Nepal's Sovereignty in Flux: Navigating the US MCC and China BRI Conundrum - Implications for Nepali Democracy

Nepal's strategic location between India and China necessitates a balanced approach to strengthening its democratic institutions. A significant issue in this context is the acceptance of a $500 million grant from the United States under the Millennium Challenge Corporation (MCC), aimed at supporting hydroelectric and infrastructure projects. The decision by the Nepali government, led by the pro-Chinese Maoist party, was widely perceived as a strategic move primarily intended to consolidate its power. After prolonged political and ideological debates, the grant was ratified by Parliament on February 27, 2022.
Nepal’s simultaneous commitment to China’s Belt and Road Initiative (BRI) and its engagement with the U.S.-led Indo-Pacific Strategy presents challenges in maintaining a delicate balance between these global powers. Nepal must navigate its relationships with India and China while addressing various domestic political and economic challenges at this critical juncture. This panel will explore Nepal's democratic transition in detail and assess its broader implications for South Asia's regional stability.