Sunday, October 05, 2008

From The Archives: ...But Not Karnali?

Indian Foreign Secretary Shyam Saran is due in Nepal Sunday on a three-day visit. The Indian and Nepali press have given prominent coverage to schedule in Kathmandu --and with good reason.
With the U.N.-Iraq oil-for-food scandal having claimed Foreign Minister Natwar Singh’s job, Saran, a former ambassador to Nepal, has come to wield much influence over Indian diplomacy.
Considering its “history of unpredictability”, in the words of one Indian newspaper, Nepal-India relations require handling with “extreme care and dexterity”. But as part of its extended neighborhood and given the historical ties that India enjoys with Nepal, an Indian ambassador has a very important role in Kathmandu.
How much Saran’s performance in the kingdom contributed to catapulting him to the foreign secretary’s seat remains unclear. Few Indian ambassadors to Nepal have succeeded in getting the top diplomatic job back home. The fact that Saran superseded almost a dozen babus says a lot.
Although he took over as foreign secretary after Prime Minister Manmohan Singh’s government assumed power last year, Saran’s appointment was actually pushed by the Vajpayee administration. (Another confirmation perhaps of Indian political parties’ broad consensus on matters concerning foreign policy.)
Maila Baje was impressed by Saran’s past as a journalist with Calcutta’s now-defunct JS magazine. Its breezy, graphics-heavy coverage of Nepal stood in refreshing contrast to the normally staid fare of the Indian press. One hopes Saran can enliven South Block’s ambience during his tenure, which ends in less than a year.
As for Nepal, the Indian foreign secretary recently asserted that India had high stakes in the kingdom.
Those who continue to labor over what role New Delhi played in forging last month’s deal between the parties and Maoist rebels shouldn’t have searched any further. Saran was quite candid in insisting that India had begun a process of engagement with all parties to Nepal’s deepening conflict.
Since Nepal’s Maoist rebels and mainstream politicians had only assembled in New Delhi awaiting further orders when Saran met King Gyanendra on the sidelines of the SAARC summit in Dhaka last month, there must be much Saran hopes to discuss with the palace.
With 18 truckloads of Chinese arms entering Kathmandu days after Nepal played its part in ensuring China’s firm imprint on South Asia’s geopolitical map, New Delhi felt forced to act. But the mainstream-Maoist accord didn’t have the desired effect.
Four days after returning home from a three-week foreign trip, King Gyanendra reconstituted his cabinet in a way that, among other things, signaled he may be ready to cut his own deal with a section of the rebels.

What About Our Stake?
But Maila Baje thinks something else is bothering India: the Upper Karnali Project, located in the Surkhet-Accham-Kailali triangle, a Maoist stronghold.
India's National Hydroelectric Power Corporation (NHPC) and Nepal Electricity Authority (NEA) had reached an initial understanding on building the 300MW project. The NHPC has not replied to the formal memorandum the NEA sent over a year ago.
Here’s the rub: The NHPC was reported to have insisted on an 85 percent stake in the project, something Nepal considered highly unfavorable. In the draft the NEA sent, Nepal sought a 49 percent stake.
Given its severe power shortage, Assistant Minister for Water Resources Binod Kumar Shah said in a recent interview with Indo-Asian New Service, Nepal can't go on keeping the project on hold.
At a public program, Shah announced the government’s plan to promulgate a new Hydroelectricity Act and an Ordinance to attract investment from other sources.
The “other sources” are clearly visible to Saran and his bosses.
Weeks after the Feb. 1 royal takeover, Xinhua news service reported that China and Australia planned to invest in the 750MW West Seti project. The $1.2 billion project, scheduled for completion within five and half years, aims to sell power to India.
Shah and his immediate boss, Tulsi Giri, retain the water resources portfolio.
Koshi, Gandaki, Mahakali but not Karnali – how can that be?