Why is MCC required in Nepal? Or its not?

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MCC in Nepal controversy

MCC is an innovative and independent U.S. foreign assistance agency that is helping lead the fight against global poverty – created by the U.S. Congress in January 2004.

There is a very hot debate going on in Nepal as why should it be approved or why it should not be approved.
The following is what I think and my personal opinion only. I too have questions and doubts.

Lets talk about it based on Nepal.

MCC Board of Directors approved Nepal Compact Program which includes USD 500 million (about 60 arba) grants in August 2017. The Compact signing is done on September 14, 2017 in Washington DC between Nepal and MCC at the State Department’s Treaty Room. Finance Minister Mr. Gyanendra Bahadur Karki and MCC Acting CEO Mr. Jonathan Nash singed the Compact agreement.

Initially, some negotiation was done and it was not required for it to be approved through the parliament(couldn’t find source). However due to some misunderstanding or some motive, it was again required to be approved through the parliament of Nepal.

It should be noted that Nepal signed to The Belt and Road Initiative (BRI) proposed by China in 2014 formerly known as One Belt One Road (OBOR) despite India, USA, EU not wanting Nepal to be the part of it. Nepal being a neighboring country to China and seeing the benefit as being a landlocked country, it became part of it. So its not a surprise that Nepal would be offered something from the country which is competing with China.

The Belt and Road Initiative (BRI) is an ambitious program to connect Asia with Africa and Europe via land and maritime networks along six corridors with the aim of improving regional integration, increasing trade and stimulating economic growth. The projects include pipelines, ports, railways and other major infrastructure projects.
Read more about BRI here

MCC wants to ensure the smooth operation of the provided funds in the concerned projects. But…
No other grant provided from other organizations or country has ever gone that way as per my knowledge (through parliament). If they are concerned with the utilization of the funds – they can work closely with the Nepalese government and in case progress is not as intended they can cut off the fund easily.
They don’t trust Nepalese govt. elected by the Nepalese but still want to work in Nepal… What’s the point?

Some politicians trying to get this passed through parliament no matter what – what’s their motive? Expecting corruption or they have got their share already?
Or they genuinely think that this will give enough boost fr the development of Nepal – less possible but still possible.

There is so much debate going on and its creating a conflict within people of Nepal. In that case, why is it being forced (kind of) to accept it? Even this grant is not that much – 10 arba per yr. (Remember about 10 arba already spend within few months in Nepal to fight against COVID19)
Why can’t they easily say – look this is creating a lot of problem in your country, let’s amend these points and make it easy. Or lets cancel this project for now.
Is it like, ‘they’ don’t want Nepal to be the part of BRI only? In that case, this fight will go on for some time.

For developing country like Nepal, 500 million USD (60 arba) is the good sum of money for some projects.
But we need to understand that, 60 arba will not come in a single year, it’ll be around 10-12 arba per year.
Again, Nepal has already spent about 10arba to fight against COVID19.
10 arba is just about 0.68% of fiscal year 2077/78

Its hard to accept that the fund is being given without any motive. especially USA
As I already mentioned before, it seems like USA wants to counter the BRI anyhow.

Also important to note that David J Ranz, assistant secretary for South Asia at the US State Department, during his Nepal visit in May last year said that the MCC was a crucial part of the Indo-Pacific Strategy (IPS).
This has created a huge controversy since the U.S. itself has defined IPS as a military project and Nepal has a strategy to not get involved in any military activities with any country.

You might be interested in this: https://www.state.gov/wp-content/uploads/2019/11/Free-and-Open-Indo-Pacific-4Nov2019.pdf

MCC can be very productive if our government is clever enough to deal and assess a few things:

  • There should be a written contract that MCC is not at all part of IPS and Nepal will not be obliged to follow/sign any contracts with IPS.
  • All the projects built within the given period should be handed to the Government of Nepal without any further commitment to anything.
  • In case of conflict between MCC and the Government of Nepal, Law of Nepal will be applicable to any of the conflicted matter,
  • Compensation should be provided to the people of affected areas by both The Government of Nepal and the MCC
  • While building any infrastructures, effect to environment should be taken care of
  • As much as possible, workers from Nepal will be used in the project at any level (engineers, laborers, auditors etc).
  • Nepal should not be obliged to share the built project with any organization or country
  • After the end of the contract period, MCC should return fully.