime Minister’s media management team. In August 2020, according to a news report, Asim Bajwaa massed tonnes of undisclosed wealth during his tenure as the chief of the CPEC Authority and acquired offshore assets with his wife and brother.

Despite protests, Bajwa refused to step down from the post of the chairman of the CPEC Authority though he resigned from the post of Imran’s media management team. Chinese officials expect that about 80 percent of investments in the CPEC is lost to corruption and this leakage is difficult to avoid.

Furthermore, the inflow of Chinese investments has worsened the corruption in private-public partnerships and in the realms of privatisation due to bad governance and conflicting roles played by the civilian government and the army establishment. At times, Beijing has also used corruption to its advantage by exploiting the growing socio-economic weaknesses of Pakistan and other participant countries.

Increased insurgency

Growing corruption, promises of jobs not materialising, rampant exploitation of natural resources and increased Chinese presence have triggered anti-state insurgency among the people of Baluchistan, who have been pushed to the margins of economy. Additionally, Pakistan has resorted to similar tactics as adopted by China against the Uyghur minorities in its Xinjiang province to quell insurgency and extremism in Baluchistan.

The Baluchistan Liberation Army (BLA) has intensified its demands for Baloch independence, blaming Beijing for exploiting and making the province more volatile. It has also accused China of being Pakistan’s “partner in crime”. Pakistan has washed its hands off the worsening security situation in Baluchistan and instead accused New Delhi of sabotaging its economic partnership with China and blamed India for planned destabilisation of Pakistan.

According to reports of the Pakistani Army, Indian agencies were specifically targeting Chinese development projects of the CPEC and “sponsored” 700 people to harm CPEC projects. Such claims made by the Pak army have made the Chinese even more cautious of their investments. The Global Times daily, the CCP mouthpiece, wrote, “Beijing will keep a close eye on how the issue unfolds in the future”.

The abovementioned factors have forced the CCP to halt some of the CPEC projects. For example, the Imran government has cleared US$6.8 billion for the Mainline-1 (ML-1) rail upgrade to double the speed of trains on 6 August 2020. The ML-1 project is the costliest project of the CPEC, with 90 percent finances made available by the Chinese.

However, Beijing has been reluctant to make progress on ML-1 rail upgrade agreement till date. Same is the case with industrial cooperation where the Chinese are sceptical, given the situation in Pakistan. The bonhomie between China and Pakistan will face more troubles in the coming months, especially given the bad economic situation because of Covid-19 and the political environment in Pakistan.

Country Reports


Troop-withdrawal continues

The acting US Secretary of Defence Chris Miller announced the decision of the Trump administration to sharply reduce the number of US troops in Afghanistan, from the existing 4,500 to 2,500 by 15 January 2021. The announcement was made only days after President Trump fired former Defence Secretary Mark Esper, who had been in favour of maintaining a significant troop presence in Afghanistan, to support the counterterrorism efforts of the Afghan government. The Taliban called the Pentagon’s announcement indicating further troop reduction a “good step”, and that it was “in the interest of both countries”.

Taliban takes strategic locale

The Taliban captured the strategic district of Maymay in the Badakhshan province, located along the border with Tajikistan. The offensive resulted in the killing of a number of personnel of the Afghan security forces, including the head of the National Directorate of Security (NDS) department of the district. Another key target of the attack was the district governor’s home, which was set ablaze by the Taliban.


No more coal-fired power plants

The government is planning to strike down coal-fired power plants and shift to more environmentally sustainable alternatives for power generation. In this regard, the power, energy and mineral resource ministry finalised a plan and sent it to the Prime Minister’s office for approval. The government is emphasising on the use of liquefied natural gas and petroleum as an alternative to coal. 18 coal-based power plant have been approved by the government since 2008.  Following the decision 13 of these projects likely to be scarped since these projects hardly made any progress. However, five of the projects where development works have significantly advanced will be allowed to continue.

Rohingya return delayed

Expressing his anguish, Foreign Minister AK Abdul Momen held Myanmar responsible for the delay in the repatriation of the Rohingya refugees.  The minister observed that lack of sincerity on the part of Myanmar is the reason behind the delay.  The minister informed that despite giving two dates for repatriation of Rohingyas Myanmar not has taken any action. Since 2017, nearly a million Rohingyas are living in Bangladesh after they fled their home in Myanmar to escape the repression of the Myanmar security forces.


