KATHMANDU, Feb 22: A task force formed by the ruling Nepal Communist Party (NCP) has recommended to the government not to endorse the Millennium Challenge Corporation (MCC) agreement signed between the US and Nepal in its existing form.
Arguing that the existing agreement greatly impacts on national sovereignty and the freedom of Nepal and the Nepali people, the committee headed by former prime minister Jhalanath Khanal has recommended to the government not to accept the $500 million US grant without changes to the grant agreement. It has suggested the government revise some ‘objectionable provisions’ of the agreement if it is to be endorsed by parliament.
The US has pledged the grant for installing cross-border electricity transmission lines and for upgrading roads.
“We studied documents related to the agreement. If it is to be endorsed as it is it will undermine the sovereignty of our country. So, there should be improvements or revisions in the agreement,” Khanal told Republica.
Formed on February 3, the task force was originally mandated to come up with its suggestion within 10 days whether the government should endorse the agreement or not. It had later sought an additional 10 days.
It has submitted its report to Prime Minister KP Oli 18 days after its formation. Present at the function were NCP Executive Chairman Pushpa Kamal Dahal and the other task force members – Foreign Minister Pradeep Gyawali and Bhim Rawal.
Out of the three members, Gyawali was for endorsing the agreement without further ado. The remaining two members opposed Gyawali’s position.
With this, the task force that was supposed to provide a way out of the MCC row has only invited further complications. Nepal may lose the grant offer if parliament fails to endorse it.
US officials have been warning of withdrawing the aid if Nepal wants revisions.
Foreign Minister Gyawali, for his part, said the government could take a decision after the party chiefs study the report.
“We have submitted a report to the chairmen,” said Gyawali adding, “They will study it further and decide the next move.”
Gyawali didn’t divulge what recommendation the task force made, saying none of the committee members was allowed to comment on the issue until the party took a decision.
The task force was formed after NCP leaders became sharply divided over endorsing the US grant from parliament. Those opposing it argue the aid was being given to Nepal as part of America’s Indo-Pacific Strategy to contain China’s influence in Nepal. MCC supporters, however, dismiss this.
Nepal and the US signed the agreement on the $500 million grant in 2017 and the US senate approved it shortly after. But Nepal’s parliament hasn’t approved the grant so far.
Due to the delay by Nepal, the US hasn’t released the funds required for implementing the development projects and for the salaries of MCC office staff in Nepal. The government here has been releasing funds to run the office and pay salaries.
With parliament dillydallying over MCC, senior US officials have been visiting Nepal back to back. Two weeks after the deputy vice-president for Europe, Asia Pacific and Latin America for the MCC met high ranking Nepali authorities, a US congressional delegation led by Ami Bera is currently in Nepal on a three-day visit.