US Assistant Secretary of State for South and Central Asian Affairs, Donald Lu visited Kathmandu for a two-day trip on November 17, 2021 similarly Deputy Assistant Secretary for South and Central Asian Affairs, Kelly Keiderling also visited on 18 November 2021. Before this high level visit MCC vice president Fatima Sumer also paid visit to Nepal. During their visit they officially met P.M. Sher Bahadur Deuba, Leader of the opposition and former P.M. K.P. Oli, Leaders of partners of the coalition government and former P.M.’s Madhav Nepal, Puspa Kamal Dahal and high level Nepali leaders and intellectuals. According to Nepali media, it is said that they have warned Nepali leaders to ratify MCC compact from the parliament before 14 December 2021 otherwise it will moved to other countries which was a diplomatic thereat.
What was MCC?
American President George W. Bush called for a new compact on March 14, 2002 for development with accountability for both rich and poor countries. The US Congress approved legislation for the establishment of MCC in 2004. The MCC was formed with the objectives of – to reduce poverty through economic growth.
MCC and the Domino theory
The domino theory was a Cold War policy that suggested a communist government in one nation would quickly lead to communist takeovers in neighboring states, each falling like a perfectly aligned row of dominos. During Cold War, to contain communism in South East Asia , USA sent military and increased their presence under JFK- Domino Theory.
This theory was practiced in Europe as well as in Asia, South –East Asia during cold war.
After the defeat of Germany in World War –II, Communist ideology became popular in Poland, Hungery, Bulgaria and Rumania. Fear of Communist ideology made the westerns to curtain Russia in Europe thus Germany was divided. Similarly to curtain communism in Asia, USA partitioned Korean Peninsula and Vietnam. Vietnam War was the proxy war against Communism. In August 1964, US congress passed the Gulf Tonkin resolution- USA officially involved in Vietnam War. But the Tonkin incident was Fake. USA, anyhow want to curtain communism in South –East Asia to prevent Japan, South Korea, Thailand, Malaysia, Singapore and other ASEAN countries.
When Communist Leader Xi Jinping became the President of China, he had forecasted his two major policies- China dream and BRI. Foreign policy adopted by President Xi became popular and successful thus traditional competitor Russia became close friend of China. China supported Russia during her economic crisis. Xi- Putin friendship made USA to curtain China and her policy- BRI. USA tried to encircle China in Hong Kong, became failure. Tried to play from Afghanistan again became failure, thus concentrated in South Asia in the name of Indo-Pacific strategy.
In Nepal, after the fall of Monarchy in 2006, communist became the ultimate power in Nepal. In the last election Communist Parties of Nepal won two-third majority in the parliament. Two major communist parties became united and formed CPN which was the concern of USA. Likewise, the South Asian countries Sri-Lanka, Bangladesh, Maldives and Pakistan, used to be a satellite state of India, came closer to China. Nepal, the one and only country left in South Asia became communist dominated country. From that date USA is pressurizing Nepal to ratify MCC compact form the parliament to get space in Nepal, a part of US strategy curtaining China in South Asia, according to the domino theory.
How it started in Nepal
The then joint secretary of Nepal Baikuntha Aryal and Jonathan Nash, acting chief of the MCC signed an agreement in September 2017 (witnessed were Gyanendra Bahadur Karki( the then finance minister ) and John J Sullivan (US Deputy Secretary of State). The US government agreed to provide $ 500 million in grants while Nepal have to put $130 million for the project of energy and roadways which was again signed during the meeting of Nepali Foreign Minister Pradeep Gyawali with US Secretary of State Mike Pompeo.
Why it became controversial
The Indo-Pacific Strategy Report clearly says that support under the compact is a part of IPS. The MCC compact doesn’t say it needs to be ratified by Nepali parliament. The text of agreement says that provision in the compact will prevail over Nepal’s existing laws in the case of conflicts, which requires parliamentary ratification, according to the Nepal Treaty Act. The MCC is the first grant agreement that requires parliamentary approval.
America’s Indo-Pacific Strategy, together with MCC are seen as a concern for Nepali national security. Indo-Pacific Command designated India as a major defense partner. Malabar exercise and revival of Quad is the example of Indo-US partnership. MCC, a part of IPS not only affects Nepali neutrality but also encourages military engagement in the region.
Intellectuals, academicians and political leaders are fully concentrated in a debate regarding the adoption of the $500 million American grant project under the Millennium Challenge Corporation (MCC). CPN (Maoist Centre) and its leadership clearly divided in two groups about the ratifying the MCC Compact.
Among the political parties, the Nepali Congress is of the view of adoption the project as early as possible. However, the CPN UML is divided on accepting the American grant. Bhim Rawal (UML) Mani Thapa, Lilamani Pokhrel, Dev Gurung and others from the Maoist Centre are the strong critics of the MCC. They have remarked that MCC is an organ of the Indo-Pacific Strategy (IPS) an American military alliance against China. Therefore, Nepal, a non-aligned nation, should not join any military pact.
Nevertheless, the American diplomats and senior officials during their Kathmandu visit had confirmed that MCC is an organ under the IPS; however, they have claimed that IPS is not a military alliance aimed at any country.
Intellectuals are of the view that intention of the donor country should be clear. Nepal should adopt such grant projects under the guidelines of the constitution and other existing laws. The MCC project, after endorsement from the Federal Parliament, will itself be a part of the law and will remain above the existing laws of the country.
So, in this condition, Nepal should not accept this grant project.
According to the grant proposal, audit of the projects under MCC should be conducted by the American companies only. Firstly, Nepal should invest on the project under MCC and MCC-Nepal will reimburse the fund later. During the time of reimbursement, the Americans may put some conditions like security concern. In the name of security they may came to Nepal and permanently settled here.
Not only the Political leaders but the ordinary Nepali Citizen also believes that Nepal is going to handover its ownership to the Americans through this project. Majority of Nepali citizens say that Nepal should not exchange its sovereignty just for US$ 500 million.
In this very time when a debate was going on, government should follow its standard foreign policy and not to hurt its immediate neighbour by developing strategic alliance with other countries.
Result after Ratification
The MCC project, after endorsement from the Federal Parliament, will itself be a part of the law and will remain above the existing laws of the country which is the major concern for independent and sovereign nation like Nepal.
MCC is the project aimed to continuing American dominance. Firstly, MCC was introduced in South Africa when Chinese investment was intensified there. After then it designed for other smaller but strategic countries to influence them. So, Nepal should aware of ground reality, not align with any of the countries. Nepal should not be projected as the playground for international actors. Balanced and equidistance policy are the foundation of our foreign policy. Nepal has no other options except following our standard foreign policy. This is our geographical compulsion.