Geopolitical visits foreshadowed Nepal’s difficult balancing act between US-MCC and China-BRI

[TamilNet, Sunday, 12 January 2020, 23:29 GMT]
There were many visits to and from Nepal in the beginning of 2019 such as the visit by Japanese Foreign Minister Taro Kano and Nepali Foreign Minister Pradeep Gyawali's visit to India, Japan, US and many other countries. Head of US Indo-Pacific Command Admiral Phil Davidson and US Deputy Assistant Secretary of Defense for South and Southeast Asia Joseph H Felter have visited Kathmandu in 2019 seeking military cooperation. Now, the debate whether the US Millennium Challenge Corporation (MCC) is part of the US Indo-Pacific Strategy (IPS) has heavily divided the ruling Nepal Communist Party (NCP) as the country is set to decide whether to ratify or not the bilateral agreement. The MCC was established in 2002, eleven years ahead of China announcing its massive Road And Belt Initiative in 2013. The MCC signed a USD 500 million Compact with Nepal in September 2017.

“The vague agreement of MCC coupled with camouflaged Indo-Pacific strategy demands deep diplomatic consideration for the country,” write Biranchi Poudyal and Kamal Khadk, two students pursuing Master’s Degree in International Relations and Diplomacy at Tribhuvan University in an article to MyRepublica, a Kathmandu-based newspaper on Sunday.

“MCC is deemed as part of IPS,” they argue citing David J. Ranz, the acting deputy assistant secretary of state for South and Central Asian affairs (Oct 2018 - July 2019), who had gone on record stating that the MCC was one of the most important initiatives being implemented in Nepal under the US Indo-Pacific Strategy.

The clause 3 of the MCC stipulates that only a US company could audit the financials of MCC, the article observes.

“In Clause 5 (a) and (b) its mentioned that the US Government may terminate the agreement at any time but the Government of Nepal cannot. And it’s also mentioned that the US government can terminate the agreement if found any kind of activities against national security interest of US but it has not clearly explained what kind of activities and what national security interest.” 

Furthermore, there is a condition that Nepal should submit a plan that is fully satisfactory to the MCC and the Government of India will have to support that.

“We wonder Nepal has to secure consent of India in an agreement with the US,” the authors ask in the article titled, “On IPS and MCC”.

External Links:

My Republica:		On IPS and MCC
The Himalayan Times:		Thapa, Zhao hold talks in Beijing
The Kanthmandu Post:		The decade of lumpen
Khabarhub:		Foreign Minister Gyawali says MCC will be ratified
Nagarik Network:		China for any aid to Nepal without intervening by 'other forces': Envoy
Khabarhub:		We should ratify MCC instantly and go for implementation: Dr. Rajan Bhattarai
Nepali Times:		MCC row damages Nepal’s credibility

Chronology: