This morning, a delegation from the United States government’s Millennium Challenge Corporation (MCC), led by Fatema Z. Sumar, Vice President of Compact Operations, left Nepal after a four-day visit. The delegation was in Nepal to discuss the next steps in advancing the ratification of the $500 million MCC-Nepal Compact.
In order to explore the economic prospects given by the agreement and to provide any clarifications that may be required, Sumar and Jonathan Brooks, MCC’s Deputy Vice President for Europe, Asia, the Pacific, & Latin America, visited with community, corporate, and political leaders in the region.
“It was a delight to be back in Nepal, where we had such fruitful discussions with a diverse cross-section of Nepalese society, ranging from lawmakers and party officials to civil society and business leaders,” Sumar added. The support for the compact that I have received throughout my travels and in so many of our conversations has given me hope. Our ability to explain issues and resolve misconceptions, particularly those coming from an intentional misinformation effort, came as a result of an open and honest discussion between us. As a result, I look forward to Nepal’s government taking the next step and ratifying the compact, so that we can continue to improve the country’s economy for years to come.
Having spent over three years working with the Millennium Challenge Corporation and development specialists to design and negotiate the grant programme, the Government of Nepal signed the MCC-Nepal Compact in 2017. The compact, which is co-funded by the government of Nepal with an additional $130 million, focuses on two main infrastructure priorities: increasing access to affordable, dependable energy and improving the quality of Nepal’s roadways.
It is planned to complete a segment of Nepal’s 400kV East-West transmission line as well as the Nepal portion of the second cross-border line with India, for a total of around 300 km of powerlines, which is roughly equal to one-third of the country’s total power transmission line length. The country will be able to supply more reliable electricity to homes and businesses, update its electricity grid, and support the greater trading of Nepal’s excess energy as a result of these efforts.
Nepal has more than 6,000 streams, rivers, and tributaries, making it the second wealthiest country in the world in terms of inland water resources. According to the Asian Development Bank, if Nepal’s hydropower generation were to increase by just 20% by 2030, the country’s real GDP would increase by 87 percent, and exports would increase by 285 percent.
The Road Maintenance Project is intended to establish a new government-run road upkeep programme in order to improve the construction and maintenance of Nepal’s roadways. Poor road quality in Nepal, as a result of insufficient maintenance, is a contributing factor to the country’s high transportation expenses. Improved roads will result in more secure, more cost-effective, and more efficient transportation of goods, services, and people across the country.
The friendship between the United States and Nepal has been going on for more than seven decades, and it is based on common ideals such as individual liberty and respect for the sovereignty of all nations, according to Brooks.” “The MCC agreement is a natural extension of our long-standing collaboration. We expect the compact to have a positive impact on approximately 23 million Nepalis and will result in the creation of high-quality jobs for them as we expand Nepal’s electricity system and cut the cost of road transportation.
The United States established diplomatic ties with Nepal in 1947 and was one of the first countries to provide development assistance to the country. In 1951, the United States and Nepal signed a number of bilateral aid agreements as part of the United States’ Point Four Program, which was the first U.S. initiative aimed at improving the social, economic, and political conditions of developing countries. These initiatives concentrated on improving roads and telecommunications, facilitating agricultural development, and eliminating malaria. Between 1952 and 1986, the United States contributed more over $368 million in bilateral development aid. Later, following the 2015 earthquakes, the United States provided Nepal with the largest amount of financial assistance – more than $190 million – to aid in relief, recovery, and the reconstruction of critical infrastructure, which included the reconstruction of 36 schools and hospitals, as well as more than 1,600 homes.