US dismisses reports of threatening Nepal over MCC

The US embassy in Nepal has rejected reports suggesting America is threatening Nepal to ratify the proposed grant assistance under the Millennium Challenge Corporation (MCC). 

The MCC has become a toxic factor between Nepal’s major political parties. Nepal’s political parties are sharply divided over the issue of whether to accept the US grant assistance under the MCC agreement, which is under consideration in the House of Representatives. 

Nepal and the United States signed the MCC agreement in 2017. 

“We have not threatened Nepali leaders – that is false.  But we are asking Nepal to follow through on its commitments.  Whether the Nepali leaders ratify MCC is a decision for Nepal to make, as a sovereign democratic nation, and Nepal's decision alone,” US Ambassador to Nepal Randy Berry said in a statement to WION. 

“After years of delays on following through on Nepal’s promise, we simply ask that ratifying the agreement be brought to a vote so the people, through their elected officials have their say,” he added.

Ambassador Berry said this year marks the 75th year of ties between Nepal and the United States and America has stood with Nepal through "monumental and incredible changes".

"The relationship between the United States and Nepal is broader than one agreement. During these 75 years, Nepal has seen monumental and incredible changes. We have stood with Nepal through these changes and supported the country with development aid, disaster response and preparedness assistance, health and education programs, and more,” ambassador Berry said. 

Commenting on the uncertainty of the compact ratification, he said, “But in general, withdrawing from a signed bilateral agreement would have an impact on any two countries’ relationship.” 

Speaking on the compact, ambassador said, “We have had discussions with Nepali leaders – but not in the way characterized by some press and online discourse.  As verifiable by public documents or statements, Nepali leaders understand that MCC will bring jobs and infrastructure to Nepal – it is why the government of Nepal asked us for an MCC Compact in the first place.”

“Unfortunately, this development program has been mired in disinformation.  This is disinformation about a program which is based on transparency, accountability, and democracy – who would be against that?” he added in the statement. 

As per reports, US Assistant Secretary of State Donald Lu had raised the issue earlier during his separate telephonic conversation with Prime Minister Sher Bahadur Deuba and other ruling leaders. 

It is said that Lu warned that “if Nepali political leadership failed to endorse the MCC compact grant within the stipulated deadline of February 28, the US would be forced to review its ties with Nepal”. 

In a letter addressed to Prime Minister Deuba and CPN Maoist chairman Pushpa Kamal Dahal ‘Prachanda’ on Feb 3, the United States has given the government of Nepal a deadline of February 28 to endorse the compact from the Parliament. 

The letter had come in response to the commitment letter sent by Prime Minister Deuba and CPN-Maoists chairman Prachanda on September 29, 2021, to the MCC Board of Directors. In the letter, Nepal has committed to passing the compact with the required parliamentary majority within four-five months, the deadline which is approaching. 

As the deadline is hovering over the head of the Prime Minister, it seems the ruling alliance is in favour of finding a consensus on the MCC Nepal compact before it enters into the parliament.