MCC compact tailored to bypass checks by local mechanisms
Experts committee says other donor nations could use this as a blueprint
The Millennium Challenge Corporation (MCC) compact with United States has been “tailored to bypass the State institutional mechanism that manages foreign resources within the country,” the experts committee has declared.
Its report went before the Cabinet of Ministers this week and a formal decision on its future is now pending. A government announcement said the ministers had been told to study the final report and make their findings known at another meeting.
The experts committee headed by Prof. Lalithsiri Gunaruwan has said a decision by the previous government to sign the compact had been made “without conducting a thorough assessment of such conditions, mechanisms and their impact.”
Should Sri Lanka agree to this mechanism, the committee has noted that “other donor countries such as China, Japan, India and the European Union could use it as a precedent to use the agreement as a blueprint for their own grants to Sri Lanka.”
Here are highlights of some of the observations and recommendations of the experts committee:
The proposal to implement investment projects through the MCC- Sri Lanka Company according to instructions, directions and approval from MCC while provisions have been made to distance the company from Sri Lankan Government control, cannot be accepted.
The Government of Sri Lanka should not sign the MCC agreement based on the format, conditions, implementation mechanism and investment proposals outlined in the draft submitted to Cabinet on October 29, 2019.
If the GOSL considers entering into the MCC agreement, all clauses in the MCC Compact and all associated agreements and project proposals that harm the country’s sovereignty, its economic, political and social future as well as its independence must first be removed and the agreements and project proposals amended accordingly.
No mechanism that allows for the implementation of laws and/or regulations effective in another country should be established in the country based on an international agreement. The basis on which projects have been selected for investment and the mechanism used by the Sri Lankan Government in this regard are unclear to the Committee. The committee does not observe that any study had been made regarding which projects should be given priority in terms of the national economy. It also observes that certain projects include elements which are socially and economically harmful to the nation. Therefore, the entire project proposal as well as the projects themselves must be restructured.