Nepal was the first south Asian country to qualify for the compact after meeting 16 of the 20 policy indicators. Baikuntha Aryal, then Deputy Secretary, and Jonathan Nash, Acting Director General of MCC, signed an agreement in Washington in September 2017 in the presence of Gyandera Bahadur Karki, then Secretary of the Treasury, and US Assistant Secretary of State John J. Sullivan. The U.S. government has agreed to provide $500 million in grants, while Nepal would provide $130 million for the project, which prioritizes energy and roads. This is the largest grant Nepal has ever received. On the other hand, critics have the impression that the MCC is against Nepal`s national interest as it replaces the country`s laws. They believe that this could allow the United States to control intellectual property rights as part of the implementation of the agreement. Doubts are raised that it favours India because the transmission lines under the project would be connected to the latter. Since aid in the form of grants under the MCC must be approved by the U.S. Congress, the U.S. government seeks the same level of commitment from host countries. As a result, most countries ratify the MCC Pact through their parliaments.
However, their agreements do not indicate that the provisions of the treaty would prevail over national laws in the event of contraction, according to the expert who previously worked for the MCA. Nepal signed the pact agreement in September 2017. However, Parliament has not yet ratified the agreement. A month ago, MCC Vice President Fatima Sumar was on a four-day visit to Nepal when she met with parliamentarians, civil society leaders and businesses to clarify their doubts about the pact. The MCC stated that it should give the Pact the status of an international agreement and ensure that there is no delay in the implementation of projects whose ratification is necessary. Experts such as the vice-president of the National Planning Commission, Dr. Biswo Poudel, support ratification because it makes the process more transparent. In fact, Poudel argues that any aid from other countries should also be ratified by Parliament. Due to the serious differences between political parties, the whole country is now widely divided on this issue, with one section supporting it while the other opposed to it.
Those who support the MCC agreement often argue that it would allow the country to secure huge funds for the construction of roads and transmission lines, which are crucial for the country`s development. It is simply a gift from the American people to the Nepalese people. However, a US diplomat told the Post that changes to the MCC deal were rare and not possible at all. From what I understand and the clarifications of the MCC, the Compact Fund cannot be used for activities that violate U.S. laws, but it does not violate the Constitution of Nepal. The agreement is in line with most other international agreements or treaties that Nepal has already signed. And Nepal has already conducted an audit of the Nepal Compact office. Nepal and the United States signed the $500 million grant in 2017 to implement two infrastructure projects related to transmission lines and road upgrades. The agreement was registered in Parliament in 2019.
But it has been blocked for more than two years, with political parties sharply divided over its parliamentary ratification. After the MCC became a controversial issue, the Treasury Department had written to MCC headquarters during the first week of September, seeking answers to some of the concerns. The MCC headquarters then replied that the agreement was not above Nepal`s constitution and was not part of the Indo-Pacific strategy. The answer came shortly before Sumar`s visit to Nepal. Parties opposing the approval of the MCC in its current form have stated that some of the clauses need to be amended. The pact will be signed on 14 September. September 2017 in Washington DC between Nepal and MCC in the treaty room of the Ministry of Foreign Affairs. Finance Minister Gyanendra Bahadur Karki and MCC Acting CEO Jonathan Nash voted on the compact deal.
The Millennium Challenge Corporation`s Nepal Compact is a compact between the U.S. humanitarian organization Millennium Challenge Corporation (MCC) and the Government of Nepal. Nepal was the first country in South Asia to qualify for an MCC treaty by adopting 16 of the 20 policy indicators used by the MCC. The agreement was signed in Washington DC in September 2017; Nepal`s Treasury Secretary at the time, Gyanendra Bahadur Karki, and the then U.S. Assistant Secretary of State, John J. Sullivan, were in attendance. As part of the largest grant ever received by Nepal, MCC would provide $500 million for the construction of transmission lines and highway maintenance; Nepal would contribute $130 million to the projects.  MCC has become a hotly debated topic in Nepal.