Geopolitics of MCC

The history of modern Nepal, which came into existence in 1769, is full of struggle for independent national existence. Nestled in the Himalayas and known as “a yam between two boulders”, Nepal has successfully survived even as a fragile state till date.

But in the words of Bill Gates, success is a lousy teacher and it seduces smart people into thinking they can’t lose. The time has come to demand everyone who loves Nepal to take a hard look at the traditional balancing game between India and China to escape the pretty pass with the growing and unstoppable US’s footprint.

The recent four days visit of Fatema Z Sumar, the Vice President of Compact Operations at the Millennium Challenge Corporation (MCC), has thrown the compact and agreement signed between the US and Nepal further into the public eye.

The recent four days visit of Fatema Z Sumar, the Vice President of Compact Operations at the Millennium Challenge Corporation (MCC), has thrown the compact and agreement signed between the US and Nepal further into the public eye.

Kathmandu seemed crowded overnight coinciding with Sumar's visit. It’s said that some influential Indians including Ram Madhav, former general secretary of India’s ruling party Bharatiya Janata Party and Sandeep Rana, the private secretary of Indian home minister, made a secret visit to Kathmandu during Sumar’s stay. Their stances over MCC, however, weren’t made public.

Willy-nilly China was entangled too. Arun Kumar Subedi, a Nepali foreign affairs expert, groundlessly accused China of unofficially backing anti-MCC debates and protests, arguing that Nepalis rooting for China were against international democratic system.

Will MCC make established and emerging powers jostle with each other in Nepal?

China targeted

While some party leaders use US's MCC as a political weapon to further their own interests, many a favourer of MCC takes China’s Belt and Road Initiative (BRI) as a shield to repulse unending questioning and intense criticism over MCC.

Some say, “If Nepal can be part of BRI, there is no harm in accepting MCC.” Others insist that if Nepal rejects MCC, BRI should be denied too.

Fatema Z Sumar herself, according to a video available on social media, belittled and even treated BRI as mud saying that MCC compacts are a cent percent grant from the American people to Nepali citizens. The grant will not have to be repaid. China's BRI, however, are debt-based loans with a complicated repayment structure.

The American lady concluded, “It's a mistake to link these two with key fundamental differences.”

Against the impression that Nepal and the US are old friends, the US has been misleading, even cheating, Nepal on MCC issue. In a recent interview with AP1 television, Randy Berry, the US Ambassador to Nepal said, “The allegation that the compact will supersede Nepal’s own laws is completely false.” Echoing the same, Sumar during her stay in Kathmandu reiterated that “MCC is not threat to Nepal’s sovereignty”.

Written provisions of the compact speak louder than false promises and explanations. For instance, Section 7.1 of the compact signed on September 14, 2017 in Washington clearly reads, “The Parties understand that this Compact, upon entry into force, will prevail over the domestic laws of Nepal.”

The first and most significant distinction between BRI and MCC is that the former has no strings attached while the latter too many. It convinces the eagle-eyed public to refuse to buy the smooth quibbles like "MCC has no hidden agenda."

As per some observers, BRI accelerated the US’s steps to provide the grant to Nepal. Nepal signed BRI agreement with China on May 12, 2017. Less than five months later on September 14, Nepal made the MCC compact with the US after waiting for five years.

Normal and healthy competing connectivity projects among Trans-Himalayan Transport Network under BRI, cross Nepal-India border transmission lines and maintenance of strategic road networks offered by MCC, and all such projects under India’s “Neighbourhood First” policy is popular with Nepal that is in dire need of donation as well as investment for growth.

But the spiteful agenda contained in those contentious and unequal clauses in the MCC compact and agreement have frightened many sober Nepalis who believe that MCC, as the tool of Indo-Pacific Strategy (IPS), aims at putting the close neighbour China at a tight corner.

But the spiteful agenda contained in those contentious and unequal clauses in the MCC compact and agreement have frightened many sober Nepalis who believe that MCC, as the tool of Indo-Pacific Strategy (IPS), aims at putting the close neighbour China at a tight corner.

Since the ratification through the parliament means Nepal will get US$500 million assistance from the US at the price of the national’s sovereignty, Nepal’s stability, a key factor to attract foreign direct investment from China, and its ability to adhere to one-China principle may end in disaster.

How? The section 2.5 “Social and Gender Integration Plan” of the 2019 agreement says, “MCA-Nepal will develop a comprehensive social and gender integration plan.” Under this plan, MCA-Nepal “identifies approaches for regular, meaningful and inclusive consultations with women and other vulnerable and/or underrepresented groups.”

According to Prof Yubaraj Sangroula, the former Attorney General of Nepal, the inconspicuous soft projects that indirectly serve American interests, will get nearly US$ 200 million from the whole US$ 630 million with US$ 130 million contributed by Nepali government.

Consequently, reactionary Tibetan refugees living in Nepal and India and NGOs and INGOs supporting them will definitely create big trouble for China with huge support from the MCC, which is so powerful that “no decision of MCA-Nepal is modified, supplemented, unduly influenced or rescinded by any governmental authority,” according to the Section 1.3 Role of MCA-Nepal of the 2019 agreement.

India’s dominance challenged

When it comes to India, the country's personality is quite unique in South Asia. Prime Minister Narendra Modi asserts that India can serve the earth as a global guru. But what type of character does India display to the rest of the world?

India is a land of fantasy, illusion, and superstition. As a regional power, India aspires to be a superpower by following the US’s footsteps.

Ironically, India’s role as a regional force in South Asia is declining steadily. India imagines the US to be its ally but the US makes India fetch and carry by inciting it to counter China as well as cajoling it into purchasing costly weapons.

What happened to India's influence in Afghanistan after the US’s abrupt withdrawal? India has almost lost all its influence there while Pakistan, India's great rival, has gotten a good hand.

In Nepal, it is understood that India and the US are collaborating to promote MCC. Does this imply that India is so fragile that it requires the US’s assistance to combat China's presence? Can India still be called a regional power if this proves true?

In the past, Americans viewed Nepal through the lens of Indians and they even outsourced its Nepal policy to Indians. India enjoyed the state of “controlled instability” in Nepal where it could guide Nepal for few decades.

But the situation will go wayward with the sea change brought forth by the MCC, the largest game changer in Nepal’s geopolitics.  

The Indian government desires for the advancement of Eastern civilization. But the Hindu religion may face difficulties in Nepal thanks to the endorsement of MCC. The current Indian administration opposes Nepal's secular practice. Given that the US's preferred religion is Christianity, has India seen the danger that lies ahead?

By persuading Nepal to pass the MCC agreement, the US has made it clear that it intends to be a decisive player in the Himalaya region.

By persuading Nepal to pass the MCC agreement, the US has made it clear that it intends to be a decisive player in the Himalaya region. A Chinese idiom says, “One mountain cannot contain two tigers.” If India continues its ostrich-like foreign policy, it has to throw in its hand in its backyard where its supremacy still enjoys borrowed boom.

The US selfishly obstructs cooperation between China and India in the region or across Asia. With MCC and IPS, the connectivity of the whole Asia Pacific region might be cut to the bone.

In fact, apart from the border problem, the two Asian giants--China and India--have no other disagreements. As the intersecting link, the Eastern civilization lays the most important foundation for collaboration between Nepal, China and India.

Published on 20 September 2021