MCC is Against the National Interest of Nepal-Sameer Budhathoki ‘Mukti’

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‌Introduction of MCC
At a meeting of the Inter-American Development Bank on March 1, 2002, President George W. Bush called for a new agreement on responsible development for both rich and poor countries. He pledged to increase development assistance by 50% by fiscal year 2006 (double that of 2004 and double that of 2006 by 2010). It is driven by very different and sometimes contradictory goals from other development programs like USAID, which are often the result of political pressure.

The MCC was authorized in 2004 with bilateral support.Its guiding principles are as follows.
‌Competitive Selection: Before any country qualifies for assistance, the MCC board tests its performance on independent and transparent policy indicators and selects compact-eligible countries based on policy performance.
‌Country-led solutions: The MCC needs countries to identify priorities to achieve sustainable economic growth and poverty reduction. Countries develop their MCC proposals in broad consultation within their societies. MCC teams then work in close partnership to help countries refine their program.
‌Country-led implementation: MCC administers the Millennium Challenge Account (MCA). When a country is awarded a compact award, it sets up its own local MCA Accountability Unit to organize and oversee all aspects of implementation. Monitoring of funds is rigorous and transparent, often through independent financial agents.

To be eligible for MCC grants, these countries must meet strict eligibility criteria, as the amount depends on governments committing to democracy, investing in their citizens and economic freedom. MCC is based on the premise that free market policy and economic development are not linked to democratic principles. Can’t succeed Since its inception, the MCC board has approved 37 compacts worth 13 billion for 29 countries by 2019.

Nepal’s participation in MCC:
During Sher Bahadur Deuba’s tenure as Prime Minister, in September 2017, the then Finance Minister of Nepal Gyanendra Bahadur Karki and MCC Executive Chief Jonathan Nash signed the MCC agreement in Washington. The US government agreed to provide $500 million in grants, while Nepal agreed to invest $130 million in the project, which prioritizes energy and roads. This was the largest grant Nepal has ever received. Nepal is the first country in the whole of South Asia to complete 16 out of 20 in the MCC’s policy index. As per the agreement, the amount will be spent on setting up 400 KV transmission line in Lapsiphedi-Galchi-Damauli-Sunwal Power Corridor. The funds will also be used to establish three substations along the route for infrastructure to connect to the cross-border transmission line with India at Rupandehi. Under the MCC Compact, about $130 million will be spent on repairing about 305 kilometers of roads on the East-West Highway.
MCC controversy:
The MCC was generally seen by the US government as an aid to Nepal’s road improvement and energy development! There was not much controversy over the MCC, but during a visit to Nepal in May last year, US State Department Assistant Secretary of State for South Asia David J. Ranj said that MCC was part of Indo Pacific Strategy .Most of the top leaders of the ruling NCP demanded the opinion of the US government expressing that Nepal would not be able to participate in a military strategy that would look like a military alliance if the MCC was part of the US military strategy.

How is MCC against the national interest of Nepal?

At a glance, the points signed in the MCC are horrible and against the national interest, even though it may be superficially understood as assistance for road upgrading and energy promotion in Nepal.

1.According to the clause 3.2 (f) of Article 3 The United States shall have full rights over all intellectual property, according to which the United States shall have full rights in the development or excavation of non-existent objects while working on this project.
2.According to the clause 3 (8) (a ) of Article 3 The project audit can only be done by a US company, according to which Nepal will not have transparency in the accounting of 130 million invested in this project and all rights will be vested in the United States of America .
3. According to the clause 7 (a) of Article 5 after the implementation of the agreement mentioned in the present agreement and in conflict with the national law of Nepal, the proposed agreement will be implemented according to which even if the project is operated in Nepal, Nepal’s constitution, law and act will not apply over MCC .
4.When the Government of Nepal has to deploy any state body in the project, it has to get the approval of the MCC, according to which the MCC project will not be under the Government of Nepal and will be above the Government of Nepal.
5.Schedule 4 (a) – The Government of Nepal must send a plan to satisfy the MCC and such a plan must be supported by the Government of India – This means that even if the project is to be carried out on Nepalese territory, India’s support must be sought for which disrespects Nepal’s independence and sovereignty.

At the same time, the Indo-Pacific strategy is a strategy to encircle neighboring China and the military strategy put forward by China at the counter of the economic cooperation project Belt and Road Initiatives . If Nepal, which is pursuing a non-aligned foreign policy, falls into the trap of a military strategy in the form of economic aid, it will have an impact on Nepal’s geopolitics in the long run and will become a playground for foreigners like Iraq, Afghanistan and Syria has suffered . $500 million is only about 2.9 percent of Nepal’s total budget (2020/21). The present and future of Nepal and Nepalese should not be traded off just for the sake of 2.9 percent of the total budget! Today, the MCC has entered into the policies and programs of the budget, tomorrow it will enter into our economy and in the future towards independence and sovereignty of the country.Incase, MCC is necessary for Nepal it has to reconcile the above mentioned points, otherwise let’s uproot it from the grassroot level and dismiss it.
(The author is ANNISU leader ( Student wing of Nepal Communist Party and scholar of International relations )