Kathmandu: The Nepal government has formally started discussion on whether to accept the USD 500 million grant assistance from the US under Millennium Challenge Corporation (MCC), a senior minister said on Thursday, after major political parties, including from the ruling coalition, were sharply divided over the issue.

The first meeting of the three-member task force formed by the five-party ruling coalition was held on Wednesday to reach a conclusion on the multi-million dollar US grant, aimed at upgrading roads and constructing transmission lines in the country.

The preliminary discussion on MCC has advanced positively, said Information Minister and task force member Gyanendra Bahadur Karki.

Nepal’s political parties are sharply divided over the issue of whether to accept the US grant assistance or not.

Nepal and the United States signed the MCC agreement in 2017. The MCC, however, has become a hotly debated political issue in this country, with some parties objecting to it on grounds that the US programme is part of the Indo-Pacific Strategy and its parliamentary ratification would be against Nepal’s national interest.

Nepali Congress President and Prime Minister Sher Bahadur Deuba has decided to forward the grant project for the development of the country.

However, major ruling coalition partners including CPN-Maoist Centre led by Pushpakamal Dahal “Prachanda” and CPN-Unified Socialist led by Madhav Kumar Nepal as well as main opposition CPN-UML led by K P Sharma Oli have not yet decided on the matter.

The task force consists of CPN-Unified Socialist leader Jhalanath Khanal, CPN (Maoist Center) leader NarayanKaji Shrestha and Information Minister and government spokesperson Karki.

The task force has been given mandate for holding necessary discussions with other political parties on the issues ranging from resuming the parliamentary procedure to advancing several agendas under-consideration in the parliament.

Meanwhile, CPN (MC) Chairman Prachanda has said that the ruling alliance will not break because of the US-funded MCC compact agreement.

I don’t think the alliance will break down because of MCC. It should not be allowed to be broken, he said.

“We are not in a position to reject foreign aid or grants,” Prachanda said, adding, “We should gladly accept the assistance that comes in the form of grants for the construction of our physical infrastructure.

He further said that amendments should be made when necessary.

The provisions that seem to bother us should be corrected, he added.

Earlier, on Wednesday, he said that MCC would be endorsed after making necessary amendments.

He also reminded that the task force formed by the party on MCC had submitted the report on it.

He reiterated that it would be passed by the parliament with amendments.

“MCC is not the Bible, so it can be revised and forwarded,” he argued.

CPN-Unified Socialist President Madhav Nepal said, “Nepal would not participate in any kind of military alliance, would not participate in any security strategy and would not take part in any type of activity against our neighbours.”

There are rumours among Nepalese people as well as local media that accepting aid under the US-funded MCC would drag Nepal into a military alliance with the US.

Speaking at a programme in Rautahat district, Nepal said, “discussions are being held between the party and the government about MCC as Nepalis can make their own decisions on Nepal’s development, employment and other rights.” 

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