MCC grant: a ploy for compacting national sovereignty
Posted on November 12th, 2019

By Dr Kamal Wickremasinghe Courtesy The Island

The yahapalana government’s failed attempt to hurriedly sign the Millennium Challenge Corporation (MCC) compact surely injected some life in to an otherwise lackadaisical presidential election contest, at least from the points of view of the UNP’s old guard, and the increasingly cynical voting public; the government’s attempt to sneakily sign the compact in the middle of a bleak-looking election campaign was so daring that cynics might suggest that it was probably the last nail on the coffin of the presidential hopes of the candidate the UNP reluctantly nominated.

The government’s deferral of the signing of the compact until after the election—due to pressure from the public and the outgoing president––has made the NGOs, including some apparently purpose-built for ‘advocating’ the harmlessness of the compact and the urgent need to sign, have grown more raucous. Notably, the NGOs leading the charge include those who have obtained lucrative, multi-million dollar contracts from the initial developmental process. Despite such urging from vested interests and American sycophants, opponents of the compact have correctly pointed to the danger of assessing the compact in isolation, and the need for consideration of what it involves in combination with the provisions of SOFA and ACSA agreements the government has already signed with the US government.

The purpose of this despatch is to provide some contextual information relating to the genesis of the MCC fraud and the locus it occupies within the web of broader American defence and foreign policy infrastructure. Such an examination would be vital for the assessment of the impact of the compact on Sri Lanka’s future sovereignty, not to mention its economic well-being.

MCC, a cog in the neocon ideology
concocted for the new millennium

The best précis of the MCC is that it was an integral part of the neoconservative ideology that was concocted to provide primary justification for the 2003 invasion of Iraq. It was an integral cog in the haughty ‘millennium’ ideology developed through the 1990s by a neocon cabal, primarily for the purpose of engineering regime change in Iraq.

The neocon ideology was underpinned by haughty, self-congratulatory references to the state of the world at the dawn of the 21st century, with a disintegrated Soviet Union and Central and Eastern repossessed by the West. Neocons grabbed the opportunity to portray the situation as a decisive victory of free market capitalism over socialism and ‘liberty’ over totalitarianism. Renaming the 21st century ‘new American century’, they pushed for a new US national security strategy designed to reshape the legal, institutional, infrastructural and financial contexts of poorer countries to better suit US economic interests. They predicted that the world would welcome American military dominance as a force for stability and evoked ‘bandwagoning’ logic as per Thucydides’ famous dictum that ‘the strong do what they can and the weak suffer what they must’. This policy was later adopted by the foreign policy neophyte George Bush Jr. upon his controversial ‘victory’ in 2000, to be later named the ‘Bush Doctrine’. The comical Bush ‘strategery’ was taking place in full swing.

President Bush first announced the creation of a Millennium Challenge Account (MCA), framed as ‘a new compact for global development’, at the Inter-American Development Bank on March 14, 2002. Since the very first announcement, great efforts were made by US propaganda to present MCA as an ‘independent’ US foreign assistance agency that heralded a revolutionary change in carrying foreign aid in that it would be based in the Executive Branch, administered by a new government corporation supervised by a Board Chaired by the Secretary of State and a CEO. The MCC was established as a US government corporation in January 2004 by the Millennium Challenge Act of 2003.

A brief look at the 16 indicators used to identify eligibility of countries pointed to the MCC being a funding mechanism for countries wishing to become vassals of the neocon empire; The form of the MCA represents a brazen articulation of US imperialism that underlie the neocon open market agenda, namely, that the path to increased growth and prosperity lies in countries’ willingness and ability to adopt policies that promote economic freedom and the rule of law – bywords for freedom for America to operate.

National Security Strategy of
September 2002

The true nature of the MCA fraud was revealed in its placement within President Bush’s annual National Security Strategy (NSS) to Congress document, released on 20 September 2002. Overall, the NSS 2002 abandoned previous concepts of deterrence in favour of strategies that primarily targeted Iraq, such as pre-emptive attacks to destroy Weapons of Mass Destruction before they reached the US. Importantly, the NSS elevated the MCA’s goal of ‘reducing poverty through growth’ as the third pillar in America’s security portfolio, adding to defence and diplomacy. The NSS also placed the MCA Steering Committee under the direction of the National Security Council. In short, the NSS and the MCA collectively misrepresented Iraq invasion plans by crudely and dogmatically aligning neoliberal economic policies and America’s national security, reformulating the previously veiled relationship between foreign aid and global hegemonic ambitions of the US.

There is an interesting aside that demonstrates media freedom that existed in the west in 2002, and a remarkable display of fortitude by an Australian journalist currently unthinkable in corporate media in any western country. On 22 September 2002, The Sydney Morning Herald launched a scathing editorial attack on America’s NSS as a ‘Manifesto for world dictatorship’. The editorial opened with the words: ‘Now we know. The Americans have spelt it out in black and white. There will be a world government, but not one even pretending to be comprised of representatives of its nation states through the United Nations. The United States will rule, and not according to painstakingly developed international law and norms, but by what is in its interests.’ The editorial ended with the memorable words: “Australia’s choice is to become a non-enfranchised satellite state of the United States – and thus responsible for its aggression and a legitimate target for those fighting to win back countries the Americans take by force, or to fight like hell to save the United Nation’s dream of world government by negotiation.”

For his troubles however, by April 2003, a shake-up of senior management at John Fairfax Holdings saw Robert Whitehead (SMH editor, (2000-2005), moved to a new commercial and editorial division described as ‘powerful’. Showing even more spine Robert Whitehead appeared to cast off the copybook ‘kick upstairs’ and resigned his position less than 18 months later; He is currently on the Board of McPherson Media Group, and is the author of a recent International News Media Association (INMA) report on its new Digital Platform Initiative.

