In Stratfor's 2017 Fourth-Quarter Forecast, we wrote that Nepal's upcoming elections, although an important step toward democracy, likely wouldn't end the country's outreach to Beijing as part of a strategy to diversify Nepal's strategic partnerships beyond India. That analysis still holds, though rhetoric from the campaign trail suggests that the Nepal's foreign alignments will become an important issue for voters in the country's elections going forward.
Nepal is marking a milestone on its pathway to democracy. The recent elections are an important step for the Himalayan country and its 29 million citizens in the transition from monarchy to federal democracy that began with the end of the country's civil war in 2006. On Dec. 7, Nepal held its second and final round of parliamentary elections, as well as elections for seven newly established provincial assemblies. Voting took place in 45 districts under the watch of 200,000 security personnel guarding polling stations across the country. Successful elections were crucial to the success of the 2015 constitution that was part of an effort to devolve power from the Kathmandu-based elites and place it into the hands of marginalized communities. Dec. 7 marked Nepal's first parliamentary and provincial elections under the new constitution.
Geopolitically, the elections also reveal to what extent China will emerge as a viable alternative to India in Nepal's foreign policy. Nepal, sandwiched as it is between the nuclear rivals, is the quintessential buffer state. Although India has long been the dominant actor in Nepalese foreign policy, the country faced a tipping point during the 2015 blockade at the India-Nepal border. The nearly five-month ordeal exposed Nepal's almost singular economic dependence on trade routes crossing through India and gave the government an incentive to diversify its relations through closer ties with China. In addition, the blockade caused many of the ruling elite in Kathmandu to cast a suspicious eye toward India, believing that the government in New Delhi tacitly supported the blockade.
Although none of the parties explicitly aligned themselves with India or China during the campaign, clear preferences along party lines emerged in rhetoric and in the minds of voters. Prime Minister Sher Bahadur Deuba's ruling Nepali Congress party is generally seen to be pro-India, while the recently stitched-together Left Alliance between the country's two main communist parties is seen as pro-China. Left Alliance leader and former Prime Minister Khadga Prasad Oli also suggested he would renegotiate treaties with India and try to forge closer ties with China if elected. Going forward, the election winner will be able to draw the country closer to India or China through development deals. For example, Dueba's administration recently revoked a contract for a hydroelectricity project held by a Chinese firm, with rumors suggesting it will be awarded to an Indian firm.
The elections mark a critical phase in Nepal's transition to democracy, though the country has a long way to go as it embarks on the arduous task of administering a new political system. One thing, however, is certain: The rivalry between India and China for influence in Nepal will only ramp up.