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MCC Compact to be launched in SL soon: State Dept. official

27 November 2019 12:11 pm - 11     - {{hitsCtrl.values.hits}}


The controversial Millennium Challenge Corporation (MCC) Compact, which caused a huge uproar particularly prior to the recently concluded presidential election, would be soon launched in Sri Lanka, according to a top US State Department official.  

“We have another MCC that we’re launching soon in Sri Lanka that will undertake the same kind of nitty-gritty reforms in land registration and motorway harmonisation that will, we determine, you help unlock economic development,” the US Principal Deputy Assistant Secretary of State for South and Central Asia, Alice Wells, said in Washington DC last week.

The previous Cabinet of ministers of the Sirisena-Wickremesinghe government had given approval to the then Finance Minister Mangala Samaraweera to sign the Compact with MCC. 

However, the newly appointed SME and Enterprise Development, Industry and Logistics Minister Wimal Weerawansa this week affirmed that the MCC Compact wouldn’t be signed under the new government headed by President Gotabaya Rajapaksa.

Wells in her speech highlighted that Sri Lanka was one of the victims of China’s One Belt and Road Initiative, having forced to cede its sovereignty over a key asset (Hambantota Port). 

“In Sri Lanka, even though multiple feasibility studies repeatedly rejected the commercial viability of a large scale port facility at Hambantota, Beijing went ahead and loaned the government over one billion dollars for the project.  

The result—Sri Lanka struggled to service those loans and eventually handed over a 99-year lease on the port to Beijing in return for debt relief.

Sri Lanka’s not the only country that has ceded, effectively ceded sovereignty over a key asset.  You’ve had reports out of Tajikistan overland swaps in order to get out of excessive debt.  And this is a real issue,” she elaborated. 

Despite the criticism of Western multilateral organisations such as the World Bank and the International Monetary Fund, Wells pointed out that these organisations have never asked countries to compromise their national sovereignty as China has done. “All I can say is that however much you might dislike the World Bank or IMF, they don’t take 99-year leases or strip away the sovereignty of countries that they engage in.  So let’s be very clear-eyed about the terms that multilaterals bring to the table versus the terms that are being imposed under some of these programmes,” she said. 

She went on to note that several other Chinese-financed projects remain vacant and unused in Sri Lanka, including a US$104 million telecommunication tower and a US$209 million international airport in the south with zero regularly-scheduled flights.  

She emphasised that the United States shares India’s concerns in countries ceding sovereignty over the projects financed under China’s One Belt One Road Initiative. 

“I think India has been crystal clear from the outset that they saw the geopolitical nature of elements of the One Belt One Road.  We share India’s concerns over projects that don’t have an economic basis and that lead to countries ceding sovereignty,” she added. 

Wells urged China to be transparent while committing to international standards in lending to developing nations such as Sri Lanka.

“Why not adopt Paris Club standards?  Why not increase your concessional loans as well as incorporate grants as part of your development assistance to lesser developed countries?  Why not abide by the infrastructure principles at the G20 of which China obviously is a member, has adopted?  Why not be transparent?  Report your official lending to other countries.

Right now neither the IMF nor any other multilateral organisation truly know the indebtedness of countries who are involved in these One Belt One Road projects, and that creates its own risks and can have its own knock-on effect.

So the simple request is to be a global good citizen.  Be transparent.  Adopt the high standards that G20 nations should be promulgated,” she said.

  Comments - 11

  • Lalu Wednesday, 27 November 2019 03:08 PM

    We study in our mother tongue. Don't understand what you say

    Jayantha Wednesday, 27 November 2019 03:10 PM

    The US seems overly keen to get us to sign the MCC agreement.

    DJ Wednesday, 27 November 2019 04:27 PM

    It was clearly intimated to the masses that the present president will not sign. It is left to be seen what W Wansa and gang will say to this?

    Champa Wednesday, 27 November 2019 04:35 PM

    There there, now Sri Lanka gets a valuable opportunity to identify who the genuine Sri Lankan patriots are.

    Citizen USA Wednesday, 27 November 2019 05:01 PM

    No No. The USA is merely trying to lift us up from the deep well. If we don't lift our hand up we will sink. They won't care. Today if USA allow Sri Lankans to enter without visa 95% of us will even sell our properties and go to USA. Our president was there for 12 years !

    Lord Wolfstein Wednesday, 27 November 2019 05:21 PM

    Gota has to obey the US, because if he fails the US will leak, that he is still a US citizen.

    lanka peiris Wednesday, 27 November 2019 05:27 PM

    China never forced to cede its sovereignty over a key asset (Hambantota Port). It was Ranil/Mangala who sold (leased) the asset to China for 99 years. Harbours and airports are long term projects they take time to make profits. Are Chinese foolish to lease out the harbour if they cannot profit?

    Jeeves Wednesday, 27 November 2019 05:50 PM

    Deflecting about China, and TELLING US to be " good global citizens and transparent" is pure hypocrisy from US! America First will not help us! Is that transparent enough?

    Gihan Wednesday, 27 November 2019 05:58 PM

    Is she aware of her President, and his possible impeachment? Better to await outcome!

    Dilshan Wednesday, 27 November 2019 06:01 PM

    Yes, re-construct our roads, to help US troops move around; just like the British built the railroads in India to fleece them!

    LOKKA Wednesday, 27 November 2019 06:07 PM

    Dear Madam, how do you say that the MCC Compact agreement will be launched soon, whereas the present Sri Lanka government has not yet accepted it. Is it your way of imposing your will on a sovereign nation, and as seen from your past record, you are notoriously capable of doing it.

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