Proof is in the eating

The above contextual evidence shows that the Millennium Account was nothing but another fraudulent exercise undertaken in pursuit of global hegemony by the American empire through the penetration of neoliberal capitalism to prepare the world for the entry of its military forces and the mighty arsenal of WMDs without hindrance.

The real proof of the objectives of the MCC fraud, however, only comes across through the record of its operation in poor countries over the last two decades. Since 2004, 36 countries have signed MCC compacts and 29 countries entered in to threshold agreements, with some countries signing second compacts and threshold agreements.

Analysis of events in countries subjected to MCC compacts suggests that MCC grants dehumanise and disempower citizens in countries concerned by imposing Faustian deals on puppet governments. Significantly, MCC dealings with independent-minded leaders in countries such as Senegal, Malawi and Tanzania show that their defiance of MCC orders has led to swift cancellation of grants, and worse still, later imposing such deals through political opponents of forthright leaders who seem to be miraculously ascending to power.

A classic example is the case of Malawi: In 2012, Malawi’s MCC compact was suspended citing ‘rapidly deteriorating human rights environment’. In March 2012, following the ganging up of western donors against him, President Bingu wa Mutharika accused them of plotting to bring down his government and told them to ‘go to hell.’ Mutharika died of cardiac arrest just two weeks later. Following a constitutional and legal battle, and military intervention, the Columbia educated feminist activist Joyce Banda was sworn in as President of Malawi. The western corporate media led called it a triumph for democracy. Within the first week of her presidency, Banda spoke to Hillary Clinton and other western governments and the $350 million compact grant was reinstituted almost immediately. On the advice of the IMF, Banda devalued the Malawian currency by 33 per cent against the US dollar, overturning Mutharika’s refusal. On the political and social front, Banda refused in June 2012 to host the African Union summit on the grounds that the AU had insisted on assurances that Malawi would not allow the International Criminal Court arrest Sudan’s president Omar al-Bashir. Banda announced her intention to overturn Malawi’s ban on homosexuality. Later, however, Banda was involved in a corruption scandal of $300m, and was heavily defeated in the presidential election of May 2014, to the late president’s brother, current President Peter Mutharika. She failed in an attempt to nullify the election, and left the country to be placed a fellow at the Woodrow Wilson Centre International Centre for Scholars.

Similarly, in Senegal, the former president of Senegal, Abdoulaye Wade’s refusal to allow the French-Canadian consortium that held a 34 per cent stake in Senegal’s monopoly electricity supplier—as per the requirements of a $540 million MCC grant entered in to in 2004—to increase prices of electricity led to the freezing of funds. President Macky Sall, who was prime minister under President Wade, and was sacked by him in 2008, was elected president in April 2012 and 2019 is having a compliant relationship with the MCC, signing a new $550 million Senegal Power compact in December 2018.

More recently, in March 2016, the MCC suspended its grant of $472 million intended to help Tanzania bolster its power sector, following Tanzanian government rejection of MCC demands for assurances that the Cybercrimes Act—which prohibits Tanzanians from transmitting unsolicited messages containing false information ‘would not be used to restrict freedom of expression’. More importantly, the suspension related to Tanzania’s parliament passing legislation severely restricting the actions and movement of foreign diplomats and international workers to meet with local government authorities and party members without permission from the Ministry of Foreign Affairs. Another bone of contention was the Election Commission annulling elections for president of Zanzibar due to alleged irregularities. Tanzania president John Magufuli called the suspension of the MCC compact an opportunity for Tanzania to get serious about reducing its dependence on foreign assistance.

Similarly, in Ghana, in October 2019, MCC responded by cancelling the US$190 million grant in response to Ghanaian government’s termination of a 20-year contract transfer of operations of the state-run Electricity Company of Ghana (ECG) to an international consortium (PDS), citing dissatisfaction with payment guarantees. The MCC agreed in 2014 to provide Ghana with US$498 million for the power sector subject

Can foreign grants save Sri Lanka?

In addition to the concerns arising from the above information, fundamental questions need to be asked about the current government’s philosophy that Sri Lanka’s economic salvation lies in engagement with foreign markets, export of raw materials and the so-called foreign aid. The failure of Sri Lanka over the last century or so to become an economic El Dorado following this approach should help open the eyes of those who are unable to think independently.

The failure of trillions of dollars that have been transferred to developing countries over the last half the century, branded foreign aid, to lift the vast majority of people in these countries from abject poverty clearly suggests that it will not help buy more development. Despite such clear evidence, the current political leadership seem s hell-bent on keeping up ‘stoking the fire’ by supplying raw materials to world markets at grossly uneven terms of trade.

The proposed MCC pact appears even worse than other forms of so-called aid in that it has been designed for failure: Any economic plan—developed by the Center for International Development (CID) at Harvard University or anyone else—trying to reduce Sri Lanka’s development problems to issues relating to access to land and weakness in transport is simply baloney.

Our problems are rooted in incompetence, and lack of interest, of political leadership and the MCC pact should be thrown in the bin, preferably with some of that leadership.

2 Responses to “MCC grant: a ploy for compacting national sovereignty”

  1. Hiranthe Says:

    Totally agreed!!!

  2. Henry Says:

    Dr. Wickremasinghe’s article is an epiphany, and it is surprising (an understatement) that there are still some people who do not realize that the MCC etc are a ploy for the US to further its own interests.If not, where were these do gooders when the country was reeling under the vicious attacks of the LTTE for instance? The time of philanthropy as part of foreign policy is long gone. Everything is for the benefit of the donor. People like Mangala Samaraweera and his cohorts should read up on what has happened to countries that signed their freedom away. With such stupid “Leaders” around, who needs traitorous separatists?

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