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Saturday June 3rd, 2023

Sri Lanka MCC grant terminated by US

ECONOMYNEXT – Washington-based Millennium Challenge Corporation said it has ended a 480 million dollar grant to Sri Lanka, which was not taken up by the island’s current administration.

The MCC board said it had “discontinued the proposed compact with Sri Lanka.”

“On December 15, the Millennium Challenge Corporation (MCC) board decided to discontinue the proposed Rs. 89 billion MCC development assistance grant to Sri Lanka due to lack of partner country engagement,” the US embassy in Colombo said.

“The Rs. 89 billion approved for Sri Lanka will be made available to other eligible partner countries in need of grant funding to pursue their economic development priorities, reduce poverty, and grow their economies.

“Country ownership, transparency, and accountability for grant results are fundamental to MCC’s development model.

“These grants have lifted millions of people from poverty by catalyzing local and domestic investment.

“The United States remains a friend and partner to Sri Lanka and will continue to assist Sri Lanka in responding to COVID and building its economy.”

MCC had given grants to 30 countries worldwide on 38 totaling nearly 13.5 billion dollars the embassy said.

The MCC grant approved for Sri Lanka was to upgrade urban transport, land registration and also builds several key rural road links to highways became embroiled in multiple conspiracy theories in the run up to the 2019 elections.

The then opposition claimed that it would undermine the sovereignty of the country, force the country into defence deals with the US, get the country involved in a ‘economic corridor’ to transport US troops.

The modernization of the land registry was claimed to be a way to sell land to foreigners.

The then administration and the MCC denied the allegations and offered to amend the agreement if to address any perceived concerns.

Approved grants have to be ratified in the parliament of the country before money is released.

MCC says grants are made to countries that “meet rigorous standards for good governance, from fighting corruption to respecting democratic rights, as evaluated by MCC’s scorecard.”

The MCC board said it had approved grants to Sierra Leone, Kribati and Solomon Islands. (Colombo/Dec17/2020 – Updated with US embassy comments)

Comments (6)

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  1. sacre blieu says:

    Most such cpuntry agreem nets and aid must not be taken at face value. There is always that hidden clause which works in favor of the grantor that subjects the receiving country to various types of humiliation and enslavement. Ultimately the social fabric becomes rotten and that society losses its character coming from ages of culture and refinement, to be subject to base desire of the beneficiary country.

    1. JP says:

      We can see what the new regime will bring. Pestilence, poverty and hunger so far. Death eventually.

  2. Rajah Miranda says:

    Now developing country and poor countries expect USA to depreciate US Dollar currency exchange rate by 90%
    as Europe & USA economies are under performing due to covid -19
    poor countries borrowing from IMF is set of balance of payment deficit
    International currency exchange rate is 1 USD =RS. 187 sri lanka Rufee
    This is unfair injustice.

  3. Percy DeZoysa says:

    Correction. Washington-based Millennium Challenge Corporation did not ended the agreement. Sri Lanka terminated the MCC trap last year by refusing to sign it. My hats off to Sri Lanka’s new administration by not letting the country be another U.S. territory. Well Done Mr. Rajapaksa!
    – Anura Zoysa

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Comments (6)

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Your email address will not be published. Required fields are marked *

  1. sacre blieu says:

    Most such cpuntry agreem nets and aid must not be taken at face value. There is always that hidden clause which works in favor of the grantor that subjects the receiving country to various types of humiliation and enslavement. Ultimately the social fabric becomes rotten and that society losses its character coming from ages of culture and refinement, to be subject to base desire of the beneficiary country.

    1. JP says:

      We can see what the new regime will bring. Pestilence, poverty and hunger so far. Death eventually.

  2. Rajah Miranda says:

    Now developing country and poor countries expect USA to depreciate US Dollar currency exchange rate by 90%
    as Europe & USA economies are under performing due to covid -19
    poor countries borrowing from IMF is set of balance of payment deficit
    International currency exchange rate is 1 USD =RS. 187 sri lanka Rufee
    This is unfair injustice.

