from the visit and relations with its giant northern neighbour, China's security concerns, changing re-alignments in geopolitics in the Asia-Pacific, our relations with India and last but not least about the current turmoil within the Nepali Congress.

What is the significance of the visit to Nepal next week of the Chinese premier Zhu Rongji?
Any bilateral visit of the prime minister of a neighbouring country is important. Apart from that, the fact that Mr Zhu Rongji is also visiting other South Asian countries gives us an indication of the importance that China attaches to relations with Nepal and other countries in the region. Apart from trade, China also aims to play a significant role in the region as a major power.

What are the substantial achievements that can be expected from the visit? Overall, we have very healthy bilateral trade with China. There are a few bilateral agreements that are in the pipeline and four or five of them are in the final stages of negotiations and are likely to be signed during the visit.

Such as?
There is the 80 million yuan development cooperation agreement that includes the building of a civil service hospital, a polytechnic and construction of the Nuwakot-Syabrubesi highway. There is a possibility of an agreement on agriculture, tourism-China has agreed to give Nepal an outbound tourist destination status, which is very important for our tourism industry-an agreement on avoidance of double taxation, and another agreement on border trade, transport and transit. But the major highlight will be the development cooperation agreement.

There has been a general deterioration in the security environment in the Asia-Pacific region in the past few months with disputes between the new US administration and China over the spy plane and arms sales to Taiwan on the one hand, and signs of an unprecedented convergence between Washington and New Delhi on the other. How will these new alignments affect Nepal?

This is a bit worrying. The Cold War ended more than ten years ago, but we may be seeing the recurrence of a new Cold War in our region. If US-China tensions spill over into South Asia, then it could revive a Cold War and could put us in a very uneasy and difficult position.

But China and India fought a hot war in the early 1960s, and we handled things pretty well then. How will it be different this time if relations deteriorate?
We have to look at this from multiple dimensions. At one point in time the goal of our foreign policy was to strengthen our national identity, and that was done pretty well. I don't think we have an identity crisis any more. Our identity was linked to the preservation of independence and sovereignty, and today we have moved ahead from that point. Now, we are looking at development and the well being of Nepalis. Tensions that are brewing in the region may distract from this task of development. And that is what is worrying.

These geopolitical realignments also seem to be causing worries for China. We had the recent visit here of the Chinese defence minister, what are their concerns?
As far as China is concerned and going by what they have said publicly, they are preoccupied with the situation in Tibet and Taiwan. Apart from these two issues, they do not have any major problems. And we have very good working relations with China.

How do the Chinese see the Maoist problem in Nepal? Is this a security concern to them?
We have not yet talked to them seriously about it, and neither have we heard their observations on this issue yet. We know they are following developments and studying the issue, and maybe during the prime minister's visit it will come up. When the Chinese defence minister was here recently, the issue of a regional peacekeeping centre did come up, and he assured us of support. The Chinese have also told us that they are going to increase the intensity of visits to Nepal at various levels, and that we will have very thick interactions.

Is Nepal going to get membership in the BIMSTC (Bangladesh, India, Myanmar, Sri Lanka, Thailand, Cambodia) grouping?
The idea here was that Nepal should strike out beyond SAARC to be a member of other regional groupings. At the Yangon meeting earlier this year, Myanmar proposed our membership and Bangladesh seconded it. Our membership was supposed to be discussed at the next meeting this month, but it has been postponed. At that meeting we will probably also get support from Sri Lanka and Thailand. Membership of BIMSTC would be important for us, because it would be a bridge between SAARC and ASEAN and would also put us in the Indian Ocean Rim.

But isn't India making its own "Look East" economic foray into Southeast Asia?
Yes, but that does not preclude the importance of a part-South Asian-part-Southeast Asian grouping like BIMSTC. Also, over time we have come up with some new directions in our foreign policy. We may have been too "Eurocentric" in our foreign policy. We need a policy that looks nearer home: South Asia, Myanmar, Thailand. ASEAN countries were on their
way to becoming tigers, but they did not grab our attention as we were looking elsewhere. Then Asian economic crisis and the rebound both happened right in our neighbourhood, but we were oblivious. Take the IT revolution in India, we know precious little about it. Bad things percolate to us, why not the good things? Take Bangladesh, Sri Lanka, Bhutan-we
interact with them at the SAARC level, but there is tremendous room to build on bilateral relations with them. With Myanmar, for instance, we need to make a special effort because it is very strategically located and there are 300,000 Nepali speakers there.

It has been six months since the prime minister's visit to India, before which you had told us your priority was to bring Indo-Nepal relations to a more even keel. Since then there have been the Hrithik Roshan episode, the Indian media campaign against Chinese goods, the ISI and calls to roll back the 1996 trade treaty. It doesn't look like things have improved.

What we emphasised during the prime minister's visit was regular, more frequent interactions so that we don't leave any space for misunderstanding. But that hasn't really happened. There was an invitation to the Indian prime minister, my invitation with the foreign minister is pending. The need for frequent interactions is as important as ever before. But during that time, there have been at least five important visits here by various Chinese delegations.

Some western embassies in Kathmandu expressed concern about dangers to the democratic process in Nepal, and have been accused by some quarters of interference. What is your take on that?
They expressed their concern, and they have understood that democracy in its early stages is fragile. There have been attacks on the democratic process from inside parliament and from outside parliament. In that situation, what they have done is reiterated their commitment to democracy in Nepal. That is all. This is a lesson to all of us involved in the democratic process to be more sensitive to the working of democracy in our country. That is how we should take it, rather than as interference.

You are a member of the ruling party that has become quite shaky of late. Where do you see this heading?
What I can say is that there has been a gradual erosion of state authority. The private sector, media and civil society are all moving much faster than the state, and that is quite natural for a country in our stage of development. But the government either has to strike a partnership with the private sector and civil society, or move ahead faster than the private sector. If you don't do that these factors will challenge state authority and result in its gradual erosion. And we see evidence of this. The state has to be agile, swift and flexible to the changing demands of the times.