MCC in Nepal; a grant for development or political bargain?

Table of Contents

Is MCC good for Nepal? Will MCC help the US send its troop (US Army) to Nepal? What are the terms in the MCC Nepal agreement that is detrimental to the sovereignty of Nepal? Who is supporting the MCC project? Who are against this MCC project? Why leaders like Pradip Gyawali, Minendra Rijal, KP Oli and many leaders of Nepali Congress so keen to pass the MCC project in Cabinet while leaders like Bhim Rawal, Rabindra Mishra in opposition of the MCC grant.

These are becoming everyday questions of Nepalese citizens these days who are locked inside their homes due to the Corona Pandemic. Although there were questions and debates regarding this grant from the moment the agreement was signed, the epidemic of opposition from citizen level started when the intellectuals have begun discussing the issue after the US official’s remarks that this is part of their Indo-pacific strategy. The terms of the conditions, the potential intention of the grant and the chaos it has created in Nepalese politics also triggered citizens to voice their concerns. The whole Grant thing does not seem like a normal contract although the United States government and the US Embassy tried to clarify many times about it.

What is the Millennium Challenge Corporation (MCC)? Why is this body attracting controversies right from the day of launch?

According to the US government, the Millennium Challenge Corporation (MCC) is an innovative and independent U.S. foreign assistance agency that is helping lead the fight against global poverty. Although the US claims it is a development project, there are many facets that make it more like a strategic project to establish its own political agenda. The wrongful use of MCC to influence the decisions of Government at Kosovo, Malawi, Ghana, Madagascar and many other countries has brought this so-called generous project of the states to a controversy. Countries have started to question the motives and even started saying NO to the funds after blackout calls from the citizens. Recently, Srilanka government withdrew after widespread opposition from their citizens.

The MCC Project and Nepal

Nepal has passed 16 out of 20 indicators on U.S. Millennium Challenge Corporation’s Scorecard, and thus become eligible for receiving MCC fund. MCC says The MCC Nepal Compact will increase the availability of electricity and lower transportation costs—helping to spur investments, accelerate economic growth, and reduce poverty. The funds are to be provided to construct electricity transmission lines and developing the road infrastructure. However, this “generosity” shown by the Land of Liberty is not quite welcomed by the vast majority of Nepalese. The number of people who are coming forward (at the internet) to oppose the project is increasing at an exponential rate. There are a lot of things that are smelling fishy in this grant. As mentioned earlier, the clear and explicit indications from the US officials that the MCC is part of their Indo-pacific strategy also question its true motive.

Will the MCC invite and allow the US Army in Nepal? Why would The United states interested in a small country like Nepal?

The agreement itself doesn’t have any component of the military in it. The US Embassy also clarified this in its fact sheet about the MCC project. However, since the US officials themself have provided sufficient evidence that this is part of their Indo-pacific strategy, the world won’t be surprised to see the activities of US spies or Armies with the help of this and similar agreements. Nepal is in an interesting position geographically and politically. The two Giants; China and India, whom the US is watching closely share the border with Nepal and this is no better place for the US to install its intelligence and monitoring bodies. So, yes, Nepal definitely attracts establishment of the US bodies and MCC might be a strong ladder to climb the Himalayan nation to have its binoculars installed.

Link between IPS (Indo-pacific strategy) and the MCC

Minister of Foreign Affairs Pradeep Kumar Gyawali claimed that the Millennium Challenge Corporation Compact Programme and United States Indo-Pacific Strategy were two different things, and that there was no need to link them together.

However, Visiting Acting Deputy Assistant Secretary for South Asia at the US Department of State David J Ranz made public remarks that the MCC was one of the most important initiatives being implemented in Nepal under the US Indo-Pacific Strategy. Ranz said the MCC Compact was valuable not only because it was going to provide critically needed infrastructure to boost Nepal’s energy sector, but also because it would boost regional connectivity. “Regional connectivity is another critical aspect of our goals in the Indo-Pacific Strategy,” Ranz said at an interaction with a select group of journalists.

A FREE AND OPEN INDO-PACIFIC Advancing a Shared Vision” report published by the United States Department of State also clearly says MCC is part of their “Indo-Pacific Strategy” which reflects the attention of the United States to the Indian Ocean region.

It indicates that the US plans to build a stronger geopolitical military alliance than an economic one throughout the region.

Are there any pieces of evidence of the US using MCC as a political chip?

There are many. In Kosovo, the States clearly bargained to lift the tariffs imposed on Serbia saying that they will stop the MCC grant. The Trump-led government was not quite happy about the reelection at Tanzania. What it did to express that? It pulled the grant given through the MCC and made Tanzania struck in the middle.

The attitude of their Leader; Trump clearly shows how they use their foreign Aid. he clearly says, if countries taking money from the US vote against their agenda at the United Nations, He will pull the financial support and stop the grants.

How big is 500 million USD? Is that so huge that the whole political leadership is divided into two poles? Amid so much of oppositions from people and many analysts and intellectuals, why are some leader devoted to passing this MCC grant?

This is strange in itself seeing the level of commitment of some leaders towards the MCC project. It proves that this is not only the matter of the 500 million dollars grant but there is something huge behind the curtains. There may be personal benefits, commissions or even intimidations involved in all this.

Now how big is 500 million USD? Let me put it in perspective.

500 Million USD is equivalent to (as of 5th June 2020)

  • 0.33% of the Net worth of the richest person of Earth, Jeff Bezos.
  • 0.94% of the Net worth of Mukesh Ambani
  • 70% of the Net worth of Binod Chaudhary (Richest person of Nepal; legally)
  • 4% of the budget of Nepal (2076/2077)


Bamdev Gautam’s infamous 70 crore commission bargaining is equivalent to 1.27% of the MCC grant and the disputed tax payable amount of Ncell is equivalent to 35.5% of the amount.

Definitely, the amount is not that huge as the supporters of the MCC grant are advertising. Some leaders like Minendra Rijal has even expressed that there no other alternatives to Nepal to build those infrastructures except this grant. This is funny and sad at the same time.

There are lots of questions and tons of debate going on regarding the MCC grant that Nepal signed with the United States’ independent body. The video provides an answer to many of the questions. I have done extensive research on the MCC project and the countries it has helped since 2004. To make this video as compact as possible, I am explaining many things in short. If you wish to have a detailed analysis and further study of any component of The MCC project covered or not covered in the video, please feel free to contact me.