‘MCC pact includes Economic Corridor’ - Review Committee | Daily News


‘MCC pact includes Economic Corridor’ - Review Committee

President Gotabaya Rajapaksa receiving the MCC Review report
President Gotabaya Rajapaksa receiving the MCC Review report

The much-debated US-sponsored Millennium Challenge Corporation (MCC) project is once again in the spotlight creating ripples in political circles.

In simple terms, the MCC pact refers to a proposal for a US$ 480 million grant for a project dividing in to two components dealing with lands and transport. However, the proposal received flak from many quarters for its lack of transparency, contentious clauses and the hurried manner in which it was attempted to push through. There were arguments that the project, though it looks good on the paper, comes with an undisclosed package, which may turn out to be very harmful to the country.

The previous administration committed political suicide by trying to push the deal through on th cusp of the Presidential Election despite the public opinion against it.

The MCC was established in January 2004 as a US Government agency to assist lower and lower middle income countries for economic growth and poverty alleviation after the United Nations declared the Millennium Development Goals (MDGs) in 2000. Sri Lanka had been named an eligible candidate for the MCC programme as far back as 2004, but the matter was held in abeyance till the Government changed in 2015.

The MCC Compact Agreement was to be signed towards the end of 2018, but the public outcry against it and the political crisis stemming from the sudden change of Prime Ministers put if off.

The new administration of President Gotabaya Rajapaksa, soon after it took office, appointed a four-member Expert Committee to review the MCC proposal. After six months’ deliberation, the Committee headed by Colombo University Economics Department Prof. Lalithasiri Gunaruwan has come up with a detailed report with a firm ‘no’ to the proposal in its current shape. Its final report was presented to President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa last week.

Million-dollar question

The 59-page report is now available in Sinhala on the official websites of the President, ‘pmdnews.lk’, ‘presidentsoffice.lk’ and ‘president.gov.lk’, for perusal by any interested party. English and Tamil translations are expected to follow.

The report made an explosive revelation that US$ 10 million had been granted under two initial agreements signed in 2017 and 2018 to draw the plan(s) for the project, but that it had not been accounted anywhere. The US Embassy in Colombo promptly refuted this claim stating that “no MCC grant monies were ever transferred to or spent by Sri Lankan Government” and that “funds for preparatory activities have been cancelled or indefinitely postponed, pending the Government’s decision whether to proceed with the grant”.

Yet, the newsfeed of the Embassy’s own website contradicted that assertion. In a web news report published on June 13, 2018, the Embassy detailed that two high-ranking US diplomats signed an agreement at the Finance Ministry to “provide an additional US$ 2.6 million grant to finalize [the] compact development”. “This amount supplements the grant of US$ 7.4 million MCC provided last July to support feasibility studies needed to develop a high-quality, evidence-based and sustainable program and is in addition to the final grant amount that MCC will provide for the compact,” the news report added.

In the wake of recent developments, U.S. Secretary of State Michael Pompeo had talked to Foreign Relations Minister Dinesh Gunawardena over the phone on Monday. Following the talks, Pompeo had tweeted, “Productive call with Sri Lankan FM Gunawardena on our COVID-19 cooperation, pandemic assistance, and the US commitment to a strong, sovereign Sri Lanka. We discussed economic stability, sustainable development, human rights, and continued US-Sri Lanka partnerships”.

The UNP in a statement on Monday vehemently denied the allegation by the MCC Review Committee. Its General Secretary Akila Viraj Kariyawasam, addressing a press conference, went on to question the impartiality of the Committee also alleging that it is carrying out the Government’s political agenda.

Report’s content

The Review Committee observed that the experiences of other recipient countries of the MCC grants had not been very encouraging and that most of them had not reached the expected outcomes.

The report analysed that ‘MCA Sri Lanka’, the proposed company to carry out the MCC project, would be a “special unit” that does not come under the existing institutional framework of the country, and would be beyond the supervision of a local regulatory body.

Prof Gunaruwan’s Committee was of the view that the project could risk national security and sovereignty of the country as it paves the way for foreign contractors to possess and access sensitive data and information.

Interestingly, the report also stated that the disputed “Colombo-Trincomalee Economic Corridor” is in fact a part of the MCC proposal despite the previous Government’s repeated claims otherwise. The Committee has advised against including it in the programme.

Highly critical of the project component to reform the land administration system, the report pointed out that it contravenes the current land laws of the country, which require a two-thirds majority in Parliament to revise.

“Endorsing the MCC Compact Agreement by a Parliamentary Act is a prerequisite of the Agreement. Any attempt to pass a set of proposals, that goes against the country’s existing laws, with a simple majority in Parliament is a violation of the Constitution,” the report highlighted.

“Entering into an international agreement is not an activity solely in the hands of the Executive. It is a responsible task that will have far reaching impact even on future generations. It is the Committee’s final recommendation to add a proviso in the Constitution that any internationally binding agreement must be passed with a suitable majority in Parliament before the Executive inks it,” the report wrapped up.

Hot topic

In the run up to the General Election, the MCC agreement has invaded the political discourse like in the previous Presidential Poll.

The only difference is that the Sri Lanka Podujana Peramuna (SLPP) members, now in the Government ranks, are keener to alleviate the fears of the public, whereas the UNP and the SJB members, now in the Opposition ranks, shoot their mouths off demanding the Government to remove the MCC Office in Sri Lanka and to swear that it will not sign it.

Co-Cabinet spokesman Dr Ramesh Pathirana at the last Cabinet press briefing firmly said that the MCC agreement would not be signed under any circumstances. SLPP stalwart and Minister Wimal Weerawansa has made it clear he would leave the Government immediately if it signs the MCC agreement.

The future course of action with regard to the MCC pact is indeed a Litmus test for the Government to prove that it walks the talk.

UNP goes digital

The UNP kick-started its Parliamentary Election campaign on Sunday using multiple digital platforms to overcome the prevailing restrictions on campaigning in the face of COVID-19.

UNP Leader Ranil Wickremesinghe launched the Digital Meeting at ‘Sirikotha’ in a ceremony attended by 100 people, the maximum number allowed at an election meeting as per the health guidelines.

The members and supporters were asked to join the meeting virtually through social media platforms such as Zoom, Instagram, Facebook and YouTube. The meeting was screened live at ground-level pocket meetings.

With a tag-line ‘a Digital Vision of Sri Lankan Politics’, it could be seen that the UNP is trying to be appealing to the youth to tap their vote base.

At the meeting, Wickremesinghe commented that the new generation is repulsed by the prevailing political culture of the country and wants to see the back of all 225 Parliamentarians who were at the last Parliament. Sensing this bitter truth, similar sentiments had recently been echoed by leaders of other political parties too.

However, an analysis by ‘Manthri.lk’ website run by Verité Research has pointed out that 208 out of the 225 members of the last Parliament (at the time of its dissolution) are back in the election race. One hundred and ninety eight former MPs have received nominations to contest while another 10 are included in the National Lists.

It is still too early to predict how many of them will return, but seeing the back of many of them will certainly be a distant reality. Expecting ‘old wine in a new bottle’ will be a far more realistic prediction at this point. 

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