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The Millennium Challenge Corporation (MCC) is a US organization that specializes in providing development assistance to underdeveloped nations. The MCC Compact, which Nepal signed in 2017, was anticipated to serve as a catalyst for the nation's infrastructure and economic development. The implementation of the agreement, however, has faced challenges due to political unrest, controversies, and geopolitical tensions.

The $500m MCC Compact between Nepal and the United States has selected two major projects: a road maintenance project and an electricity transmission project. While the electricity project seeks to address the problem of power outages and inefficiency by enhancing Nepal’s power transmission infrastructure, the road project aims to increase road upkeep, advance transportation efficiency, and lower transportation costs, consequently boosting economic activity.

While the agreement has the potential to benefit Nepal significantly, it has also drawn criticism over concerns of sovereignty and potential entanglement in regional geopolitics.

This article analyzes the positive and negative aspects of the MCC agreement’s impact on Nepal and emphasizes the need for addressing challenges to harness its potential for the country’s development while preserving its sovereignty and regional relationships.

Despite its potential benefits, the implementation of the MCC agreement has faced several complex and multifaceted challenges, manifesting in various forms, including political unrest, controversies surrounding issues of sovereignty, and geopolitical tensions. One of the major points of contention arose when some stakeholders associated the project with the Indo-Pacific Strategy (IPS), a geopolitical initiative aimed at countering China's influence, raising concerns that it could potentially undermine Nepal’s sovereignty.

Critics voiced apprehensions about the deal's potential alignment with American interests and policies, fearing that it might bind Nepal to external agendas. Geopolitical anxieties were further exacerbated by Nepal’s strategically advantageous location situated between two influential neighbors, India and China, sparking concerns about how accepting aid from the US under the MCC could impact the country’s regional relations.

The agreement, caught in the midst of these intricate challenges, has not been immune to criticism concerning the perceived erosion of Nepal’s sovereignty and the potential entanglement in regional conflicts. This uncertainty surrounding the deal's implications and potential consequences contributed to delays in the ratification process through Parliament.

Consequently, the local communities directly affected by the proposed projects have voiced concerns about potential evictions, apprehensions about environmental ramifications, and anxieties related to the right compensation for land acquisition. 

These uncertainties surrounding the MCC Compact have had a tangible and adverse impact on Nepal’s development trajectory, impeding the timely flow of critical infrastructure funding and exacerbating existing challenges with power transmission and road maintenance that hinder industrial expansion and economic growth. Therefore, it is necessary to address these challenges with a comprehensive approach to ensure the realization of the agreement’s potential benefits while safeguarding Nepal’s sovereignty and fostering harmonious regional relationships.

To harness the benefits of the MCC agreement, it is crucial for the Nepali government and stakeholders to address the controversies and ensure openness in negotiations. Diplomacy should be used to alleviate geopolitical tensions and reassure Nepal’s neighbors about the country’s intentions. Seen as a game-changer for Nepal, the MCC agreement presents both opportunities and challenges for Nepal’s development. 

While it holds the potential to improve infrastructure and foster economic growth, it must be implemented with care to address concerns about sovereignty and regional relations.  The Government of Nepal should strive for transparency and engage in diplomatic efforts to overcome the hurdles and ensure successful project implementation. By doing so, Nepal can reap the benefits of the MCC Compact while preserving its sovereignty and regional links.

Japan is currently facing a significant challenge with its growing elderly population and declining childbirth rates. This demographic shift has led to the decline of extended families, resulting in a demand for caretakers in the Japanese market. A team of Japanese experts recently discussed the shortage of human resources and the increasing elderly population, highlighting the opportunities for Nepalis to address the human resource crisis in Japan. In a discussion organized by Annapurna Media Network on Tuesday, they shed light on the ways Nepalis can apply for semi-skilled worker positions in Japan and economically benefit from these opportunities.

In the interaction, Sanat Neupane, CEO of Annapurna Media Network, shared his perspective on Nepal-Japan relations and the migration of Nepalis seeking employment abroad. He said that Nepal and Japan have a long-standing friendship, and added that the network has been advocating for the healthcare and rights of migrant workers. “Although the ultimate goal is for Nepalis not to have to go abroad for employment, he acknowledged that if they do, Japan should be the preferred destination due to the favorable prospects it offers,” he added.

Given below is the viewpoints of the members of the delegations in their own words:

Shimichi Hotta, Advisor, Blue Sky Japan

There are no extended families in Japan anymore, and the childbirth rate is very low. We have started experiencing a shortage of human resources in Japan to take care of our elderly population. With the decreasing childbirth in the country, the population has decreased in Japan of late. Currently, there are 5,000,000 households in Japan, and about 20 percent of them are families of the elderly population. Unfortunately, the Japanese tradition of extended families has now ended, and the active working population is becoming low. Though we have insurance policies for the elderly population, the time when youths were taking care of the elderly population will not come back.

