15 August, 2020

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Govt. Signs SOFA & ACSA; Spreads Confusion About Millennium Challenge: Demystifying The Millennium Challenge Deal

By Kumar David

Prof. Kumar David

This piece will address three aspects of the Millennium Challenge Deal (MCD).  MCD-Sri Lanka is an offer of a grant of $480 million ($350m for Transport, $67m for a Land Project LP; the US Embassy Infographic is unclear on $63m). Traditionalists, nationalists and leftists object to LP’s intention to digitise deeds “to improve tenure security” and move land registration from “a Deeds System to a Title Registration System”. It is alleged that this is a furtive attempt to encourage peasants to sell their lands enabling entrepreneurs and richer peasants to procure and consolidate acreage into large farms. That is, to push Sri Lanka towards capitalist farming and away from small-parcel land ownership and semi-feudal land tenure that prevails in rural society. 

Traditional holdings passed down over generations are freehold and owners can dispose of their lands if they don’t mind dispossessing their heirs. Traditional lands are by far the largest part of peasant holdings. There are constraints on selling due to culture and custom but no legal prohibitions. It is only land granted under colonisation and land reform schemes that have constraints on sale. Why is consolidation not going apace now, on sans MCD, if peasants are so likely to be readily seduced into parting with their lands after MCD arrives! How will a “title registration system” encourage land sales more than the current “deeds system”?  

Land holdings are not being consolidated apace into capitalist farms right now for four reasons; seasonality of labour, prohibition on converting paddy land to commercial crops, some village paddy land has been used to build houses and fourth, lack of buyers. The charge that the underhand intention of MCD is to induce peasants to sell to American companies who will then create US owned farms and land corporations is dubious – rather like the deep trench from Kurunegala to Trinco that MCD is going to dig to complete the job the LTTE didn’t finish! As with all things Sri Lankan the opposition to MCD is marinated with racism. I am no MCD fan or foe at this point but the socio-economic objections seem frail.  I have consulted a land lawyer, an agriculturist, two small holders and a Ratnapura activist to learn ground realities and I have concluded that most fears regarding LP arise from febrile imagination of unlikely doom. 

US Embassy Infographic

The much larger Transport Project has attracted little attention or comment, but to repeat, official blurb about LP can be summarised as follows. Create a parcel fabric map and inventory of state lands, digitise deeds, move from deed registration to title registration, digitise valuation data, set up land policy councils. The opponents say, to repeat for emphasis, that modernising the land data-bank will facilitate selling. In different jargon they say: Sri Lanka will transit from archaic semi-feudal land ownership to capitalist property in land. I am scratching my head to answer to this question: “Should those of us who are unsympathetic to capitalism prefer to retain traditional land ownership?” My hard Leninist friends will find this a difficult nut to crack because at one time Lenin’s thesis was about the progressiveness of capitalism over feudal remnants, but at other times he warned peasants not to capitulate and sell out to large capitalist farmers. I have decided there is nothing in this old debate on land and agrarian question that is of any use to us in thinking over capitalism in agricultural land in Sri Lanka today. We already have capitalism in land ownership in a big way in the plantations anyway. We must stand on our feet and think sui generis.

The second matter I wish to advert to is the belief that MCD-Sri Lanka is an American plot to make Sri Lanka a client state. Remember we were told that the Indian ambulance project was a covert intelligence plot, but it has proved to be a sterling effort that has saved many lives. Of course, in a broad sense, the US has foreign policy objectives; no great power will assist anyone opposed to its interests. The US will not assist Cuba or Iran, Russia is unlikely to be kind to the Ukraine and China’s Belt and Road Initiative is to secure its place as a great power of the 21-st Century. From this it does not follow that every grant and piece of assistance from China or America is a subversive scheme to ensnare the recipient. That’s stupid, it’s not so linear. China has spent $200 billion on BRI and says it will commit $1.25 trillion by 2027. The US will spend $900 million ($0.9 billion) a year globally on MCC on an open-ended time horizon. In the tussle for soft-power BRI and MCC are the weapons of the dualists and China will outspend the US. The attempt at assimilation of small countries is a general process.

Sri Lanka is deeply in hoc to China because of the inanity of the projects we asked for and the billions political leaders siphoned off. The inanity of projects like Mattala Airport simply boggles the mind. Even if the advising officials are daft and the political boss who makes decisions corrupt or a moron who wanted to grandstand in his home territory, surely something as hugely ridiculous as this cannot happen! The historian Suetonius claims that Caligula planned to make his horse Incitatus a consul who could invite horse-dignitaries to dine with him in a mansion staffed by human, not equine servants. But even Suetonius does not say Caligula actually did it.  But this crazy airport in the backwoods actually got built at a cost of millions of dollars that the country is bleeding to pay back. Nations that choose rotten projects end up ensnared. Ok, there is a difference, since MCD is a grant if it is wasted or looted Lanka will be a loser, but won’t have to pay back in hard cash. Still, if leaders loot, nations lose; don’t blame the Chinese or the Americans if we are suckers and waste and loot.

