US gift to Nepal a Trojan horse: China Daily editorial

In a statement on Feb 9, the United States embassy in Nepal described the $700 million that was pledged to the country in an investment deal arranged under the auspices of the US aid agency Millennium Challenge Corporation as "a gift from the American people and a partnership between the two nations that will bring jobs and infrastructure to Nepal and improve the lives of Nepalis".

But in telephone conversations with Nepalese leaders on Feb 10, US Assistant Secretary of State for the Bureau of South and Central Asian Affairs Donald Lu told them to endorse the MCC pact by Feb 28 or else Washington would "review its ties with Nepal."

As Chinese Foreign Ministry spokeswoman Hua Chunying noted on Wednesday, when does a gift come packed with an ultimatum — "Is it a 'gift' or Pandora's box?" And judging by the public protests aimed at stopping Nepal's Parliament from endorsing it, many Nepalis have been asking themselves the same question, and have concluded it is the latter.

Which should not be surprising seeing that Section 7.1 of the agreement reads, "The Parties understand that this Compact, upon entry into force, will prevail over the domestic laws of Nepal." Furthermore, the Compact includes the condition that the auditing of the use of the funds be carried out by US rather than Nepali auditors. Since the MCC will assume a higher authority than Nepal's domestic law if accepted, it would make Nepal a dependent of the US.

Nepal is a developing country. Its per capita GDP is just $1,028 according to World Bank data, about 8 percent of the world average. It desperately needs infrastructure investment, which is why the US "gift" has not been rejected out of hand by the government despite the attached conditions which herald its loss of autonomy.

By attaching these conditions to its "gift", the US is exploiting Nepal's need for assistance to try and undermine the country's friendly relations with China and drive a wedge between the two countries.

David J Ranz, who was US deputy assistant secretary of state at the time, admitted while on a visit to the country in 2019 that Washington viewed the grant as a crucial part of the US' Indo-Pacific Strategy aimed at containing China.

Since the devastating earthquake in Nepal in 2015, Beijing has overtaken India to be the main source of foreign investment in the country. And China supports Nepal's socioeconomic development to the best of its capability with respect for its sovereignty and the will of its people. As part of these efforts, a freight railway is under construction between the Tibet autonomous region and Kathmandu under the framework of the Belt and Road Initiative.

The world needs international cooperation. But such cooperation should be carried out under the principles of mutual respect and equality. The providers of aid should fully respect the sovereignty of the recipient state and not attach any political strings to their assistance.