If somebody wants to make a fast-paced political thriller in Nepal, the drama over the Millennium Challenge Corporation (MCC) Compact ratification of the last few weeks offers a good script. From shifting political alliances behind closed doors to diplomatic overreaches from the north and beyond, everything boiled down to a showdown on the streets in front of the Parliament building. The scenes inside the House were equally intriguing, with the opposition silently supporting the deal, but a party in the coalition government determined to play spoilsport until the very last moment. What is there not to love about the drama, amid which the speaker declared that the House had ratified the controversial aid compact? Except that it came at considerable cost to the nation and its international standing, a nation that has only recently emerged out of several decades of political instability.

The MCC Compact is the largest grant aid Nepal has ever received to fund its infrastructure needs. It will most certainly play an instrumental role in improving national grid connectivity and cross-border energy trade. This alone could have a significant multiplier effect on our national growth. The project this aid will finance has long been part of Nepal's energy master plan, and will guarantee institutional ownership from the national energy regulatory body and other private energy producers.

Reason for outrage

So, what is the reason for all this outrage? To put it bluntly, a handful of leaders were audacious enough to think they could use a vital development agenda, twist it to their advantage and whip up public sentimentalism in the run-up to the upcoming elections. But one needs to go at least two years back to understand why the situation unfolded the way it did. The then KP Oli government had registered the aid agreement in Parliament for discussion. This was when the erstwhile Nepal Communist Party was going through an internal power struggle, with Pushpa Kamal Dahal and Madhav Nepal rebelling against Oli's one-upmanship. Both leaders tried to use the MCC deal as bait to extract political concessions from Oli, encouraging leaders like Bhim Rawal and Jhala Nath Khanal, who were running a campaign to oppose the aid deal. Bhim Rawal's arguments opposing the deal were flimsy and without much substance, but it did not seem to matter to the senior comrades as long as it served their political purpose.

Eventually, the Nepal Communist Party split into three; Dahal and Nepal found themselves in a coalition government with the Nepali Congress, which strongly supported the deal. With the approaching elections, chances were that the Nepali Congress would ride on the failure of the KP Oli government. Both Dahal and Nepal would have felt they needed an electoral plan that they could use against both Oli and their coalition partner Nepali Congress. As a result, the MCC deal became a rag doll that the two leaders used to beat their political opposition with, both in and out of government. Despite giving a written commitment to ratify the MCC agreement, Dahal continued his political flip-flop until hours before Nepal's self-imposed deadline. But his cadres were already protesting in the streets, battling security forces in front of the Parliament building.

Disappointingly, while things were going south with the MCC deal, a large section of Nepal's media and public intellectuals either remained silent or echoed the leaders who were spreading disinformation and lies. Outlandish claims that the United States Army was planning to establish a military base in Nepal or that the aid document somehow would supersede Nepal's constitution and infringe upon our national sovereignty were uncritically published and broadcast through more or less every mainstream media outlet. While the government's Office of the Millennium Challenge Account struggled to counter the wave of disinformation by providing factual information regarding the aid agreement, prime time debates were replete with supposed experts screaming out of our television sets, warning how Nepal would turn into another Afghanistan.

Disinformation campaign

As the disinformation and fear-mongering were amplified over social media platforms, some mainstream media outlets realised the extent of the damage and began independently assessing the aid agreement. They began talking to more people, including former bureaucrats who were involved in the negotiations with MCC officials from the Nepali side. Policy Entrepreneurs Inc, which organised a series of interactions with reporters, senior editors and bureaucrats from various line ministries, also shared insights from its yearlong research into South Asia's perilous aid landscape and Nepal's infrastructure diplomacy.

The research done by Policy Entrepreneurs shows that geopolitical competition among the large donors in South Asia will only intensify in the coming years due to its strategic location between growing markets in East Asia and the rest of the Asia, up to Europe. However, it also offers an unprecedented opportunity for aid recipient countries to fund their infrastructure gaps and spur growth. Navigating the geopolitical interests of competing donors while benefiting from the aid money they provide will be key to doing this, as countries like Bangladesh have shown. However, our bitter lesson with the MCC has shown that we must be equally mindful of the domestic political instability such deals could create. A timely public and media discourse on Nepal's aid diplomacy, leading to a minimum consensus on its broader tenets among all national stakeholders, would help us avoid such political deadlocks, which almost damaged our international standing among the major development partners.