The scheduled House session this week was once again postponed with Pushpa Kamal Dahal of the Maoists seemingly reneging on a deal with Prime Minister Sher Bahadur Deuba to table the bill in exchange for registering an impeachment motion against Chief Justice Cholendra SJB Rana.
The 28 February deadline to approve the American-funded Millennium Challenge Corporation (MCC) project is looming, but the the ruling coalition is now on the verge of a split if Deuba convinces the UML’s K P Oli to back him on Friday. Oli may be willing, but Deuba is wary of his prime ministerial ambition and possible realignment with the Maoists.
One might wonder why the very political parties and their leaders who had previously signed the grant contract with the American government used every excuse in the last four years to delay its endorsement by Parliament. The answer is simple.
Pushpa Kamal Dahal and Madhav Kumar Nepal pitted the $500 million infrastructure compact as ‘anti-national’ to such an extent to topple Oli that they cannot now retract their words, and risk election prospects by supporting ratification.
Read also: Putting the MCC into context, Jeevan R Sharma and David Seddon
Neither the Maoist Centre nor the Unified Socialists have strong local bases, since both are breakaway parties. Prime Minister Deuba for his part wants to have his cake and eat it too — keep the coalition intact and pass the MCC. The time may have come for him to choose.
Deuba knows that rejecting the MCC would impact on future aid, trade and development partnerships, and lead to international ostracisation. Sri Lanka rejected its own $480 million MCC two years ago, and is now ensnared in debt.
Dahal landed in hot water two weeks ago after a letter to the MCC he co-signed was leaked, exposing his duplicity. This is a prominent feature of Nepali politics, but the collateral damage this time is a project that is important for Nepal’s future growth.
If the 5-year project had gone ahead, the transmission lines would have been built by now and Nepal would be able to distribute electricity from new plants. Those hydropower plants were developed with Rs215 billion in investment from banks, which means deposits of ordinary Nepali citizens.
As Anil Shah argues (page 6-7) the banks and their depositors will be in deep trouble if the private producers go belly-up. Nepal will then have to get loans from the World Bank or the ADB for transmission lines, but even that will be difficult unless we have an explanation for why we rejected the MCC.
There is no one party or politician to be singled out for this unholy mess. The UML rallied behind the MCC while in government, only to use it now to bring down the ruling coalition. The two Communist parties in the ruling alliance are hoping Deuba and Oli will be punished by voters on 13 May for their support of the MCC.
Coalition leaders have failed to garner support within their own party ranks for the project, nor are able to explain its reality to the public. This provided an opportunity for self-proclaimed nationalists of the left and right to spread disinformation about how the US was turning Nepal into a US military outpost.
Read also: To be or not to be on the MCC, Anil shah
A generation that grew up reading Communist commentary on ‘American imperialism and Indian expansionism’ is now in the leadership of the Communist parties. Such phrases may be obsolete now, but it is being revived to stoke populism during a Sino-US Cold War. This has not only increased the ideological polarisation, but also led the country astray.
It is important for Nepal to vet all aid and loans, not just the MCC. However, domestic and geopolitical factors should not affect important projects. The populist nationalism around the MCC is not only tarnishing the image of the parties and their leaders, but also Nepal’s image as a nation. The consequences will be borne by the people.
Hundreds of thousands of Nepalis have to migrate to the Gulf and Malaysia every year for work and it is the remittance money that runs the country’s economy. We will never rise above this with such insular hyper-nationalism.
Nepal currently does not have the capacity to mobilise sufficient resources to upgrade transmission lines and prevent potential wastage of Rs142 billion a year worth of electricity by 2025. So the country has no choice but to seek foreign funding. Rejecting this grant is foolish, especially because all the leaders today were all on board when it was signed in 2017.
Not ratifying the MCC today will set a precedent tomorrow to embroil every Belt and Road Initiative (BRI) project in controversy. Once and for all, Nepal’s politicians must stand together for the country’s future regardless of their party election symbols.
A MCC ratification will also be a lesson for anyone tempted to misuse quasi-nationalism for self-interest and weaken the Nepali nation.