US withdraws MCC from Sri Lanka ‘due to lack of engagement’

The JVP held a protest in Colombo against the MCC earlier this year as US Secretary of State Mike Pompeo visited.

 

17 December 2020

The United States announced that it has withdrawn its offer of a Rs. 89 billion Millennium Challenge Corporation (MCC) grant to Sri Lanka, “due to lack of partner country engagement”.

The US statement comes after months of controversy around the grant, which has seen widespread Sinhala nationalist opposition.

Earlier this year, Sri Lanka’s president Gotabaya Rajapaksa said he would not sign the grant “even in his dreams”, whilst the opposition JVP party protested against what they termed an infringement of Sri Lanka’s “sovereignty”. Meanwhile, Buddhist monks have launched hunger strikes against the move, Fundamental Rights petitions have been filed and anti-American artwork has even been produced in the south as opposition to the grant grew.

Senior Sri Lankan government officials and leading candidates visit a hunger striking Sinhala Buddhist monk last year, where all pledged not to sign the MCC.

“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,” said the US embassy in a statement this morning. “Country ownership, transparency, and accountability for grant results are fundamental to MCC’s development model,” it added.

The withdrawal also comes whilst Sri Lanka is in the midst of an economic crisis that has seen international ratings agencies downgrade the country, with several large international debt payments looming.

“MCC provides time-limited grants to developing countries that meet rigorous standards for good governance, from fighting corruption to respecting democratic rights, as evaluated by MCC’s scorecard,” said the MCC in a statement yesterday. “MCC takes a business-like approach, with bedrock commitments to data, accountability, and evidence-based decision making.”