MCC Vice President makes a strong case for early ratification of Nepal Compact

Before wrapping up her four-day Nepal visit, Fatema Z Sumar reminded Nepal of the urgency to ratify the Compact and shared the optimism that Nepal would.

Mahabir Paudyal

  • Read Time 4 min.

Kathmandu: Fatema Z Sumar, the Vice President of Compact Operations at the Millennium Challenge Corporation (MCC), has asked the political leaders and the government to urgently ratify its Nepal Compact so that Nepal can reap the benefits that Compact’s implementation could bring to the country.

Sumar was on a four-day trip to Nepal that started on Thursday.  

During the press meeting organized in Kathmandu before she flew back to Washington by wrapping up her Nepal visit, Sumar shared with the journalists the interactions she had with various stakeholders in Nepal regarding the need for Nepal to ratify the Compact as soon as possible. “I shared the message of urgency with every single person I spoke to because this is an opportunity to use $ 500 million grant investment with no strings attached,” she said. “Ratification was supposed to happen two years ago.  My question to all the political party leaders was how long can you afford to wait? I said it’s time.”

She said Nepal does not need to wait anymore “to create jobs, to build the transmission infrastructure to turn the power on, to turn the lights on all throughout the country”, which is what, she said, the MCC’s Nepal Compact is all about. “Why should the people of Nepal wait to have safe roads to drive on” so that over 2000 people “don’t die a year because of unsafe roads? Why should the people of Nepal wait to lower the cost of doing business in Nepal?”

Sumar said that MCC is for fighting poverty. “The $ 500 million is meant for reducing poverty for nearly 23 million Nepalis, which is more than 80 percent of the population and to create thousands of high-quality jobs in Nepal,” she said. This is about providing Nepali children “who otherwise might feel the only way to provide for their families is to leave the country” high-quality jobs in Nepal.

“The Compact is a 500 million dollars grant, zero loans, zero debt, and 100 percent grant and gift from the American people to the people of Nepal, so that they may have an economic future that is filled with hope, opportunities and dignity,” the MCC Vice President reiterated.

When asked how the political party leaders reacted to her call for ratification, Sumar said that she had productive meetings with all and everyone shared the excitement about the Compact.  “I had very productive meetings with the political party leaders, parliamentarians, business community and civil society. In every one of my meetings, people shared their excitement and optimism that this Compact is not just in Nepal’s interest, but this Compact is absolutely fundamental in order to make the economy productive, to create opportunities and to create jobs,” said Sumar.  “There was strong support across the spectrum.”

While speaking about her South Asian origin, Sumar said MCC’s Nepal Compact was about creating opportunities for Nepalis.  As someone from South Asia, as someone whose parents saw abject poverty, whose grandparents were trapped in generational poverty, as someone whose parents had to leave their home country in order for me not to grow in poverty, she said, she wishes for every South Asian and every person around the world to have the same opportunities.

She said that Nepalis can have opportunities for a better future if they don’t have to spend hours on roads that don’t work, if they don’t have to die because of road safety issues, if the lights do not go out all the time and if they can run businesses and build economies.  “Nepal has potential to give clean energy to South Asia. That is the power of this Compact,” said the MCC Vice President.

Responding to the question of whether Nepal’s failure to ratify and implement the Compact will have a bearing on Nepal-US relations, Sumar said that the partnership between Nepal and the US is “enduring partnership that has lasted over 70 years” and that “MCC is just one part of relationship between the two countries.”

She also recalled that Nepal was the first country to qualify for the Point Four Program of the US government in 1951 because of that ‘special relationship.’

She shared the optimism about Nepal ratifying the Compact. “The US government has officially provided the clarifications on the questions on the Compact to the Nepal government. I hope this provides clarity,” she said. “When the Compact is ratified and implemented, it will transform the power sector, it will be the backbone of power sectors of this country that will allow all the businesses to run.”

While citing how Covid-19 has slowed down the economies of the countries around the world, Sumar said Nepal has no moment to lose to benefit from the Compact to reduce poverty and to spur economic growth. “Covid-19 has changed the economic outlook in many countries in the world. In 2020, the world undid 25 years of progress to fight extreme poverty,” she said.  Nepal, which has some of the highest poverty in the world, should use this moment to utilize what the Compact would provide to help spur economic growth, she said.

The MCC’s Nepal Compact is in limbo because of the differences among the political parties regarding whether to ratify it in its current format or after making amendments to some of the clauses. While ruling Nepali Congress has stood in support, the main opposition, CPN-UML has flip-flopped, and Maoist Center (a key coalition partner of Sher Bahadur Deuba’s government) stands opposed, even though it advocated for consensus during the talks with Sumar.

During her four-day visit, MCC Vice President Fatema Z Sumar held consultations with nearly all the political parties, without consensus among whom the ratification of the Compact has faced a hitch for the last four years.

As the disputes over whether to ratify the Compact or not remains, the MCC’s response to the questions raised by the government of Nepal clarified that the Compact cannot be amended. Meanwhile, the rejection of the American grant by Nepal is also feared to have a fallout on Nepal’s relations with the US, the second country after the UK, with which Nepal had established diplomatic relations in 1947.