MCC: An agreement that divides the country

Last week, Nepal’s politics was largely dominated by the visit of Fatema Z. Sumar, Vice President of Department of Compact Operations at the U.S. Millennium Challenge Corporation (MCC), who visited Nepal in a wake of the ongoing debate whether to endorse the MCC agreement from the Parliament. Prior to the visit of its officials to Nepal, the US-based Millennium Challenge Corporation replied to Nepal’s Finance Ministry, trying to clarify concerns raised in Nepal regarding the MCC Nepal Compact, under which the country would receive 500 million in grants. The response also comes on the day when Nepal’s Parliament convened its new session.

The US program, which has invited controversy in Nepal, where Nepali political parties have been divided, has been awaiting its parliamentary ratification for over two years now. It might be recalled that Nepal and the United States had signed the agreement four years ago — in September 2017.

In its 13-page response, the MCC has attempted to send clarifications to 11 major questions and supplementary concerns raised by the Finance Ministry, including whether the MCC agreement is above Nepal’s constitution and whether it is part of the Indo-Pacific Strategy.

Most of the questions raised by the Finance Ministry were the issues that have heightened mistrust among the political sphere in recent days. Political parties have been divided to the MCC as few leaders say it is part of the American military Indo-Pacific Strategy, which aims to counter the Chinese highly ambitious program Belt and Road Initiative (BRI) that provisions to connect Asia with Africa and Europe via land and maritime networks.

Even as the erstwhile government led-by KP Sharma Oli had tabled the agreement in 2019, the MCC agreement is stuck in Parliament due to controversies resulting in a delay in implementing two key projects — electricity transmission and transport (road) improvement.

The MCC agreement was duly signed during the previous tenure of incumbent Prime Minister Sher Bahadur Deuba and is now under pressure to get it endorsed through Parliament.

However, the ruling coalition members CPN-Maoist Center and the CPN (Unified Socialist) are against endorse without amendment. During their meeting with MCC’s officials, top brass leaders from both parties insisted that the agreement could not be rectified “as it is”.

CPN-UML, in its part, which once had lobbied for the endorsement during the government led by its Chairman KP Sharma Oli, has not changed its voice and has stood against the bill saying it was against the national interest.

The public at large has been in confusion due to contradictory political views. The situation is overwhelming as some have opined that if the MCC project is implemented in Nepal, it will be like Afghanistan. On the contrary, some people argue that if the project is implemented, Nepal will become a developed country like Japan or South Korea.

Protests on the streets and social media against this project and its agreement points are out of control. Political leaders are sharply divided: some are in favor of the project and some are strictly opposed to it. Despite their involvement, interestingly, these political parties and their leaders who would once support the project are now seen as against it. When they were in government, they supported the project, but when they stepped down from the government, they stood against the project.

It might be recalled that Nepal is not the only country in the world that is receiving an MCC grant. Several other countries have already received grants and some countries are now in the process of receiving it, while some countries have rejected on their own condition. The government should be able to come up with a strong decision with political consensus about this before it is too late as experts have termed it as the issue which is giving larger space to propaganda and dirty politics. On the other hand, Vice-Chairman Sumar, during her meeting with stakeholders, expressed grave concerns over the ongoing lingering, and it has been understood that even a warning of consequences was given for American grants and aid in the future.

Thus, it is the right time for Nepal’s leadership to think and push them to make the right decision in time before they prepare for the untoward situation.

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