MCC LIES: Sri Lanka is not getting $480m signing MCC

by Shenali Waduge · Published 19th October 2020 · Updated 19th October 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 2^ndyear, $97.7m in 3^rdyear, $89.1m in 4^thyear & $57m in 5^thyear.

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)