The GCC pact does not say it must be ratified by Nepal`s parliament. However, the text of the agreement stipulates that in the event of a conflict requiring parliamentary ratification, the provisions of the pact will prevail over the laws of Nepal under the Treaty Act of Nepal. The GCC is the first grant agreement that requires Parliament`s approval. However, it is also the largest grant agreement ever signed by Nepal. MCC is a committed partner that has successfully partnered with nearly 30 countries around the world for 37 financial assistance contracts worth hundreds of millions of dollars and a total of $13 billion. These subsidies have helped free millions of people by investing and encouraging investment and supporting the sovereignty of partner countries. Each country eligible for a second grant applied. MCC`s transparency as a development partner is also recognized around the world and, again this year, the MCC was ranked as the leading bilateral donor to the Transparency Aid Index. At the initiative of the Nepalese government, an agreement to improve roads and energy infrastructure was signed with the MCC, for which the United States agreed to provide $500 million in grants to the country. At the time the MCC pact was signed on September 14, 2017, the Government of the Nepal Congress (NC) was in power and the Maoist party at the time (later merging with the Communist Party of Nepal (Communist-Leninist Party) and the Nepal Communist Party was part of the coalition government. Nepal was the first South Asian country to qualify for the pact after completing 16 of the 20 political indicators. In September 2017, Secretaries of State Baikuntha Aryal and Jonathan Nash, Chief Executive Officer of the MCC, signed an agreement in Washington in the presence of Gyandera Bahadur Karki, then Minister of Finance, and U.S.
Assistant Secretary of State John J Sullivan. The U.S. government has agreed to provide $500 million in grants, while Nepal would provide $130 million for the project, which prioritizes energy and roads. This is the largest grant Nepal has ever received. In particular, there are concerns that the MCC agreement could compete in Nepal with China in the United States. The report on the U.S. Indo-Pacific Strategy of June 1, 2019 makes it very clear that China is a revisionist power and threat while Nepal maintains friendly relations with China. Nepal`s mentality has been deeply shaken by India`s harmless 2015 blockade.
Kathmandu is aware of the importance of the roads and railways that connect China and thus keeps the Belt and Road initiative in a positive light. Partnership between the Millennium Challenge Corporation (MCC) and Nepal The Indo-Pacific Strategy Report, released last June, indicates that the strategy provides for overall links between security, governance and the economy. While not the MCC is, another report, released two months ago, makes it clear that aid under the pact is part of the IPS. According to an expert who worked for the Millennium Challenge Account, the Nepalese office of the MCC, Nepal should consider the MCC as an economic part of the IPS. Ratification of the MCC does not necessarily mean being part of a «military alliance.» Economists suggest that Nepal accept all economic support and that there be no damage to the country if it supports the MCC. Even China`s ambassador to Nepal, Hou Yanqi, said Beijing welcomed any international assistance to Nepal in terms of economic cooperation. However, it is not confirmed whether Nepal, by the mere ratification of the MCC, would be part of the American military alliance and that it would oppose any third country. The pros and cons of the GCC could have been discussed before the country accepted it. Most skepticism about the MCC seems more favourable to domestic consumption than to realism.