Kathmandu, February 2

After a number of members raised questions about the Millennium Challenge Corporation Compact Programme in the central committee meeting of the ruling Nepal Communist Party (NCP), the party today formed a three-member team to study the United States-backed grant scheme.

Responding to questions raised by central committee members at the end of the meeting this afternoon, NCP Co-chairperson Pushpa Kamal Dahal informed about formation of the study team led by NCP Secretariat member Jhalanath Khanal. The team has Minister of Foreign Affairs Pradeep Gyawali and NCP Standing Committee member Bhim Rawal as members. It has been given 10 days to submit its report.

While Gyawali is in favour of implementing the $500 million MCC scheme, Rawal is staunchly opposed to the idea. The MCC agreement that Nepal signed with the US in 2017 is awaiting parliamentary approval.

Although the government has committed to getting the agreement endorsed by the Parliament, some senior party members, including Rawal and Dev Gurung, are opposed to it.

There are two distinct views about the MCC in the ruling party. The first is implementing the MCC, which the US side has clearly said is part of its Indo-Pacific Strategy, will be against Nepal’s policy of non-alignment. The leaders opposed to the MCC are of the view that endorsing the MCC will align Nepal with the IPS, which they say is a military alliance aimed at containing China.

Proponents of the second point of view in the party are led by Prime Minister KP Sharma Oli and Foreign Minister Gyawali. They argue that since the agreement’s terms and conditions do not have any military component, it is not against Nepal’s foreign policy of non-alignment and Nepal’s sovereignty. They are also of the view that since the MCC agreement was signed before the inception of the IPS, Nepal views the MCC as nothing more than development assistance.

The political document presented at the meeting by NCP co-chairs Oli and Dahal had initially stated that the IPS was a US-led military strategy aimed at boosting its influence and dominance in the Indo-Pacific Region, containing China’s rise as the world’s top economic power and weakening it.

“However, the phrase ‘IPS is aimed at encircling China’ has been removed from the endorsed political document,” NCP Standing Committee member Mani Thapa told THT.

Thapa added that the party would decide on the MCC on the basis of the study report submitted by the Khanal-led team.

The main opposition Nepali Congress is in favour of endorsing the MCC agreement.

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