What Is Millennium Challenge Corporation Agreement With Sri Lanka

In recent months, China has made significant and highly visible efforts to support Sri Lanka`s – and many other countries` – response to the COVID-19 pandemic, including a $500 million concessional loan agreement signed in March. “The first 10 years of the MCC were conducted at a time when there was no competition between great powers and China,” Runde said. 18 Rose, S., Wiebe, F. (2015). An overview of the Millennium Challenge Corporation. [online] Centre for Global Development. Available at: www.cgdev.org/publication/ft/overview-millennium-challenge-corporation [accessed 2019 Aug 16]. However, after reviewing publicly available information resources, the MCC grant does not involve a lease or transfer of ownership of Sri Lankan land and does not require Sri Lanka to repay the grant amounts, unless the agreement is expressly violated. Two main arguments have been put forward against this agreement. The first is that the land project will mean that land owned by the Sri Lankan government will be available for purchase by the US government.

This escalation poses a challenge to U.S. development institutions that were not built to compete between the great powers, according to Daniel Runde, senior vice president of the Center for Strategic and International Studies in Washington. The main points of contention focus on the question: where does the money go and what does this funding mean? According to the publicly available draft agreement, MCC is providing this subsidy to address two of Sri Lanka`s “constraining constraints” on economic growth: (a) inadequate infrastructure and transport logistics planning, and (b) lack of access to land for agriculture, services and industrial investors. 4. Experiences of other countries with MCC: MCC has signed 37 pacts since its inception in 2004. In Madagascar, MCC-funded land reforms have free leased 1.3 million hectares, half of Madagascar`s arable land, to a foreign private company for export agriculture for 99 years. In Ghana, MCC subsidies to the energy sector led to reforms that privatized one of the largest state-owned electricity suppliers. In Honduras, funding for the MCC continued months after an illegal right-wing coup, providing funding and legitimacy to an undemocracy regime.

Given that there is overwhelming evidence of the negative consequences of MCC experiments in other countries, we recommend that Sri Lanka avoid the same mistakes. But with the public agreement with opportunities for continued negotiation, the cabinet evaluation and the Attorney General`s (AG) seal of approval, what else does Sri Lanka have to worry about? These are limitations identified by a comprehensive constraint analysis conducted by the Government of Sri Lanka and MCC in collaboration with Harvard University`s Center for International Development. .