MCC in Nepal: Games Nations Play!

Published On: February 23, 2022 06:30 AM NPT By: Shanker Man Singh

The geopolitical confrontation between the US and China has been escalating since 2015 and Nepal is in a sensitive position in terms of geographical location. That is why we need to have a balanced relationship not only with India and China, but also with the United States.

Recently, the US Embassy in Kathmandu stated that it’s Nepal’s sovereign right to decide whether to approve the US-aid project MCC compact agreement. This is a good thing coming from the US authorities. The US embassy said in a statement recently that Nepal and the United States have a 75-year-old relationship and that the 500 million US dollar Millennium Challenge Compact (MCC) grant is a gift from the American people to Nepal. The partnership between Nepal and the United States will contribute to employment and infrastructure development in Nepal and improve the living standards of Nepalis, the statement said.

“The project has been requested by the Government of Nepal and the people of Nepal and is designed to reduce poverty and increase Nepal's economy in a transparent manner," the statement further said.

Disagreements are growing between the ruling parties over the approval of the MCC grant agreement.  

Earlier, Chinese Foreign Ministry spokesman Wang Wenbin said that Nepal's decision to form the MCC was an attempt to undermine Nepal's sovereignty and independence. While the Nepali Congress and Prime Minister Sher Bahadur Deuba himself are trying to reach a consensus on this issue, the government's statement seems ignorant.

It is to be noted that while the Chinese spokesperson responded by limiting Nepal's sovereign right to choose development projects for the benefit of the people and the country, no political party seems to have made its views public. Nepal's Ministry of Foreign Affairs has not yet commented - neither on the Chinese spokesperson's statement on the MCC nor on the US embassy statement.

Neighboring countries and development partners have provided development assistance to the international community to contribute to Nepal's economic growth and livelihood improvement. However, there is no doubt that such assistance should fully respect the will of the Nepali people.

On the other hand, as the violent protests against the MCC intensified in the streets of Kathmandu, the US Embassy in Nepal stated that "violence and incitement to violence is unacceptable." The US embassy's statement came in the wake of protests in the country against the MCC agreement. This statement was also seen on social media as made public by the Ministry of Home Affairs of the Government of Nepal. "We are strong supporters of fact-based freedom of expression and public discourse, including the MCC. The right to express one's views is inherent in democracy, and people should be allowed to share their views peacefully. Incitement to violence and violence is unacceptable."

The late Professor Leo Rose once said, "International factors have a strong and often decisive influence on the domestic politics of Kathmandu. The experience is given.

A cursory review of history reveals that although this is not the first time that Nepal has been embroiled in a world power dispute, there are those who believe that Nepal's kings have shown a way to resolve such disputes in a peaceful and effective manner.

According to the opinion of Nepali diplomats, no political party should inflame diplomacy with its internal behavior even if Nepal does not know how to display diplomatic behavior. Nepal should look at its diplomatic behavior so far. Especially since the Cold War, Nepal has continued to be non-aligned, enhancing and preserving its dignity. How to enhance the dignity of Nepal by studying history? Mutual animosity in domestic affairs, whether inside or outside the party, does not allow it to influence diplomacy.

Mutual animosity should be resolved within the country. He is of the opinion that everyone should think calmly about how to prevent diplomacy from being inflamed and how to improve it.

It is said that India should also be taken into confidence as the power transmission line will be laid from Butwal in Nepal to Gorakhpur in India when this agreement is signed. But the political parties are not satisfied with why India was brought in when the Nepal-US agreement was reached.

A section of the Nepali people is protesting against it. In doing so, Nepal is considered a supporter of the Quad Group in the United States, India, Japan and Australia, say some Nepali intellectuals. This is not good for Nepal's independent foreign policy. The big question is whether the agreement will be approved by parliament or whether the United States will withdraw its offer of assistance.

Meanwhile, referring to US Secretary of State Luke's telephone call and his push to pass the MCC agreement, China has called it "forced diplomacy" by the United States. This is China's first official statement on the MCC. Minister Lu warned that the withdrawal of the MCC would mean that US assistance would be interrupted by China. However, the US ambassador clarified that the US had not made any threats. The United States and China, which have been exerting internal pressure on the party leaders for some time now, will be able to strengthen their strategic interests when they openly step down. The House of Representatives has until February 24 to decide on the long-pending MCC agreement.