India to launch satellite

India is preparing to launch a Bhutanese satellite into space next year and provide a third international internet gateway for Bhutan. This  announcement were made by Indian Prime Minister Narendra Modi during the e-launch of the second phase of the RuPay card network by the two countries’ prime ministers. India would also welcome four promising youth space engineers from Bhutan in December this year following a memorandum of understanding was signed recently between the two countries for cooperation in the space sector.

Indian funds for PTA projects 

The Government of India through the Indian embassy in Thimphu has released Nu 1.19 billion for the Project-Tied Assistance (PTA) projects on November 19.This release is part of the Indian government’s assistance Nu 28 billion to the PTA projects under the current PlanThe fund will be used for the implementation of five PTA projects.

Stimulating economy

The Ministry of Economic Affairs (MoEA) and the Ministry of Finance (MoF) are recommending bold economic reforms to stimulate the economy, hit badly by Covid-1. An important recommendation of the ministry calls for reviewing the ‘Regulations Relating to the Possession of Assets and Properties outside Bhutan by Bhutanese Citizens, of July 1993’. The report has proposed to allow automatic overseas investment by Bhutanese as the country is looking for investors to come to Bhutan there could be Bhutanese companies that would like to set up FDI ventures outside or open businesses there. The Ministry of Finance also recommended 30 percent shares of State-owned Enterprises (SOEs) to be divested to the public.


Covid-19 surge in Delhi

There is a fresh spike of Covid-19 cases in the national capital of Delhi. Experts believe that the beginning of the winter and the declining temperature might be responsible for spreading the threat of fresh COVID19 infections in northern India. Delhi Chief Minister Arvind Kejriwal has requested the Centre for more beds in government hospitals as the caseload seems to surge ahead once again. Home Minister Amit Shah had a review meeting with Kejriwal for taking a stock of the mounting health crisis. Fresh restrictions have also been imposed by Delhi government to curb the rise in infections.

‘Rebels’ in Congress panels

The Congress Party has formed internal committees. The three panels on economic affairs, foreign policy and national security has been constituted. Senior leaders like Dr Manmohan Singh, P. Chidambaram, Malikarjun Kharge and Digvijay Singh are members of the panels amongst others. The Congress leaders who sought major changes in the functioning of the party recently, including Gulam Nabi Azad, Sashi Tharoor, M Veerappa Moily and Jairam Ramesh, have also been inducted in those panels.


China prefers ‘friendship’

In a tweet tinged in sarcasm, Chinese envoy Zhang Lizhong tweeted that his nation preferred friendship to ‘grandmother’s jewellery’ after Parliament Speaker and ruling MDP chair, Mohammed Nasheed said that even if Maldives sold the proverbial ‘grandmother’s jewellery’ they would not be able to repay moneys owed to Beijing. Amb Lizhong also pointed out how China, as a part of the G-20, post-Covid economic recovery initiative, had postponed repayment of loans given to Third World nations. In pipping the Chinese creditor, Speaker Nasheed also averred that President Ibrahim Solih Government’s Budget-2021 was ‘unrealistic’ in terms of revenue receipts and allocations for various sectors and programmes.

Pandemic no at 12.5 K

With the detection of 32 new case, comprising 17 locals and 17 foreigners, the number of persons who have tested positive for Covid-19 pandemic has gone up to 12,548.  Of the, 414 cases tested positive over the past week. Of them, 19 cases were identified from the Greater Male’ region while the remaining 13 cases were from the atolls. According to health officials, 62 additional patients were confirmed to have made full recoveries taking the total to 11,559. With this, the country has 967 active pandemic patients, of whom 341 were in isolation facilities while 82 have been admitted to hospitals.


Protecting non-supporters

The National League for Democracy (NLD) central executive committee issued a press statement on 17 November under the title ‘Informing the People, which says that they believe they must not only protect the rights of their supporters but also non-supporters. In addition and in brief the party statement promised to fulfill the aspirations and trust in the party by the people and they would continue their work in accordance with the three objectives as mentioned in the party’s election manifesto for 2020 general elections namely ethnic affairs and internal peace, emergence of the constitution to pave the way for a genuine federal union and perpetual security and development.