The third point is my prediction that the government will sign MCD; Committees and endless Cabinet reviews are smokescreens. A semicolon here or a phrase there may be adjusted, but that’s window dressing; the substance will be unchanged. Gamanayaka and Wimal caterwauled, tore their hair and lifted their dhotis, but that was then. Now the MCD is 70% terrific, 30% slightly soiled. Presumably Gota told them to pipe down so their vocal cords went numb.  GR, MR, Cabinet and SLPP will meekly sign-on after the elections. Broke, penniless, desperate for dollars. Crawl, beg and get dollars or you will end their lives in a metaphorical international debtor’s prison! They are scurrying, headless chickens seeking to scrape together every dollar and kopek. $480 million in the foreign kitty and a corresponding amount of junk rupees offloaded into the domestic monetary system; you’re nuts if you think they won’t sign!

There is the concern that MCD should be seen in the context of SOFA (Status of Forces Agreement) and ASCA (Acquisition and Cross-Services Agreement). What I find perplexing is that Gota has signed these two far more controversial agreements but is juggling MCD. “We have taken a decision that all agreements should be in keeping with our constitution; they should not harm our national security and not infringe sovereignty and territorial integrity. Sri Lanka will not sign any agreement that violates those basic principles. We have not signed the MCD, and the President has sought the opinion of the cabinet. (BUT!!) we have signed the ACSA and SOFA”, said spokesman Stadium Bandula on 1 July according to Asian Tribune of 3 July. 

This is the first occasion on which an official admission has been made that SOFA and ASCA have been signed by Gota’s government. Wow so the big two, from a security and sovereignty point of view, are done! Where are the braying asses Gamanpilla and Wimal?

A classified U.S. Diplomatic Note, the Asian Tribune says, “asserts that U.S. personnel are not subject to Sri Lanka’s criminal jurisdiction. The Government of Sri Lanka recognizes the importance of disciplinary control by U.S. Armed Forces authorities over U.S. personnel and authorizes the US Government to exercise criminal jurisdiction over U.S. personnel while in Sri Lanka”. The report adds, SOFA states that “Aircraft and vessels of the U.S. Government shall be free from boarding and inspection.”

This brings me to an interesting point which was a follow up conversation that I had with Comrade M sipping a rum and tonic on Wednesday afternoon. M is convinced that Gota and the Executive have decided, definitely, to go over, in general, to the “American side”. As evidence he mentions the above agreements, Gota running to India as soon as he was elected to do pooja to Modi and possible Israeli influence in Lanka. Israel and a ruthless to the Palestinians and Modi hates Muslims more than our Executive hate them. M’s picture does indeed add up but I did not agree or disagree because there came to my mind MR’s long time Chinese-coolie practices. Will Lanka’s great power relationships see a shift? If so, how strongly will China react? Will a shift, if M’s analysis is correct, raise tension between the brothers? These are questions for after the elections that we will need to carefully watch.

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Latest comments

  • 8
    14

    Wow, nice clickbait name on the article KD.

    I first thought this was news. then realized it is our commie friend KD . By the way the so-called link you are attaching has the following heading “Another bomb blast inside Colombo Fort Railway station – 9 dead and more than 100 injured” I suppose going to his favorite times.

    I wonder what the editors of this Colombo Telegraph do. !!! They are very quick to censure but do not chank the sources.

  • 6
    6

    In his last essay Prof. Kumar mainly stayed with other points instead of brothers’ relationship. Yet, after that there are some new developments. Old King had said he wants the PM position to implement King’s policies. Then let me insert my assumption into that. If King is willing to go with America, then there is new indication from Old, he wants to get along with America.
    But here it is very difficult to explain how my assumption would work. Old have been never honest to anybody. He takes everybody to JVP Girls, though Leader Pirapaharan to Sampanthar Aiya…… S. M Krishna FAM et al. These days America is really fed up with China. IF Old plays double game like he played on Suzanne Rice’s State Secretary position, America may react & it may hurt King’s polices too. On the other side, China always knows how to bring Old under its feet. Nuraicholai time, it took the computers in its hand. How it was settled was Old King made contract to China maintains Lankawe Aanduwa’s computers + Colombo Pong Cing. After that his computers were working. So now, Old is going to be like a woman loved one and married one for parents money ending up killing one of them to straighten her life to be one man.

