By overcoming the multiple challenges posed against the MCC, the Nepalese government was finally able to ratify the long-delayed agreement.
On the night of 27 February, the House of Representatives (HoR), the lower House of Nepalese Parliament ratified the Millennium Challenge Corporation (MCC) with over two-thirds majority, paving the way for receiving the grants amounting to US$500 million from the American government for the construction of electricity transmission line and for repairing and maintenance of roads in Nepal in the next five years. The MCC was tabled in the Nepalese Parliament in July 2019, but it could not be passed for a long time because of the differences amongst the political leaders on this issue. But on 27 February, almost all the political parties—be it the government or opposition, including the Nepali Congress, the Loktantrik Samajbadi Party (LSP), Janata Samajbadi Party (JSP), the Communist Party of Nepal–Maoist Centre (CPN-MC), the Communist Party of Nepal–United Socialist (CPN-US), and the Communist Party of Nepal -Unified Marxist-Leninist (CPN-UML) voted in favour of MCC.
The MCC was ratified by the Parliament at a time when protests against the MCC was quite visible both within and outside the parliament. After witnessing the opposition piled against the MCC, it was difficult to fathom even until the last hour if the MCC would be passed at all. Amidst such a situation, it appeared as a miracle when the MCC was successfully passed and that too with over two-thirds majority.
The MCC was ratified by the Parliament at a time when protests against the MCC was quite visible both within and outside the parliament.What worked in favour of the MCC in the last hour was the ‘12-point Interpretive Declaration’ that was also passed by the Parliament at the same time when the MCC was ratified. This declaration helped mollify those who were protesting against the MCC as it ensured that the MCC was neither a part of the US Asia-Pacific strategy nor was it above the Nepalese Constitution. Yet, experts believe that the 12-point interpretive declaration is not meaningful as the MCC does not recognise anything that it does not mention. However, later on, the American ambassador to Nepal, Randy Berry, stated that the 12-point interpretive declaration was nothing but what the Americans already have been explaining about the MCC.
The total cost of the MCC project stood at US$ 630 million. This has been the largest foreign grant assistance that Nepal is likely to receive.To dispel some of these doubts concerning MCC, several high-level delegations of the American government visited Nepal and interacted with different groups of people in their bid to convince the Nepalese that the MCC was merely a gift from the American people to the Nepalese and there was hardly any string attached to it. It was revealed that each government and political party when in power in Nepal expressed their desire to receive the American grant assistance. To expose the elements that opposed the MCC, the secret letter jointly written by Maoist leader Pushpa Kamal Dahal and Prime Minister Sher Bahadur Deuba to MCC headquarters was leaked to the press in which the duo had asked the MCC to give them four-five months till 28 February to create a congenial environment for the ratification of the MCC through the Parliament. With the publication of this letter, the Maoist leader Dahal, who happened to be the most vocal critic of MCC, found himself in an embarrassing situation as he was criticised both by the public and by his party workers. Furthermore, the American government also threatened that it would ‘review’ its relations with Nepal if the MCC was not ratified by the Nepalese parliament by 28 February. Such a warning from the American government created uneasiness amongstthe Nepalese politicians. Reviewing relations with Nepal meant a massive cut in aid and assistance, not only from the US but also from the European Union and the multilateral institutions such as the World Bank and the Asian Development Bank (ADB) which are highly influenced by the US.
The Maoist leader Dahal, who happened to be the most vocal critic of MCC, found himself in an embarrassing situation as he was criticised both by the public and by his party workers.At times, the US authorities charged that China was creating hurdles in the ratification of MCC. The Chinese diplomats, on the other hand, charged that the Americans adopted coercive diplomacy to push the Nepalese to ratify the MCC. The spokesperson of China’s Foreign Ministry also asked if the MCC was a ‘Gift’ or ‘Pandora’s Box’?
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Hari Bansh Jha is a Visiting Fellow at ORF. Formerly a professor of economics at Nepal's Tribhuvan University, Hari Bansh’s areas of interest include, Nepal-China-India strategic ...
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