Complaints over cash-aid

The Myanmar government’s Covid-19 direct cash assistance to low income families, the fourth in a series, is facing criticism and public street protests, prompting the authorities to open complaint centres. Some people said that even contacting the numbers of these centres is very difficult as the lines are mostly very busy.  State Counsellor Aung San Suu Kyi, addressing the nation on 16 November, stated that no one would be intentionally omitted in receiving cash assistance and those who did not get the assistance would be helped.


Cross-border rail link

In an attempt to enhance cross-border railway cooperation between India and Nepal, the fourth Nepal-India Joint Working Group (JWG) meeting, held online, discussed several important projects like Jaynagar-Bijalpura-Bardibas, Kurtha-Bilajpuraand Jogbani-Biratnagar. It also discussed rail wagons purchased by Nepal from India, thereby demonstrating progress in this sector of agreement.

Protest to open border

The civil society groups along with parties like the Nepali Congress and the Janata Samajwadi Party have been staging a demonstration n in front of the customs office for reopening the India-Nepal border. The government on the other hand has not taken any decision on this front. The Madhesi people of Nepal are apparently in the forefront of this protest.


Khan meets Gani

Amid escalating violence in war-torn Afghanistan that is threatening to derail the peace deal between the Afghan government and the Taliban, Prime Minister Imran Khan made his first historic visit to Kabul. Khan met Afghan President Ashraf Gani and other state officials and stressed upon strengthening the historical links between the two neighbouring nations. He assured President Gani that Pakistan is committed to peace in Afghanistan as Afghan people have suffered for four decades. Both sides issued a document of shared vision to nurture a trustful future relationship, aiming to achieve tangible outcomes.

Chinese shield, yet

China has once again shielded Pakistan from fresh allegations of New Delhi and recalled the “positive contribution” made by Islamabad against global terrorism. Chinese Foreign Ministry spokesman Lijian Zhao said Pakistan has positively contributed to international counter-terrorism measures and Beijing firmly supports the country to crack down terrorist forces. The announcement comes soon after Prime Minister Narendra Modi claimed a Jaish-e-Mohammed (JeM) plot in Kashmir had been thwarted by the security forces. It is pertinent to mention here that four recently infiltratedJeM terrorist were killed at the Ban Toll Plaza near Nagrota on the Srinagar-Jammu National Highway.

Sri Lanka

Mahinda presents ‘pandemic Budget’

As Finance Minister, Prime Minister Mahinda Rajapaksa has presented the nation’s Budget for fiscal 2021, announcing incentives, tax-breaks and additional funding in the form, of five-year loans to promote entrepreneurship and also to cut down forex out go on daily products by  $ 55 m from the annual figure of $ 355 m, the latter in line with President Gotabaya Rajapaksa’s poll promise to promote domestic agriculture sector. The Budget has also promised such incentives for technical training and vocational training centres, to promote skilled-based education and jobs, but without indicating domestic or overseas employability of students, whose intake is being doubled from 10,000. To shore up forex and attract more remittances from Sri Lankans working overseas, the Prime Minister offered Rs 2 for every dollar received, and pointed to the favourable dollar-exchange rate in their favour.



Opinion Pieces

Chris Nyamandi, “Afghanistan Needs More Assistance to Save Millions of Children”, TOLO News, 20 November 2020

Eli Lake, “Trump’s Afghan Troop Withdrawal Puts Biden in a Jam”, Bloomberg Quint, 19 November 2020


Afghanistan Times, “Rush Exit”, 17 November 2020

The Daily Outlook Afghanistan, “Imran Khan’s Trip to Afghanistan Crucial to Peace Process”, 17 November 2020


Opinion Pieces

Mahfuz Anam, “From a pro-party to pro-people police force”, The Daily Star, 20 November 2020

Tasneem Tayeb, “Crisis of opportunities feeds Bangladesh’s human trafficking problem”, The Daily Star, 19 November 2020

Fahmida Khatun, “Bangladesh’s expectations from the Biden government”, The Daily Star, 17 November 2020