  • 5
    7

    Russia hacked Ukraine’s computers last week. Ukraine immediately asked US to check what went wrong with its computers. Last time, instead of doing something like that, Old King Offered the maintenance contract to China to solve the problem. If US gets the MCC deal (Not the other way, Lankawe getting the MCC funding) China may like to check in what had gone in the land registries & things like where the Shangri-La value is placed too. Matala Mahinda Bachan Naked international Airport, Sooriyawewa, Homagama all may be valued at competitive price. This will directly affect assets value and GDP. Old said getting back Hangbangtota will be difficult job, but he will still find ways to get the country’s assets back for younger generation (Wow). Further Ranil has not set an interest price for the $1.2 Billion, China paid on that lease. Now Lankawe may have to deal separately the on the Five villages land China has started to develop. Nuraicholai is getting another Generator to power Colombo Pong Cing. We don’t know how the water and drainage supposed to work. We cannot analyze individually one by one like that. It will be messy.

  • 6
    16

    The land that Malabar Vellala Demalu claim as theirs were land of the Kingdom of Kandy before Portuguese occupied Yapanaya. Land in Yapanaya grabbed by Portuguese were eventually grabbed by Malabara Vellala Demalu who are the descendants of laborers brought from Hindusthan after colonial parasites left. Therefore, the Government should declare the land in Yapanaya as State Owned Land and give permits as done in settlement schemes to people who lived in that land and tilled the soil as tenants. This will eliminate absentee land lords and benefit ordinary Demala people.

  • 14
    2

    Though disinterested in David’s regular analyses (proven to be either inconsequential or flat wrong!), a warning needs to be issued regarding the ‘cultur’ sounding drink of ‘Rum and Tonic’ he claims to have had with his imaginary comrade ‘M’.
    +
    Rum and tonic is not a common or popular drink among Sri Lankans who get together for a chin wag, including on politics. Their drink would be Gal Arakku or toddy.
    +
    But as a helping hand to any middle class empty heads who might rush to try this particular combination (be warned, an average Sri Lankan can’t afford Rum!), it is undrinkable without turning in to a cocktail, with a couple of additions.
    +
    Obviously David has never drunk it. Usually it is a 1:2 mixture of white Rum and Indian Tonic Water with lemon bitters well stirred , garnished with a lemon wheel.
    +
    Rum and Tonic without the bitters will taste like donkey urine, only failed comrades of the dead Left could swallow!

    • 5
      0

      HA
      “Rum and Tonic without the bitters will taste like donkey urine”
      You must have tried both to say this.

      • 1
        1

        “You must have tried both to say this.”

        Why that question? Lived in HA in his stable too.

        • 0
          0

          “Lived in HA in his stable too.”
          Really?
          When did you live there and share that divine experience?

          • 0
            0

            I pray only Siva and cow. Tell me about how is Deva’s and Velanai donkey’s, your divinities.

  • 8
    10

    Thank you Professor Kumar David for this very balanced and informative piece. I am sure the JVP will not like this, coming from a NPP National List candidate. For them, everything foreign is no good. They will never grow up, despite all your efforts. More strength to your elbow!

    • 5
      0

      “For them, everything foreign is no good. “
      Not always.
      Di you remember the praise that they heaped on the US and India in the early years of the century for the support lent in the war against the LTTE?

    • 1
      0

      They swallowed Marx’s opium. Another foreign label.

      • 0
        0

        I wish they did!

        • 0
          0

          You couldn’t learn economics. that is hurting you. If they didn’t do, don’t worry. Lankawe is Market economy- Competition based. That means one client leaves a day but two clients comes and get added to an expanding business. Ask your boss; he will explain the rest.

  • 4
    1

    From mid-thirties to late seventies, the so-called Leftists of Ceylon have befuddled the country for far too long. This futile effort was coterminous with Hitler’s total attempt at making communism and socialism unsafe in Germany and in Europe. What does the period 1950 to 2020 teach us about Europe, occasional ups and downs notwithstanding? Has capitalist Germany swallowed up infant Israel? They are two of the most vibrant trading partners sharing the same destiny.

    Are US and Japan at war? They are two of the closest in growth as well as at possible war about to brew in the Far East. In post Korean War days quite a portion of Asia was made to believe that S.Korea, Philippines, Taiwan, Indonesia – after 1965 – and a few other countries were lackeys of capitalism about to collapse any time. No group can have more robust economies now.Take the most powerful economy the US, CAPITALIST China cannot sustain her economy without. Capitalist mode of production gives the world. wheat. corn, cotton, soya bean and meat.

    For once Sri Lanka is in the vestibule of being launched into disposable land ownership. Let the archaic system go to smithereens. In a clear headed strong country, this would have happened 14 years ago when MCC made its appearance.

    • 4
      1

      Everything has been made absurdly easy like in the “*** Made Easy” books.
      Let the US colonize us, and we will live happily ever after.

    • 3
      0

      Momentous20,

      Are you not aware of the many problems that the US faces in its capitalist system?
      Did you see how poorly the US has handled the Covid pandemic?

