Commentary | What does the Maoist Center want in MCC’s Nepal Compact?

As Maoist MPs continue to harbor doubts about the $500 million Nepal Compact, experts say they need to make their position clear indicating that sustained opposition to the grant will have a bearing on Maoist Center's relation with the US.

US Assistant Secretary of State Donald Lu, Maoist Center Chair Pushpa Kamal Dahal and US Ambassador to Nepal Randy Berry at Singha Durbar, in Kathmandu. Photo: Pushpa Kamal Dahal's Facebook

Mahabir Paudyal

  • Read Time 7 min.

As the Millennium Challenge Corporation’s Nepal Compact lies in limbo due to the failure of the political parties to give it a parliamentary ratification, Nepal Communist Party (Maoist Center), and its Chairman Pushpa Kamal Dahal ‘Prachanda’, is being singled out as a spoiling force to the realization of MCC’s $500 grant offered to Nepal for transmission lines construction and road maintenance projects.

Two recent visits to Kathmandu by American officials—MCC Vice President Fateme Z Sumar in early September and the US Assistant Secretary of State for South and Central Asian Affairs Donald Lu this week—were focused, among other things, on seeking assurance from Nepali political parties, Maoist Center in particular, to ratify the Compact from parliament.

On both occasions, Maoist Center fell short of commitment and instead gave a conflicting message that the party would make a decision after further deliberations. To Lu, Prachanda is said to have rooted for building a national consensus to push the deal. Maoist leadership, however,  has not elaborated what it means by ‘national consensus’ and how it could be achieved.

Meanwhile, many in the political as well as civil society circles have faulted Maoist Center and its leader Prachanda for deferring the Compact ratification. They argue that the sovereign parliament is the place to seek national consensus on the Compact, if at all.

[Related: What will Nepali Congress do about the MCC Compact?]

Main opposition CPN-UML, while itself appearing to give a conflicting message after being dislodged from the government in July this year, has openly accused Maoist leadership for the MCC debacle.

Talking to Nepal Live Today early last week, Ishwar Pokhrel, General Secretary of CPN-UML, accused Prachanda of obstructing Compact ratification. “Prachanda played a dubious and double role in MCC,” he said. “He would say one thing to the American ambassador to Nepal, quite another thing to us and then quite a different thing to the public.” According to Pokhrel, Prachanda, in a meeting with the US ambassador, assured the latter that he would get the MCC ratified after the fall of K P Sharma Oli-led government. He even accused Prachanda of asking for the support of the US ambassador to help him become the PM.

Pushpa Kamal Dahal and Fatema Z Sumar meet in Kathmandu during the latter’s visit to Nepal in September.

Pokhrel is but one among other UML leaders to point to Prachanda for the MCC debacle.

In an earlier interview with Nepal Live Today, another CPN-UML leader Rajan Bhattarai made similar accusations. He accused the Speaker of House of Representatives Agni Sapkota and his predecessor Krishna Bahadur Mahara of not tabling the Compact in parliament for discussion. “We got it [MCC Compact] approved from the cabinet and forwarded it to parliament for the necessary process for ratification…But the Speaker never included it in parliament’s business,” said Bhattarai. “Neither incumbent Speaker Agni Sapkota nor his predecessor Krishna Bahadur Mahara was in favor of tabling the Compact for ratification. This is the reason why we could not push the MCC when we were in power.” 

According to Bhattarai, both Mahara and Sapkota refused to present the Compact for parliamentary ratification because Prachanda would not allow them to. “Outside they are creating the narrative of national consensus on MCC but they clearly told us that they would push MCC only if Prachanda gave them a nod,” Bhattarai said.

Since the Compact was registered in parliament for ratification in 2019, Maoist Center leaders have presented themselves as its steady opponents.

Experts say that the position of opposition taken by the Maoist Center and its leaders is not only intriguing but it could also jeopardize the international image of the party.

The Ministry of Finance, currently headed by Maoist Center leader Janardan Sharma, wrote a letter to the MCC headquarters seeking clarification on the ‘disputed points.’ After the MCC’s clarification, the US side appears to be raising the concerns about Compact ratification with Nepali political parties, with urgency.

Maoist Center, as usual, has been non-committal and dithering. 

Maoist MPs doubt 

While Maoist Center leadership is either vacillating or sending conflicting messages, the MPs from the Maoist Center argue that the ‘disputed points’ of the Compact should be either removed or amended before it is ratified. Kamala Roka, the House of Representative member from the Maoist Center, said that the Compact should be ratified by first building a national consensus around it, reiterating that it is their official position so far. “Comrade Prachanda has clearly said that the MCC Compact should be ratified by building national consensus on it,” said Roka.

Roka argues that the Compact should be ratified in line with the recommendations proposed by the task force formed by then Nepal Communist Party (NCP) in February, 2020.  “I think we need to move forward with the MCC compact by accommodating the recommendations of that task force,” she added.

The NCP had formed a three-member task force to study the Nepal Compact. It submitted its report to then NCP co-chairs—KP Oli and Pushpa Kamal Dahal—on February 21, 2020.

