Editorial | After MCC Compact ratification, a lot to reflect on and learn for Nepal 

The MCC's Nepal Compact had to be ratified by parliament and it did. The focus now should be on its speedy implementation but there is a lot to learn as well.

Lawmakers including Prime Minister Sher Bahadur Deuba raise their hands to endorse MCC Compact during a voting held at a Parliament meeting. (File photo/RSS)

NL Today

  • Read Time 4 min.

This may be the first time in Nepal’s history that an infrastructure development grant project was excessively politicized and made a victim of misinformation and disinformation.  This may be the first time in Nepali history, it appeared, that attempts were made to use a grant project as the tool to divide the Nepali society—from the political level down up to the people’s level. But, in a way, this episode has also become a history.

With parliament ratifying the Millennium Challenge Corporation’s $500 million Nepal Compact on Sunday,  politics of division staged in its name is expected to end. For the moment it must have alleviated misgivings and doubts the people had about the Compact, especially after intense deliberations in parliament based on facts. It was unfortunate that misinformation came to define a purely bilateral development partnership between Nepal and the US, with which the country enjoys smooth and friendly relations for over seven decades. Now that the much-debated Compact has been through parliamentary tests, the government, MCC and other stakeholders have much to reflect on, learn lessons and ensure that the transmission lines and road maintenance projects of the Compact are implemented without delay and completed on time. 

Needless to say, the first thing to do for MCA-Nepal and the government is to expedite the implementation of the projects without any delay.  One reason why a section of Nepali society has consistently supported the MCC project is because of its time-bound project completion plan.  That a national pride project can be accomplished within a five years period is a matter of disbelief for many Nepalis because most of the national pride projects in Nepal have taken years, even decades, to accomplish. The Melamchi project is a notorious example in this regard.  The project that was supposed to be completed by 2006 ran for nearly two decades and yet it has not been completed.  If the road maintenance and transmission lines construction works funded by the MCC get accomplished within five years, it will not only create a new history in Nepal’s infrastructure development but also set an example and hope that it is possible to complete the big projects on time.  This, in the process, will also dispel  all the misgivings and doubts people may have about the project.

The rigmarole on the MCC Compact of the last three years, which was unfortunate by any standard, also has a lesson for Nepali politicians, as well as the development partners.  Part of the reason why MCC became a subject of controversy was that the debate was not focused on the substance of the Compact. It was rather guided by what was not in the Compact. The allegation, for example, that it is a military strategy targeted against Nepal’s neighboring country and it undermines our sovereignty were based on hearsays and misinformation.  If the political parties and the stakeholders had done proper homework before signing the Compact, or if they had discussed the merits of the Compact back then, it would not be much debatable. Likewise, if the political parties had focused on the substance of the Compact, the kind of solution they forged out on Sunday—rarifying the Compact along with its ‘interpretive declaration’–could probably have been found much earlier. The US side too created a ground for confusion when some of the officials connected the financial assistance under MCC to Indo-Pacific Strategy (the MCC headquarters has officially dismissed it). For smooth implementation of such a national project, better communication strategies are equally important to ensure that people are told the truth and they are not misled. 

Nepal’s Minister of Finance Gyanendra Bahadur Karki, seated left, and acting CEO of Millennium Challenge Corporation Jonathan Nash, seated right, sign the Nepal Compact, as Joint Secretary at the Nepal Ministry of Finance Baikuntha Aryal, standing left, and U.S. Deputy Secretary of State John J. Sullivan, standing right, look on Thursday, Sept. 14, 2017 in Washington. (Photo by Steve Ruark for MCC)

The MCC Compact was unnecessarily dragged into geopolitics, especially because of the apparent lack of diplomatic sensitivity among the Nepali political actors. The war of words between the US and Chinese officials over the Compact, which was in Nepal’s parliament for deliberations, raised the fear of geopolitical trap, something that Nepal should always avoid. Nepali actors should be able to clearly tell its development partners–such as the US, China and India–that taking development assistance, whether grant or loan, from one country does not make it an ally of that country and an opponent of another. Therefore, the impression that Nepal ratified the MCC Compact and as such it is moving to American orbit, away from India and China, is fraught with exaggeration. Nepal is a signatory to China’s Belt and Road Initiative (BRI) as well and enjoys assistance from India in several development projects. MCC ratification should open an avenue for Nepal to concretize the infrastructure projects that have been listed under the BRI but on which the progress is literally nil. 

One major lesson that Nepal should learn from the MCC episode is that the more we politicize the foreign grant project the more it will delay Nepal’s development prospects. In the process, it will also erode Nepal’s credibility among the international community.  What happened with the MCC Compact should not happen with any development projects Nepal may run in assistance with the development partners.

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