      Germany handled it much better than the US because the former has a lot of socialist elements incorporated into their ostensibly capitalist system. The same with Canada. Countries like Taiwan and Vietnam did even better.

      I am here to tell you, based on my near 3 decades of experiences in the US, that capitalism can quickly lead to predatory and deceitful practices, and we always need people to guard against it, to speak up and defend those who are victimized by it.

      More fundamentally, I take issue with the claim that ‘capitalism creates wealth.’ That may be true in cases where more efficient and innovative ways of extracting value from raw materials are found; but most of the time, when the money supply remains constant, capitalism merely leads to redistribution, or vacuuming of money from one pocket into another. So capitalism has to be properly balanced and regulated. People on the left can provide that balance. It is why Bernie Sanders has gained a lot of support in the U.S.

  • 1
    2

    Sri Lanka to neutralize China’s growing presence in Sri Lanka, USA will reach Sri lanka to its partner India would know exactly what Sri Lanka needs in return. Sri Lanka should initiate a negotiation process with both China and USA.
    The fact that india is trying to reduce the exposure to China
    Sri Lanka needs foreign assistance to attain growth levels. If the two largest economies in the world needs each other and engages in a lengthy negotiation process, there is no doubt that a small developing economy such as Sri Lanka needs that

  • 5
    0

    The Millenium Challenge Deal is between Hard Cash and the Philistine Sentimental values of Sovereignty and Territorial Integrity etc etc.
    The question is will the Rajapakses look at a gift horse in the mouth?

  • 7
    2

    USA did not allow Gota to become the President of Sri Lanka without any deal with Gota. Mahinda also aware of that deal. The fact is that they can’t win the presidential election without anti western propaganda and anti Muslim and Tamil propaganda. USA not only helped Gota to come to power through MCC deal but also helped them with Easter Bombing. Anti Muslim propganda not started after Easter Bombing, it started after 2009. Everything went according to plan and they are almost there to sign the deal in a month. It is always easy to cheat Sinhala Buddhists with anti-Tamil and anti-Muslim propaganda.

  • 4
    0

    Many development agencies have given total grants. Victoria Dam entire UK gift, Kotmale project- Swedish soft loan, Jayawardenapura Hospital- Japan gift. There have been many NORWAY funded integrated rural development projects. UN agencies have funded many useful projects on total grant funds.
    MCC two of the key projects are good. One a total traffic management system for Colombo. We stop at every traffic light and at the mercy of the cursing Police traffic guy. A computerised smart system can facilitate better traffic flow. MCC project is to assist us develop such a system.
    Land project is to have a digitised deed titles, and ease of deed transfer even without lawyers as done in developed countries. Currently- Land registry deed records get torn and damaged. Title records lost. People cannot get Bank loans or sell such lands as deed records are damaged.
    There are many type of land titles given by Government, Swarnaboomi, Jayaboomi, middle class etc. They cannot be easily used as Bank collateral for loans. The second part of MCC is to have a computerised land registry,
    The fear mongering of MCC Corridor and need visas to go to Sigiriya etc. all a fabricated story.
    MCC is free development assistance, and not loans and we are rejecting it.

  • 3
    0

    Sam Panditha,
    I don’t think any one including Gota, Mahinda, Weerawanse, and Magasangha Monks are not against to it. They are going to sign the deal after August 05th of 2020. All this fake patriots are very good at cheating Sinhala masses in election times. If you look at the 2019 presidential election this was the main issue brought by SLPP. Now no one of the above talk about it. These are the people who brought Chinese settlements to Hambantota. These are the people who signed SOfa with USA. Big deals means big commission.

  • 1
    0

    Few have read these agreements including me
    .
    “A classified U.S. Diplomatic Note, the Asian Tribune says, “asserts that U.S. personnel are not subject to Sri Lanka’s criminal jurisdiction. The Government of Sri Lanka recognizes the importance of disciplinary control by U.S. Armed Forces authorities over U.S. personnel and authorizes the US Government to exercise criminal jurisdiction over U.S. personnel while in Sri Lanka”. The report adds, SOFA states that “Aircraft and vessels of the U.S. Government shall be free from boarding and inspection.”
    .
    WHICH IMPLIES TO ME THAT EVEN THE PROFESSOR HAS NOT SEEN ANY OF THESE AGREEMENTS
    .
    Although I haven’t seen what is inside the gift box I don’t like the donor running behind me with stretched hands carrying the gift box.
    Donor’s exceeding interest and resorting to all kinds of subterfuges to force it on me is scary.
    .
    Why are these agreements are always kept and singned in secret? That makes me pee in the pants.
    .
    What if China and India too demand similar agreements now that we are in their “debt trap”? There is no place to run.
    .
    Is it possible for Colombo Telegraph to find and publish these agreements? That would be the ultimate journalistic service Colombo Telegraph can deliver.

    Soma

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