The US ambassador to Nepal recently reacted to this after some ruling party and other party leaders and activists chose the path of street struggle against the MCC. "We are strong advocates of freedom of speech and open debate based on facts. Our views on the MCC are the same," he said, “But ideas of violence or incitement to violence are not acceptable.”

On the same day, China also protested against the US for conducting 'forced diplomacy' in Nepal. The Chinese were already active in Nepal with the MCC. China's interest in the MCC project, which is being launched in Nepal, grew after the decision was made in 2017 to make the MCC a part of the Indo-Pacific Military Strategy (IPS).

With China’s autonomous region of Tibet bordering Nepal in the north and US interest in Tibet, China appears to be more cautious about economic aid and security in Nepal. It’s just that it has become more vocal in recent times. 

According to diplomatic experts, the recent shift in the balance of power in the world is related to the recent conflict between China and the United States. "Whether it's in their security documents or in their national security policy, the Americans have mentioned China's rise and the kind of structural challenges that China has been facing in recent times,”

The geopolitical confrontation between the US and China has been escalating since 2015 and Nepal is in a sensitive position in terms of geographical location. That is why we need to have a balanced relationship not only with India and China, but also with the United States.

Experts say that China and the United States, which have adopted a constitutionally non-aligned foreign policy and are able to make their own decisions. Whatever the statements of the US officials, they are of interest to Nepal and the US.

Nepal has the capacity to manage it on its own and give the necessary answers. China or anyone else should not worry. The move of China, India or any third country to speak on behalf of Nepal on other issues is to show unnecessary and inappropriate interest in Nepal's internal affairs. When the then Jawaharlal Nehru of India expressed concern over the security of Nepal, the protest made by the first elected Prime Minister of Nepal, Bishweshwar Prasad Koirala, is remembered here. In particular, Prime Minister Sher Bahadur Deuba should not compromise the national self-esteem.

The Nepali people were disgusted with the Indian government for showing undue interest in Nepal's internal affairs. A goodwill toward China is maintained as there is no undue interest in Nepal's internal affairs so far.

After China took control of Tibet, Nepal gave shelter to thousands of Tibetan refugees. Despite China's open dissatisfaction, Tibetan refugees have remained silent, promoting trade in Nepal. Similarly, India had long resolved the Kalapani border dispute diplomatically.

The imperial regimes never teased it with obscenity and Indian sentiments. Understanding India's security risks, the late King Birendra had directed to cancel the contract agreement for the construction of Kohalpur-Banbasa road with the financial assistance of the World Bank. As an independent nation, Nepal has the right to determine its own foreign policy and development policy. Nepal's freedom of choice is clearly limited by the needs of power politics.

Nepal's strategic location carries the scope of maneuvering within certain boundaries. These boundaries are determined, in practice, by the fact that India and China have a vested interest in certain circumstances. Of course, there are limits to Nepal's foreign relations. However, China cannot instruct Nepal on what to do or not to do in matters related to its development unless it gives instructions to any country.

The Government of Nepal, political parties and intellectuals must respond against the encroachment on our sovereignty. If the statement is objectionable, Nepal should respond diplomatically. Prime Minister Deuba has been in favor of getting the MCC approved by parliament from the beginning. But the ruling coalition has not been able to reach a consensus.

In particular, the leaders of the CPN (Maoist Center) and the CPN (Unified Socialist) do not seem ready to get the MCC approved by parliament, at least in the status quo.

As Nepal is the chair country of SAARC and a member of BIMSTEC, the United States believes that Nepal can play an important role in the Indo-Pacific region. Four months after the signing of the BRI, Nepal signed an agreement on September 14, 2017 on the MCC project in the United States to build a 400 kV high voltage transmission line and upgrade the road. Strategic and economic competition is going on between the US and China. We have seen trade wars and growing geopolitical, security rivalry in various fields that help Nepali intellectuals and political leaders to doubt that the MCC is just an economic project or that it has geopolitical interests. 

This is perhaps the first time in a seven-decade-long relationship with Nepal that the United States has been embroiled in controversy over the MCC.

If this is just a general economic project and it has no ill intentions, then why is the US pressuring Nepal to reach an agreement anyway? The United States has not been able to provide a credible answer to this question. The MCC project has become a national issue in Nepal and so has the need for clarifying the agreement.

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