Randy Berry: I don’t know what the proposed amendments to the MCC are

The MCC compact is again at the center of national attention following the re-election as prime minister of Sher Bahadur Deuba, whose government signed the compact in 2017. Since that time the compact has been in constant controversy for supposedly trying to undermine Nepal’s sovereignty. Here are edited excerpts from veteran TV journalist Bhusan Dahal’s recent interview with US Ambassador to Nepal, Randy Berry, on AP1Hd television.  

The Nepali parliament is yet to endorse the MCC compact. What is its current status in your understanding?

The partnership that is offered through the MCC to the Nepal government is something we would like to see Nepal move forward with. It makes a great deal of sense for Nepal’s own objectives. It is important to remember that the request for the compact started here in Kathmandu and not Washington. The compact is being undertaken for one basic purpose: to provide sustainable development on an infrastructure project of a scope Nepal has not implemented before. This will give a vote of confidence to the economy, employ Nepalis, and it will allow Nepal to monetize a green energy source, which is another priority of our government right now.

The compact still requires parliamentary ratification. It is our hope that the parliament will act on it so that we can get along with the good work. We absolutely welcome, and always have, the scrutiny on the MCC compact. We are committed to transparency and accountability to the people of Nepal on any form of assistance, and it is also the case with the MCC. You can ask any question about that compact because it’s all public. Any form of assistance should get that kind of scrutiny. 

But the scrutiny has gone to the level that the compact is alleged to hamper Nepal’s sovereignty, and it’s said the grant does not promote Nepal’s national interests. Are you aware of such criticisms, from the street to the political level?

I have heard both of those comments but I have never seen them explained in a way consistent with the facts of the compact. For example, the notion somehow that Nepal’s sovereignty is damaged or that somehow the compact will supersede Nepal’s own laws is completely false. There is nothing in this compact that sets that precedent. In fact, that would undermine what we are trying to do here. So I don’t see a credible linkage that goes to the real element of the compact. This has to do with misinformation, and disinformation—intentional misinformation to skew off what is the real intention of this program. Everything about this compact is absolutely in plain sight. There are no classified addendums, nothing that has been decided outside the public realm. That is part of the transparent process in which the MCC operates. 

Of the many American cooperation packages Nepal has received, this compact has one significant difference: that it needs to be ratified by the country’s parliament. Why was parliamentary ratification necessary?

This isn’t development assistance, this is an investment, and inherent in the compact is to make sure that countries have to achieve a certain threshold on democratic practices and other types of governance that allows them to participate. Fundamentally important is that there is a buy-in, that a country takes ownership of a project. At the end of the day, it is an entity, an infrastructure package, that does not belong to the United States. It will belong to Nepal. The idea of ratification is that it reflects people’s will. People’s elected representatives will decide whether or not the compact is suitable for the country. That’s not something that is required only for Nepal but has been required in every single compact established since the corporation itself began its work in 2002. 

People say the MCC grant is a way of countering China’s Belt and Road Initiative. How true or false is that?

I reject that linkage entirely. You are dealing with two entities that are completely different in their fundamental approach and implementation. For example, in the case of the MCC, there is a very clear set of public criteria that a country has to meet in order to qualify. It is also vital to understand that the United States does not propose compacts to other countries. Other countries request a review and the United States also looks at national priority. For example, in this compact’s case, the priority is the funding that would flow through the MCC compact is not for a project devised or prioritized in the United States. In the formulation of this, a question was asked: What does Nepal want to do with the compact? And the electricity transmission line and roads maintenance that ended up as priority were lifted straight out of Nepal’s own national planning documents. I fear because of misinformation there is always the perception that somehow these projects or the emphasis has been provided by the United States, which is not true. The MCC responded to Nepal’s own government seeking this kind of investment.

The criticism actually started when people started saying that the MCC and the Indo-Pacific Strategy are interlinked.

This is a part of the disinformation. Of course, the United States is going to devise and offer a program that is consistent with its policies. Way too much has been made of labels here. However you talk about the policy, the reality is that the US commitment in this region and in Nepal has been about fundamental freedoms, a free and open society, about economic prosperity and growth, the elements that make a free and open Indo-Pacific. It is too reductionist, too easy to simply link up a couple of phrases that are often misunderstood and point in the wrong direction. We know that the MCC corporation itself came into operation in 2002. Discussion on this compact with Nepal commenced in 2012, and the compact was signed in 2017. All of this predated this concept known as the Indo-Pacific Strategy. 

Coincidentally, the head of the government under whom the compact was signed is back in power in Kathmandu. Does that help?

This project has had the support of every Nepali administration that has been in power since the initial discussions began in 2012. Every single one of them. The substance of this program is sound, it is helpful, it is responsive to Nepal’s needs. I think problems develop when we attempt to politicize it. This is a stand-alone compact that is not attached to anything else the United States does. Of course, we hope that it is complementary to our development agenda and that we are not doing completely uncoordinated engagements here. But there are no conditionalities to it. That’s the one part of the conversation that I found most alarming because too many people are willing to suggest that A is linked to B which is linked to C. In fact, these compacts are designed to be stand-alone, independent sorts of projects. The MCC is a creation of the United States government but it does not reside as a specific US government entity. This is intended to make sure that we don’t get these things into political lanes. 

But like it or not, the compact is being politicized. Now we hear about its amendment, that the compact would not be signed as it is. Is the United States flexible about amending the compact?

I don’t know what those amendments are. I have also seen the press about the need for amendments. But I can tell you that we have not seen any reflection of the content of such amendments. This leads me to believe that in fact the substance of the compact is sound. The reality is, we spent five years negotiating this and answering many of these fundamental questions. This has not been rushed through. This went through a significant process of mutual discussion to make sure that when we got to the point where the compact was signed in 2017, we would have resolved many of the outstanding issues. Again, we welcome the questions raised in the parliament, we welcome the scrutiny, to ensure that there is an adequate degree of buy-in by the government. But rather than amendments I would want to focus on the substance of the question. We have been very committed to helping explain or clarify elements of the compact, so that we are grounded in facts. 

How much time does Nepal have to ratify the compact before it expires?

I can’t walk into hypothetical situations. I can tell you that we very much would like to see a ratification occur so that we can make this great program work for the Nepali people. It is a fundamental requirement of this program. 

What does your gut say? Would the MCC compact be ratified before the end of your term as ambassador in Nepal?

I certainly hope so. I know how critically important this is from a number of different perspectives. I know how important the compact and its implementation is not just for the project itself, which is already substantial, but also for the vote of confidence this can give for Nepal’s ability to implement a world-class infrastructure project on absolutely world class terms of transparency, employing and imparting skills to Nepali citizens, and in a way that allows the country to monetize its green energy: this is fundamentally important. I can’t think of anything else the US government could offer, if you are talking purely in terms of economic growth and employment, which would be a better option.