By Hyacinth Estrada
A significant budget cut proposal from the Millennium Challenge Corporation (MCC) headquarters in Washington, DC, has cast doubt on the future of Nepal’s Millennium Challenge Corporation (MCC) projects, raising questions about whether the US$697 million infrastructure initiative will continue.
In a seven-page budget justification sent to the US Congress, the MCC has proposed cutting down its global budget from US$930 million to US$224 million.
Notably, Nepal’s initiatives fall under the category of compact implementation, for which the document does not include any funding.
The MCC has not formally communicated with the Nepali government regarding the status of its projects, despite the substantial budgetary shift.
According to Millennium Challenge Account Nepal spokeswoman Pushkar Mathema, they had just gotten an email asking for a three-month work plan.
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Significant impact on the project’s future
The changes might have a significant effect on project implementation, according to former Finance Secretary Krishna Gyawali, who participated in previous phases of the MCC negotiations.
“There is also no budget for compact development and implementation, which means projects like Nepal’s that are about to take off could face a huge budgetary crisis,” Gyawali told The Kathmandu Post in an interview.
“Plus, going through the paper, it looks like they will maintain only a skeletal structure of the project office in Nepal.”
For the next fiscal year, the Ministry of Finance has set aside NPR5.68 billion for the two MCC-funded projects.
While Nepal committed US$197 million, the MCC had pledged US$500 million.
MCC initiatives should be in line with American interests and provide a return on investment, according to the US document, which also claims that the budget drop shows “fiscal discipline” and a strategy shift.
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Newsjustnews writers 
Geoffrey H. Latayan