U.S. Senator Jeanne Shaheen (D-NH), the Ranking Member of the Senate Foreign Relations Committee, has raised alarm over reports that the Trump administration’s proposed “Department of Government Efficiency” (DOGE) is pushing to dismantle the Millennium Challenge Corporation (MCC). Shaheen warned that scrapping the MCC would weaken U.S. global influence and create opportunities for China to expand its geopolitical reach, particularly in countries like Nepal.
Recent reports have revealed that the MCC is preparing to wind down its operations. According to internal communications, MCC staff were informed via email on Wednesday that all MCC programs would be terminated, and the agency’s workforce would be significantly reduced. Employees have been notified that they will be placed on administrative leave starting May 5, 2025. During a meeting on the same day, MCC leadership confirmed that all project activities would cease, and staffing would be minimized to the greatest extent possible.
These developments have raised serious concerns about the future of MCC-funded projects worldwide, including in Nepal, where the MCC has been implementing significant infrastructure initiatives. In Nepal, where China has been actively expanding its presence through infrastructure investments, the termination of MCC projects could create a vacuum that Beijing is poised to fill.
“The Millennium Challenge Corporation is a bipartisan, independent government agency established in law by Congress to reduce global poverty through economic growth. Just last year, Congress passed, and President Biden signed into law, a bipartisan bill that expands MCC’s pool of eligible candidate countries. MCC is a necessary tool to counter China’s Belt and Road Initiative, and dismantling it will open the door for the PRC to further exploit and capitalize on America’s retreat, as it has with Nepal,” Shaheen warned.
The “Department of Government Efficiency” (DOGE) effort to dismantle the Millennium Challenge Corporation (MCC). Since its establishment under President George W. Bush over 20 years ago, the MCC has a proven track record of delivering economically transformative, transparent, and accountable returns on foreign assistance through its projects, helping partner countries such as Kosovo and Senegal strengthen their democratic institutions and reduce their dependency on aid in the long term,” Shaheen noted.
“This destructive dismantling of the MCC does nothing to make America stronger; it only harms our economic and national security interests,” she argued.
The controversy surrounding the MCC in Nepal has been particularly contentious. In 2017, the U.S. and Nepal signed a $500 million MCC compact to fund infrastructure projects, including roads and electricity transmission lines. This was later supplemented by an additional $50 million to fund critical infrastructure projects focused on electricity transmission and road maintenance. However, the agreement faced opposition from some Nepali political factions, who viewed it as a threat to national sovereignty or an alignment with U.S. geopolitical interests against China. Despite these challenges, the compact was ratified in 2022.
The Nepal Compact, which officially entered implementation on August 30, 2023, aims to strengthen Nepal’s electricity grid, enhance hydropower utilization, and improve the quality of its major road networks. The total project budget stands at $747 million, with the Government of Nepal contributing $197 million.
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Kishor Panthi
View More PostsKishor Panthi is the founder and editor-in-chief of Khasokhas and NepYork. He is the author of three books, “Kampan,” "UNTRANSLATABLE" and “Zero Mile.” He writes about social issues, immigration, and politics.
