MCC LIES: Sri Lanka is not getting $480m signing MCC
Posted on October 18th, 2020

There is a major misconception that Sri Lanka in its cash-strapped status should ignore all questionable aspects of the MCC and just sign MCC Compact as MCC is holding a carrot of $480m which they call a gift from US to the people of Sri Lanka. We have very eminent personalities going out of their way to hold panel discussions and promote MCC parroting how lucky Sri Lanka is to benefit from this ‘gift’. This is far from the truth. Out of the $480m across 5-year gift”, the Transport Project allocation is $350m & Land Project allocation is only $67.3m (total $417.3m) the remaining $62.7m is allocated for monitoring & evaluation & program administration. In reality we will get $82.8m in first year, $120m in 2ndyear, $97.7m in 3rdyear, $89.1m in 4thyear & $57m in 5thyear.

MCC is no ordinary bilateral agreement. This agreement has several phases.

Phase 1is a set of preconditionsin MCC Compact & Program Implementation Agreement, which Sri Lanka must complete before signing the MCC Agreement

  • Inventory & mapping of State lands & preparing parcel fabric map
  • Creating a land valuation system & valuing all State land
  • Privatizing State Land – transferring to title registration from deed system
  • Legislative changes & amendments to Title Registration Act 21, 1998 (Bim Saviya) to facilitate MCC
  • Establishing a land policy research council which is above the Land Ministry

Phase 2is the signing of MCC agreement after Phase 1 is complete.

After signing the MCC Agreement, MCC & US government will release $32.5million to do only the following.

  • Financial management & procurement
  • Admin (salaries/rent/computer hiring etc)
  • Feasibility studies
  • Other activities approved by MCC

Disbursements are subject to strict conditions to be approved by MCC and any funds remaining returns to MCC.

US Procurement guidelines & NOT SRI LANKAN PROCUREMENT guidelines are to be followed.

(Any Sri Lankans planning to make bucks from commissions to their companies can well forget this plan as reference to foreign firms & US procurement guidelines means hardly any locals will secure project contracts – money given in one hand will return to the source from the other)

Phase 3is the passing of MCC by Parliament after which GoSL must

  • Create a Company under Sri Lanka Company’s Act – MCA Sri Lanka to act as primary agent on behalf of the GoSL
  • MCA-Sri Lanka will have an account opened in a private bank (MCC will send funding only to MCA-Sri Lanka through this private bank account not to Sri Lanka’s Treasury)
  • MCA-Sri Lanka will have a Director Board comprising Secretaries and Officials of GoSL but they will be only reporting to MCC & US Govt
  • GoSL shall permit all foreign parties working for MCC as individual consultants or personnel of firms, are allowed to open foreign currency bank accounts & these individuals or personnel of firms providing goods, works or servicesare to be given entry & work visas

Phase 4are letters by GoSL confirming it has completed the set of preconditions required to pass the MCC Compact by Sri Lanka’s Parliament & have the MCC Compact enter into force

  • PIA signed by GoSL & MCC
  • Letter by authorized GoSL representative that GoSL has duly completed its domestic requirements
  • Signed legal opinion by the Attorney General that the Agreement does not violate the constitution (this letter signed by previous AG has been shared via social media already)
  • Signed, certified copies of all legislative, decrees amended for the purpose of implementing MCC Compact

The MCC agreement clearly sets out how the MCC funding is to be disbursed. So those trying to promote the notion that Sri Lanka is getting $480m to its hands are trying to fool the Public because we are not getting $480m at once or into Sri Lanka’s Treasury.

However, we have to not only amend our constitution, laws, policies, statutes but even privatize state land & agree to a set of immunities for all of the foreign individuals and firms working on the projects in Sri Lanka by even allowing them to operate foreign currency accounts and waiving taxes and duties from them. US officials will even have right to audit the Govt.

Section 5.5 gives a list of responsibilities GoSL must adhere.

Have Sri Lanka’s public officials not compared these demands against what US is promising to give annually, out of which an amount is likely to return to the US & its foreign ally firms and questions what exactly are we really getting out of this deal ‘gift’.

http://treasury.gov.lk/documents/10181/519892/MCC+Rescan1.pdf/a5d28fac-22cc-4139-a88e-a37311bafb6b

The MCC is an in-equal agreement as the MCC Funding covers only 7 targeted district, 28% of land area and 10 land registries.

