The United States has clarified that it agrees with the interpretative declaration added to the Millennium Challenge Corporation compact by the Nepali Parliament.

When Nepal’s House of Representatives ratified the MCC compact between Nepal and the MCC—a US aid agency—on February 27 last year, the lower house had ratified it by adding a 12-point interpretative declaration to pacify widespread public opposition to the programme.

In a statement on March 1 last year, the MCC acknowledged Nepali Parliament’s decision to ratify the $500 million compact signed between the MCC and the Nepal government in September 2017.

But some leaders of the ruling parties and some splinter Maoist groups have started speaking out against the US aid just a few days ahead of its entry into force scheduled for August 30.

Earlier on Monday, Prime Minister Pushpa Kamal Dahal, speaking at a function in Butwal, had also expressed his doubts about whether the US had accepted the interpretative declaration. He said he would seek definitive answers from MCC Vice-president of Compact Operations Cameron Alford, who is currently in Nepal, on the 12-point addendum to the compact.

They have been arguing that the US is yet to endorse Nepali Parliament’s interpretation of the MCC compact, questioning if the US had a different interpretation from that of Nepal.

But, in a written response to the Post, the US embassy in Kathmandu clarified that the US was in agreement with the Nepali Parliament’s interpretation.

“We agree with the interpretative declaration and consider it to be consistent with our understanding of the terms of the compact including the prevalence of the Constitution of Nepal over the MCC Nepal Compact,” the US Embassy said in a response to the Post.

The embassy also reminded that the MCC has already acknowledged receipt of the interpretative declaration last year.

The interpretative declaration clarifies Nepal’s understanding that the MCC compact is just a development grant, it is not above the country’s constitution and Nepal can terminate it if there is anything in it against national interest.

Before its ratification, some cross-party leaders said that the MCC compact was a part of the US military strategy. And the interpretative declaration says Nepal shall not be a part of any strategy, military or security alliance including the US Indo-Pacific Strategy.

“Nepal declares that the Constitution of Nepal, being the fundamental law of the land, shall prevail over the MCC compact and other associated agreements,” reads one of the points in the declaration. It also says that other than for the implementation of the MCC compact, Nepal will not comply with current and future US laws or policies.

“The two sides are scheduled to announce the beginning of implementation of the $500 million MCC Compact through signing of letters of exchanges on Wednesday,” an official of Millennium Challenge Account, Nepal (MCA-Nepal), the special purpose vehicle formed to implement the compact, told the Post.

MCC Vice-president Alford will be in attendance to mark the entry into force of the MCC compact, according to the US embassy.

Entry into force means the compact’s implementation runs for exactly five years from the day it begins and then the projects will be handed over to Nepal, according to MCA-Nepal.

“After five years, the money stops flowing from the MCC for the implementation of the projects under the compact,” an MCA-Nepal official told the Post earlier.

Under the compact, a 315-km 400kV transmission line will be built and part of the East-West Highway will be improved. For this, the Nepal government will also be contributing as much as $197 million.

But the public utterances of some leaders against the compact in recent days has raised concerns about whether political challenges would once again emerge as a threat to the MCC-funded projects.

A meeting of the CPN (Unified Socialist), one of the parties in the ruling coalition, sought the government's response on the implementation of the compact’s interpretive declaration. In a statement issued after the meeting last week, the party also demanded that a parliamentary committee be formed to monitor whether the MCC compact is implemented in line with the interpretive declaration.

According to reports, its leaders including Madhav Kumar Nepal and Jhala Nath Khanal have called for discussions on the implementation of the interpretative declaration.

The Communist Party of Nepal led by Netra Bikram Chand, on August 22, announced a series of protests from August 23 to August 28, opposing the compact’s entry into force.

Issuing a statement, Chand vowed to prevent the implementation of MCC projects, calling the compact an American strategy to check China and India. On the same day, the Revolutionary Communist Party Nepal, another Maoist splinter group, appealed to the people to help scrap the compact, saying it goes against Nepal’s national interests and non-alignment policy.

After Nepal’s ratification of the compact by adding an interpretative declaration, the MCC had acknowledged the ratification of the compact without clarifying whether it had endorsed the addendum.

Hari Roka, a political analyst, said he doesn’t feel the country will now see major protests against the MCC as the government is now led by the CPN (Maoist Centre) whose leaders were in the past the compact’s most vociferous critics.

“You cannot rule out all political challenges to the MCC’s implementation as there is a tendency of organising protests just because you are an opposition party,” Roka said. “Fringe parties also seek to show their relevance by organising protests.”

Before the compact’s ratification, the country had seen massive street protests against the US aid programme.

Lokraj Baral, a political analyst and former Nepali ambassador to India, said that the MCC issue is settled and there is nothing to protest about.

“Some of the same leaders who endorsed the compact’s parliamentary ratification are now speaking against it,” said Baral. “Hindrances to its implementation will destroy the country’s credibility abroad.”

He said that the political parties and leaders should now focus on implementing the MCC funded projects instead of protesting the programme itself.