US Assistant Secretary for South and Central Asian Affairs Donald Lu phoned Prime Minister (PM) Sher Bahadur Deuba, CPN-UML Chairman KP Sharma Oli and CPN (Maoist Center) Chairman Pushpa Kamal Dahal on Thursday and warned that bilateral ties will be affected if the Millennium Challenge Corporation (MCC) Compact is not passed by February end.
Assistant Secretary Lu called the top leaders of the three major political parties separately on Thursday as America continues to exert pressure on the parties to get the MCC Compact ratified by February end.
Lu called PM Deuba at nine Thursday morning and pointed that the grant amount will be taken back if the House does not ratify within the deadline of February end set by him and Dahal. Deuba told Lu, according to a Baluwatar source, that his party Nepali Congress (NC) is committed to ratifying the MCC Compact and he is making efforts to try to convince other leaders for the same.
Lu also called Oli and Dahal on Thursday.
"US Assistant Secretary asked for help to pass the MCC pointing that an agreement between the two countries cannot be stopped. He also pointed that it is also an issue of Nepal's credibility," Chief of the Foreign Department of UML Rajan Bhattarai told Setopati. "Chairman Oli pointed that UML is not currently in the government and does not have any responsibility. He added that the government has majority and can conclude the issue if it so wishes."
Oli reminded Lu that the government has yet to take any official decision on the issue.
A Maoist Center source confided with Setopati that Lu told Dahal that America will take refusal to endorse the MCC Comapct as Chinese intervention. Dahal, in return, opined that the issue should not be connected to China.
"Chairman has said MCC should be passed after amendment. He also added that decision on the MCC should now be taken only after the election," a source close to Dahal said. Dahal pointed that the country is already in election mode and argued that it would be appropriate to decide about it only after the election.
Lu then warned that the refusal to endorse the MCC Compact can affect bilateral ties between the two countries.
The MCC has already stated that the MCC grant will be taken back if the House does not ratify the MCC Compact by February end.
Speaking during a virtual interaction Wednesday Vice President of the Department of Compact Operations Fatema Sumar said that the coming three weeks or so are very important for implementation of the MCC and pointed that the deadline of February end cannot be extended as the deadline was set by Prime Minister (PM) Sher Bahadur Deuba and CPN (Maoist Center) Chairman Pushpa Kamal Dahal.
"The February 28 deadline is not for tabling the MCC Compact in the House or to hold discussion on it, but to ratify it," Sumar stressed. "There is meaning of deadline and agreement. We cannot accept yet another excuse to delay it once again."
She also clarified that there will be no amendments in the MCC Compact as demanded by Maoist Center and CPN (Unified Socialist) in the ruling coalition.
Deputy Vice President of MCC for Europe, Asia Pacific and Latin America Jonathan Brooks also took part in the interaction and pointed that the MCC cannot provide more time for Nepal as other countries are also waiting for grant. "Other countries facing the situation like that in Nepal are in a hurry to sign the deal. We have been keeping them waiting. We cannot keep them waiting for any longer," Brooks stated.
Sumar and Brooks had visited Nepal in September 2021 and talked with top leaders of all the major political parties about the MCC. She had said she was hopeful about House ratification before returning back. "I wish that the next time we talk, we'll be talking about implementation of MCC projects," she said Wednesday. "The Nepal government must decide what to do about the MCC in the next three weeks."
Pointing that politically disputed issues are concluded by voting in the Congress even in America, she stated that the MCC Compact should also get into the parliamentary process in Nepal. She reminded that the MCC has kept US$ 500 million on hold through terms of three American president—Barack Obama, Donald Trump and Joe Biden—and added that it cannot be held any longer. "We cannot be irresponsible toward the taxpayers by keeping such an amount on hold," she stated.
She revealed that the decision taken by the Nepal government by February end will be briefed to the next MCC board meeting to be held in March. She rued that Nepali leaders are in favor of the MCC Compact while in power but change their tone when they are in the opposition.
She opined that there have been many disinformation and misinformation about the MCC in Nepal due to geopolitics, social media and other powers.
The MCC has already written to PM Deuba and his coalition partner Dahal to take decision on the MCC Compact by February end.
