Nepal urged by US to ratify MCC compact for transmission lines and highways project: China is said to oppose agreement

A senior official of the US State Department has urged Nepali Prime Minister Sher Bahadur Deuba to ratify the Millennium Challenge Corporation (MCC) Nepal Compact under which the country would receive $500 million for the improvement of its electricity transmission network and highways

Nov 19, 2021
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A senior official of the US State Department has urged Nepali Prime Minister Sher Bahadur Deuba to ratify the Millennium Challenge Corporation (MCC) Nepal Compact under which the country would receive $500 million for the improvement of its electricity transmission network and highways.  Assistant Secretary of State for South and Central Asian Affairs of the United States Department of State Donald Lu, who is on a visit to Nepal, met Deuba on Thursday and discussed the climate crisis, Covid vaccine support, and post-Covid recovery, among other issues.

In 2017, Nepal had signed the MCC compact with the US. The government had promised to rectify the agreement in Parliament. However, even after four years, Nepal has been struggling to form a domestic consensus to ratify the pact. Earlier in  September, the MCC headquarters had sent a delegation to Nepal to clarify the provisions to political parties there. The delegation had also urged the Nepal government to decide soon on the matter. 

Left parties, barring NCP (UML), in Nepal remain suspicious of the nature of the pact, and have repeatedly expressed doubt if the agreement would mean entering into any sort of security alliance with the US a move that could upset neighboring China with whom Nepal shares increasingly close ties. 

The Nepal Communist Party (Maoist-Center), also known as the NCP (MC), is a major partner in the ruling coalition led by Deuba. Former prime minister Pushpa Kamal Dahal Prachanda, the leader of the NCP (MC), has long been opposing the pact. The government is unlikely to ratify the agreement in Parliament without his support. Despite severe efforts to form a consensus on the issue, Dahal remains adamant, according to a report in The Kathmandu Post. 

Furthermore, if the government fails to ratify the agreement soon, the MCC headquarters could take a call to nullify the pact with Nepal. A decision on the matter is likely in December. Earlier it had reviewed the progress made in Nepal in September-end after the visit of MCC Vice President of Compact Operations, Fatima Z Sumar in early September.

Interestingly, recently Nepal Intelligence agencies have reportedly alluded to the role of a Chinese intelligence official behind whipping up anti-MCC sentiments in Nepal. The assessment reported by an online portal said that the Chinese official was working with some Nepali journalists, left-wing activists, political leaders, and academicians. 

Citing an unnamed senior intelligence official in Nepal, the report also hinted at the involvement of some "top political leaders" of the country in the Chinese activities aimed at "damaging" Nepal's ties with "third countries". The report also claimed that the complete intelligence assessment on the Chinese intelligence activities would soon be presented to the government. 

(SAM)  

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