MCC responds to the letter of Nepal government

Clarifies that MCC is not part of the Indo-Pacific Strategy, it has no component of military alliance, the constitution of Nepal prevails over the Compact and it does not impact Nepal's agreements with other countries.

NL Today

  • Read Time 3 min.

Kathmandu: The Millennium Challenge Corporation based in Washington DC has sent replies to the letter sent by the Ministry of Finance on September 3, clarifying that MCC’s Nepal Compact is not the part of Indo-Pacific Strategy, it has no component of military alliance, constitution of Nepal prevails over the Compact and that it does not impact Nepal’s agreements with other countries.

In a long letter addressed to Minister of Finance Janardan Sharma (carbon copied to Prime Minister Sher Bahadur Deuba, US ambassador to Nepal Randy Berry, Finance Secretary Madhu Kumar Marasini, MCC Deputy Vice President for Europe, Asia, Pacific and Latin America Jonathan Brooks,  Joint-Secretary of Finance Ministry Dhani Ram Sharma, MCC Resident Country Director of Nepal Troy E Kofroth, and Executive Director of  MCA-Nepal Khadga B Bisht), the MCC has thanked Finance Minister Sharma for “opportunity to address the clarification questions provided on behalf of members of Parliament, civic leaders, and the Nepali people.”

The letter signed by Fatema Z Sumar, the vice-president of Department of Compact Operations at the MCC headquarters in Washington DC, who is scheduled to visit Nepal on Thursday, states that the MCC is committed to having open and transparent dialogue with the people of Nepal and says that this exchange is a positive step toward ratification of the MCC Nepal Compact.

“MCC’s promise to help the people of Nepal has never wavered. We are dedicated to reducing poverty and fostering economic growth for all Nepalis,” states the letter. The letter further says that MCC Nepal Compact is a continuation of mutual friendship between the US and Nepal and underscores the government of Nepal’s commitment to democratic principles and building a better future for all Nepalis.

In the letter, Sumar also talks about the false and misleading information about MCC in Nepal. “There has also been an increase of false and misleading statements about MCC. MCC has no hidden agenda,” states Sumar in the letter. Sumar has recommended that the letter be made public so that all Nepalis will know “this grant program will benefit nearly 23 million people by providing more reliable electricity and lowering the cost of transportation and energy.”

“In Nepal, MCC’s goal is to increase and accelerate improvement in the lives of Nepal’s citizens,” says the letter. It says that the MCC Nepal Compact is a grant for Nepal to complete the electricity transmission and road maintenance projects that the Government of Nepal itself selected as critical for Nepal’s economic growth. “The funding does not need to be repaid,” the letter clarifies.

Likewise, it clearly states that MCC prohibits using funding for any military purpose. “There is no connection between the MCC Nepal Compact and any military alliance or defense strategy,” it says.

Dispelling a major rumor that MCC Compact stands above the constitution, the letter says that the constitution of Nepal prevails over the MCC Nepal Compact. The “Constitution of Nepal always prevails over the MCC Nepal Compact,” says the letter.

In another major clarification, the letter states that MCC Nepal Compact is not an agreement under the Indo-Pacific Strategy. “MCC compacts are agreements between MCC and the partner government. The strong relationship between the United States and Nepal long predates the Indo-Pacific Strategy,” says the letter. It further says that MCC Nepal Compact is not an agreement under the Indo-Pacific Strategy. “Any decision by Nepal regarding the Indo-Pacific Strategy is separate and independent from the MCC Nepal Compact.”

While clarifying that the signed MCC Nepal Compact cannot be amended at this time, the MCC has mentioned that the Compact does not impact the government of Nepal’s agreements with other countries or entities. “MCC recognizes that Nepal has relationships and agreements with many other donors and countries. All of these relationships and agreements are separate and independent from the MCC Nepal Compact,” says the letter.

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