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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2786

Sri Lanka’s pre-election bid to rush signing of MCC pact with US stalled

By Lasanda Kurukulasuriya

In the face of intense public pressure, the government appears to have backpedaled on its decision to hurriedly sign the controversial Millennium Challenge Corporation compact with the US before the Nov.16th presidential election. Conflicting news reports indicate there is still much ambiguity as to the government’s intentions, and no clarity as to whether the deal will be brought to parliament ahead of its signing.

Criticism of the MCC deal has come not only from the parliamentary opposition but from diverse quarters including environmental groups and the Bar Association of Sri Lanka (BASL). Among the numerous financial grants received in Sri Lanka, the US’s Millennium Challenge Corporation compact seems to be the most unwanted, even as it is thrust upon its recipients with great determination by the donors. Prime Minister Ranil Wickremesinghe and Finance Minister Mangala Samaraweera have vigorously worked towards finalizing the $480 million project in isolation from the wider public. The MCC compact unexpectedly got rubber stamped at last week’s cabinet meeting, with President Maithripala Sirisena finally giving his consent to its signing. He had vehemently opposed it previously. It is reported that a fundamental rights petition has now been filed in the Supreme Court saying the MCC is highly prejudicial to the interests of national security, territorial integrity and the fundamental rights of the citizenry, and violates the constitution. The petitioner, according to reports, seeks an order staying the signing of one or more the US agreements - the MCC pact, ACSA and SOFA.

To the bewildered public, the proposed MCC compact is littered with contradictions and question marks. At Temple Trees on Wednesday (30), just a day after the cabinet meeting, Prime Minister Wickremesinghe told the media that the agreement would be signed before the Nov 16th presidential election. The government’s indecent haste to seal the deal during the presidential election campaign, with just days to go before the poll, is in itself a cause for concern. That’s considering the far-reaching consequences of the MCC’s proposed projects on the economy and infrastructure, including changes in laws, transforming patterns of land ownership and administration and use of resources, impact on lives of rural communities, the prospect of mass dispossession of farmers and implications for sovereignty and territorial integrity. Having been hatched in virtual secrecy by a ‘project unit’ within the prime minister’s office, the compact was never presented in parliament and escaped broad public discussion.

Following a meeting on Friday (01) with Opposition MPs Athuruliye Rathana thera, Udaya Gammanpila and Wimal Weerawansa who expressed concerns, the president reportedly said the signing will not take place before the election. Minister Samaraweera is reported to have given this assurance. Yet in these cynical times, the journalist’s quote that comes to mind is “never believe anything till it is officially denied.”

With days to go for the election the finance minister has announced that the agreement will be gazetted and tabled in parliament – but only AFTER it has been signed. For the first time it is revealed that a new law is to be enacted to accommodate its requirements. This information is also contained in a somewhat condescending statement from the US embassy: "Consistent with the Millennium Challenge Corporation’s worldwide policy in all partner countries, once the grant assistance agreement is signed, the Government of Sri Lanka will send it to parliament for approval. Inasmuch, Parliament will have ample opportunity to review the grant assistance agreement” it said.

There is a conundrum here. What’s the point in debating the subject in parliament if the deal is already done? The BASL in its statement has pointed out that “Such a course of action is meaningless and once signed the agreement will have a binding effect.” The question as to why the government sought to rush the signing of a controversial agreement at a time of great political uncertainty, remains unanswered.

Already, the Supreme Court has ruled that at least one law sought to be introduced with a view to obtaining MCC funds, is in violation of the constitution. Following a landmark ruling (under-reported in the media) the State Land (Special Provisions) Bill was quietly withdrawn by government in August.

Later that month the MCC’s country director Jenner Edelman warned that Sri Lanka would need to sign the agreement before the MCC’s board meeting in September, or else it would lose its eligibility for the grant on account of the World Bank’s new classification of Sri Lanka as an upper-middle income country. That deadline passed without incident. In what appears to be yet another round of carrot-and-stick tactics it was reported that Minister Samaraweera conveyed the same warning at last week’s cabinet meeting – this time citing the MCC Board’s December meeting as the new deadline.