Social security has been a matter of great concern for our government. There is a high demand for caretakers in our country. To address labor shortages in various industries, the Japanese government has come up with the semi-skilled worker scheme. Under the new conditions, about 60,000 foreign workers will be allowed to enter Japan. Nepalis can cope with any kind of situation and can control their feelings and emotions, which is why there is a demand for Nepali human resources in Japan. 

Go Uehara, CEO, Blue Sky Japan

I am thankful for the opportunity to share about our work here. Our company has been providing employment for 200 Nepalis, and we are eager to offer employment opportunities to more Nepalis. People from across the world have come to Japan to work in the caregiver sector in the elderly care homes. We are focusing on how we can safely take Nepalis to Japan without them being cheated by middlemen. Our commitment is to strengthen their economic status and ensure their stay in Japan is safe.

Naohiro Beppu, General Manager, Planning Division, Medical Corporation Seihoukai

​​​​​​​We have been running nursing homes and hospitals in Japan. I have noticed that Nepalis are close to the pronunciation of the Japanese language, which is crucial for effective communication in elderly care. Nepalis are smart in developing these communication skills. We believe that  Nepalis can benefit a lot. We have already decided to take 12 Nepalis and are eager to recruit more. Currently, we have 2,500 people working with us, and we are looking to add more Nepalis to our team.

Minoru Fujisawa, Trainer/Caregiver specialist, Medical Corporation Seihoukai 

I am responsible for the training component in the company, and I strongly believe in the importance of continuous training for better job performance. In our experience, even Japanese employees may not possess all the required skills in the beginning, but Nepalis have demonstrated better skills, and they are easy to teach. Once they receive proper training, it significantly eases their work and enhances their abilities. With their inherent skills and the added benefits of training, I have full confidence that Nepali caregivers can excel in their roles and achieve remarkable outcomes. 

Yoshiyuki Masuda, General Manager, HR Division, Medical Corporation Eiseikai

I have been involved in running health care institutions, and one of the challenges we face is that elderly people often seek emergency services at a particular health institution but then have to go to other places for further treatment. Many prefer different health institutions for extended hospital stays rather than the one they used for emergency care. Additionally, doctors often recommend physiotherapy treatments for patients, but some patients prefer to stay at home, and they cannot be left alone without proper care. This has created a significant need for caretakers to assist these patients with their daily needs. 

Moreover, nursing care is also in high demand for patients who require specialized attention and support. Health practitioners also visit patients' homes for follow-up care. Due to these factors, there has been a wide demand for caretakers in Japan. Having observed the qualities of Nepali caregivers, I can say that they are smart, dedicated, and honest in their work. Because of these attributes, we have been actively seeking to recruit Nepali caregivers in our health institutions. I have already listed eight Nepalis for the second round of interview.

Akiko Wakata, Chief, HR Division, Medical Corporation Konoikekai

​​​​​​​This is my first visit to Nepal, and I am truly impressed by the Nepalis’ ability to speak Japanese properly. I have observed that they possess excellent caring skills, and those with nursing expertise will find it much easier to adapt to life in Japan. I am eager to provide caregiver certificates to Nepalis who are willing to stay and work in Japan. Currently, I have already listed six Nepalis for interviews, and I am highly interested in increasing the number to 12 or even 18. 

Santosh Poudel, Director, Blue Sky Japan

​​​​​​​To apply for the visa in Japan under this scheme, one must pass the Japanese language test. The test can be taken after completing three months of language classes at any recognized language institution in Nepal. Anyone willing to apply for the caretaker position, can sit for the test, which includes fundamental questions about caretaking. The test format is multiple-choice, and the applicant has the option to take it in either Nepali or Japanese language. The application process is free of cost, and the air ticket will also be provided at no charge. Once selected, you can work for eight hours per day and earn Rs 200,000 per month, along with access to insurance facilities.  Anyone below the age of 60 are eligible to apply for this position. The companies will offer a minimum five-year contract, and the visa should be renewed every year. Also, the applicants can take a certificate within five years of their tenure and then apply for a permanent residence in Japan.

Compared to other South Asian countries, Nepal’s electoral process is considerably free and fair. However, there are many loopholes where the country needs to make urgent improvements to strengthen democracy.  

The Election Commission (EC) has come up with a draft of new law which proposes sweeping changes in the country’s election law to create a more inclusive and accountable electoral process. The draft law, prepared after comprehensive consultations with political parties, is currently being studied by the Ministry of Home Affairs. 

