Demystifying the Millennium Challenge Deal

Govt. signs SOFA & ACSA; spreads confusion about Millennium Challenge



by Kumar David-July 25, 2020, 12:00 pm

This piece will address three aspects of the Millennium Challenge Deal (MCD). MCD-Sri Lanka is an offer of a grant of $480 million ($350m for Transport, $67m for a Land Project (LP); the US Embassy Infographic is unclear on $63m). Traditionalists, nationalists and leftists object to LP’s intention to digitise deeds "to improve tenure security" and move land registration from "a Deeds System to a Title Registration System". It is alleged that this is a furtive attempt to encourage peasants to sell their lands enabling entrepreneurs and richer peasants to procure and consolidate acreage into large farms. That is, to push Sri Lanka towards capitalist farming and away from small-parcel land ownership and semi-feudal land tenure that prevails in rural society.

Traditional holdings passed down over generations are freehold and owners can dispose of their lands if they don’t mind dispossessing their heirs. Traditional lands are by far the largest part of peasant holdings. There are constraints on selling due to culture and custom but no legal prohibitions. It is only land granted under colonisation and land reform schemes that have constraints on sale. Why is consolidation not going apace now, on sans MCD, if peasants are so likely to be readily seduced into parting with their lands after MCD arrives! How will a "title registration system" encourage land sales more than the current "deeds system"?

Land holdings are not being consolidated apace into capitalist farms right now for four reasons; seasonality of labour, prohibition on converting paddy land to commercial crops, some village paddy land has been used to build houses and fourth, lack of buyers. The charge that the underhand intention of MCD is to induce peasants to sell to American companies who will then create US owned farms and land corporations is dubious - rather like the deep trench from Kurunegala to Trinco that MCD is going to dig to complete the job the LTTE didn’t finish! As with all things Sri Lankan the opposition to MCD is marinated with racism. I am no MCD fan or foe at this point but the socio-economic objections seem frail. I have consulted a land lawyer, an agriculturist, two small holders and a Ratnapura activist to learn ground realities and I have concluded that most fears regarding LP arise from febrile imagination of unlikely doom.

The much larger Transport Project has attracted little attention or comment, but to repeat, official blurb about LP can be summarised as follows. Create a parcel fabric map and inventory of state lands, digitise deeds, move from deed registration to title registration, digitise valuation data, set up land policy councils. The opponents say, to repeat for emphasis, that modernising the land data-bank will facilitate selling. In different jargon they say: Sri Lanka will transit from archaic semi-feudal land ownership to capitalist property in land. I am scratching my head to answer this question: "Should those of us who are unsympathetic to capitalism prefer to retain traditional land ownership?" My hard Leninist friends will find this a difficult nut to crack because at one time Lenin’s thesis was about the progressiveness of capitalism over feudal remnants, but at other times he warned peasants not to capitulate and sell out to large capitalist farmers. I have decided there is nothing in this old debate on land and agrarian question that is of any use to us in thinking over capitalism in agricultural land in Sri Lanka today. We already have capitalism in land ownership in a big way in the plantations anyway. We must stand on our feet and think sui generis.

The second matter I wish to advert to is the belief that MCD-Sri Lanka is an American plot to make Sri Lanka a client state. Remember we were told that the Indian ambulance project was a covert intelligence plot, but it has proved to be a sterling effort that has saved many lives. Of course, in a broad sense, the US has foreign policy objectives; no great power will assist anyone opposed to its interests. The US will not assist Cuba or Iran, Russia is unlikely to be kind to the Ukraine and China’s Belt and Road Initiative is to secure its place as a great power of the 21-st Century. From this it does not follow that every grant and piece of assistance from China or America is a subversive scheme to ensnare the recipient. That’s stupid, it’s not so linear. China has spent $200 billion on BRI and says it will commit $1.25 trillion by 2027. The US will spend $900 million ($0.9 billion) a year globally on MCC on an open-ended time horizon. In the tussle for soft-power BRI and MCC are the weapons of the dualists and China will outspend the US. The attempt at assimilation of small countries is a general process.

