ECONOMYNEXT – Sri Lanka has begun preparations to use US$700 million in grants under the United States Millennium Challenge Corporation (MCC) aid agency program to qualify for which it must maintain high standards of good governance like fighting corruption.
The Cabinet of ministers this week approved the setting up of a project unit in the prime minister’s office as it prepares for a study to identify growth constraints that MCC investments are expected to overcome.
Prime Minister Ranil Wickremesinghe told the Cabinet Sri Lankan has been chosen under the MCC Compact Program which funds large investments in priority areas over a five-year period.
Policy instability, access to land and transport have been identified as three main constraints to growth, Wickremesinghe has said.
MCC will also consider water, wastewater infrastructure, electricity and education as other constraints to Sri Lanka’s growth, he said.
“Once a country is selected for an MCC programme, it has to be reselected annually bv the MCC Board until the Compact is signed,” he said, noting that it has to pass a scorecard annually and improve on its indicators.
Failure to pass the scorecard and its hurdles like control of corruption and democratic rights in a particular year can result in the country not being reselected, he said.
Under the MCC Compact a country must meet “rigorous standards for good governance, from fighting corruption to respecting democratic rights,” according to the prime minister’s proposal approved by Cabinet.
(COLOMBO, March 16, 2017)