The changes proposed in the election laws were made based on various factors, including the orders from the Supreme Court, practices followed in other democratic countries, and lessons learned from Nepal’s own electoral history.

Constitutional expert Chandra Kanta Gyawali says the proposed law aims to address numerous issues related to free and fair elections, such as allowing voting rights to Nepali citizens living abroad, imposing a spending ceiling on candidates and taking measures to minimize the chances of vote-rigging.  The law covers all types of election, from presidential to local level, and if endorsed, will further improve and democratize the election process.  

Key provisions 

One of the proposed changes is the implementation of an online-based voter registration system. This system will modernize the way citizens register to vote, making it easier and more efficient for everyone to participate in the democratic process, say EC officials.

To ensure that Nepalis living abroad too have a say in the nation's governance, the EC has proposed including them on the voter list and allowing them to cast their votes under the Proportional Representation (PR) system. 

The election governing body has also proposed a provision to prohibit candidates who have lost in federal, provincial, or local elections from running in other elections, except in the case of their own constituencies or local units. This measure is aimed at preventing candidates from hopping from one constituency to another.

To ensure a diverse representation of voices, the EC has proposed restricting candidates, who had been elected twice under the PR system, from running again through the same route. To ensure women representation, the EC has proposed making at least 33 percent women candidates mandatory under the first-past-the-post (FPTP) voting system. 

The EC plans to boost women’s participation even further in local units. To this end, the election body has proposed a provision that requires parties to field women in the posts of either mayor/chairperson or deputy mayor/vice chairpersons in local units. If parties are filing candidacy in one of these two posts, it has to be women. The EC has also proposed that 33 percent of the candidates for the post of ward chairpersons in local units has to be women. 

Another key proposition made by the EC in the election law is  the ‘None of the Above’ (NOTA) option on the ballot paper. This option would give voters the chance to express their dissatisfaction if they feel that none of the candidates are suitable to represent them. 

In 2014, the Supreme Court had directed the government to allow voters to cast negative votes by including NOTA option on the ballot paper. But the directive was never implemented at the consensus of major political parties.  Another crucial proposal to reform the country’s election process proposed is fixing the election dates and campaigning period to ensure a more structured and organized electoral process. 

Similarly, the poll body has recommended setting the candidate eligibility criteria directly in the law itself. This proposal aims to establish clear standards for individuals aspiring to run for public office. The EC has also proposed prohibiting candidates from contesting elections under a different party's banner before formally resigning from their current party. This provision intends to discourage the practice of using other political parties' election symbols for personal gain.

To expedite the resolution of disputes regarding the eligibility of elected candidates, the EC has suggested that the concerned courts must render a final decision within six months from the day the case is filed. Furthermore, the EC has proposed a provision mandating candidates to declare their assets held in their name or in the name of their family members during the nomination process. 

Recognizing the importance of diverse representation, the EC has recommended providing a 50 percent discount on the election deposit amount for candidates belonging to Dalit, women, underprivileged, sexual and gender minorities, and people with disabilities. 

Likewise, the EC has also suggested introducing advance voting under the PR system for specific groups, such as government staffers assigned on poll duty, security personnel, election observers, and individuals preparing for foreign visits.  The EC has said that these changes would be incorporated into the ‘Bill to Amend and Unify Existing Election Laws’ and forwarded to the Cabinet through the Ministry of Home Affairs.

EC hopeful of parliamentary endorsement 

Chief Election Commissioner Dinesh Kumar Thapaliya said the commission is positive that the lawmakers will endorse the bill aimed at improving the country’s electoral system. He added that in consultations held with the chief whips of all political parties, the EC officials were assured that the proposed law will get parliamentary endorsement.  But Ila Sharma, former EC commissioner, said that there was no guarantee that Parliament would accept all the provisions suggested by the EC. As electoral reform is an ongoing process, all issues may not be incorporated at once, she added. Sharma suggested that all sections of society should exert pressure on the political parties and the government to reform the electoral process.

Key suggestions

• NOTA ballot paper 
• Ensuring diverse representation 
• Declaration of assets by candidates 
• 33 representation of women at all levels 
• Voting rights for Nepali living abroad 
• Online-based voter registration 
• Fixing the date of election by EC 

Residents of Balkot area in Suryabinayak Municipality-3, Bhaktapur, were hit by a power outage that lasted for several hours on Tuesday morning. The morning routine of office workers and students were affected as a result. Many families did not have access to water because they could not use the water pump. 

When the residents tried to call ‘No Light’ service of the Nepal Electricity Authority (NEA), the line, as always, was unresponsive.  

“We could have prepared accordingly, had we been notified about the power outage,” said Roshan Dahal, a local resident. “We tried calling the ‘No Light’ number, but no one answered.” 

