US assures economic support despite MCC grant withdrawal

The United States yesterday assured to continue to assist Sri Lanka’s economy, despite the decision taken by the Millennium Challenge Corporation (MCC) to withdraw the proposed US $ 480 million (Rs.89 billion) development assistance grant to the island nation.

The withdrawal was prompted by “lack of partner country engagement”, a statement by the US Embassy in Sri Lanka said. 

“The Rs.89 billion approved for Sri Lanka will be made available to other eligible partner countries in need of grant funding to pursue their economic development priorities, reduce poverty and grow their economies,” the statement added.

It also said country ownership, transparency and accountability for grant results are fundamental to the MCC’s development model and the MCC has successfully partnered with nearly 30 countries worldwide on 38 grant agreements, totalling nearly US $ 13.5 billion. 

“These grants have lifted millions of people from poverty by catalysing local and domestic investment,” it noted.
The statement added that the United States remains a friend and partner to Sri Lanka and will continue to assist Sri Lanka in responding to COVID and building its economy.

The MCC grant approved for Sri Lanka, which was to upgrade urban transport, land registration and also build several key rural road links to highways, became embroiled in controversy in the run up to the 2019 elections.

The then opposition and the present government claimed that it would undermine the sovereignty of the country, force the country into defence deals with the US and get the country involved in an ‘economic corridor’ to transport US troops.