After years of toxic debate that divided the nation, the Nepali Parliament ratified the Millennium Challenge Compact (MCC) on February 27. Ratification of the agreement has finally opened doors to the use of the $500 million U.S. grant for construction of hydroelectricity transmission lines and upgrading of highways.
The Nepali Congress (NC)-led ruling coalition largely stood together to ratify the agreement. However, the ratification was prefaced with an “interpretive declaration” to placate concerns of skeptics and save face for coalition partners that had opposed the MCC in the past.
Foremost among those who did a volte-face on the MCC is Pushpa Kamal Dahal, aka “Prachanda,” the chairman of the Nepal Communist Party-Maoist Centre (NCP-MC), a key ruling coalition partner. Just days earlier, Prachanda had threatened to quit the coalition government and break the coalition if Prime Minister Sher Bahadur Deuba of the NC forced his way to ratify the compact. Prachanda had also deployed his party’s fraternal organizations to protest against the ratification.
It later emerged that even as he was fiercely declaring his opposition to the MCC to his party members, arguing that the MCC should not be ratified without amendment, he had co-written a letter with Deuba addressed to the MCC Board expressing support to ratifying the agreement.
Upon ratification, Deuba claimed, “Nepal’s credibility in the international arena has increased.” Unfortunately, the same cannot be said for Prachanda or the NCP-MC. He has been roundly criticized for his duplicitous behavior.
So why did Prachanda oppose the MCC earlier? First was his need to get back at former Prime Minister Khadga Prasad Oli for his attempt to marginalize him when the NCP-MC was part of the unified Nepal Communist Party (NCP) government.
The Prachanda-led Communist Party of Nepal-Maoist Centre (CPN-MC) and the Oli-led Communist Party of Nepal-United Marxist Leninist (CPN-UML) had formed an electoral alliance to fight the 2017 general election, which they won. The two parties merged the following year to form the NCP, with Oli and Prachanda as the co-chairs, and Oli as the prime minister. The two co-chairs had agreed to share power, but Oli controlled the government and the party, and relegated Prachanda to a secondary position. As prime minister, Oli was in favor of the MCC’s ratification and Prachanda therefore took his revenge on him by blocking its ratification.
Second, center-left political forces have dominated Nepali politics for decades. It has contributed to skepticism of the U.S. and its intentions. Nepali Maoists take this skepticism further; cadres are nurtured on the doctrine that India and the U.S. are “expansionist” and “imperialist” forces. Not surprisingly then, many Maoist leaders saw the MCC as an American strategic tool to suck Nepal into its Indo-Pacific Strategy. Opposition to the MCC was therefore an extension of Prachanda’s public persona and the party’s doctrine.
Third, Prachanda’s opposition to the MCC was based on his electoral cost-benefit analysis. A significant number of party cadres and the general public opposed the MCC, partly because of the disinformation sowed by the party leadership. Therefore, Prachanda feared that endorsing the MCC would cost the party dearly at the upcoming local elections. This apprehension deepened because the CPN-UML, the main opposition party to the present government, could capitalize on the anti-MCC sentiment at the grassroots if the ruling coalition ratified the MCC. Additionally, CPN-UML leader, Oli, has cultivated a “nationalist” image and his position on the MCC would only solidify that image, hurting the ruling coalition.
So why did Prachanda come around to supporting ratification of the MCC? Prachanda’s change of heart vis-à-vis the MCC was hardly shocking although he characterized his support for the MCC as having come under “compulsion.”
Deuba’s strategy of simultaneous negotiations with Prachanda and Oli put Prachanda in a difficult situation. Deuba was determined to ratify the compact. Oli was willing to support ratification under certain conditions, which included breaking the coalition, getting rid of the Speaker of Parliament, and disqualifying 16 members of the Communist Party of Nepal-Unified Socialist (CPN-US), which had broken away from the CPN-UML. Prachanda feared that ouster from power would deal a significant setback to the Maoists (and the Unified Socialists, too) in their preparation and chances of victory in upcoming elections.
Prachanda was mindful of history too. When the CPN-UML’s Bamdev Gautam split the party to form the Communist Party of Nepal (Marxist Leninist) following the 1998 India-Nepal Mahakali Treaty, the new party failed to win a single seat in the 1999 general elections. Prachanda was worried that a similar fate awaited his party in elections should the ruling coalition split on the MCC ratification issue.
Prachanda is also said to be apprehensive of what he could face if out of power. Narayan Man Bijukchhe, chairman of Nepal Workers’ and Peasants’ Party has alleged that Prachanda ratified the compact ‘due to fear that he will be taken to the International Court of Justice for crimes committed during Nepal’s civil war. While this may be far-fetched, Prachanda is concerned that he and people close to him could face targeted attacks as thousands of cases from the ‘people’s war’ still linger in various courts.
Justifying his decision to support the MCC’s ratification, Prachanda told party leaders that the “UML had plans to frame some businessmen close to me [Prachanda] for money laundering.” His logic is that he and his party need to remain in power and this will be best served if the party could go to the polls as part of an electoral alliance of the ruling coalition. This could happen only if he ratified the MCC.
Nevertheless, ratification of the MCC may not have done the Maoists much good. Yubraj Chaulagain, a CPN-MC Central Committee member said, “[T]he way we handled the MCC issue has damaged us, both internally and externally. There is disenchantment at [the] ground level because we held conflicting positions.” The party’s image has suffered as a result.
The party is also divided on the question of the MCC’s ratification. Four senior leaders opposed the party’s vote in favor of the compact. Questions are being raised over Prachanda’s leadership. He is going to find it difficult to keep disenchanted leaders and cadres united and motivated going forward. It will also be a challenge to keep the party, whose influence has been shrinking since 2008, at the center of Nepali politics.
In essence, Prachanda’s earlier motivations for opposing the MCC were primarily rooted in domestic politics and personal insecurity. This is true of his subsequent decision to support its ratification. It reiterates the fact that foreign policy is an extension of domestic policy.