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US-Sri Lanka Relations are in for a hard time in 2020-2021 as Sri Lanka’s concerns over its sovereignty and independence clash with the geo-political interests of the US.

By P.K.Balachandran

The relations between Sri Lanka and the United States are in for a hard time in 2020-2021 as Sri Lanka’s concerns over its sovereignty and independence clash with the geo-political interests of the US.

Though couched in the language of goodwill for Sri Lanka and Sri Lankans in the short and the long term, America’s interest in the island nation is essentially, if not exclusively, in preventing it from going into the waiting arms of China, the regional and global rival. The bitter pill of geo-political interest is sweetened by economic offers.

If the bid to make Sri Lanka sign the Status of Forces Agreement (SOFA), reflects America’s geo-political game plan, the offer of US$ 480 million as grant under the Millennium Challenge Corporation Compact (MCC) is meant to sweeten the bitter pill.

Since the Rajapaksas (President Gotabaya and Prime Minister Mahinda Rajapaksa) took charge of the country following Gotabaya Rajapaksa’s good showing in the November 16, 2019 Presidential election, Sri Lanka has asserted its sovereignty in the UN Human Rights Council (UNHRC) by opting out of the co-sponsorship of resolution 30/1 of 2015, which had required it to solve the problem of post-war ethnic relations in ways which are politically unsustainable and constitutionally untenable.

To soften the impact of the withdrawal on the UNHRC , the government formally told the UNHRC that the government will work with the UNHRC to implement the implementable parts of the resolution. But the government did tell the High Commissioner of Human Rights that it is aiming at disassociating with the resolution in 2021, thus clearly indicating that opting out of co-sponsorship is but a prelude to a total dissociation with the resolution. Past events show that there is little that the UNHRC can do against a rebellious member. In Sri Lanka’s the High Commissioner expressed disappointment with Colombo’s decision but according to sources in the Lankan delegation, the top rungs in the Office of the High Commissioner understood the validity of the Lankan government’s arguments.

While the Status of Forces (SOFA) agreement had little or no chance of being signed because it would brazenly violate Lanka’s sovereignty, law and constitution, the MCC compact was a different kettle of fish. It was developmental aid, a grant of US$ 480 million. A major part of it was non-controversial and very useful too.

However, some of the mechanisms envisaged by the scheme are unacceptable as per the report of the committee appointed by President Gotabaya Rajapaksa to examine it. Additionally, in the eyes of Lankan nationalists, a foreign power’s largesse and focus on some parts of the country are suspect.

A paper on the MCC done by Pathfinder Foundation says that Mahinda Rajapaksa’s government had partnered the MCC from 2005 to 2007 to design a program of rural road rehabilitation, rural electrification and the development of small and medium enterprises. But then, the war intensified and the MCC put the program on hold due to the security situation. In 2015, the Sirisena-Wickremesinghe regime recommenced negotiations to secure the MCC grant again.

Non-controversial Transport Project

The “Yahapalanaya” led by Prime Minister Wickremesinghe eventually got US$ 480 million in grant form for two types of projects: for digitalizing land holdings in certain districts and the other for modernization and improvement of transport and communication in some other districts where there are bottlenecks.

According to the University of Moratuwa, the opportunity cost of traffic congestion to the Sri Lankan economy will total Rs. 1.847 trillion annually next year. The U$ 350 million MCC transport project is designed to reduce traffic congestion on all major transport corridors in and out of Colombo through an advanced traffic management system; modernization of the bus service in the Western Province to make it safer, more reliable and more comfortable; and upgrade interprovincial roads to better connect people and goods in the central region with ports and markets. This part of the project appears to be the least controversial.

Controversial Land Project

The most controversial is the land component of the project. Most, if not all, critics believe or pretend to believe that the objective of the land component is for the Americans to own Sri Lankan land in the designated districts. But actually MCC land project may be considered as funding for programs Lanka already has: the Bim Saviya, improving land valuation and the survey department, and digitalizing deeds.

The Pathfinder Foundation paper says that the US$ 67 million land administration project is to scale up existing historically under-resourced Sri Lankan government initiatives in several districts by inventorying state lands, digitizing records for efficient and speedy land-related delivery of land transactions and strengthening land tenure security, especially for smallholders and women that will give farmers, small businesses and people flexibility to improve their livelihoods for their families.

The issue of land rights and the need for proper titling has been on the agenda of many successive governments since the early 1980s. Grants and permits have been issued under the Swarnabhoomi, Jayabhoomi, Rathnabhoomi and Ranabhoomi programs. But still there are over 1.4 million hectares of alienated State lands across the country without survey plans.

However, the Pathfinder Foundation believes that there are legal implications of the MCC agreement which need a thorough legal analysis by carefully scrutinizing the draft agreement. Based on its study of the agreement, the Foundation has recommended the following:-

According to the MCC agreement, the land project will focus on seven districts. But these are not the only districts where poverty is at its worst, and where land reform will benefit most people. These selected districts ironically led to the perception that the MCC is to build an economic corridor between Colombo and Trincomalee and facilitate a land grab by foreigners. The Pathfinder Foundation has suggested that the government select other poverty-stricken districts that will benefit the most from the MCC.

The Pathfinder Foundation proposes that the MCC-funded land component is brought under the purview of the Information and Communication Technology Authority as it is in-charge of digitalization. MCC implementation must be carried out by Sri Lankans and provide only “observer status” to officials of the donor agency.

The Pathfinder Foundation found that almost all other previous USAID projects were mainly managed by US contractors and were not overseen or managed by the Sri Lankan government. In fact, USAID procurement guidelines are used for all tenders, and payments are made directly to contractors and not to the government, but USAID approval of all major actions is required.

MCC projects will be managed by a “company limited by guarantee”. On this ,the Pathfinder Foundation asks: “Why would Lanka have a company to implement this grant? “ Therefore, the Foundation recommends that the government decide what form the MCC implementation structure will take, whether it’s a trust, a non-profit or under a Government ministry.

The Pathfinder Foundation says that government must employ legal experts of the highest calibre to ensure that the MCC agreement, or for that matter any agreement with foreign countries or institutions, is well scrutinized to ensure that Sri Lanka’s national interests are not compromised. Any provisions that would harm the country’s independence, sovereignty and national security must be excluded.

With regard to acceptance or rejection of any offer of grants, Lanka should not throw out the baby with the bathwater, the Foundation wants. “Let us hope that the government will explore the possibility of negotiating the compact to produce a favorable outcome and give a strong signal to the world that Sri Lanka, under the new administration, is in business,” the Foundation says.

All foreign-funded projects and negotiations on them are now at a standstill because of the parliamentary elections which are to be held on April 25, 2020. The results of the elections will show how much power the Gotabaya Rajapaksa government has. Its decisions on pending projects, issues and controversies will depend on the nature of the new parliament and how strong or weak the government is in that parliament . Thus, the MCC’s fate, and Sri Lanka’s relations with the US as a whole, will be known only after April 25.