The US embassy in Kathmandu on Friday issued a 10-point statement clarifying that the Millennium Challenge Corporation (MCC) is not part of military affairs.
The press statement, which it says is in response to a large number of queries from Nepali citizens, politicians, and members of the media about the MCC, claims that every Nepali government since 2012 has been in favor of the MCC and that there is no military component to the compact.
“The MCC does not include any military components,” it reads. “In fact, US law prohibits the inclusion of military components in any MCC compact.”
The clarification, however, does not mention whether the MCC is a part of the Indo-Pacific Strategy.
Ruling CPN had hotly debated MCC during the recent standing committee meeting with the erstwhile Maoists and those from Madhav Kumar Nepal faction opposing it saying it should only be passed if it becomes clear that it is not part of the Indo-Pacific Strategy floated by America.
The government is preparing to move the MCC Compact by passing a resolution motion declaring that the American assistance program is not part of any military strategy and Nepal will not join any military alliance.
"This should not become an issue of intra-party dispute. Who becomes prime minister is not a big issue but we should not play with the country's prestige," a minister recently confided with Setopati. "Suspicions about it will be cleared once a resolution motion is passed by the House. We will think about it later if America does not agree with that," the minister added revealing PM KP Sharma Oli's plans.
Secretariat members like Nepal and Jhala Nath Khanal, who are former PMs, have openly opposed it. Chairman Pushpa Kamal Dahal may not have openly commented on the issue but he also is said to be against passing it as it is.
But a leader close to PM and CPN Chairman Oli has argued that MCC should not be under suspicion as it has not even hinted about being part of the Indo-Pacific Strategy.
The party has passed over the issue to the secretariat to decide after the standing committee meeting failed to decide on it. The intra-party circular signed by the two chairmen mentions that MCC does not seem to be part of the Indo-Pacific Strategy.
Leaders close to Oli have suggested the option of resolution motion as the issue has been victim of factionalism in the party.
"The government is now preparing to move it forward with a CPN lawmaker registering a resolution motion stating that MCC is focused only on financial aid and Nepal will not participate in any military alliance," the minister stated. "The minister concerned will then express commitment to even incorporate the resolution motion in MCC Compact to move it forward."
The minister assured that the government is also careful whether MCC is related to the Indo-Pacific Strategy. "PM is more careful than anybody else that Nepal will be in a difficult position on joining a military alliance because we cannot bear the pressure of China and India if we join the American military strategy," the minister pointed. "But PM is also equally concerned that we should not stop financial assistance merely on grounds of suspicions. We will focus on the issue that we have agreed on. We will reserve the rights to revoke the MCC Compact if conditions outside the agreement that can harm the country are brought."
