Kathmandu : The United States will have to wait another four month for the Parliament of Nepal to approve the Millennium Challenge Corporation (MCC) Compact Agreement.

The State Department is in the mood to take a firm decision to withdraw 500 million in grant aid if Parliament does not approve the MCC by 2022 March , a foreign ministry official said.

“We have received information that the US State Department has decided to scrap the MCC compact without the approval of the Nepali parliament by March,” the foreign ministry official told Nepalpage.

The next board meeting of the MCC headquarters will be held in March. The official said that before the meeting, there were indications that the Parliament of Nepal may decide to reject the MCC Compact if it does not approve it.

US State Department officials met with Nepali officials and signaled that they would not wait any longer for MCC compact approval, according to foreign officials.
US officials have begun to express concern that the issue of MCC ratification by Nepal’s parliament is affecting the political, economic and security aspects of bilateral cooperation.

The MCC Board meeting held in Washington on Tuesday reviewed the status of MCC-Nepal Compact and the progress made so far.

“The MCC Board meeting is aware of the Government of Nepal’s commitment to approve the MCC Compact soon,” the MCC headquarters in Washington said in a statement on Wednesday.

This means that the United States expects the MCC to be approved by the Parliament of Nepal soon. And, he has made up his mind to wait another four month for that.

The MCC’s quarterly progress review meeting was held on Tuesday via video conference. This is the last meeting of the MCC board in 2021.
Prior to the meeting, US officials had met with Nepali leaders to seek MCC compact approval from parliament.

US Assistant Secretary of State Donald Lu, who visited Nepal last month, hinted that the 500 million grant could be diverted unless a decision is made to approve MCC compact by the Nepali parliament before the board meeting.

“The US seems to be in the mood to wait for the next board meeting in four month after seeing the MCC Compact Nepal’s immediate approval from the parliament,” said a joint secretary of foreign ministry of Nepal.

MCC compact approval has been a major agenda item in most bilateral meetings between Nepal and the United States.
“However, it is not clear when the MCC compact will be ratified as there is no consensus among the major political parties represented in parliament,” the official said.

US Deputy Assistant Secretary of State Donald Lu, who arrived in Nepal a month ago, had suggested to Prime Minister Sher Bahadur Deuba, UML Chairman KP Oli, CPN (Maoist Center) Chairman Pushpa Kamal Dahal Prachanda and other leaders that it would be appropriate to ratify the MCC Compact by December 14.

Lu had said that the board meeting of MCC would be held on December 14 and that it would review the Nepal Compact. But he did not give any indication that the US was in the mood to scrap the MCC compact in Nepal.

On the same day as the MCC Board meeting, the Government of Nepal had convened both the sittings of the Parliament for 14 December. But the parliament session has been postponed for a year.

A government minister told NepalPage last week that a parliamentary meeting was convened to discuss MCC compact approval. According to the minister, Prime Minister Sher Bahadur Deuba is set to hold talks with the ruling and opposition parties soon to approve the MCC.

No agreement has been reached between the ruling coalition and the opposition on MCC.

“Even if the MCC is not approved immediately, it could send a positive message to the United States if it is tabled in parliament,” Deuba said.

The MCC agreement was submitted to the Parliament Secretariat during the Oli government. However, this has not yet become an agenda item for discussion in Parliament.

At a program organized in Chitwan in a few days ago Maoist chairman Prachanda had said that the MCC would be approved only after a national consensus was reached. He said that the convening of the MCC board meeting in the United States and the convening of the parliament meeting in Nepal on the same day was just a coincidence.

Arguing that the MCC should be amended, the ruling Maoists and the Unified Socialists parties have been holding the view that Nepal would become a part of the US Indo-Pacific Strategy if it ratified the agreement without correction and that would be against Nepal’s non-aligned foreign policy.