MCC headquarters raises concern about parliament not endorsing the Nepal Compact

There has been no progress on Compact ratification nearly two months after the MCC and Nepal government exchanged letters.

NL Today

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Kathmandu: Washington DC based Millennium Challenge Corporation (MCC) office, which has offered $500 million in grant to Nepal for the transmission line development and road maintenance projects, has expressed concern over the government of Nepal not ratifying the Compact through parliament.

MCC Nepal Compact was signed between the government of Nepal and the MCC in May 2017.  Since the Compact was registered in parliament for ratification process in 2019, it remains stuck as political parties are sharply divided over whether the Compact is to be ratified in its current format or whether it should be given a go-ahead only after amendment.

While recalling the visit of MCC’s senior delegation to Nepal in September which provided clarifications on the MCC-Nepal Compact, combined with recent commitments from the Government of Nepal confirming their ongoing support for the compact, the MCC, in its statement issued on Saturday, has raised the concern that parliament’s session was prorogued without initiating the process for Compact ratification. 

“Today’s recess of Nepal’s Parliament without ratification further delays benefits to millions of Nepali households,” says the statement.

Parliament session was prorogued Friday midnight on the recommendation of the government of Nepal. Despite running for more than one and half months, this session of parliament failed to deliberate on crucial bills, even discuss the vital public concerns due to the continuous obstruction of the House proceedings by the main opposition CPN-UML.

While recalling that the United States and Nepal have forged a partnership based on shared values, democratic ideals and trust for the last 70 years, the statement further says that the US has stood for the people of Nepal in their greatest times of need, from disaster assistance after the 2015 earthquake to ongoing whole-of-government response to the coronavirus pandemic including the donation of 1.6 million COVID19 vaccines to Nepal. “The $500 million grant from the Millennium Challenge Corporation (MCC) is a continuation of the strong partnership between the United States and Nepal to reduce poverty through economic growth,” says the statement.

The MCC has further clarified that the delays in ratification will “jeopardize the critical and timely support this $500 million grant would provide to help more than 23 million Nepalis access reliable energy and safer roads.” “The decision whether to move forward with the compact now rests with Nepal,” the statement further says.

During her visit to Nepal in September, Fatema Z Sumar, the Vice President of Compact Operations at the Millennium Challenge Corporation (MCC), had met top leaders of nearly all the political parties during which they are said to have assured her of Compact’s ratification. She had expressed optimism that the Compact would be ratified by the Nepal parliament.

The MCC VP had also made it clear that Nepal either had to move forward with the Compact or decide it no longer needed the MCC grant.

The Ministry of Finance of the Government of Nepal wrote a letter on September 3 to the MCC office seeking clarifications on issues related to MCC’s Nepal Compact. The MCC had offered clarifications on the questions raised by the Nepal side three days later.

There has been no progress on Compact ratification nearly two months after the exchanges of letters between the MCC and the government of Nepal and nearly one and half months since the Nepal visit of MCC Vice President Fatema Z Sumar.