Nepal and the United States signed the $500 million grant in 2017 to implement two infrastructure projects related to transmission lines and road upgrades. The agreement was registered in Parliament in 2019. But it has been blocked for more than two years, with political parties sharply divided over their parliamentary ratification. Nepal signed the pact agreement in September 2017. However, Parliament has not yet ratified the agreement. A month ago, MCC Vice President Fatima Sumar was in Nepal for a four-day visit when she met with parliamentarians, civil society leaders and the business community to clarify her doubts about the pact. To reduce poverty in developing countries, the United States has signed the Millennium Challenge Corporation (MCC) agreement with 46 countries around the world. At Nepal`s request, the country signed on 14 September. In September 2017, MCC reached an agreement with the United States to receive $500 million in grants for energy and road development. However, one of the conditions attached to this agreement was that the beneficiary country had to have it ratified by Parliament.
But even after four years, the agreement could not be ratified in that country. Washington, D.C. (October 29, 2021) – For more than 70 years, the United States and Nepal have forged a partnership based on shared values, democratic ideals, and trust. From disaster relief after the 2015 earthquake to our ongoing whole-of-government response to the coronavirus pandemic – including the donation of 1.6 million COVID19 vaccines to date – the United States has been there for the Nepalese people in their greatest needs. The $500 million grant from the Millennium Challenge Corporation (MCC) builds on the strong partnership between the United States and Nepal to fight poverty through economic growth. Since grant assistance under the MCC must be approved by the U.S. Congress, the U.S. government seeks the same level of commitment from recipient countries. As a result, most countries ratify the MCC Pact through their parliaments.
However, their agreements do not say that in the event of contraction, the provisions of the pact would prevail over national laws, according to the expert who previously worked for the MCA. MCC has become a hotly debated topic in Nepal. While some political parties have expressed concerns about certain points in the deal that undermine Nepalese sovereignty, social media platforms and YouTube are flooded with comments and opinions against the US subsidy. Nepal was the first south Asian country to qualify for the compact after meeting 16 of the 20 policy indicators. Baikuntha Aryal, then Deputy Secretary, and Jonathan Nash, Acting Director General of MCC, signed an agreement in Washington in September 2017 in the presence of Gyandera Bahadur Karki, then Secretary of the Treasury, and US Assistant Secretary of State John J. Sullivan. The U.S. government has agreed to provide $500 million in grants, while Nepal would provide $130 million for the project, which prioritizes energy and roads. This is the largest grant Nepal has ever received.
The key question that Nepalese should discuss is not whether the pact is in Nepal`s national interest, but whether Nepal has a strategy and process by which it chooses to conduct its foreign policy and reach agreements. Failure to ratify the agreement will seriously damage Nepal`s credibility, its relations with the United States and hamper aid and investment in Nepal. After MCC became a controversial topic, the Treasury Department had written to MCC headquarters during the first week of September asking for answers to some of the concerns. MCC headquarters replied that the agreement was not above the Nepalese constitution and was not part of the Indo-Pacific strategy. The answer came shortly before Sumar`s visit to Nepal. Parties opposing the approval of the MCC in its current form have stated that some of the clauses need to be amended. Many have also questioned the need for parliamentary ratification of the pact while other similar development projects or grants have simply been concluded between the two governments. Due to the serious differences between political parties, the whole country is now widely divided on this issue, with one side supporting it while the other opposing it. Those who support the MCC agreement often argue that it would allow the country to secure huge funds for the construction of roads and transmission lines, which are crucial for the country`s development. It is simply a gift from the American people to the Nepalese people. Since Nepal is divided on the MCC issue, it is imperative to develop a national consensus on MCC and not be influenced by rumours.
It must decide whether it wants to be like Sri Lanka, which ended the MCC agreement for certain reasons, or like Mongolia, another landlocked country like Nepal, which successfully implemented it. If it cancels the MCC, it could affect aid and support not only from the United States, but even from other multilateral institutions. But if it ratifies it, it could also have an impact. Now the ball is in Nepal`s court, as it has to decide whether it wants to live with or without MCC. The MCC stated that it should give the Pact the status of an international agreement and ensure that there is no delay in the implementation of projects whose ratification is necessary. Experts such as the vice-president of the National Planning Commission Dr. Biswo Poudel support ratification because it makes the process more transparent. In fact, Poudel argues that any aid from other countries should also be ratified by parliament. Partnership between the Millennium Challenge Corporation (MCC) and Nepal The Millennium Challenge Corporation`s Nepal Compact is a pact between the U.S. humanitarian organization Millennium Challenge Corporation (MCC) and the Government of Nepal.
Nepal was the first country in South Asia to qualify for an MCC treaty by adopting 16 of the 20 policy indicators used by the MCC. The agreement was signed in Washington DC in September 2017; Nepal`s Treasury Secretary at the time, Gyanendra Bahadur Karki, and the then U.S. Assistant Secretary of State, John J. Sullivan, were in attendance. As part of nepal`s largest grant ever received, MCC would provide $500 million for the construction of transmission lines and road maintenance. Nepal would contribute $130 million to the projects. [1] The pact will be signed on 14 September 2017 in Washington DC between Nepal and the MCC in the treaty room of the Ministry of Foreign Affairs. Finance Minister Gyanendra Bahadur Karki and JONATHAN Nash, acting CEO of MCC, chanted the Pact agreement. On the other hand, critics have the impression that the MCC is against Nepal`s national interests as it replaces the country`s laws. They believe this could allow the U.S. to control intellectual property rights as part of the implementation of the agreement. Doubts are expressed that it favours India because the transmission lines under the project would be connected to the latter.
Foreign Minister Gyawali has repeatedly denied that the MCC Nepal Compact talks about IPS. He stated that there was no need to worry as the implementation of projects under the MCC is directed exclusively by the Pact. The Nepali Congress, under whose leadership the pact was first signed, adopts the same position. Congress says the administration must abide by the agreement, which does not talk about the IPS, regardless of what officials say, even from the United States. Congress asked the administration to prioritize the pact for ratification at this session of the House of Representatives, thereby expanding its cooperation in the process. Opposition leaders have even warned that it would be « suicidal » for Nepal if parliament rejected the pact, as it would have lasting consequences for diplomatic relations between Nepal and the United States. There are several cases in which USA Compacts end partially or completely for a variety of reasons. The contracts for Madagascar and Mali were fully terminated, while those for Nicaragua and Honduras were partially withdrawn.
In Mali, the dismissal followed the military coup at the end of March. From what I understand and the clarifications of the MCC, the Compact Fund cannot be used for activities that violate U.S. laws, but this does not affect the constitution of Nepal. The agreement is in line with most other international agreements or treaties that Nepal has already signed. And Nepal has already conducted an audit of the Nepal Compact office. However, another section of the ruling party, led by Prime Minister KP Sharma Oli, has lobbied for the pact and wants the current session of the House of Representatives to ratify it. The Nepali Congress of the main opposition also argued that the agreement would be approved without delay. The mcC pact does not say that it must be ratified by the Nepalese parliament.
However, the text of the agreement states that in the event of a conflict, the provisions of the covenant will prevail over nepal`s existing laws, which require parliamentary ratification under the Nepal Treaty Act.
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