Foreign policy should serve Nepal’s domestic economic ambitions: Foreign Minister Khanal

Kathmandu / Aug 20: Foreign Minister Shisir Khanal has said Nepal’s foreign policy should deliver direct and transformative economic outcomes for the country and serve as an instrument for its economic transformation.

Addressing the launch of the book Geopolitical Conflict in a Wolf World: Great Power Competition and the Illiberal Revolt Against the Liberal Order and a panel discussion organized by the German foundation Friedrich-Ebert-Stiftung Nepal in Kathmandu on Thursday, Khanal said foreign policy should be aligned with the country’s domestic economic ambitions.

“Foreign policy should be an external instrument for our domestic economic ambitions,” Khanal said.

He said Nepali voters, including young people, had given a clear mandate in recent elections in favour of good governance, employment and economic dignity.

Khanal said Nepal’s foreign policy is based on friendship with all and hostility toward none, sovereign equality, mutual respect, non-interference, international law, and an independent and non-aligned approach.

While Nepal has traditionally been described as a “yam between two boulders” because of its location between India and China, Khanal said the country’s strategic vision in the 21st century is to develop Nepal as a dynamic and credible bridge between two large and rapidly growing economies.

“Our vision in the 21st century is to transform Nepal into a dynamic and credible bridge. We must use our geographical position between two large and rapidly growing economies not only as a challenge but also as an opportunity,” he said.

Khanal said developing, landlocked and vulnerable countries are likely to be affected the most as the rules-based multilateral order weakens globally.

He said institutions such as the United Nations, Bretton Woods institutions and the multilateral trading system were established to replace raw power with common rules and collective predictability. Nepal has embraced these institutions not because they are perfect, he said, but because they provide a basis for addressing their shortcomings.

“For countries like Nepal, a rules-based multilateral order is not merely a diplomatic priority but a necessity linked to our survival,” Khanal said. “When multilateralism weakens, developing, landlocked and vulnerable countries are affected before powerful countries.”

He said Nepal’s decision to join the United Nations in 1955 reflected its firm belief that the international system should be governed by universally accepted rules rather than the will or arbitrary influence of major powers.

Khanal also said geopolitical fragmentation and conflict were not merely theoretical issues, as their consequences directly affect Nepali citizens’ lives, employment and economic well-being.

He pointed to the large number of Nepali workers employed in West Asia and said instability in the region has had a direct impact on Nepal.

“A large number of our workers are employed in West Asia and make a significant contribution through remittances to Nepal. When instability increases in the Gulf, flights are disrupted, employment agreements are affected, consumer prices rise, families face greater anxiety and, unfortunately, Nepali citizens can also lose their lives,” he said.

Khanal said maintaining peace and stability globally was directly connected to the everyday lives of Nepali families.

He also highlighted Nepal’s efforts to raise the interconnection between mountains and oceans through international platforms such as the Sagarmatha Sambaad. Climate change, he said, is affecting the Himalayan region and could have consequences not only for Nepal but also for billions of people who depend on river systems originating from the Himalayas.