Is the MCC ‘dead and buried’? | Sunday Observer

Is the MCC ‘dead and buried’?

28 June, 2020

I wouldn’t blame anyone for believing that the Millennium Challenge Corporation (MCC) Compact is dead. Indeed many thought it was effectively shot down in early November 2019 when Ven. Ududumbara Kashyapa Thera ended a fast-unto-death protesting the Compact upon assurances first by Gotabaya Rajapaksa, the presidential candidate of the Sri Lanka Podujana Peramuna and then by the United National Party’s candidate Sajith Premadasa.

Rajapaksa, at the time, vowed that all agreements signed after elections were called would be reviewed. Premadasa immediately asserted the same. The two polled 94.24% of the total votes cast. While the election was not primarily fought over the MCC Compact it is obvious that the result did not demonstrate a green light for it. The sentiment probably leaned the other way, i.e. against the MCC Compact.

So, is it dead then? Well, in politics it is not unusual for people, parties and policies considered dead and buried to be resurrected. At the turn of the millennium many in the then ruling People’s Alliance and their ideological cousins in the UNP would have believed that nationalism or at least Sinhala Buddhist Nationalism, along with concerns over the future of the unitary state were dead. Federalism was the future they may have believed.

They would have to shed such convictions a few years later. Similarly those who thought federalism in and of itself and as a stepping-stone to separatism was buried when the LTTE was defeated in May 2009 had to live with a resurrection of sorts after January 2015.

So let’s not get ahead of ourselves here, not least of all because US Ambassador Alaina B Teplitz has stated that the MCC Compact would be signed after the General Elections of August 5, 2020. For all the assurances given by the lady and MCC representatives about benefits (‘It’s a gift, not a loan, dudes,’ they’ve said) one has to wonder why the gifting party seems to be more interested in the matter than the would-be beneficiary.

The answer was provided in December 2019 by Senator Bob Menendez (D-N.J) in his opening statement at a US Senate Foreign Relations Committee hearing titled ‘Oversight Of The Millennium Challenge Corporation,’ convened to question the MCC’s Chief Executive Office Sean Cairncross, Senator Menendez, the Vice Chair of the Committee made the following observations:

Important tool

‘MCC’s data driven approach assesses countries’ constraints to economic growth, and their needs to ensure a maximisation on investment returns each countries receives.

Americans benefit from these investments as strategic partner countries experience improved regional security through improved economic security, growing trade opportunities, and the ability to resist malign external influence. MCC is an important tool in the U.S. foreign policy toolbox that requires congressional support, including robust oversight to ensure the independent agency sustains its success.’

Flag the following sections: a) ensure a maximization on investment returns, b) ability to resist (as ‘strategic partners’) malign external influence, and c) important tool in the US foreign policy toolbox.

So it’s not a ‘bucks needed by friends, bucks given, end of story’ as made out by outfits such as the so-called ‘independent policy think tank’ Advocata Institute which brags that its reductionist and anti-intellectual beliefs in ‘free-markets’ will deliver ‘sound policy ideas’ that are compatible with ‘a free society.’

Advocata is either ignorant of the basics of political economy or is as thick-as-thieves with the goons in this matter, for they submitted to the review committee the view that the Compact ‘should be accepted without further delay.’ Advocata need not call Menendez to figure out what’s what — a close reading of the text should suffice. This however would first require a suspension of free market fixations and a preference for wide-eyed embracing of stuff dished out from Washington DC.

Back to the question. Is it dead, then? The Review Committee (on the MCC Compact) has submitted its final report to the Prime Minister.

The Committee, in the Interim Report submitted in February clearly opined the following in the main: a) the Compact would have an adverse impact on national, social and economic well-being of Sri Lanka, b) the Compact in its draft form contains sections that are at odds with Sri Lanka’s Constitution and the law while implementation would be detrimental to national interest, sovereignty and national security.

Given that the US Government has not indicated any willingness to amend the terms of the MCC Compact as of now, one can surmise that the Sri Lankan Government would find it hard to sign the document if the final report does not stray significantly from the above. Apparently there’s been no such departure — Joint Cabinet Spokesperson Minister Ramesh Pathirana declared that Sri Lanka will not sign the Compact.

However, we can’t dismiss the Ambassador’s claim. She mentioned elections. Let’s consider the key players in this election. We know that the SLPP has a significant edge. We know that the Opposition is split, after the UNP’s presidential candidate Sajith Premadasa broke ranks and decided to contest in a separate coalition, the Samagi Jana Balavegaya (SJP).


In January this year President Rajapaksa told the visiting Deputy Assistant to US President Donald Trump, Lisa Curtis and Acting Assistant Secretary for South and Central Asia, Alice G Wales that a decision on the Compact will be taken considering the views of the people and after the expert committee which is going into it comes out with its report.

The views of the people were obviously considered by the Review Committee and found expression in the Interim Report, over and above the antipathy that’s evident in the November 2019 election result. Ramesh Pathirana has articulated the Government’s position. The party, i.e. the SLPP, hasn’t said anything so far.

The UNP’s stand is clear. The Compact’s key champion was Mangala Samaraweera, a powerful Minister in the UNP Government of the time. In late October, the Cabinet of Ranil Wickremesinghe’s Government decided to sign the agreement. Wickremesinghe claimed that this will happen before the Presidential Election.

Interestingly, Sajith Premadasa, a senior Minister in the same Cabinet never once raised any concerns about the MCC Compact. He went along. He offered silent consent. It wasn’t until Gotabaya Rajapaksa gave the above-mentioned assurance to Ven Ududumbara Kashyapa Thera that Premadasa discovered an ‘opinion.’ He copy-pasted his opponent’s position.

In December 2019, Sajith Premadasa went a step further. ‘I will provide parliamentary support if the Government decides to tear up the MCC (agreement),’ he said.

Just a few days ago, Premadasa upped the ante, ‘I am prepared to sign an affidavit pledging I would never sign the MCC agreement,’ he said, adding that the present Government should give a similar assurance. Premadasa no doubt would publicise the promised affidavit in the coming days.

Is it dead, then? Let’s say, ‘buried,’ and as a note of caution add, ‘for now.’ The US is down (on multiple fronts) but it is certainly not ‘out,’ as machinations in Geneva to stop moves for a UN resolution or investigation on rights violations indicate.

Moreover, this is not only about Washington’s prerogatives as clearly articulated by Menendez. It’s a pet project of the Ambassador. Ms Teplitz was in charge of making Nepal swallow the MCC pill. Perhaps it is a career-defining matter for the lady. One would have to be very naive to believe she would ‘take a knee’ (in remorse) having ‘given the knee’ (so to speak) in a diplomatic equivalent of what George Floyd had to experience.

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