Nepal: Approval of US Aid Grant

February 28, 2022

The parliament of Nepal has approved a contentious USD 500million US grant, despite opposition and street protests from the Communist parties. In 2017, the US government’s Millennium Challenge Corporation (MCC) pact was signed by Nepal for infrastructure projects but its ratification had been on hold as there were divisions within political parties, including the coalition that was ruling.

Overview:

Prime Minister Sher Bahadur Deuba’s coalition allies voiced strong opposition, claiming that this pact jeopardized Nepal’s sovereignty.
As part of a compromise, the vote included a declaration stating that Nepal will not join any strategic, security, or military, alliance, including the United States’ Indo-Pacific Strategy.
There were some reports blaming China for the spread of misinformation regarding this pact.

About Millennium Challenge Corporation

The Millennium Challenge Corporation (MCC) is a United States bilateral international aid agency established in 2004 by the US Congress. It is a separate organization from the USAID and State Department. It gives funds to countries that have been found to have the potential for economic growth and good economic policies. The country qualification method is objective, comprising scores in 20 different categories provided by third parties. A country that is eligible for a grant must apply with a specific project in mind. This organization is headquartered in Washington D.C.

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