“There is room to doubt that the MCC grant is purely an economic aid. If this was an economic project, why would it have to be endorsed by parliament?” she asked. “It’s no good blaming the Maoist Center. The focus should be on seeking better clarity on the Compact.”

Chudamani Khadka, another Maoist MP, argues that the Compact is detrimental to Nepal’s national interests. “There are such issues in it which are directly related with our national interests. Why would there be such a debate and controversy if it were related only with Nepal’s development and job creation for Nepalis?” said Khadka. According to him, Nepal would immediately ratify the Compact if it was related only with Nepal’s development and job creation.  “We seriously think that there could be some hidden interests in it.”

[Related: What will Nepal lose if the MCC is not given a parliamentary nod?]

Khadka, however, is not in favor of rejecting the Compact. “We need to take the MCC grant but by making it more favorable to Nepal’s interests, after removing the disputed clauses from the Compact.”

When asked if the clarifications offered by the MCC to the government of Nepal were not enough, he counter-questioned: “If so, why would the controversy still persist? Civil Society, intellectuals and political leaders are still raising questions about it. They are still saying that the Compact needs to be amended.”

According to lawmaker Chand Tara Kumari, the party still believes that the MCC should not be endorsed in its current format. While revealing that Speaker Mahara had not presented it in parliament to allow further discussion and debate on the Compact, Chand Tara said that political leaders, including the Maoists, first need to educate the people why Nepal must accept it. “Let there be more discussion. Let the general public know that it has only economic interests.”

Indu Kumari Sharma cautiously defends the Compact. “You should not understand it as the party opposing everything about the MCC grant. The party is only seeking clarity on some of the points which have become a matter of debate.” According to her, the top leadership during the meeting with them says that until and unless the disputed points in the Compact are amended the party will not stand in favor of endorsing it from parliament. “This is what chairman Prachanda also says.”

Come clean, say experts

Experts say that the position of opposition taken by the Maoist Center and its leaders is not only intriguing but it could also jeopardize the international image of the party which entered the mainstream democratic politics after the end of the armed revolt in 2006. Binoj Basnyat, geopolitical and security analyst, said that politicization of development grants by the US will finally have a fallout on political trust and reflects poorly on Nepal’s diplomacy. “This, in turn, will have a detrimental impact on our development aspirations,” said Basnyat.

[Related: What lies behind the politicization of MCC?]

He argues that if we raise unnecessary controversy over the MCC grant, other donor countries and development partners will also be alarmed. According to him, Prachanda’s claim that there is a variation between the earlier draft and the current draft of the Compact with regard to parliamentary ratification is guided by misinformation and disinformation.

“We really need to be concerned about the way the whole issue has been politicized. Politicizing the development initiative will have an impact on the Maoist Center’s relation with the US or the way the US is viewing the Maoist party,” he said.

So what should the Maoist Center do? “They need to say clearly if they want to accept it or not.  The Nepal government signed the deal with the US government agency. How can they now disown something which the government of Nepal earlier accepted?” 

Lokraj Baral, former ambassador and foreign policy expert, contends that neither Maoist Center nor Nepali Congress has come clean about the MCC. “I wonder why they are thinking too much about the MCC. The MCC project is all about building transmission lines and maintaining roads,” he said. “Maoist Center needs to make its position clear but they are not doing so. Prachanda promises with the visiting American officials that he will build a national consensus on the issue but he does not seem to be working to do so.”

[Related: No more dishonest rigmarole on the MCC grant: Let parliament decide its fate]

Political analyst Hari Roka is of the view that both American and Nepali sides are politically motivated on the MCC Compact. “Americans seem politically motivated on MCC, and Nepali side also got politically motivated in its response,” he said.

Roka believes that the government as well as Maoist Center need to come clean about the Compact. “Perhaps the Chinese raised objections about the MCC thinking that it is a strategy to contain them. They could have asked the Maoist Center to be cautious about it. The Chinese believe that it is a part of America’s Indo-Pacific Strategy,” Roka said.

Commenting on the possible geopolitical dimensions, Roka said our development cooperation with one major power should not put us in a difficult situation in our relation with another major power. “Nepal cannot afford to worsen its relation with China by standing with India and the US. Nor can it afford to dampen its relations with the US and India by standing with China. We need to understand this geopolitical reality,” he said.

Roka, however, agrees that political parties must come clean about the Compact and should not put it in uncertainty anymore. “Those standing in favor of MCC need to tell the people how it benefits Nepal and those who are opposed to it should also come up with facts and logic to prove it is against Nepal’s interests,” he said. 

But what should the Maoist Center, in particular, do? 

“Of course, the Maoists need to make their position clear but so should the UML,” said Roka. 

“Until recently UML were vocal advocates of MCC. Why are they changing their tone now? Why were they in favor of MCC when they were in the government? Why do they not stand in its favor now?”

Postscript: Maoist Center was a coalition partner in the Nepali Congress-led government that signed the Compact with the MCC in 2017. Today its leader Janardan Sharma heads the Ministry of Finance, which wrote a letter to the MCC headquarters to which the MCC responded with clarifications. The Secretary of the Ministry of Finance serves as the chairperson of MCA-Nepal Development Board. MCA-Nepal oversees the MCC projects in Nepal.