Monday 27th May 2024
Monday 27th May 2024
गृहपृष्ठOpinionThe origins of MCC and its future in Nepal 

The origins of MCC and its future in Nepal 

On the morning of September 11, 2001, two jet planes crashed into the World Trade Center, turning the landmark Twin Tower skyscrapers into a hellish storm of ash, smoke, glass, and rubble. Within an hour, another jetliner crashed into the Pentagon in Virginia. The attack was deadly, killing 2,977 and injuring more than 6,000 people.

September 11 was the worst attack on American soil since Pearl Harbor, but more severe because it was aimed at civilians and happened during a non-war period. The day of September 11, now referred to simply as 9/11, dismantled the United States’ confidence in its sovereignty and security.

In his response to the attacks, then US President George W. Bush assured justice to his fellow citizens, saying that the United States would “hunt down and punish those responsible for those cowardly acts.” The speech he gave was as close to a declaration of war without actually declaring any war.

As a consequence, on October 7, the US waged war on Taliban controlled Afghanistan with an intense bombing campaign with the support of its allies like Britain, France, and Canada. The primary target was Al Qaeda leader Osama bin Laden, the mastermind behind the 9/11 attacks. As of September 2019, the US has poured more than $822 billion in the war against Afghanistan, deploying hundreds of thousands of soldiers to the region.

While the retaliation against the terrorist group was essential, it was hardly enough to solve the root cause of the violence. As the US continued its fight against terrorism, it sought to fight two-track wars— one against the terrorist organizations themselves and the other against poverty.

After it became evident that a colossal inequality had developed between first and third world countries, first world countries began to provide financial and physical support to least developed countries and contribute to the overall improvement of education, health services, food, and jobs so that those living in extreme poverty would not be forced to join extremist religious organizations to escape their misery. Out of this was born the Millennium Challenge Account, or MCA, a US foreign aid program created to increase assistance to developing countries.

In his book The End of Poverty (2005), Jeffrey Sachs writes about the MCA. “[President Bush] pledged that the United States would increase its foreign assistance to countries that demonstrated the will and the capacity to use that increased funding effectively,” he writes.

The Millennium Challenge Corporate (MCC) was created by the US Congress in January 2004 with strong bipartisan support. In its essence, the MCC is refined foreign aid, with high standards of transparency, accountability, effectiveness, and anti-corruption. To date, it has collaborated with nearly 30 countries on different 37 grant agreements and aided a total of $13 billion people to provide necessary support in sectors such as agriculture, education, transportation, and energy.

Nepal signed the MCC compact on September 14, 2017, during the premiership of Sher Bahadur Deuba, and received a grant of $500,000,000 to be invested in transmission and transportation projects.

The transmission line project comprises building approximately 300 km high voltage power lines—Lapsiphedi-Ratmate-Hetauda and Lapsiphedi-Ratmate-Damauli, including a link to the Indian border to facilitate trade. The project will also build three substations to transfer power from one voltage level to another for further transmission and distribution to customers. It also aims to improve the governance sector to generate new private sector investments.

Similarly, the transportation project’s objective is to maintain road quality across the strategic road network of around 305 km on the East-West Highway, preventing further deterioration of Nepal’s road network and making travel less challenging and expensive.

Despite its clear objectives, the MCC has been controversial in Nepal. A faction of Nepalese leaders says that the MCC is a part of the US’s Indo-Pacific Strategy, a US commitment focusing on economics, governance, andsecurity of the Indo-Pacific region. However, US Ambassador Randy Berry has said that the MCC is not a part of the Indo Pacific Strategy, and Nepal does not need to sign into any coalition to receive the aid.

Many Nepalese people have been frustrated by the provision of ratifying the compact through the parliament. Ambassador Berry has clarified that the provision is only to ensure the transparency and accountability of the aid to the Nepalese people.

Although the MCC was set to be approved by the House’s ratification before June 30, it could not happen due to disputes within the ruling Communist Party of Nepal. Many politicians, experts, and civil society leaders have stated that they do not want to miss out on the largest grant given to Nepal, especially during a time when a pandemic has severely disrupted the country’s economy.

A three-member task force under the leadership of former Prime Minister Jhalanath Khanal was formed to study and provide suggestions on the MCC. The group suggested that the MCC should not be passed without amendment.

“MCC has already been discussed in detail by the two sides for five years between 2012 and 2017 before signing the compact,” US Ambassador to Nepal Berry said in an interview with BBC. “After two and a half years of accepting the terms and conditions, MCC can be amended at the time of execution.”

It becomes important to note that a last-minute cancellation of the compact can lower Nepal’s credibility in the international arena. Therefore, discussions should happen without any prejudices against the US and its foreign aid. Developed countries like Britain, France, Japan, and South Korea had also taken huge foreign aid from the US in the past before turning into formidable powers.

The US Embassy in Nepal had put forth a statement on June 29, stating that “[d]elaying the ratification is delaying the benefits of more jobs and increased economic growth for nearly 23 million Nepalis.”

MCC has been helping millions of people in more than 30 countries for more than a decade. The transparency and accountability of the MCC are recognized worldwide, and it is the top bilateral donor in the Aid Transparency Index. Nepal had proposed the two projects since the projects can contribute greatly to the development of the country. With the US embassy in Nepal having already clarified that the compact is not related to any military agenda, skeptical Nepali leaders and concerned authorities should study the track record of MCC Projects in other countries like Indonesia and Malawi.

The largest grant in the history of Nepal should not be avoided due to misunderstanding and misinterpretation. Proper discussions need to be held by all stakeholders so that millions of Nepalese can benefit from the MCC and meet the Nepalese dream of ‘Prosperous Nepal, Happy Nepali.’

Aashish Sunar, Sub-Editor and Writer for Kathmandu Pati English, covers politics, marginalized communities, international relations, economics, and sports. He is pursuing an undergraduate degree in International Studies and Economics at Soka University of America. He tweets @imAashishSunar.

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