Kathmandu: The United States has expressed dissatisfaction over the delay in the implementation of the agreement with the US aid agency Millennium Challenge Corporation (MCC). The US State Department's '2021 Investment Climate Statements: Nepal' report states that the delay in ratifying the MCC agreement in Parliament is not a good sign for potential investors.
Nepal had signed an agreement with the MCC on September 13, 2074, to receive a grant of USD 500 million for the construction of energy and road infrastructure. The United States has expressed dissatisfaction with the non-implementation of the agreement even after four years. It was Nepal's commitment to implement the agreement by completing all the procedures by July 30, 2008. The process of approving the agreement was not taken forward due to the internal dispute of the then ruling CPN (Maoist).
The report cites political instability, corruption, a complex bureaucracy, and inconsistent implementation of laws and regulations as obstacles to investment, despite the country's potential.
The US understands that this has particularly affected the energy, tourism, information and communication technology, infrastructure, and agriculture sectors. Such a message from the United States also raises the question of whether US assistance to Nepal will decrease. Former finance secretary Rameshwar Khanal believes that the anti-MCC should be asked about such a US report. "It is our duty to abide by the agreement to abide by international law. Otherwise, trust in Nepal will decrease tomorrow, 'he said.
As soon as the coalition government led by Sher Bahadur Deuba is formed on July 13, there is interest in the implementation of the MCC agreement. In this government, Congress has been saying that the MCC agreement under consideration in the parliament should be passed and in this case, the agreement should not be passed by the parliament. Janardan Sharma, who has become the finance minister from the Maoist center, is responsible for answering the parliamentarians in the parliament regarding the agreement put forward by the finance ministry. Leaders of the Maoist center have been holding the view that the MCC agreement should be amended and ratified. Sharma has not spoken about the MCC since he became finance minister.
The MCC agreement was signed by the then Finance Minister Gyanendra Bahadur Karki and the then Acting Chief Executive Officer of MCC Jonathan G. Nash on behalf of Nepal. The agreement has to be approved by the parliament. After a dispute over the issue within the then ruling CPN (Maoist), the Central Committee meeting on January 3, 2008, formed a three-member task force led by former Prime Minister Jhala Nath Khanal to study the agreement. The task force consisted of standing committee members Bhim Rawal and Pradip Kumar Gyawali. Rawal himself was against the MCC agreement while Gyawali was in favor of ratifying the agreement. The task force had submitted a report to the party on March 26, 2008, with the suggestion that the agreement should be approved only after modification. Gyawali, a member of the task force, had a 15-point difference of opinion and suggested that the agreement should be passed as it is.
The Ministry of Finance had written a letter to the MCC headquarters on July 30, 2008, stating that the agreement could not be implemented on time due to the Covid-19 infection. There has been no response from the United States. In the meantime, when the House of Representatives was dissolved twice, there was confusion over the agreement. For the second time, the Supreme Court overturned the government's decision to dissolve the House of Representatives, raising concerns about whether the approval process would move forward. At other times, the government is also making agreements with various countries and donor agencies on grants and loans. Where, how, and when most of the agreements are made, there is no public interest and discussion. As the MCC agreement has to be approved by the parliament, it is being discussed by the political parties, the parliament, the streets, and the people. Despite the debate from various angles, the implementation of the agreement is being delayed.
The Ministry of Finance had sought the opinion of the Ministry of Law and Parliamentary Affairs on the issue of approval of the MCC Agreement by the Parliament on December 29, 2008. Accordingly, the law sent a secretary-level decision on December 10 stating that the MCC agreement must be approved by a simple majority in parliament. In the reply, it is mentioned that as per the provisions of the Treaty Act of Nepal, 2047 BS, Article 7 of the agreement, and the agreement presented in case of conflict with the national law of Nepal, the agreement will have to be approved by the simple majority of the House of Representatives. Based on that, the Ministry of Finance had submitted the MCC agreement to the Council of Ministers for parliamentary approval.
The Council of Ministers decided to submit the agreement to the Federal Parliament for approval on 25 January 2075. Five months later, on 30 July 2076, the Ministry of Finance registered the agreement in the Bill Branch of the House of Representatives. No progress has been made since then. It is unknown at this time what he will do after leaving the post. But now UCPN (M) Central Committee Chairman Pushpa Kamal Dahal is also positive about the agreement. According to sources, the agreement has been discussed between Dahal and US Ambassador Randy Berry and senior officials of the MCC office in Washington DC.
Economist and professor Vishwambhar Pyakurel say the latest US report on the MCC agreement will affect Nepal. "Nepal may not be affected by the influence of just one country, but the return of aid from an influential country like the United States and an influential country in the region seems to have a big impact on Nepal," he said. Earlier, all the governments of Nepal had said that they would take it forward. But a dispute within a party stopped it.
What happens now
The Congress and the Maoist center, which were in government when the MCC agreement was signed, are now partners in power again. The then Finance Minister Gyanendra Bahadur Karki, who signed the agreement on behalf of Nepal, is now the Law Minister. Outgoing Prime Minister KP Sharma Oli had initially accused then-Speaker Krishna Bahadur Mahara of failing to move the MCC agreement in Parliament. Oli said that the government should implement the agreement as it belongs to whichever government it belongs to.
While some have linked it to the US Indo-Pacific strategy, then-Secretary of State Pradip Kumar Gyawali said the MCC was declared by George W. Bush in 2002 and established by the US Congress in 2004. Nepal has been taking initiative since 2008 to support ACC. In 2011, Nepal was eligible for this assistance. The agreement could not move forward after the then chief whip of the parliamentary party of the CPN (Maoist) Dev Gurung and former deputy prime minister Bhim Rawal continued to protest.
Law Minister Karki, who is also the government's spokesperson, said that there was no alternative to ratifying the MCC agreement as it was in Nepal's wider interest. Stating that the government has been working on the project since the leadership of then Prime Minister Baburam Bhattarai, he said the MCC should be approved to make international investment credible and attractive. "It's a development project. It is a big grant project linked to the economic prosperity of the nation. By using it, Nepal can make a big leap in the energy sector, 'Karki said. Karki said the project would be the subject of parliament. "There is no discussion about when to approve it before," Karki said, "but there is no alternative to approving it by making it a matter for parliament." It does not have the same conditions as it did yesterday. '
The MCC agreement stipulates the construction of a 400 kV transmission line from Lapsiphedi northeast of Kathmandu to Kathmandu West Ratmate, from Ratmate to Hetauda, to Damauli, from Damauli to Butwal, and from Butwal to the Indian border. Under this project, substations are planned to be constructed in Ratmate, Damauli, and Butwal. In addition, there is a program to upgrade the roads.
When did it happen
2074
August 29: MCC agreement
2075
Dec. 13: Ministry of Finance seeks opinion from Ministry of Law
Dec. 10: Secretary-level decision to be approved by a simple majority of parliament
Feb. 25: Council of Ministers decides to submit to Parliament for approval
2076
July 12: Registration in the Bill Branch of the House of Representatives by the Ministry of Finance
March 9: Submit a report with suggestions for approval only by modification
2077
