US Assistant Secretary of State Donald Lu discusses MCC with Nepal’s political leaders over phone


February 10, 2022


US Assistant Secretary of State Donald Lu discusses MCC with Nepal’s political leaders over phone

KATHMANDU: US Assistant Secretary of State for South and Central Asian Affairs Donald Lu has held telephone conversations with top leaders of Nepal’s major political parties and expressed concerns over the United States grant Millennium Challenge Compact (MCC).

Assistant Secretary Lu told Nepali leaders that if the grant agreement did not move forward, the US would understand that China played a role in Nepali internal politics, resulting in indecision on MCC and its ultimate suspension.

A highly placed source confirmed that US Assistant Secretary called top leaders on Thursday as the parties are nowhere near consensus as the MCC deadline approaches.

Lu had telephone conversations with Prime Minister Sher Bahadur Deuba, Maoist Center Chair Pushpa Kamal Dahal ‘Prachanda’ and CPN-UML Chairman KP Sharma Oli.

According to sources, Secretary Lu, in the telephone conversation, clearly told Maoist Chair Prachanda that the MCC agreement could not be amended nor its deadline for parliamentary ratification extended. “Now you have to decide – whether you approve it or not,” Secretary Lu conveyed Prachanda.

Prachanda, on his part, said that public opinion was divided on MCC and his party also had some objections. He also told Secretary Lu that his party decided to think about MCC only after the recently-declared election set for May 13.

However, Secretary Lu communicated to Prachanda that US would think that MCC was turned down owing to China’s pressure in Nepal. “We will understand that China intervened and suspended our aid,” he said.

The US assistance project MCC has long been under consideration in the House of Representatives.

MCC, in a recent letter dated February 6 and addressed to Prime Minister Sher Bahadur Deuba and Chairman of the ruling Maoist Center Puspa Kamal Dahal ‘Prachanda’, set February 28 deadline for Nepal to decide on grant agreement.

The letter was in response to another letter dispatched by PM Deuba and Prachanda to MCC on September 13 last year. In the letter, the two leaders sought 4/5 months assuring to create an environment for MCC approval.

A consensus among major political parties is still lacking. Prime Minister Deuba’s efforts to move forward MCC is encountered by delay tactics employed by the ruling coalition partners, Maoist Center and the Unified Socialist.

Deuba, who is also the Nepali Congress president, sought the support of the main opposition but the CPN-UML clearly told him that it would reveal its stance on MCC only after the coalition clarified its position.

The meeting of the House of Representatives has been postponed several times due to lack of consensus among the parties on agenda. Preparation is afoot to postpone the next sitting of the parliament slated for February 14.