By Rusiripala Tennakoon –

Release of the draft MCC agreement by the Ministry of Finance 01/11/2019, followed by an open challenge by Minister Mangala Smaraweera to show if  there are any harmful aspects in the MCC to the country, A fast unto death by a venerable Buddhist monk against it, resulted in the Cabinet postponement of the signing of this agreement until the conclusion of the Presidential election to be held on 16^th November 2019. In the meantime based on several petitions filed by many parties in the Supreme Courts, the SC has decided to determine whether a fuller bench should be nominated to hear them. The Petitions inter –alia allege that the compact will lead to a bartering of the sovereignty of the country and claim there is a serious danger of Sri Lanka’s interests being subdued in favour of USA.

Minister Mangala Samaraweera takes a strong position to defend the Agreement and claims that much of the information given by interested parties are false and baseless. According to him “the Project proposal under the MCC is to provide funds to be used for projects based on our prioritization indicated to them by the Government.” In the light of these bewilderments  it is prudent to examine some of the important and salient issues encircling this matter.

Background status

There are many factually incorrect positions which have been highlighted in defense of this agreement. If we trace the chronological history we come across several debatable instances.

1. US President George Bush proposed a concept for a new compact for development of  poor countries with more accountability in March 2002. Accordingly the MCC was established as a bipartisan body in the year 2004. The eligibility of the recipient of assistance was subject to a policy performance to be assessed by US under 17 policy indicators set out by them.

2. Minister MS has stated that in his capacity as the Minister of Foreign Affairs  in the previous Government he was asked by President Mahinda Rajapakse to discuss with US Government to get assistance from the MCC.

3. According to program overview, Annexure 1( of the draft MCC agreement) It is in December 2015 that the Board of Directors selected Sri Lanka to develop a threshold program. During the threshold program an analysis of the constraints was conducted jointly by the MCC Government and the HCID which was completed in November, 2016.

4. Prime Minister Ranil Wickremesinghe’s Economic statement in Parliament on 27/10/2016 has no reference to any proposed economic corridor extending from Colombo to Trincomalee or about a pending proposal for US assistance on the lines of theMCC project.

5. In Dec 2016, MCC’s Board of Directors selected Sri Lanka to develop a compact and accordingly government recruited the compact development team and started work from an office established in the PM’s office of Policy Development.

The Govt. of SL and the MCC of United States of America prepared a constraint analysis  in Partnership with Harvard University’s Center for International Development for a compact with MCC. In Nov 2017 government submitted project proposals focusing on the constraints identified.

Two principal constraints were identified.

a) The Traffic congestion in the CMR and the poor inter-regional transport infrastructure.

b) Lack of access to state lands and private lands for investment purposes was identified as a constraint for foreign and domestic investment, affecting growth-manufacturing; agriculture; construction; residential and commercial development; and tourism.

The proposed changes under MCC were intended to improve land governance framework.

Promote land transactions to stimulate investment.

Create a dynamic land market.

According to this sequence of events there is no indication of any intention by a Mahinda Rajapaksa Government to obtain any grants under the MCC for such a project. That creates disbelief about the veracity of Minister Mangala Samaraweera Statement. The question that arises is why should he refer to something that did not happen? 

Certain other positions taken by the Minister in his resolute defense of the MCC are also questionable;

• “24%of the Sri Lankan exports are to US markets.”

Is this a warning  by Minister Mangala  to the country about  any forthcoming sanctions if the MCC is not signed? 

• He goes on to affirm that US is a friendly country and they were the first to prescribe the LTTE as a terrorist Organization. Is there anything special about it? 

Considering the severe blow US suffered on 11/9 /2011 due to an attack by the terrorists ,killing 2996 people in one day,  they have to denounce terrorism anywhere else.

All these imaginations point towards one important concern. Why Is the donor country granting such a facility to a recipient country demanding acceptance by force?

Will US go to the extent of crippling our economy by applying sanctions if the decision is reversed by our country due to special reasons affecting us? Mr.Minister  doesn’t it amount to some kind of insult to the US to announce such apprehensions?

Let us examine some of the controversial contents in the compact;e draft agreement}

a) Country receiving MCC funding  is engaged in activities that are contrary to the national security interests of the United States leads to the termination of the Grant and request the Government(recipient)to repay to MCC in US $ the value of the funding within 30days.{article 5, section 5.1 (b) v of the draft agreement}

The interest to national security of US is a very wide term to be interpreted by them!

b) The government agrees that MCC and the United States or any current or former officer or employee of MCC or the US govt.shall be immune from the jurisdiction of all courts and tribunals of Sri Lanka for any claim or loss arising out of activities or omissions {Section 6.7 of t under this compact}

c) The parties understand that; consistent with SL Law ,prior to the govt. sending the letter of acceptance ,this compact is to be submitted and enacted by the parliament of SL.