But NEA Spokesperson Suresh Bahadur Bhattarai claimed that the ‘No Light’ was a 24/7 service. 

“We have a human resource crunch which might have led to unresponsiveness,” he claimed.

Abrupt and frequent power cuts have become common across the country in the recent months. The NEA officials say this is primarily due to maintenance works that are currently underway in different parts of the country. 

While the power utility has issued a ‘Maintenance Shutdown Schedule’ on its website, it does not match the time of electricity outage. Moreover, the schedule only concerns Kathmandu Valley; it does not tell when the maintenance works are being carried out in other parts of the country. 

It took five hours or so for the power to restore in Balkot. The local residents did not find out why there was an outage in the first place.    

Earlier, load shedding was primarily limited to industrial areas, but from the past few months, even households are facing frequent power cuts.

According to a research report published in May 2022 by the Confederation of Nepalese Industries (CNI), 64 percent of Nepal’s industries are forced to install diesel generators due to frequent power outages. The use of generators, as per the paper, results in an average increase of 5.3 percent in the industries’ monthly operation costs.

Between 2008 and 2016, the whole country suffered from unreliable power supply, sometimes up to 16 hours a day. According to the study entitled ‘Economic costs of electricity load shedding in Nepal,’ the country lost an estimated $11bn value of its GDP in that period. 

During the load shedding period in Nepal, the NEA used to publish weekly power outage schedules and update it regularly. 

Load shedding or not?

The recent power cuts have led many people to suspect that the NEA has imposed ‘undeclared load shedding.’ 

“When there was officially announced load shedding in Nepal, the NEA used to provide the weekly schedule of power outages,” a netizen posted on Facebook. “But now, the NEA neither admits to load shedding, nor provides regular electricity, compelling people to think if the days of load shedding are back.”

The NEA officials claimed that there is no load shedding, since the country has been generating surplus electricity during the rainy season. 

As of now, the total installed capacity of hydropower plants operational in the country is 2,759 MW. However, the national peak demand is only 1,806 MW. Yet, there are regular power outages.

Delay in the construction of transmission line

The NEA officials attribute the intermittent power cuts to the delay in constructing transmission lines. The construction of Hetauda-Dhalkebar-Inaruwa 400 kV and Hetauda-Bharatpur-Bardaghat 220 kV transmission lines has been ongoing for more than a decade, significantly surpassing the initially planned completion time of three years.

The delay in the construction of these transmission lines has also hit the country’s hydropower sector.  

Representatives of Madhya Bhotekosi Jalavidyut Company Ltd have said that the project would miss the generation deadline by at least one month. 

“We have already encountered several delays owing to local obstructions and natural disasters,” said Ram Gopal Shiwakoti, the company’s CEO. 

Initially, the project had planned to complete the project by the end of 2022, which was pushed to mid-June. 

“Our revised electricity generation schedule is September. Due to the delays, the project cost has escalated by Rs 2.75bn,” added Shiwakoti.

While the project’s work is almost complete, the actual generation cannot commence until the transmission lines are completed. 

Due to the delay in constructing high-capacity transmission lines, the NEA official said, the authority is currently transmitting only around 80 MW of electricity using its old transmission system. The new lines would have supported the transmission of up to 300 MW. 

The construction of a 400 kV transmission line is essential for transmitting electricity to western Nepal from the Dhalkebar substation. The existing 132 kV transmission line in Hetauda is unable to carry sufficient electricity to supply the western region. As a result, the NEA is unable to meet the demand and purchase electricity from independent power producers.

Poor infrastructure

Mukesh Kafle, former Managing Director of the NEA, said that the delay in the construction of new transmission and distribution lines is not the only reason behind power outages. 

“The Nepal Electricity Authority needs to replace its overall system. The time has come to invest in replacing all the channels including substations and feeders,” he said.

Without the system overhaul, Kafle warned, their situation will get worse in the future.

Meanwhile, the NEA has instructed the Independent Power Producers (IPPs) to reduce their energy generation, claiming that around 170 MW of electricity from 20 hydroelectricity projects is going to waste. 

Ganesh Karki, president of Independent Power Producers’ Association Nepal (IPPAN), said that the only solution for regular electricity flow is installation of modern distribution and transmission lines. 

“The government should not leave all the work of infrastructure development to the electricity authority. It should also intervene when necessary to control the problem of power spillage,” he said.

Karki added Nepal has finally become power surplus at least in the wet months, so the time has come for the government and investors to focus on infrastructure development.

“Earlier, everyone was focused on power generation because we were way behind our producing capacity. And since infrastructure development was never our priority, we do not have a reliable distribution channel to supply electricity.”