ECONOMYNEXT – A 480 million dollar Millennium Challenge Corporation grant that will not be paid back to the US will address key constraints to progress identified by Sri Lanka itself and the United States will not retain control of any land or resources, the country’s ambassador to Colombo said.
Sri Lankan Government and MCC has identified weak transport infrastructure and weak land administration to be main constrains to Sri Lanka’s economic growth.
"And that is why these are the two sectors addressed by the MCC grant," US Ambassador Alaina B. Teplitz told members of the Sri Lanka – USA Business Council of the Ceylon Chamber of Commerce in Colombo Tuesday.
"Under this agreement, Sri Lanka will retain oversight and control of all aspects of the proposed projects. The United States will not own, control, or in any way administer any land under this agreement."
The Millennium Challenge Corporation (MCC) is a U.S. foreign assistance agency aimed at combatting global poverty, which forms partnerships with developing countries and disburses grants on a competitive selection.
Sri Lanka’s President Maithripala Sirisena had reportedly raised objections to the signing of the MCC agreement.
President Sirisena had also objected to the halting of money printing, which has been identified as a key reason for economic instability in the country.
In a note to cabinet he had insisted that that the Treasury retain the right to interfere in monetary policy decisions in order to engage in large scale money printing by directly printing money during Treasury bill auctions, a problem identified as fiscal dominance according to reports.
The first project under MCC grant will address congestion through and advanced traffic management systems and bus modernization program.
Moratuwa University studies in 2014 states the number of trips along the main corridors connecting Colombo with its suburbs is expected t increase to 4.5 million trips per day by 2035.
"Imagine today’s traffic more than doubling…and imagine yourself writing a check to pay for all that traffic congestion," Teplitz said.
"The value proposition here is that the United States government is willing to contribute 350 million dollars to fix this problem.”
"What’s in it for us? Great private sector opportunities presented by a strong economy. Arising tide will lift all boats."
A clearer picture of the value of the country’s lands is eminent with better land information systems, which will be the other sector focused by the MCC grant.
"Sri Lankan citizens will be able to convert their deeds and titles into digital form, protecting the paperwork from damage, loss or theft."
In Sri Lanka forged deeds, encroachment and land disputes are common, according to analysts.
The 67 million dollar land project aims to increase the availability of spatial data and lands rights information.
Land activities will help the Government create an inventory for state lands, modern land valuing methods, project administration and evaluation.
Together, the two projects are expected to benefit 54 percent (11.3 million) of Sri Lanka’s population, estimations of the Office of Public Affairs of the US Embassy shows.
"I believe the private sector has a key role to play in creating the thriving global economy of the future,” Ambassador Teplitz said.
"In order to promote inclusive economic growth and development, the United States has offered the government- and people- of Sri Lanka a $480 million grant
"This is a gift from the people of the United States, not a loan."
Sri Lanka received higher volumes of grant funding in the 1980s from Western nations, but they have dwindled as Sri Lanka’s income went up. If signed the MCC grant will be single highest grant ever given by a foreign government. (Colombo/ Aug 01/ 2019)