By: Staff Writer
August 13, Colombo (LNW): The controversy surrounding Sri Lanka’s proposed US$480 million Millennium Challenge Corporation grant was unusual because opposition came from political forces that otherwise stood on opposite sides of the country’s political spectrum.
Nationalist politicians associated with the Rajapaksa camp opposed the agreement on sovereignty and land-related grounds. The present ruling party Janatha Vimukthi Peramuna, or JVP, also opposed it, but from a different ideological and geopolitical perspective.
The distinction is important.
The JVP was not part of the Sri Lanka Podujana Peramuna’s political coalition. It conducted its own campaign against the MCC agreement and criticised what it saw as growing American influence in Sri Lanka.
The proposed MCC compact had been developed over several years between the Sri Lankan government and the US-funded Millennium Challenge Corporation. It was approved by the MCC Board in 2019 and was intended to provide US$480 million in grant financing.
The programme consisted mainly of two projects.
The first was a US$350 million transport project. It was intended to improve traffic management, public transport and road infrastructure, particularly around congested urban areas.
The second was a land project worth approximately US$67 million. It sought to modernise land administration, improve land records and strengthen land-related information systems.
The proposal became increasingly controversial during the 2019 election period.
Nationalist politicians warned that the agreement could affect Sri Lanka’s sovereignty and land. Some opponents connected MCC with wider American strategic interests and raised questions about other US-Sri Lankan agreements, including ACSA and the proposed Status of Forces Agreement.
The JVP also attacked the agreement.
Its opposition was consistent with the party’s traditional criticism of Western influence and what it regards as unequal international economic and geopolitical arrangements. The party questioned whether Sri Lanka should accept an agreement that it believed could increase American influence over national policy.
This created a politically unusual situation.The nationalist right and the JVP left did not share the same ideology. They were political competitors. Yet both opposed MCC.
The election of Gotabaya Rajapaksa in 2019 changed the situation further. His administration appointed a committee to examine the agreement.The review became another turning point.
The government-appointed committee raised concerns about provisions it considered inconsistent with Sri Lanka’s Constitution, laws and sovereignty. Those concerns strengthened the government’s reluctance to proceed.
MCC presented a completely different interpretation.
The American corporation argued that the compact was a development programme intended to address transportation and land-management problems. MCC rejected allegations that the agreement would create a US military base or transfer ownership of Sri Lankan land.
The dispute consequently became more than a disagreement over infrastructure.It became a battle over trust.
Supporters saw US$480 million in grant funding that could improve roads, transport systems and land administration. Opponents saw a potentially dangerous agreement whose long-term consequences they believed could extend beyond economics.
Neither side succeeded in convincing the other.By 2020, the political environment had become too hostile for the compact to move forward. In December that year, the MCC Board discontinued the proposed Sri Lankan programme.
The JVP had achieved one of its political objectives, but the outcome was also a victory for the nationalist forces that had campaigned against the agreement.Sri Lanka, however, lost the proposed grant.
The MCC controversy therefore remains an important chapter in Sri Lankan political history because it demonstrates how completely different political forces can unite around opposition to the same foreign-funded programme, even when their reasons for rejecting it are fundamentally different.
The post Sri Lanka’s Lost US $480 Million Grant: Sovereignty or Missed Opportunity? appeared first on LNW Lanka News Web.
