As the winter session of federal parliament begins, all eyes on the MCC Compact

Experts say Nepal needs to take the decision about the MCC Compact very soon arguing that keeping the $500 million grant project in limbo will erode Nepal's credibility.

NL Today

  • Read Time 3 min.

Kathmandu: The winter session of the federal parliament commenced on Tuesday. This time around the parliament session has received a greater attention because of the Millennium Challenge Corporation’s Nepal Compact which offers $500 million in grant to Nepal for the construction of transmission lines and road maintenance projects.  

The Compact, which was registered in the House of Representatives for parliamentary ratification in 2019, is in limbo due to the division among the political parties over whether to give a parliamentary nod to the Compact in its current format or whether to get it endorsed after amendment on ‘disputed’ clauses of the Compact.

While ruling Nepali Congress and Prime Minister Sher Bahadur Deuba have firmly stood in favor of parliamentary ratification of the Compact in its current format, the coalition parties NCP (Maoist Center) led by Pushpa Kamal Dahal and NCP (Unified Socialist) led by Madhav Kumar Nepal are rooting for amendment on the Compact.

Maoist Center chairman Pushpa Kamal Dahal has called for a national consensus on the Compact. On the other hand, main opposition CPN-UML seems non-committal as the UML leadership argues that the ruling coalition has enough numbers to endorse the Compact from the parliament without its support.

Meanwhile, CPN-UML has been obstructing the House proceedings since the last session demanding that 14 members from the breakaway faction NCP(US) be dismissed from their positions. UML obstructed the House meeting on Tuesday as well. The next meeting has been scheduled for December 21.

As Tuesday’s parliament session coincided with the board meeting at the MCC headquarters in Washington, which is believed to discuss and decide about the Nepal Compact, the December 14 meeting of the House of Representatives was keenly watched in Nepal.

Experts, however, are not optimistic that political parties will discuss the Compact in parliament and make a decision.

During their recent visits to Nepal, both MCC Vice President Fateme Z Sumar  and the US Assistant Secretary of State for South and Central Asian Affairs Donald Lu are said to have sought assurance from Nepali political parties, Maoist Center in particular, to ratify the Compact from parliament.

The American officials have asked the Nepali side to take early decision on the Compact.

Experts, however, are not optimistic that political parties will discuss the Compact in parliament and make a decision.

“Political parties are focused on managing internal politics.  They don’t seem to be thinking about MCC at all,” said Binoj Basnyat, a geopolitical and security analyst based in Kathmandu.   “The way the MCC Compact has been heavily politicized; I don’t think they will be able to push it.  At most, they might try to give the message that they are trying to settle the matter while at the same time keeping the Compact in limbo. They will neither say yes nor no to the Compact,” he said. According to him, misinformation and disinformation about the MCC Compact is so rampant at the grassroots level that political parties have found an excuse not to take a firm position in favor of the MCC Compact.  “They seem to fear losing the election if they stand in favor of MCC.”

Deuba MCC

Basnyat, however, stressed that the political parties must take the decision about it at the earliest.

Dinesh Bhattarai, former ambassador and foreign policy expert, is hopeful. “Prime Minister Deuba has stood firmly in its favor while Prachanda has rooted for national consensus.  Let us hope they will agree to table the MCC in parliament,” he said, adding that it all depends on what position Prachanda will take. “I still hope they will do something about it.”

He argues that it is getting late for Nepal to take the decision regarding whether or not to ratify the Compact. “Political parties need to say it clearly whether they are going to take it or leave it.  If they want to take it they have to say they will take it, if they want to take it after getting certain clauses amended they have to say the same thing. They should not keep it in limbo,” said Bhattarai.

According to him, indecision about the Compact will only raise questions about Nepal’s own credibility. “Nepal should not put it in limbo anymore,” he said.