Fatema Sumar, vice-president of Compact Operations at the United States foreign aid agency Millennium Challenge Corporation (MCC), and Jonathan Brooks, her deputy, completed their four-day sojourn in Kathmandu on Sunday. The visit was meant to "take stock" of the possibilities of parliamentary ratification of the MCC Nepal Compact, under which Nepal would receive $500 million in grants. This high-ranking visit by MCC officials took place at a time when Nepali politics and public opinion are vertically divided on whether the Compact is in Nepal's interest or not. It was essentially a lobbying exercise by the MCC office.

Apparently, the visiting delegation failed to convince Nepal’s political leadership about the benevolence of the Compact. Many elites, including a former Nepali ambassador to the US involved in securing the grant commitment, made all-out efforts through write-ups and interviews to persuade Nepali politicians in recognising the potential benefits of the Compact. But except for the Nepali Congress, no other ruling party unequivocally expressed commitment to support the impending MCC ratification process.

Among the five factions in the ruling coalition, three communist groups—the CPN-United Socialist led by Madhav Kumar Nepal, the Maoist Centre led by Pushpa Kamal Dahal, and the Samyukta Janamorcha led by Chitra Bahadur KC—ruled out the possibility of supporting the pact "as it is" outright. Another faction, the Janata Samajwadi Party, took a noncommittal approach to "continue to forge a political consensus". Perhaps the most disappointing to the visiting US officials was the dramatic shift by the main opposition leader and CPN-UML Chairman KP Sharma Oli who, when in government, seemed to be forthcoming in tabling the pact for parliamentary approval.

Fake stances

MCC critics orchestrated themselves to be passionately concerned about the sovereignty and decision-independence of Nepal as a nation-state. Advocates of the Compact saw no flaws in the agreement signed in 2017 when, incidentally, Sher Bahadur Deuba was prime minister. The third angle brought out in the discussion was whether the size of the grant was worth letting go and should Nepal choose to mobilise her own financial resources given the controversy.

All these issues appear as if genuine on the surface but are fake political positionings. Even the communist groups know well that the country's sovereignty would in no way be infringed by ratifying the pact, and a grant of $500 million is no small amount. But this understanding could not stop them from continuing to oppose it. It is primarily because this "position" was premeditated and formed over several years, particularly after intensive Chinese engagement with the then undivided Nepal Communist Party. This same party has now split into UML, United Socialist and Maoist Centre. It may be recalled that on December 22, 2019, a standing committee meeting of the then ruling Nepal Communist Party had "recommended" to the party secretariat for ratification,

The reality of the strategic rivalry between China and the US (and India) in Nepal is more gruesome than made out to be. One, it is clear by now that China has understood MCC as an integral part of the US Indo-Pacific Strategy putatively designed to strategically surround China. Two, China has employed its Belt and Road Initiative (BRI) to extend its own strategic influence, more specifically in its immediate neighbourhood, and is moving every possible pawn to contain the American engagement and strategic presence. Three, the Communist Party of China, through its communist fraternity approach has not only extended relations with Nepali communists of varied hues, but also, in all likelihood, already taken vows from major communist leaders here to stop MCC; hence, the result.

The US and the democratic world, and India, in particular, as the nearest democratic neighbour with the most extensive socio-economic engagement with Nepal, should now understand that the Himalayan republic is by now an overwhelmingly communist-dominated country. This may be squarely attributed to the frequent policy failures of both the US and India over several decades. As a result, Nepal's democracy remains as fledgling as ever, and a non-democratic ideology has gained a better foothold here. This is because the engagement of the West with Nepal has more often been based on its strategic interests than on consolidating and institutionalising democracy.

It has its own obvious consequences. The political players act as puppets of the powers with competing strategic interests. In this race in Nepal, China has lately overtaken the rest. In the absence of other rational political agendas to capture the public attention, hyper-nationalism (not to be mistaken with patriotism) and the sovereignty card are becoming the norm of day-to-day politics.

Monetary involvement

It is evident that there was monetary involvement in the protests organised during Fatema's visit. Protesters wore new black T-shirts with slogans printed in white, reserved vehicles were used to transport them, and even the ruling party cadres were allowed to indulge in street vandalism. "Go back American imperialism" was among the slogans shouted. The protesters seemed enthused by the "Kabul debacle" of American and Indian policies, and were perhaps oriented to give an additional blow of defeat by rejecting MCC. The size and frequency of these protests were not small.

The main cause of concern is not whether MCC will get through Parliament, but which side of the fence Nepal's mainstream politics will fall in the long run. Will Nepal remain in the club of the world's democratic nations and look up to prosper through their cooperation? Or will she be a decoy agent to fight China's strategic war of influence against the democratic world represented largely by the US and India?