Sri Lanka is deeply in hock to China because of the inanity of the projects we asked for and the billions political leaders siphoned off. The inanity of projects like Mattala Airport simply boggles the mind. Even if the advising officials are daft and the political boss who makes decisions corrupt or a moron who wanted to grandstand in his home territory, surely something as hugely ridiculous as this cannot happen! The historian Suetonius claims that Caligula planned to make his horse Incitatus a consul who could invite horse-dignitaries to dine with him in a mansion staffed by human, not equine servants. But even Suetonius does not say Caligula actually did it. But this crazy airport in the backwoods actually got built at a cost of millions of dollars that the country is bleeding to pay back. Nations that choose rotten projects end up ensnared. OK, there is a difference, since MCD is a grant if it is wasted or looted Lanka will be a loser, but won’t have to pay back in hard cash. Still, if leaders loot, nations lose; don’t blame the Chinese or the Americans if we are suckers and waste the loot.

The third point is my prediction that the government will sign MCD; committees and endless Cabinet reviews are smokescreens. A semicolon here or a phrase there may be adjusted, but that’s window dressing; the substance will be unchanged. Gammanpila and Wimal caterwauled, tore their hair and lifted their dhotis, but that was then. Now the MCD is 70% terrific, 30% slightly soiled. Presumably Gota told them to pipe down so their vocal cords went numb. GR, MR, Cabinet and SLPP will meekly sign-on after the elections. Broke, penniless, desperate for dollars. Crawl, beg and get dollars or you will end their lives in a metaphorical international debtor’s prison! They are scurrying, headless chickens seeking to scrape together every dollar and kopek. $480 million in the foreign kitty and a corresponding amount of junk rupees offloaded into the domestic monetary system; you’re nuts if you think they won’t sign!

Demystifying...

There is the concern that MCD should be seen in the context of SOFA (Status of Forces Agreement) and ASCA (Acquisition and Cross-Services Agreement). What I find perplexing is that Gota has signed these two far more controversial agreements but is juggling MCD. "We have taken a decision that all agreements should be in keeping with our constitution; they should not harm our national security and not infringe sovereignty and territorial integrity. Sri Lanka will not sign any agreement that violates those basic principles. We have not signed the MCD, and the President has sought the opinion of the cabinet. (BUT!!) we have signed the ACSA and SOFA", said spokesman Stadium Bandula on July 1 according to Asian Tribune of July 3. (http://www.asiantribune.com/node/94361).

This is the first occasion on which an official admission has been made that SOFA and ASCA have been signed by Gota’s government. Wow so the big two, from a security and sovereignty point of view, are done! Where are the braying asses Gammanpilla and Wimal?

A classified U.S. Diplomatic Note, the Asian Tribune says, "asserts that U.S. personnel are not subject to Sri Lanka’s criminal jurisdiction. The Government of Sri Lanka recognizes the importance of disciplinary control by U.S. Armed Forces authorities over U.S. personnel and authorizes the US Government to exercise criminal jurisdiction over U.S. personnel while in Sri Lanka". The report adds, SOFA states that "Aircraft and vessels of the U.S. Government shall be free from boarding and inspection."

This brings me to an interesting point which was a follow up conversation that I had with Comrade M sipping a rum and tonic on Wednesday afternoon. M is convinced that Gota and the Executive have decided, definitely, to go over, in general, to the "American side". As evidence he mentions the above agreements, Gota running to India as soon as he was elected to do pooja to Modi and possible Israeli influence in Lanka. Israel is ruthless to the Palestinians and Modi hates Muslims more than our Executive hates them. M’s picture does indeed add up but I did not agree or disagree because there came to my mind MR’s long time Chinese-coolie practices. Will Lanka’s great power relationships see a shift? If so, how strongly will China react? Will a shift, if M’s analysis is correct, raise tension between the brothers? These are questions for after the elections that we will need to carefully watch.