What happens to MCC deal is a big question as rival factions prevail in ruling NCP

Published On: May 2, 2020 06:09 PM NPT By: Kosh Raj Koirala  | @KoshRKoirala

KATHMANDU, May 2: The intra-party dispute which is at its peak in the ruling Nepal Communist Party (NCP) has made the prospect of implementing the projects under the Millennium Challenge Corporation (MCC) further uncertain. 

Party insiders say the prospect of endorsing the MCC agreement from parliament appears slim even during the upcoming budget session as the rival factions in the ruling NCP that have been maintaining that the agreement should not be passed without amendments have prevailed in the latest power equation in the party. 

While the rival factions led by Pushpa Kamal Dahal and Madhav Kumar Nepal have stood against the idea of endorsing the MCC agreement through parliament, describing it as a part of the 'Indo Pacific Strategy' of the US military, Prime Minister KP Oli-led faction has dismissed such arguments and stood in favor of endorsing the agreement through parliament to ensure early implementation of these projects. However, Prime Minister Oli is under pressure to step down as Dahal and Nepal have forged an alliance in the party to ensure their majority in all committees of the party.  

Nepal plans to utilize the $500 million grant amount to develop a cross-country power transmission line with India and upgrade a few road projects. Amid sharp disputes within the party whether to endorse the MCC Compact agreement through parliament to ensure projects under it, NCP had earlier formed a three-member sub-committee led by former PM Jhala Nath Khanal to study the agreement and make necessary recommendations to the party. 

A preliminary report submitted by the sub-committee comprising Bhim Rawal and Pradeep Gyawali to Prime Minister Oli in early February suggested to the government not to endorse the agreement through parliament without amending some  of its key provisions. A detailed report of the sub-committee made available to the media only recently has suggested to the government to amend various 11 points included in the MCC Agreement before endorsing it through parliament. 

One of the members of the sub-committee, Gyawali, however, has written a 15-point note of dissent in the 146-page long report, saying that the criticisms made against the MCC agreement were misleading.  Gyawali is considered close to Prime Minister Oli.

While stating that the projects under MCC were a part of the US-led Indo-Pacific Military strategy, the sub-committee has suggested to the government to seek clarification from the US government that the MCC grant that Nepal will be receiving is not part of any military strategy or alliance under its broader Indo-Pacific Strategy. The report argues that it is against the constitution of Nepal and policy and principles of the Nepal Communist Party to be part of any military or political alliance or stay under the security umbrella of any major power. 

In its 16-point recommendation, the sub-committee has put forward its views on amending different clauses of the MCC agreement before getting it endorsed through parliament. While citing the example of Sri Lankan Prime Minister Mahinda Rajapakshya's decision to scrap the MCC agreement amid protests and controversies, the sub-committee has suggested to the government to reach a fresh agreement with the US government if the projects under the MCC grant are to be expedited. 

Gyawali, who is also the Minister for Foreign Affairs in the Oli-led cabinet, has said in his note of dissent that the rumors that this agreement would pave the way for US military to establish its units in Nepal, or that this gives rise to geopolitical competition or obstructs implementation of the agreements reached with other countries are all false, misleading and aimed at disturbing the harmonious relations between Nepal and the US. 

In addition to Khanal, NCP Executive Chairman Dahal and senior leaders Madhav Kumar Nepal and Bam Dev Gautam have stood against the idea of endorsing the MCC Compact Agreement. Former Prime Minister Dahal has spoken in public that the US government should address the concerns raised by the Nepali side to ensure the early implementation of the projects under the MCC Agreement.

Sources said US officials, however, have already communicated to the government that it would be difficult to bring any amendment to the agreement reached earlier between the two sides at this point of time. Senior US government officials visiting Nepal recently have warned of withdrawing the aid if Nepal’s parliament further delayed to endorse the agreement.

The MCC agreement was supposed to get endorsed by the previous House session that was prorogued last month amid fears of coronavirus (COVID-19). But the plan to endorse the aid agreement was delayed by months after the then Speaker Krishna Bahadur Mahara was forced to step down from the post following a rape attempt charge by a staffer at the parliament secretariat in early October 2019. 

The five-year clock for the implementation of the multi-million-dollar program financed through the MCC grant is set to start ticking from June 30. Although there was expectation that the agreement would be endorsed by the new House session that is due to begin soon, this has again appeared unlikely amid serious factional disputes within the ruling NCP. 


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