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By Our Reporter

The United States of America has finally suspended funds for the MCC compact, one of the US grant projects which has divided the Nepalis into two opposite poles during its endorsement from the parliament in February 2022.

The Millennium Challenge Corporation (MCC) has informed the government about the suspension of fund payments for activities under the MCC Compact in compliance with a 90-day funding freeze issued by US President Donald Trump on January 20, 2025.

On February 14, the MCC wrote a letter to the Ministry of Finance (MoF) to notify the suspension of disbursements linked to ongoing projects in Nepal in line with the executive order.

The Nepal government and MCC had signed the Compact on September 15, 2017. But the project was dragged into controversy with many communist leaders and others strongly opposing it. Amid the controversy, the parliament ratified it. Now the suspension of MCC has pleased many.

President Trump had issued an executive order to halt aid release with an objective for Reevaluating and Realigning United States Foreign Aid for the next 90 days.

This follows a previous decision by the United States Agency for International Development (USAID) to pause funds for Nepal. The suspension of MCC funds is expected to impact the implementation timeline of key development projects.

Earlier on January 28, the USAID had written to the MoF that grant assistance for four projects was suspended. They included Health Direct Financing Project, Agricultural Direct Financing Project, Education Direct Financing Project and Inclusive Policy Direct Financing Project.

The MCC has been suspended at a time when there were media reports about the US investment to introduce and implement federalism, secularism and republicanism. It was reported that the USA allotted US$ one million to convert Hindus and followers of other religions into Christians. Even a number of writers and civil society leaders were said to have received the money to write books, make films and other activities to weaken the Nepali society.