Nepal is facing an economic crisis due to plummeting remittances and mounting imports. Such donations, which are free as they do not need to be paid back, neither the principal amount nor the interest, should have been grabbed by both hands by Nepal. Against this backdrop, the demonstration seems to be based on more of a rhetoric than reality to apolitical persons.
Debate about the Millennium Challenge Compact (MCC) signed between Nepal and the United States acting through the Millennium Challenge Corporation, a US Government corporation, has triggered a political quake with its epicentre in the capital city of such a magnitude that it has sent the whole country shaking right from Mechi to Mahakali. Protests have been a daily phenomenon participated by political as well as social celebrities, including students' wings of different political parties. Some of them had been so aggressive that the riot police had to resort to physical force followed by the arrests of the protesting leaders.
It has also shaken the coalition government at the helm now right from its spine. The government had to call an all-party meeting in the absence of the main opposition. It ended with the formation of a committee with former Prime Minister Jhala Nath Khanal as the chairman.
Khanal is very familiar with this subject as he was the coordinator of the committee set up by the Nepal Communist Party to look into the subject and submit recommendations.
He had suggested that the Agreement could not be signed unless a few paras suicidal to the nation were changed.
Rumours of all kinds are flying across the political arena, ranging from the break-up of coalition to the formation of an UML-NC government coalition soon, giving credence to the poem of Bhupi Sherchan, who wrote that this is a country of rumours. The coalition partners, the Jana Morcha Nepal, CPN-Unified Socialist Party and the CPN-Maoist Centre are opposed to it, seeking changes in some of the clauses of the treaty for consensus.
This Agreement has a striking resemblance to the Indo-US Nuclear Civil Agreement, which was signed by then Prime Minister Man Mohan Singh way back in 2006. The Congress (I) and the DMK supported the agreement.
The BJP opposed the signing of the Agreement despite initiation of the agreement earlier by the Vajpayee government. The Samajwadi Party and the Left Front also opposed the move initially. Later on, the Samajwadi Party turned topsy-turvy after discussion with then President and nuclear scientist A P J Kalam.
The Left Front withdrew its support to the coalition, proposing a no confidence motion in the Parliament.
The government survived the motion with a slim majority of 275-256, that too with 10 BJP MPs crossing the floor.
This drama seems to be unfolding in Nepal also. It was signed by Gyanendra Bahadur Karki, the finance minister of the NC and Maoist coalition in September 2017. The Nepali Congress has supported the agreement. From the Janata Samajwadi Party Upendra Yadav has a muted silence, indicative of support. The UML has now opposed it, but it had registered the Agreement in July 2019 in the Parliament. The coalition partners of the Left have opposed it, and the solitary seated Jana Morcha in the Parliament has said that it will exit from the coalition should the agreement be passed in the present form.
This MCC aid is necessary for several reasons.
Firstly, Nepal needs better road connectivity and electrical transmission line in view of the surplus hydro power that the country enjoys at the present and increasingly so in the future so that it can be sold in the Indian market. For this, Nepal will be dependent on foreign aid for many more years to come because the revenue that it receives every year is engulfed by the running expenses. The development works are totally dependent on foreign assistance. Secondly, all the allegations dumped on this agreement appear judging by the written text.
For example, the contention of the demonstrators that the Agreement will be governed by US laws is far from true as clause 6.4 has stipulated taking recourse to international laws in case of disagreement between the two parties.
Again, the assertion that the grant could be used for marching U.S. troops to Nepal also lacks substance as clause 2.7 has provided that the expenditure should be made only in twin areas of roads and transmission line.
Regarding audit, Clause 3.8.a. has mentioned clearly that the Office of the Auditor General will not be precluded from its routine tasks.
The need for it to be passed from Parliament is said to prevail over the domestic laws to ensure its implementation in case of national conflicts due to volatile national politics as in Mali that led to its termination owing to the military coup.
The statement of David Ranz, the Assistant Secretary for South Asia, on May 14, 2019 that the MCC is a crucial part of the Inter Pacific Alliance, however, justifies the protestors' concern.
Its mention in a report of the IPA, published in November 2019, also seeks to corroborate this view. But it is nowhere mentioned in the Agreement, particularly in the beginning of the Preamble.
If future developments pan out that way, Nepal can always terminate the Agreement, giving 30 days' notice following clause 5.1.a. as in the case of Honduras.
Sri Lanka rejected this offer, but later they fell into the debt trap, leading to the lease out of the Hambantota port to China. They were also not invited to the recent Democracy Summit, indicating that the US does not put Sri Lanka on the same page. To directly offend a long-time cooperation partner like the US by, and indirectly also India, may not augur well politically for Nepal.
Nepal is facing an economic crisis due to plummeting remittances and mounting imports. Such donations, which are free as they do not need to be paid back, neither the principal amount nor the interest, should have been grabbed by both hands by Nepal.
Against this backdrop, the demonstration seems to be based on more of a rhetoric than reality to apolitical persons.
It also appears to be rather orchestrated and launched without perusal of the agreement with respect to its word and spirit.
A version of this article appears in the print on December 29, 2021, of The Himalayan Times.