Moreover, what is also shocking is that its estimated beneficiaries in giving up Sri Lanka’s state land & privatizing it is to only create – 5million beneficiaries from Land Project & 7million beneficiaries from Transport project.

So the country is sacrificing much to supposedly benefit 12million people out of a total 21million populace?

As per land project indicators MCC wants to ‘increase land transactions’ ‘increase private sector land investment’, ‘transfer land to more productive uses’ & ‘increase land investment’ – so this is the ultimate aim of privatizing land so that it falls into the hand of rich foreign investors.

There is also a clause that any funding to be made in excess for the project completion has to be borne by the GoSL – when we will have no land to even tax, where will the GOSL find money?

And the only consolation for us is that the MCC Compact can be terminated is if the MCC finds GOSL is doing drugs! JMCC Section 5.1 (viii)

Shenali D Waduge

4 Responses to “MCC LIES: Sri Lanka is not getting $480m signing MCC”

  1. aloy Says:

    Our problem at the moment is our inability to payback loans we have taken from various sources like WB, IMF, ADB and China. The whole world is virtually in lock-down state and it will be like asking the pond of flesh if any of our debtors seriously ask for the paying back exactly on the due date; all these including China can wait for couple of years. In the mean time our low level workforce in ME (as shown with highlighted text by Shenali) and poor farmers in the country side will keep the country running. In all he places except the locked down area we see the wheels of industry moving.

    If we look at the events in 1818 and 1918, this time too the epidemic will last three or four years. So, we got to live with it for some time. As someone who may have got this virus unknowingly in last December, I feel we can easily come out of it without further damaging the economy if we do not panic. We have full confidence on the people who are handling it now.

    If US wants to give us $480 millions then we should take it, not for MCC under any circumstances, but to improve our power sector and construct rural bridges, give protection from elephants etc to be implemented within a definitive time frame. I do not think US is monster that many portray them to be. If not why everybody rushing there?.

  2. Ratanapala Says:

    Did anybody ask the flies that rush towards the flames, why they are doing it?

    It is naive to imagine the US will give $480 Million just to improve our power sector or construct rural bridges, to provide protection from elephants. Obviously as Shenali has time and time again provided enough and more evidence, the US largesse is only to fulfill their selfish interests in promulgating their power in the region and as a part of the newly minted Indo- Pacific Strategy to contain China.

    It is obvious that the US wants to replace Diego Garcia with Sri Lanka as a logistical base for their Indo Pacific operations against China. The whole fiasco about land to landholders etc etc are only a pretext in the end for land acquisition by US Companies to establish a permanent land corridor from Colombo to Trincomalee. This much must he clear to anyone even with little dust in their eyes and vision.

    There are many countries that have had bad experiences from MCC involvement in their countries. There are many countries from around the world who have had bad experiences from America’s involvement in their countries.

    We have no issue about their wanting to do what throughout history empires have tried and failed – to conquer the world! Our only plea is to leave Sri Lanka alone.

  3. aloy Says:

    Si Lanka is not a Diego Garcia or a Chagos Islands where Darwin showed ‘parinamaya’ (evolution). And some people try to make it out to be an aircraft carrier too. These are all ‘onna babo billo enewa’ type of stories to fool the gullible. Sri Lankans seem to always fall for the smart and smooth talkers. Well, it is a trait not among the Sri Lankans only. Even the US people select the best talker as their Prez using a TV talk show. But sometimes it works.
    Look at the ASEAN and and some East Asian countries. They are all working with the US. Even Vietnam is working with them. It was up to LKY of Singapore to set the trend. He was educated in the US and turned a sleepy fishing village to the number one city of the world. All the other ASEAN countries are also following it and getting the US protection but has not become their colonies. What I am suggesting is to work with them not become anybody’s colony again and turn against them.
    Our people get work out of even the devils, they say. So this should not be a problem for a true Sri Lankan leader. Look at the history books. Even the most powerful Khmer Empire was defeated and was kept under their thumb for 200 year by our ancient rulers. And their genes are still there, intact. And some young guys openly say this without any fear. Perhaps it was them who turned it to be a Buddhist country when it was a Hindu one. SL (or Sinhale) has never been under one foreign power for long. Even the Britishers were careful not to rub the feathers in the wrong direction. But we are under the thumb of our own pretenders since 1948, this again is the creation of this once powerful empire. This is our problem; not the lack of visionary leaders.

  4. Nimal Says:

    We must demand visa free travel to the Sri Lankans and right to make a living in their lands.

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