The letter written by Acting Chief Executive Officer of MCC Mahmoud Bah to Deuba and Dahal, and also copied to Finance Minister Janardan Sharma, on February 3 has said the MCC board meeting in March will discuss about taking next steps about the MCC Comapct including whether to continue it or not if it is not ratified by the House by February end.
Deuba and Dahal had written to the MCC on September 29 urging it to wait pointing that getting it endorsed by the House will take around four-five months.
Responding to that letter Bah has asked the duo to take decision by February end pointing that the five months the two leaders sought will finish by then.
"The MCC Board noted your commitment in the September 2021 letter to work to ratify the Compact in four to five months from the date of the letter," the letter states. "The Board also acknowledged your plan to increase public awareness of the Compact and actively combat disinformation about the Compact. MCC therefore requests you that you continue to work with Parliamentarians and coalition partners to ratify the Compact by the timeline indicated in your letter, no latter than February 28, 2022."
Dahal, meanwhile, has proposed to table the MCC Compact in the House only after the election.
Dahal proposed that the leaders should tell the MCC that it will be moved forward with consent of even the opposition after the election during the meeting with PM Deuba and CPN-UML Chairman KP Sharma Oli at Baluwatar on Sunday.
PM Deuba and Oli did not comment on Dahal's proposal. Deuba also sought help of Oli in passing the MCC during the meeting. Oli in response said that the ruling coalition should first form a clear position on the issue.
Vice President of the Department of Compact Operations Fatema Sumar during her Nepal visit in September 2021 had talked with Prime Minister (PM) Sher Bahadur Deuba and top leaders of all the major political parties about the MCC. She had expressed hope that Nepal will endorse the MCC in the press conference organized before returning home.
The MCC had replied to the government's queries ahead of her visit. Sumar sent answers to the queries through the American Embassy in Nepal addressing Finance Minister Janardan Sharma. She also sent the response in Nepali language for 'transparency and accessibility' and recommended that it be made public to ensure that all Nepalis know that it benefits the people.
"The MCC Nepal Compact is a continuation of our mutual friendship and underscores the Government of Nepal's commitment to democratic principles and building a better future for all Nepalis," she replied.
She pointed that in her previous visits to Nepal, she was overwhelmed by the request for, and positive support of, an MCC partnership - from business and community leaders to members from every political party. "Unfortunately, since my last visit, there has also been an increase of false and misleading statements about MCC. MCC has no hidden agenda."
The MCC replied that the Constitution of Nepal prevails over the MCC Compact, it is not related to any defense or military strategy pointing that the US law governing the MCC prohibits it from using funding for any military purpose, all the projects to be developed under the MCC have been selected by the Nepal government and parliamentary ratification has been required to make it international agreement as the Nepal government concluded that parliamentary ratification is required to make the compact an international agreement as per the prevailing Nepali laws.
It also clarified that it is not part of Indo-Pacific Strategy and just an agreement between the MCC and the partner government concerned and any decision by Nepal on Indo-Pacific Strategy will be separate and independent from the MCC.
The MCC has been stuck at the House for a long time. It was to enter the construction phase from June 30, 2020 after House endorsement as per the previous schedule but could not be passed as the then ruling CPN was bitterly divided over the issue.
But government officials have been insisting the MCC is still not dead pointing that nowhere is it written that the agreement will be revoked if it is not endorsed by the House by that date.
The then CPN, formed after unification of UML and CPN (Maoist Center), had hotly debated MCC even during the standing committee meeting in December 2019 with the erstwhile Maoists and those from Madhav Kumar Nepal faction of CPN-UML 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 US embassy in Kathmandu later issued a 10-point statement clarifying that the MCC is not part of military affairs.
The press statement, which it said was in response to a large number of queries from Nepali citizens, politicians, and members of the media about the MCC, claimed that every Nepali government since 2012 has been in favor of the MCC and that there is no military component to the compact.
The then CPN had even formed a task force to address the issue. The party formed the task force led by senior leader Jhala Nath Khanal and including the then foreign minister Pradeep Gyawali and standing committee member Bhim Rawal as members to study MCC to find out whether it is part of the American military strategy or not.
The task force recommended that it should not be endorsed without amendment. But Gyawali had put a 15-point dissenting opinion.
