With Indian Prime Minister Narendra Modi's rise to power and after his invitation to all executive heads of South Asia to attend his swearing-in, neighboring countries were euphoric. India, they thought, will henceforth drop its Big Brother attitude. However, the jubilation particularly in Nepal and generally in South Asia has dissipated. The last SAARC summit in Kathmandu showed Modi's true colors when he cold-shouldered Pakistan PM Nawaz Sharif and gave unsolicited advice to Nepali leaders of taking the consensus route.The recent freeze in Nepal-India relations has further proved that Indian relationship with the neighboring countries is decided by bureaucrats rather than politicians. Otherwise, it wouldn't have thought about imposing blockade against a neighbor that is recuperating after a devastating earthquake.
The blockade has hampered recovery and rehabilitation works, causing long-term damage to Nepal's embattled economy. But economic disturbances in Nepal don't help India even in short run. There is the need for more cooperation between Nepal and India.
India's role in Nepali political and economic affairs has increased significantly after the signing in 2005 of the 12-point agreement between the then Maoist insurgents and seven-party alliance. In recent years, India's rise as economic power has intensified parleys among global strategic and economic players. Inception of the BRICS and establishment of the New Development Ban k with the engagement of both China and India are examples of such strategic partnerships. India's stable government, large geography, huge population, abundance of resources, a proven democracy and a resourceful bureaucracy have bolstered Indian ambitions.
Unlike India, Nepal has been undergoing political transition for decades. Frequent change in government, misallocation of resources, and lethargic bureaucracy has contributed to governance failure at home and diplomatic flops with other countries. Nonetheless, the promulgation of constitution has paved a way for sustainable development. Everywhere in the world, constitution is not seen as an end but a means for economic development and prosperity.
The new constitution does not guarantee transformation of provinces at low level of human development and stricken by acute poverty. That won't be possible without people-driven participative development. Aristocrats from marginalized groups are grabbing power in the name of underprivileged groups and the genuine marginalized are still deprived.
Nepal and India, sharing a porous border, should work collectively and sustainably to develop conducive investment climate in Nepal. This will not only benefit the Pahadis but a large number of Madheshis will also be brought into development mainstream. Nepal's economic prosperity is in the interest of both countries and both should make sincere effort to promote investment. Despite recent misunderstandings, the two sides should initiate constructive dialogue at the political level.
There are also opportunities accorded by geographic vicinity. Indian capital is nearer to Far-west and Mid-west than Kathmandu. A majority of Nepalis visit Indian pilgrimages and millions of Indian Hindus visit various religious places in Nepal. India is also a growing international tourist destination. On average, six million foreigners visit India every year.
Both countries should look to harness local resources for the benefit of neighborhood. A case in point is building regional airports at various bordering cities of Nepal, which will have positive impact on Indian tourism through bundling of tourist destinations. This kind of project will help in the uplift of even the residents of Uttar Pradesh and Bihar.
The major development challenge for Nepal is lack of infrastructures. It is futile to say that Nepal can build wider roads, smart metros, and large hydro projects on its own. It is important for both countries to hold dialogue in setting up joint venture development projects in Nepal. This will quell suspicions that have recently emerged in bilateral relations.
Investing in Nepal's infrastructure will have spillover impact in India. Most noticeably, infrastructure development will benefit people from Nepal's Tarai and a number of workers from India. Even today majority of workers in Nepal's major development projects come from India. It is also supported by a recent research which shows that Nepal sends large remittances to India. Around 50 percent of what Nepalis send from abroad is sent to India in remittance.
As Nepal's general public is confused about India after the recent blockade, it is high time to bring Nepal-India relations back to normalcy. For this is an age of mutually beneficial economic collaboration.
The author is with Nepal Rastra Bank
gunakarbhatta@yahoo.com
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