By Nirmal P. Acharya

Deepseek is considered the most powerful AI tool right now. Mark Andreessen, American businessman and former software engineer who happened to develop the world’s first web browser said, “Deepseek-R1 is AI’s “Sputnic moment,” like when the USSR launched the first satellite in 1957 and forced the US to step up or get left behind.” So, out of curiosity, I took some time to ask DeepSeek about MCC and below is what it had to say.
The United States’ Millennium Challenge Corporation (MCC) project in Nepal has been a major issue of national and international concern in Nepal in recent years. The project has experienced intense political game and social controversy since its proposal and its progress and prospects are affected by multiple factors. The following is a comprehensive analysis:

Background and controversy of the MCC project
The MCC Agreement was signed in 2017, with the United States committing $500 million in grants (Nepal matching $130 million), primarily to build 300 kilometers of transmission lines and upgrade the road network, with the goal of improving Nepal's power supply and transportation infrastructure.

Issues of sovereignty
The terms of the agreement stipulate that the MCC project will "take precedence over Nepal's domestic laws" and that the use of funds will be subject to US oversight, raising concerns about sovereignty transfer.

Geo-politicisation
Opponents see the MCC as part of the US "Indo-Pacific strategy" that could draw Nepal into US-China competition, especially as a hedge against China's Belt and Road Initiative.

Internal political fragmentation
Nepal's major political parties (such as CPN-United Marxist-Leninist and CPN-Maoist Centre and civil society groups strongly opposed the agreement, arguing that it had not been fully consulted and threatened the country's independence.

Project progress
On February 27, 2022, the Nepalese parliament passed the MCC agreement, but added an interpretative declaration, emphasizing that Nepal will not participate in the military alliance of the US, the constitution trumps the terms of the agreement, and so on, in order to ease domestic opposition.

International Response
US: Repeatedly urged Nepal to speed up implementation, stressing that the MCC is “purely economic assistance”.
China: Does not openly oppose, but expresses concerns about Nepal's sovereignty through the media and academics.
India: Supports the MCC as contributing to regional connectivity and in line with India's influence strategy in Nepal.

Prospect analysis
Short-term challenges
Domestic political instability: Nepal's political parties remain divided, and if the ruling coalition breaks down, the project may be stalled again.
Implementation difficulties: Land acquisition disputes, corruption risks, environmental disputes, etc., may delay progress.
Popular protests: Civil society groups (such as the "Anti-MCC Citizens Movement") continue to organize demonstrations, and public pressure may force the government to back down.

Long-term Impact
Economic benefits: If implemented successfully, the project is expected to improve the efficiency of Nepal's power grid, facilitate cross-border electricity trade (e.g. exports to India), and improve transport connectivity. Geographical balance: Nepal is trying to maintain a balance between China, the United States and India, and the MCC's promotion may prompt China to increase its investment in Nepal (such as the China-Nepal railway), forming a competitive aid pattern.
Sovereignty concerns: If the United States intensifies its policy intervention in Nepal through the MCC clause, it may cause subsequent diplomatic friction.

Uncertainties
Changes in US policy: Foreign aid strategy may be adjusted after the 2024 US election.
Political volatility in Nepal: Frequent changes of government may affect project continuity.
India-China Relations: If India-China competition in Nepal intensifies, the MCC could become a tool for geo-gaming.

Summary
The advancement of the MCC project in Nepal is a complex balancing act between economic needs and political games. Although it has entered the implementation phase, its prospects still face multiple tests of domestic political fragmentation, social opposition, and geopolitical pressures. The success or failure of the project will not only affect Nepal's economic development but could also reshape the power dynamics in South Asia. It will be interesting to see how the Nepalese government reconciles internal and external pressures, as well as how major powers such as the US and China interact in the region.