MCC grant dispute: US says neither military alliance nor the Indo-Pacific Strategy

us MCC deal-1

Kathmandu, September 9

The United States government has clarified that the 2017 Millennium Challenge Corporation (MCC) grant agreement signed between the governments of Nepal and the United States is not related to any military or defence alliance of the US. It also clarifies this is not a part of the disputed Indo-Pacific Strategy.

In response to a letter from the Ministry of Finance dispatched some days ago, the MCC sent a response to the ministry in both English and Nepali languages on Wednesday and made it public on the US Embassy in Nepal’s website. The response includes specific answers to 11 questions asked by the government.

“The MCC Nepal Compact is not an agreement under the Indo-Pacific Strategy. MCC compacts agreements between the MCC and partner government,” the response reads, “… nor is it a part of any military strategy of the United States.”

Read the full version of the response here.

The response comes at a time when both ruling and opposition parties, as well as the public, in Nepal, are virtually divided over whether the parliament should endorse the deal, which is a requirement for its implementation. Whereas the ruling alliance consisting of five parties fears the discontinuity of the alliance if the endorsement is made, the main opposition party, CPN-UML, has recently decided not to make a decision about the deal anytime soon.

Meanwhile, MCC Vice-President Fatema Z Sumar, who has signed the letter to Nepal, is coming to Nepal on an official visit on Thursday.

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