Ruling Nepal Communist Party (NCP) leaders look headed toward scuttling the 500 million dollar American grant largely on the basis of misinformation and rhetoric. NCP has remained a divided house on Millennium Challenge Corporation (MCC) grant assistance of the US government. While a section of leaders, mostly representing former UML, has stood in favour of endorsing MCC agreement from the parliament, those aligned with former Maoist faction seem resolutely opposed to the idea. It was hoped that the task force formed by NCP to study the matter and make the recommendations to the government would come up with the needed solution. It did not. As a matter fact, the task force, which submitted its recommendations to the government on February 21, seems to have made the matters worse, when it suggested that the government should not endorse MCC without revising the contract. The government has been hesitant to even start deliberations on MCC after the task force submitted its report.
It is already nine months since the agreement was registered in the parliament for discussion. It had to be endorsed by September last year. But we are already running five months behind the schedule. Meanwhile, parliament’s winter session is likely to be prorogued by mid-April as budget session is expected to commence from May, which is unlikely to discuss non-budgetary issues, which means the MCC might not feature as the agenda for the discussion in the parliament within a month. The debate on MCC started rather late in Nepal but when it did, political parties started to take side without delving into clause-wise discussion based on information and logic. Some of the leaders within the NCP have equated this grant assistance with the American ‘design’ of forming a military alliance to ‘encircle’ China. Others have gone to the extent of saying that endorsing MCC will be tantamount to allowing the US to station its military base in Nepal. Such unfounded rhetoric has only helped to raise unnecessary suspicions.
Meanwhile, Americans seem to be upset and they even seem to have reached a conclusion that ‘if Nepal does not want to take it, so be it.’ Nepal has almost completed four other pre-conditions including reaching agreement on modality with India on cross-border transmission line, including the MCC projects on the list of national pride projects, finalizing subsidiary agreements and forming a regulatory commission, according to the Millennium Challenge Account Nepal (MCA-Nepal), the entity established by the government to implement the MCC compact. Sources say that the US will withdraw the grant if Nepal fails to implement the entry of force of the grant within the given deadline. It would be a mistake on their part if the government ministers and ruling party leaders turn this huge assistance away just to prove their revolutionary credentials. The government needs to be smart enough to make its position clear on MCC with the Americans and discuss any outstanding concerns they may have in true spirit of friendship. With the spectre of global recession looming, Nepal will need more foreign assistance for infrastructure development in the days to come. It would be foolish to scuttle this American assistance just because certain leaders think otherwise about it.