  3. Percy DeZoysa says:

    Correction. Washington-based Millennium Challenge Corporation did not ended the agreement. Sri Lanka terminated the MCC trap last year by refusing to sign it. My hats off to Sri Lanka’s new administration by not letting the country be another U.S. territory. Well Done Mr. Rajapaksa!
    – Anura Zoysa

Sri Lanka to ramp up weekend fuel deliveries after petrol price cut

More deaths reported at Sri Lanka fuel queues

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation will be operating on the weekend to complete all fuel deliveries to end vehicle queues forming outside fuel stations after the price revision earlier in the week, Energy Minister Kanchana Wijesekera said.

“Instructions have been given to CPC and Ceylon Petroleum Storage Terminals to continue fuel deliveries on Saturday and Sunday this week to supply sufficient stocks to all fuel stations,” Minister Wijesekera said in a TWITTER.COM MESSAGE

“To reduce expenses on overtime, CPC and CPSTL have not been operating on Sundays and public holidays in the last 4 months,” Wijesekera said.

“Non-placement of orders by fuel stations from last Saturday, anticipating a price reduction, not maintaining minimum stocks, immediate increase in demand by consumers after the price revision, and quota increase have created shortages in the fuel stations.”

The Minister in April 2023 said all fuel stations would be required to maintain a minimum of 50 percent of stock tank capacity.

“I have asked CPC to review and suspend the license of fuel stations that had not maintained minimum stocks.” (Colombo/ June 02/ 2023)

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Sri Lanka bonds yield up at close, rupee at 291.75/292.50 against the US dollar

ECONOMYNEXT – Sri Lanka’s bonds closed steady on Friday, dealers said, following the central bank’s decision to cut its main policy rate by 250 basis points.

The Spot US dollar closed at 291.75/292.50 rupees, dealers said.

The rupee opened at 290.25/75 to the US dollar Thursday and closed at 292.50/295.50 to the US dollar.

A bond maturing on 15.09.2027 closed at 24.70/90 percent up from 24.50/90 percent a day earlier, dealers said.

A bond maturing on 15.05.2026 closed at 25.75/26.25 percent up from 25.00/26.00 percent a day earlier.

A bond maturing on 01.05.2025 closed at 27.00/30 percent, up from 26.30/27.00 per cent at last close.

A bond maturing on 01.07.2032 closed at 20.25/21.00 percent, up from 20.00/40 per cent at last close.
(Colombo/ June 02/2023)

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Sri Lanka’s shares edge up on positive macroeconomic sentiments

ECONOMYNEXT – Sri Lanka’s shares closed higher in trade on Friday, over positive macro-sentiments encouraging investors to redeem their interest towards buying, an analyst said.

The main All Share Price Index was up 0.72 percent or 62.19 points to 8,753.80,  while the most liquid index S&P SL20 was up 0.68 percent or 16.87 points to 2,487.29.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

Prior to the Monetary Policy investors were quite optimistic that inflation is to lower and interest rates will decrease and since exp, an analyst said.

Sri Lanka Central Bank is waiting for the government proposal on the domestic debt restructuring (DDR), the central bank governor Nandalal Weerasinghe said amid uncertainty over DDR and speculations over instability in the banking sector.

“On debt restructuring, the borrower is the ministry of finance’s treasury. Certainly we will announce what the strategy will be. We are waiting for a government proposal,” Weerasinghe said.

Sri Lanka’s investors are waiting on assurances to be made on debt restructuring and optimization, Central Bank Governor Nandalal Weerasinghe said, “It is up to the government to clear the uncertainty, because from our side we have done that part.”

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

The speculation of DDR has hit the market and the risk premium has kept the market lending rates well above the central bank’s policy rates. The government has yet to present its plans on DDR.

Weerasinghe said the central bank has done its best to reduce the risk premium through bringing down the market lending rates while keeping the policy rates unchanged.

Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.

“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.

“Attention was also paid to the on-going debt restructuring negotiations.”

However Officials from IMF have said Sri Lanka has to focus on expanding taxes.

“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability,” Deputy Managing Director Kenji Okamura said in a statement.

The finance ministry this week issued rules requiring everyone above 18 year of age to register to pay income tax.

“I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner.

The market generated a revenue of 738 million rupees, while the daily average was 1 billion rupees.

Top gainers in trade were Vallibel One, LOLC Finance and Browns Investment. (Colombo/June02/2023)

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