A model for transparent development projectsTo move the Millenium Challenge Corporation compact forward, stakeholders need to complete all required activities, like parliamentary ratification, expeditiously.
For most Americans, like me, November is the month we celebrate Thanksgiving in the United States and an opportunity to reflect on the things we value and for which we are grateful. November is also an important month for the Millennium Challenge Corporation (MCC) because that is when this US foreign assistance agency issues its ‘scorecard’—a collection of 20 independent, third-party indicators produced for all low- or lower-middle-income countries, as classified by the World Bank.
The scorecard measures each country’s policy performance in the areas of economic freedom, ruling justly, and investing in its people. MCC scorecards are a vital component in the agency’s annual competitive selection process that determines which countries are eligible to develop compacts, which are pure grant resources, not loans. A country must pass the scorecard before it can be considered by MCC’s Board of Directors to receive MCC compact assistance.
The scorecards for the fiscal year 2020 are out, and Nepal has again passed, even showing improvement on a critical indicator, ‘Control of Corruption.’ In fact, Nepal has passed the overall scorecard every year since 2012. As a result of its strong policy performance, Nepal was selected as eligible to develop a compact in December 2014. And, in September 2017, Nepal signed the $500 million MCC Compact.
The issuance of the annual scorecard seems an excellent time to take stock of the progress of the MCC Compact and the Nepal-US relationship. As the Country Director for MCC Nepal, I am dedicated to working with government counterparts, civil society, and communities to implement the compact’s projects in the electricity and roads sectors that are designed to unlock economic growth in the country. What drew me to this job is the development model that the Millennium Challenge Corporation offers—a model that focuses on host country ownership and transparency.
Country ownership means that it is not the US government or MCC staff who are completing the project, but rather staff employed by the government of Nepal. While MCC plays a critical support and oversight function, Nepal takes the lead role in every phase of the project. It was Nepal who completed the original economic analysis identifying the energy and transport sectors as barriers to economic growth and then designed the projects in the compact. And now it is the Millennium Challenge Account-Nepal, a development board formed by the cabinet of Nepal and through the agreement, which is implementing the projects. Following the MCC blueprint and standards for excellence, the government and Nepali citizens are strengthening the capacity they’ll need to complete these projects, as well as to continue to grow their infrastructure in the future.
The second crucial attribute offered by the compact is transparency—MCC and US standards for open government and transparency that are foundations of our own democracy. During compact design, the government consulted with all stakeholders—civil society, communities, and the private sector—to receive feedback and build buy-in. Anyone may view the documents related to the compact online at www.mcc.gov. Similarly, MCA-Nepal is required by MCC standards to publish all documents: board minutes, bidding documents, and related materials for public review at www.mcanp.org. Why is this level of transparency important? Quite simply, it makes the project stronger. It allows citizens, the media, private sector partners, bidders, and all stakeholders to understand each phase of the project. It holds MCA-Nepal, the board of directors, and MCC accountable for their decisions and actions. But most importantly, it instils confidence in potential private sector investors that bidding on projects with MCA-Nepal will be a fair, open, competitive process.
As for the Nepal-US relationship, the MCC compact exemplifies the ties that our two countries have built over our 72 years of friendship. Like all relationships, Nepal and the US continue to learn from and support one another—even when challenges emerge. The compact is in a pre-implementation period during which time the government must meet a set of conditions, after which the compact must be completed on a strict five-year clock. MCA-Nepal and the government continue to make progress, but in some cases, progress has been slower than desired or expected. A current example is parliamentary ratification, which the government did not achieve on time. For the compact to move forward, ratification—majority approval in Parliament—must be expeditiously completed.
It is also important to note that the agreement was signed before the Indo-Pacific Strategy was launched. But, because it, like all US development assistance in Nepal, seeks to support Nepal’s growth as a free, open, and secure society—the compact shares the US’s vision for the Indo-Pacific region.
Congratulations to Nepal in again passing the annual MCC scorecard. While passing is a reason to note the achievement, we must also recognise that much work remains to continue to build public institutions that strengthen Nepal’s democracy and to meet the conditions required to implement the MCC compact. All government officials and parliamentarians should continue to work transparently with all stakeholders to complete the necessary activities to move the compact forward. Also, it would be prudent for all citizens to engage and support the progress of this important project.
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