Emphasis ours. This becomes an act of Parliament?

In the Program review under the background and the sub title consultative process it is stated as follows;

1. In December 2015, a constraint analysis was conducted by the Govt. a constraint analysis was conducted by the Govt. and the MCC with the HCID and this was completed in 2016 November.

2. Lack of access to State Land and Private land for investment purposes was identified as a deterrent to foreign investment. Creating a dynamic market for land is also a priority in the Vision 2025 development plan of the Govt. This policy was announced in September 2017.

It follows that the MCC/HCID economic analysis preceded the 2025 vision plan. Hence the initiation of the Project proposal for the MCC was not based on a national priority identified by the Govt. but developed on the findings of the HCID/MCC analysis.

High lights of the MCC project Proposal;

The  program consists of two projects,a Transport Project and Land Project which is described in detail as follows under the objectives;

a) to increase the relative efficiency and capacity of th e road network and bus system in the Colombo Metropolitan Region(CMR) and to reduce the cost of transport in order to facilitate the flow of passengers and goods between the central region of the country and ports;

b) to increase the availability of information on private land and under- utilized State Land in order to increase the land market activity;

It is noteworthy that in 2016, a report was published by two of our researchers from the University entitled,’Reducing Traffic congestion in Colombo Metropolitan Area through adaptation of Alternative Transporting Methods:Barriers and Long Term Strategies.”

This was a fairly comprehensive approach by our local specialists who addressed the issue in a more domestic background. No attention apparently has been paid to this exercise. It may be that sometimes the HCID would have got the basics for their recommendations from this report at no cost.

Regarding the Lang Policy there certain intriguing points that should be focused on. According to the Draft Agreement the land Policy broadly encompasses the following;

Among the several proposals under this scheme the most significant are:

1. Convert permits and grants in state land to “Absolute Land Grants” which can get registered as freehold land.

2. To support the conversion of state lands to the private domain, creating a marketable and bankable title in the name of the land holder.

3. Government shall allow the use of land as collateral for loans and their free transfer.

4. The Land Special Provisions Act is expected to define the process the government shall use for this conversion of land rights.

5. The MCC funding for this activities is conditional on the enactment of the LSPA with the above facilities (Page 30)

6. MCC believe that the title system would help to stimulate greater land market activities leading to investment and economic growth. MCC funding is conditional upon the enactments of amendments to remove difficulties in moving deeded properties to title system. 

The main focus of the MCC is to promote the Land Market activity more than the development of Land by the present owners or the State. It is a matter that requires serious comprehension in the context of sovereignty and unlimited land ownership by foreigners.

Strangely this focus coincided with the published findings of certain other internationally finaced think tanks operating in our country.

They claimed that ,most of the prime real estate blocks owned by the govt. are presently utilized in a manner that “greatly outweigh their economic value”and they should be brought under the management of”an independent body free of political influence to minimize corruption”. To establish the point stressed by them ,they issued a statement in a sponsored  publication to the effect that Sri Lanka was given a low ranking  for “weak Soverignty anesses in the legal system and property rights”. Some of these foreign experts headed by the HCID,recommended the creation of a PUBLIC ENETERPRISE BOARD ACT on the Tamasek Model of Singapore. This Board as was explained by Minister Kabir Hashim,would be empowered to “sell or dispose of ,turn to account or otherwise deal with any property vested in the Public Enterprise”

 It is also interesting to note that the HCID is co financed by multi million dollar currency speculator George Soros. He also happened to be one of the prospective world class investors supposed to invest in Sri Lanka immediately after the new Good Governance Govt. came into power as announced by the then finance Minister Ravi Karunanayake.

Looking at all these we could see a full nexus of a wide circle operating behind the policy making activities including the projected International Compacts and Grants. In the context the following concerns should be seriously addressed.

• Is our national sovereignty at stake?
• Are we subjected to any force by any super power Standing tall in their pursuit for global hegemony.
• Are we subject to some influence of a country determined  to establish its power across a full spectrum including land, air , maritime, outer space, and cyberspace?
• Do  the proposed agreements fall in line with the International Laws and UN charters?
• Are we not becoming a party to the very principles of non- alignment to which we committed ourselves in the past leading to the initiation of certain important UN charters on sovereignty and independence of nations?

May be our pending legal actions will address these issues.