The Fate of the MCC Project in Nepal: How Will the Government Pay the Price?

  नेपाली सन्देश डट कम | १ जेष्ठ २०८२, बिहीबार १९:३६

Lakshmi Thapa :

Since President Trump suspended aid funds for the Millennium Challenge Corporation (MCC) project in Nepal in February, the Nepalese government has spent 90 anxious and nerve-wracking days. Now that the 90-day suspension period has ended, the future of the MCC project in Nepal is becoming clearer. In late April, billionaire Elon Musk’s Department of Government Efficiency (DOGE) announced the closure of all global MCC operations, dashing the hopes of Nepalese officials who still harbored illusions about the MCC. What will be the ultimate fate of the MCC project in Nepal? Will it be abandoned halfway, or will the Nepalese government and people have to clean up the mess themselves?

The MCC project in Nepal was initially funded with a $500 million grant from the U.S. government, later increased by $50 million, with the Nepalese government contributing $197 million. The project primarily includes the construction of transmission lines, substations, and road maintenance. The agreement was signed in 2017, but it was only approved by the Nepalese Parliament in 2022. Currently, the MCC website still states that the Nepal Compact will increase power supply, reduce transportation costs, and help reduce poverty through economic growth. However, the MCC project is now at a standstill, leaving the Nepalese government facing potential compensation claims from contractors. The MCC’s development vision for Nepal is on the brink of collapse.

During the Trump administration, a more extreme version of MAGA (Make America Great Again) diplomacy was implemented, focusing entirely on U.S. interests and disregarding those of other countries. This policy even required other nations to pay for American interests when necessary. The global trade war initiated by Trump is a prime example of this pragmatic MAGA approach, and Nepal was one of the victims.

From the perspective of the Nepalese people and government, it is deeply unfair that the burden of the MCC agreement should be entirely borne by Nepal. The agreement was imposed, forced into existence, and compelled to be approved by the Nepalese Parliament, only for the U.S. to unilaterally withdraw, leaving Nepal in a state of confusion and distress. Nepal is truly innocent, but as a small and weak country, it has no other way but to wait for the U.S. to provide a solution. Media reports now focus on Nepalese officials trying to project optimism, as the U.S. has not yet issued a final ultimatum. However, almost everyone assumes that the U.S. will abandon the MCC project in Nepal, though there is still hope that the Trump administration will not end this flawed and misguided agreement in the most undignified way possible.

Conclusion
The future of the MCC project in Nepal remains uncertain, but the Nepalese government is left to bear the brunt of a decision that was largely out of its control. As the U.S. shifts its focus and priorities, Nepal must navigate the aftermath of this failed initiative, hoping for a more dignified and fair resolution.

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