Opinion Pieces

Sonam Tshering, “The best intentions must not be implemented through wrong procedures” , Kuensel, 21 November 2020


The Bhutanese, “Investing outside Bhutan”, 14 November 2020


Opinion Pieces

Prabhas Ranjan, “India’s mask of economic liberalism is off”, The Hindu, 20 November 2020

Ajit Prakash Shah, “Amid a judicial slide, a flicker of hope on rights”, The Hindu, 19 November 2020

Dhiraj Nayyar, “Delhi govt should collect clean air tax and pay farmers to change farming practice”, The Indian Express, 18 November 2020

Bharati Chaturvedi, “Delhi can’t fight pollution with the current institutional apparatus”, hindustantimes, 15 November 2020


The Indian Express, “No sugarcoating”, 18 November 2020

hindustantimes, “The crisis of Muslim representation”, 17 November 2020

The Indian Express, “Director’s actor”, 17 November 2020

The Hindu, “Content tracking: On government regulation of online news, OTT services”, 14 November 2020


Opinion Pieces

N Sathiya Moorthy, “Maldives: India backs Shahid for UN post, firms up political ties”,, 17 November 2020


Opinion Pieces

Jayanta Kalita, “Myanmar’s Transition to Democracy Vital for India’s Strategic Interests”, The Irrawaddy, 17 November 2020

Lee Sang-Hwa, “Time to Upgrade ASEAN-ROK Ties With Greater Focus on Myanmar”, The Irrawaddy, 16 November 2020


The Irrawaddy, “Myanmar Votes for a Continued Peaceful Transition”, 16 November 2020


Opinion Pieces

Anjali Subedi, “When will Nepal rise?”, Republica, 19 November 2020

Jesselina Rana and Shubhangi Rana, “Remove the ‘luxury tax’ to overcome period poverty in Nepal”, The Kathmandu Post, 17 November 2020

Mahabir Paudyal, “What is Nepali Congress thinking about China?”, Republica, 14 November 2020


The Kathmandu Post, “Lying with numbers”, 18 November 2020


Opinion Pieces

Fareeha Shamim, “Compensating the civilian victims of conflict and terrorism”, The Express Tribune, 21 November 2020

Ziauddin, “The importance of being G-B”, The Express Tribune, 21 November 2020

Parvez Hoodbhoy, “Shockwaves out of UAE” Dawn, 20 November 2020

Ashaar Rehman, “Time to tone down”, Dawn, 20 November 2020

I.A Rehman, “High drama in Islamabad”, Dawn, 19 November 2020

Skander Ahmad Shah, “Sponsoring terrorism”, Dawn, 18 November 2020


Dawn, “FDI challenge”, 18 November 2020

Sri Lanka

Opinion Pieces

Rajan Philips, “Budget offers fool’s paradise instead of facing Covid-19 realities”, The Island, 22 November 2020

Uditha Devapriya, “Sri Lanka, the US and what the future holds”, Daily Mirror Online, 21 November 2020

M S M Ayub, “Muslims’ dilemma on ethnic politics”, Daily Mirror Online, 21 November 2020

Malinda Seneviratne, “Gota’s no-frills first year, whines and whiners”, Daily Mirror Online, 19 November 2020

Oscar Amarasinghe and Kaumi Piyuasiri, “Caught between the devil and the deep murky seas: The calamitous impact of the coronavirus on fishing livelihoods”, Daily Mirror Online, 19 November 2020

Jehan Perera, “Govt alone cannot solve all problems”, The Island, 17 November 2020

N Sathiya Moorthy, “Double trouble over turmeric”, Colombo Gazette, 17 November 2020

Srimal Fernando, “India-Sri Lanka commercial diplomacy”, The Island, 16 November 2020

N Sathiya Moorthy, “String of Pearls: China’s encirclement of India”, Ceylon Today, 16 November 2020


Afghanistan: Shubhangi Pandey

Bangladesh: Joyeeta Bhattacharjee

Bhutan: Mihir Bhonsale

India: Ambar Kumar Ghosh

Maldives & Sri Lanka: N Sathiya Moorthy

Myanmar: Sreeparna Banerjee

Nepal: Sohini Nayak

Pakistan: Ayjaz Wani

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