Visiting United States Under Secretary of State for Political Affairs Victoria Nuland has urged Nepali officials to protect national sovereignty while dealing with neighbours, particularly on economic partnerships.

Addressing a press conference in Kathmandu before wrapping up her two-day Nepal trip on Monday, Nuland, the first foreign dignitary to visit the country after the formation of the Pushpa Kamal Dahal government, said Nepal could pursue economic relationships with all its neighbours, “but just ensure when you do that, you are protecting your own sovereignty… that the deals that you apply to are good for Nepal.”

Responding to a query by the Post on how the US sees the increasing geo-political rivalry between the US and China in Kathmandu in the wake of the ratification of the $500 million Millennium Challenge Nepal (MCC) compact, Nuland said, “Rather than geopolitics with Nepal’s two big countries, we want Nepal to make a sovereign decision about its interests.”

She arrived in Kathmandu on Sunday evening as part of her seven-day Asia tour during which she will also visit India, Sri Lanka and Qatar.

Ahead of the MCC ratification by the Parliament in February last year, both Washington DC and Beijing were engaged in heated exchanges over the MCC compact.

Despite strong reservations from Beijing, Nepal’s Parliament in February last year ratified the compact, which will come into effect from August this year. Nuland also said any economic assistance or partnership should be free of corruption.

“We welcome Nepal having good relations with all of its neighbours. In fact we obviously have very strong relationships with India. You saw that with regard to China that President Biden and President Xi Jinping sat down together in November and we will have more engagement with China in the coming weeks,” she said. “So it's not about [choosing] one or the other, it is about what is good for Nepali democracy, Nepali prosperity.”

She added that everything the US was working on in Nepal would benefit Nepalis, the American people and “strengthen everything that we do together as democracies.”

Earlier too, whenever American diplomats visited Nepal, they always urged Nepal to have economic cooperation and partnership with China and India, including on the China-led China-led Belt and Road Initiative. They also said Nepal should ensure these initiatives and partnerships are free from corruption and irregularities and uphold international standards on environment, quality and other parameters.

Nuland also announced that the US government will invest over $1 billion in Nepal over the next five years in green energy, electrification, and businesses led by women and under-represented communities with a focus on health, agriculture, and tourism.

But she did not mention whether this would be new investment from the US or old assistance announced and signed by the government of Nepal and the USAID.

Nepal and the USAID signed a $659 million new “development objective” agreement in May last year.

The grant [equivalent to Rs81 billion] for the next five years will support Nepal’s goal of graduating to a middle-income country among other areas of cooperation like education, health, economic development and growth, and strengthening democratic institutions.

Before the press conference, Nuland met Prime Minister Dahal, Nepali Congress President Sher Bahadur Deuba, CPN-UML Chairman KP Oli and Foreign Minister Bimala Rai Paudyal.

With Prime Minister Dahal and other leaders, she had inquired about whether there would be any shift in Nepal’s US policy under the new government.

“Since a new political dispensation has emerged in Kathmandu, one of her major concerns was whether there would be any shift in policy from that of the previous Sher Bahadur Deuba-led government,” a senior official, who was present at the meeting between Nuland and the prime minister, told the Post.

Besides stressing policy continuation, she also discussed how the new government was moving forward in terms of its engagement with the US government and on other major international issues.

In response, the prime minister and other officials said Nepal will continue its good relations with all friendly nations and old friends like the US.

“Nepal will continue the partnership with long-time friends like the US that have contributed to its development and economic prosperity,” the official quoting Dahal added.

While informing of her engagements with the prime minister and political party leaders, Nuland said at the press conference, “I specifically talked about four issues such as strengthening democracy, Nepal-US partnership, supporting Nepal’s prosperity, and transitional justice.”

In all meetings, she had stressed the implementation of the MCC compact and discussed the benefits of MCC projects, according to officials. From prime minister Dahal to Deuba to Oli, all leaders, according to the officials and leaders the Post talked to, had conveyed to Nuland Nepal’s commitment to the compact’s implementation and to further strengthening partnership with the US.

With Deuba, she discussed how open, diverse and inclusive governments make democracies stronger.

She also discussed ways to strengthen democracy, fight corruption, and promote human rights and economic growth through the Summit of Democracy and the MCC. Deuba had attended the democracy summit hosted by the US President Joe Biden in December 2021.

With Oli, she discussed “efforts to build on our historic ties, bolstering democratic resiliency, and strengthening Nepal’s economy through partnership with our innovative foreign assistance agency, @MCCgov,” she tweeted after meeting him.

In the press conference, Nuland said the US was also ready to help Nepal fend off cyber threats. If Nepal needs support in preventing cyber attacks, “we are ready to send a team of experts.”

Nuland also said she discussed the unfinished transitional justice process with Nepali leaders.

Quite a significant number of Americans are willing to invest in Nepal, she said. “We also discussed how to create an investment-friendly environment for them.”

On behalf of the US government, Nuland also pledged to work towards creating more jobs and opportunities in Nepal.