WHY OPPOSE THE MILLENNIUM CHALLENGE CORPORATION IN NEPAL?

Abstract

The construction project agreed with the Millennium Challenge Corporation (MCC) has become highly controversial in Nepal. According to MCC policy, the contract, signed in 2017 with the goal of increasing the availability of electricity in Nepal and reducing transportation costs, must be ratified by the Nepali parliament. Confusion and controversy arose, since the move would create a precedent for the ratification by parliament, if demanded, of each and every foreign investment in Nepal. There are also legal controversies when countries that receive MCC grants are required to comply with MCC provisions intended to ensure that projects are not hampered by changes in state law. A further controversial point is a provision that makes implementation of the MCC project conditional on approval from India. The MCC is actually a part of the United States’ broader Indo-Pacific Strategy (IPS), related to military pacts such as the QSD (Quadrilateral Security Dialogue) that are aimed at containing China. In such circumstances, how can Nepal maintain its stance as a non-aligned nation in relation to its giant neighbors? Leaders of various political parties, civil society organizations, and the general public in Nepal currently fall into two camps that either support or reject the MCC grant.