MCC doesn’t undermine Nepal’s sovereignty: PM

Kathmandu, January 29

Prime Minister KP Sharma Oli today said there was nothing to debate in the Millennium Challenge Corporation Compact Programme, as the agreement didn’t have anything that would undermine Nepal’s sovereignty.

Addressing the inaugural session of the central committee meeting of the ruling Nepal Communist Party (NCP) that kicked off here today, Oli said the $500 million United States-backed grant did not have any link with anything else and that Nepal’s obligations were limited to terms and conditions in the MCC agreement, and nothing more.

Oli’s clarification comes amid opposition from some of his senior party colleagues, who say the MCC, which awaits parliamentary approval, is linked to the US Indo-Pacific Strategy. They are of the view that the IPS is a NATO-like military alliance and that endorsing the MCC will be against Nepal’s policy of non-alignment. The debate over the MCC ensued after visiting US officials said the compact was part of the economic pillar of the IPS, with the other two pillars being governance and military defence.

Although the MCC was established in 2004, much earlier than the inception of the IPS in late 2017, the US has said the IPS is a new name given to the US policy that encompasses every US engagement, including the MCC, in the Indo-Pacific region.

At the same time, the US embassy in Kathmandu has categorically said the MCC does not have any military component to it as the US law prohibits the same. Moreover, since the MCC agreement was signed before the inception of the IPS, the Nepal government views the MCC as nothing more than development assistance. Oli said for any agreement between the two countries, laws and policies at the time of the signing would be applicable. “If we change our laws now, we cannot unilaterally change agreements signed with other countries in the past in line with the changed law,” said Oli.

He also made it clear that the MCC was not an agreement that would be effective forever, but for a maximum of five years. “The agreement will end after five years even if the projects do not complete by then,” said Oli. “Therefore, it is unnecessary to link it with the IPS.”

According to Oli, there are many countries in the world that have different ideologies, political, social and economic systems and regional and global interests. But Nepal receives grants, assistance or loans as per its national interest, priorities and benefits. “If we start looking for others’ hidden interests, we cannot forge international relations with any country,” he said.

Oli said the MCC pact did not have any provision that would have negative effect on Nepal’s sovereignty, independence, development process, responsibilities and international relations. “I urge all to be clear about this. The US embassy has also clarified on this issue. There’s no problem in implementing the MCC,” said Oli.