Sri Lanka at risk of losing US$ 480 mn MCC grant - Advocata Institute | Daily News

Sri Lanka at risk of losing US$ 480 mn MCC grant - Advocata Institute

 Sri Lanka is at risk of losing a US $480 million Millennium Challenge Corporation (MCC) grant due to a campaign of misinformation and political differences among the ruling ‘coalition’.

The MCC grant represents the largest grant from a single source Sri Lanka has ever received and presents a valuable opportunity to fix some of the country’s constraints to economic growth.

Despite the fact that this grant is being offered as a response to a proposal submitted by the Sri Lankan Government, rampant political dysfunction has resulted in the Government failing to sign the final agreement. Sri Lanka is now at risk of losing the grant, if it does not receive Cabinet approval and fails to sign the agreement prior to the September 18th MCC Board meeting.

The MCC Compact is a grant funded by the Millennium Challenge Corporation, a foreign assistance agency of the U.S. Government. Although heads of the U.S. State Department and U.S. Treasury sits on its board, the MCC operates independently as a separate entity. The aid agency uses a competitive process to select countries on a variety of criteria that include a commitment to good governance, investing in healthcare, education and economic freedom. The pool of eligible countries is also limited to those falling under the threshold for the World Bank’s classification for upper-middle income countries.

Sri Lanka has been awarded a US $480 million 5-year Compact in response to a proposal submitted by the Sri Lankan Government in 2017. Selected countries then go through a constraints analysis study to identify the bottlenecks for economic growth.

Sri Lanka’s study was led by the Sri Lankan Government with the assistance of Harvard University’s Centre for International Development and the MCC.

Based on the constraints identified, the Compact seeks to address two critical impediments to growth through its funding: (1) inadequate transport logistics infrastructure and planning; and (2) lack of access to land for agriculture, the services sector, and industrial investors.

The Transport Project seeks to modernise bus systems in the Colombo Metropolitan Region and optimise efficiency of road networks through better traffic management.

The project will also work to reduce transport costs and increase mobility between the central region of the country, and ports and markets in the rest of the country. The Land Project seeks to improve access to land, and improve land valuation systems.

 


Visit Kapruka.com Sri Lanka's Largest online shop. Over 125,000 unique categories such as Fresh Flowers, Cakes, Food, Jewllery, Childrens Toys and other Sri Lankan e-commerce categories. Low delivery cost to most cities here and free delivery in Colombo.

 

Add new comment