In order to understand why the US is so determined to have the MCC compact in place without delay, one needs to examine it in the context of the two other Sri Lanka-US agreements – the Acquisition and Cross Service Agreement ACSA) signed in 2017, and the proposed Status of Forces Agreement (SOFA). The renewal of those two defence-related agreements, in beefed-up format, has assumed new importance for the Americans in recent times owing to the ongoing contest to gain supremacy in the Indian Ocean region, where arch-rival China continues to extend its maritime footprint. Sri Lanka’s strategic location near vital sea lanes has brought the island into the crosshairs of big power rivalry, and the stakes are high for the world’s sole superpower whose overriding concern is maintaining hegemonic status.

The MCC compact, innocuously dubbed as a ‘development project aimed at poverty alleviation,’ does not merely tie in with US’s projection of its neoliberal economic model. There is every indication that the radical changes envisaged in the area of land administration – bringing massive extents of state owned land into a ‘land market’ where they become tradable and available to private (including foreign) investors – plus the upgrading of road and rail transport infrastructure, facilitating swift access to ports and airports etc - also relate to a larger project of transforming the entirety of Sri Lanka into a military logistics hub to serve US operations in the Indian Ocean (or the ‘Indo-Pacific’ as it has been strategically re-named by the US, covering a larger operational area). There will be no ‘military base’ in the conventional sense – as the US embassy likes to remind us – but an incremental process whereby the country’s infrastructure, resources and facilities are transformed to serve US geopolitical objectives in the region. There is no gainsaying that at some point this could translate into using Sri Lanka as a launchpad for US military operations. In December last year, when the country was embroiled in a constitutional crisis, the US quietly carried out an experimental ‘cargo transfer’ operation using the Bandaranaike International Airport to ferry supplies to an aircraft carrier located somewhere in the Indian Ocean off Sri Lankan waters. It remains a mystery as to how military craft gained access to the main commercial airport.

It is a matter of concern that the MCC draft document, released at the last minute on Friday (01) by minister Samaraweera following the outcry over its anticipated finalization, mentions not only a gamut of tax concessions but also privileges and immunities for MCC personnel, similar to those listed in the SOFA. The compact is to be governed by ‘international law.’ The MCC pact includes immunity from prosecution under Sri Lankan law.

According to Section 6.8 (page 16): “The government agrees that MCC and the United States Government or any current or former officer or employee of MCC or the United States Government shall be immune from the jurisdiction of all courts and tribunals of Sri Lanka for any claim arising out of activity or omission under the compact.”

This clause alone should alert the public to the inherent dangers in the MCC which, along with the ACSA and SOFA could virtually reduce the country to the status of a neo-colony. Prof Tissa Vitarana a veteran leftist who has been in politics since 1953 and leads Sri Lanka’s oldest political party, the Lanka Sama Samaja Party (LSSP), warned of this danger at a forum at the N M Perera Centre in August when he said “Never before have we faced this kind of threat, not even under colonial rule.”

The sudden reversal in president Sirisena’s position on the MCC also merits some scrutiny. It comes against the backdrop of an extremely generous package of retirement benefits proposed for him by finance minister Samaraweera. This was approved by cabinet earlier last month and allows him to retain his official residence in Mahagama Sekara Mw., Colombo 7, and an STF security detail, among other benefits, reports say. Transparency International Sri Lanka (TISL) has questioned the propriety of taking decisions on such entitlements while the president is still in office.

A conflict of interest arises since the president is the head of cabinet the organization pointed out, referring to a Supreme Court decision of 2007 under the Presidents Entitlements Act of 1986. Samaraweera is reported to have justified his proposal on the basis that President Sirisena faced threats to his life owing to his work to combat drug trafficking. The minister’s solicitous attitude to the president’s welfare becomes interesting when we recall that that during the constitutional crisis less than a year earlier, Samaraweera was hurling expletives of the canine variety at the president, who had sacked the prime minister and dissolved parliament. The relationship has come a long way it seems!

If president Sirisena wishes to leave office with some honorable act as Head of State for which he would be remembered with gratitude by generations to come, rather than sending someone to the gallows he would do better to make that one last act, the withdrawal of his consent to the signing of this pernicious agreement, so that the resulting delay might possibly help trash it.

- Asian Tribune -

Sri Lanka’s pre-election bid to rush signing of MCC pact with US stalled
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