Smaller South Asian states deftly adapt foreign policy amid regional strife

When it comes to South Asian geopolitics, international attention often centres on China-India tensions or potential conflicts between nuclear-armed Pakistan and India.

Smaller states such as Bhutan, Sri Lanka and Bangladesh also make headlines, but often for domestic developments such as election results, financial difficulties, or economic aspirations.

But in 2024, these smaller South Asian states have been working to realign their strategic regional relationships in the presence of powerful India and China, a sign of pragmatism in their respective foreign policies that deserves greater coverage.

Each of the three states are pursuing new strategies based on practical considerations which are in line with their own domestic priorities.

Sri Lanka

Sri Lanka for example underwent a complete economic meltdown in 2019, which was characterised by a near depletion of its foreign exchange reserves, severe shortage of medical supplies and soaring prices of basic commodities.

The crisis resulted in nationwide protests and the eventual ousting of the Rajapaksa brothers' administration.

Under new President Ranil Wickremesinghe however, Colombo last year managed to approve a $2.9 billion bailout package from the International Monetary Fund, which was actively facilitated and backed by India.

Yet Sri Lanka's closer ties with New Delhi over its support for economic revival is not coming at the expense of its relationship with China. This is evident from the remarks of Prime Minister Dinesh Gunawardena, who stated in March that Beijing will assist the island with strategic infrastructure including its port of Hambantota. China also remains Sri Lanka's biggest bilateral creditor.

Sri Lanka's realignment in 2024 with two regional powers marks a notable contrast to previous years under former Prime Minister Mahinda Rajapaksa's government.

Rajapaksa was known to sidestep India's concerns about the post-Lanka Tamil Tiger Eelam environment in Sri Lanka, which New Delhi alleged was characterised by the administration's heavy-handed approach towards ethnic Sri Lankan Tamils.

While relations with India were not tense per say, greater priority was accorded to China in terms of increasing foreign direct investments from Beijing and the development of the port of Hambantota, raising concerns in New Delhi that China was building military bases in close proximity to its shores.

While such Chinese investments continue in 2024, an understanding also exists in Sri Lanka that the island should navigate itself shrewdly amid the presence of two major powers in Asia for maximum benefit.

Bhutan

The same is the case for the tiny Kingdom of Bhutan which is geographically sandwiched between China and India. Following its fourth parliamentary elections in January 2024, Thimphu has adopted a more nuanced approach when reaching out to its neighbours, dealing with both sides despite not having diplomatic relations with China.

Border disputes between the two sides dating back to 1930 has not prevented Bhutan from kickstarting negotiations with China to resolve tensions, while also acknowledging that Beijing's economic rise can benefit Bhutan financially.

Bhutanese Foreign Minister Tandi Dorji and his Chinese counterpart, Wang Yi for example, spearheaded efforts to diffuse border tensions through planned demarcation of boundaries in 2023. The 25th round of talks between the two sides are the first in seven years and indicates that Bhutan seeks amicable ties as well as peace with China.

While India has been mildly sceptical of rapprochement between Thimphu and Beijing, strong relations between the three sides with a workable peace framework acts in New Delhi's favour. This is because Bhutan has a stake in keeping the peace between the two groups for its own security.

This improvement in relations with China benefits Bhutan and helps it hedge itself against potential escalations between Beijing and New Delhi, while maintaining an independent foreign policy anchored in neutrality and a focus on economic integration.

Balancing competing interests through realignment and multilateralism serves the kingdom well as it continues to maintain strong relations with India.

Bangladesh

As for Bangladesh, the results of the 2024 elections have once again brought Sheikh Hasina Wazed into power. Her administration in Dhaka also seeks to balance its relationships with both China and India.

This is despite opposition parties and activists launching an "India Out" campaign that involves boycotting Indian products over alleged electoral interference from New Delhi to bring the Awami League back into power.

Despite criticism of democratic backsliding from people within Dhaka and Western leaders, Beijing and New Delhi have open-heartedly accepted Hasina's legitimacy.

In her previous term, the prime minister had inaugurated a $1.2 billion submarine base in Cox’s Bazaar with Chinese assistance, while her current administration is considering a proposal from China to undertake dredging and embanking on significant sections of the Teesta River which is valued at $1 billion.

All of this is taking place as the Hasina government maintains solid relations with India, which she called a "great friend" of Bangladesh after winning the elections.

Nepal is not too different. With the arrival of the newly formed government led by a five-party Left Alliance in 2023, its newly appointed deputy Prime Minister and Foreign Minister, Narayan Kaji Shrestha went to China on a visit to expand bilateral relations and secure investments.

Nepal has had excellent bilateral relations with India and continues to maintain close contacts through official dialogues on initiatives such as the Pancheshwar Multipurpose Project.

This push for realignment and multilateralism from smaller nations in South Asia bodes well for their respective futures.

Given that each of these states lack the economic clout to assert themselves on the regional and global stage and face significant domestic developmental challenges, it is a wise move from their respective leaderships to adopt foreign policies geared towards multifaceted engagements with both countries.

On the global stage, other countries are also adopting a more pragmatic approach. South Africa and Brazil for example are seeking meaningful engagement with countries such as Russia and China while partaking in blocs such as BRICS.

Meanwhile, they are working to keep from compromising constructive relations with the United States and its allies.

It's a positive sign to see that in a region as volatile as South Asia, smaller states are adopting pragmatic foreign policies as regional powers such as China and India vie for influence.