New Delhi, India

On the recommendation of council of ministers, President Bidya Devi Bhandari last week had called for the next session of the House of Representatives to be held at 4 pm on September 8 and one of the main agendas is to table the proposal to endorse $ 500 million American grant assistance, Millennium Challenge Corporation’s Nepal Compact. 

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It is a project of $630 million, where MCC will provide a grant of $500 million and Nepal will bear $130 million. $500 million goes to the energy sector and $130 million goes to the roads sector. 

It is a challenging task for Prime Minister Sher Bahadur Deuba to reach a consensus on the MCC, taking into account US pressure on the one hand and coalition partners on the other. 

Leaders of the then CPN (Maoist), including Chairman Pushpa Kamal Dahal, had protested when the then Prime Minister KP Oli took the process forward for the parliamentary approval of the MCC. 

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Maoist leaders, that opposes the MCC outright, argues that it is a part of the U.S. Indo-Pacific Strategy (IPS) and thus acceptance of MCC would drag Nepal into a military alliance with America. 

Communist Parties in Nepal believe if Nepal subscribe to the IPS, its relation with China will be affected. 

However, following controversey surrounding the programme, the MCC is yet to be ratified by Nepal’s Parliament, a prerequisite for its implementation in the areas of electricity transmission and transport (road) sector. 

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As per the agreement with the United States, the MCC should be endorsed from Parliament to ensure that all political parties take ownership so the project can be implemented in a smooth way. However, some politicians and civil society members argue that there is no tradition of endorsing aid projects from Parliament.

Meanwhile, the US Embassy in Nepal has stated that the western country was a supporter of free speech after a protest was staged in front of the Embassy against MCC. 

“We are a strong supporter of free speech & public discourse based in fact, including on MCC. The right to peacefully express one’s views is intrinsic to democracy. The US has been a partner of Nepal and its people for decades & will always support its long-term prosperity,” the Embassy said in a tweet. 

Nepal Government had earlier written a letter to the US Government through the Embassy in Nepal to clarify on provisions of the project of which some leaders think is allegedly jeopardizing Nepal’s sovereignty.

Responding to the letter received, Embassy officials told WION, “MCC received official correspondence from the Government of Nepal’s Ministry of Finance regarding the MCC grant today. This is a positive step toward ratifying the compact and shows MCC’s consistent willingness to have an open and transparent dialog with the Nepali people regarding the infrastructure program.”

Voices against the ratification of MCC have started to be heard on the streets and many groups, political parties will once again stage a protest today in front of the Parliament. 

The last session of the Nepal parliament was prorogued to August 17, a day after which the Deuba government introduced an ordinance to amend the Political Parties Act. 

At a time when the United States is stepping up diplomatic activism over MCC ratification, China has also expressed interest in implementing the BRI. Kathmandu is now in the geopolitical gravity between the two powers.