By  Chandre Dharmawardana

(This article is  also to appeared in the Island Newspaper January 23, 2020)

The so-called  Millennium Challenge Compact (MCC)  of USA  proposes to grant nearly half a billion dollars to Sri Lanka’s development. Sri Lanka has already received  over  2.5 billion in Chinese aid, and this is a US initiative to counter China’s outreach. However, while Chinese aid  is much less intrusive, US aid is feared for a variety of reasons by many observers. In contrast, the Ranil-Sirisena government, an ally of the West  was ready to approve the MCC as well as other US proposals for the facilitation of visits by US troops into the island. A US-paid Sri Lankan ex-diplomat as  an adviser”, retained by the speaker Jayasuriya and  unprecedented in parliamentary practice clouded the issue further.  The MCC proposes, among other things, to improve infrastructure and simplify  recorded legal  land ownership making land easily marketable and usable  for development”. A strategic  example of MCC’s  infrastructure proposals included a  fast highway linking Colombo to Gokanna (Trincomalee), with
alleged special legal privileges to US troops.


Thamara Kunanayagam, an ex-diplomat critical of the West  viewed the  MCC to be incompatible with international law and Lanka’s sovereignty. Others claimed it  a direct land grab by the USA,  now evacuating its military base in Diago Gracia, and looking for rotating footholds  for its troops. Dr. Asoka Bandarage, a US-based academic sees it in continuity with previous colonial takeovers but seems less negative towards  it.  Many feared that outright rejection of the MCC may sour US-SL relations very adversely. Hence the  new  government under Gotabhaya Rajapaksa has appointed a committee to review the MCC grant, while  stating that  the parliament will not  ratify any agreements that are detrimental to the country”, without defining what is detrimental”.

Here we  focus on a number of vital issues that previous commentators had not touched.   Even if all political and  sovereignty issues were ironed out,   it does not mean that the proposed infrastructure and development” is going to be beneficial to Sri Lanka, as old-style development based on Chicago Economics of competition and opening up  to free markets” cannot be expected to help small countries like Sri Lanka.

So, as a learned committee is examining the “pros and cons” of the MCC,  changes to the existing MCC to make it useful to Sri Lanka may be possible.

Sri Lanka  has suffered  enormous onslaughts on its natural habitat due to several factors. (a) The rapid rise in population since the 1920s and particularly after world war II, and the conversion of land to housing. (b) The programs based on agricultural expansion, clearing of forests,   implementing massive irrigation schemes and resettling the southern demographic bulge in the recolonized” dry zone  freed from Malaria. While people have eloquently criticized  the conversion of the mountains to plantations  by the Colonials, this touched less than 2% of the land mass, while modern schemes, employing modern equipment and dynamite had pushed the forest cover in Sri Lanka down to 32%. or less.

Today, conflicts between wild life  and people, encroachment of marauding monkeys into habitations, rapid drop of pollinating insects like wild  bees and wasps  etc., are all too common. That they are a consequence of loss of natural habitat is rarely admitted. It is far easier to find some other excuse, say, argro-chemicals, underhand activities by  Tamil terrorists or Muslims with Arab funding, decline in morals and the consequent wrath of gods, are all simple explanations acceptable to the public and many politicians. They become the clarion call for taking control” and returning to the traditional pastoral way of life” to solve all problems. This picture involves the resurrection of the old Gama-Weva-Temple or Kovil” (GWT) concept, ignoring that GWT implies an enormous assault on  nature  and fails for today’s demographics.  

In stark contrast, and with equal error, the MCC wants to facilitate capitalist exploitation of the land where it is claimed that  living standards will go up as global investments flow in! The actual failure  of such policies is seen in Haiti and Nigeria!  

What will happen if ownership, be it private land, state land or  marine floor  where oil, gas or minerals are  suspected to be present, were  made available for sale to any investor”, with only the criteria of global capitalism (i.e., the bottom line of the share holder living in the Emirates, New York or Singapore) ?    

The committee looking into the MCC proposals must establish mechanisms to evaluate every sale of land  for its proposed use,  habitat encroachment, carbon footprint and so on. If land is acquired for biomass energy generation, such applications can be ecologically positive, while  building  tourist resorts and  tourist infrastructure like roads,  clubs, swimming pools etc., produce  unsustainable development”.  The rural population gets converted into waiters, cooks, drivers  and pimps serving the whims of the tourist. Checks and  balances are  needed.

If the MCC  facilitates  politicians who invoke the GWT concept to build  slews of match-box houses sprawling over an area where village thickets or pristine forests have  been  bulldozed, or where low-lying marshes and bogs have been drained, then legislation must be include to prevent such development”. Since land rights are distributed between the central government and local governments, over-arching legislation is needed to apply at every level. The best solution is to transfer approval of land transactions to a national authority if foreign investors are involved.

The infra-structure proposed by the MCC seems to favour  highways rather than fast electric trains geared to public transport.  The latter is  the most optimal developmental tool. Highways or trainways must have at least a kilometer of elevated track for every 10 km so that pedestrians, local traffic,  animals, insects, spores and even underground root systems can pass across. This ensures that fast highways do not divide the ecosystem, and animals have linked wilderness corridors of passage. This ensures not only ecological integrity, but also the socio-political integrity of the country.

The proposed Colombo-Gokanna highway will not be a veritable division of the country into  northern and southern sections if there are ecological underpasses for each 10km interval.  we already have a rail line connecting Colombo through Polgahawela, Maho and Galoya  to Gokanna. The new route should be developed along the old route, to run fast bullet trains”,  instead of opening up virgin land and adding to the incessant assault on  natural habitat. Such development programs” have  huge carbon foot prints and affect bio-diversity.  All this can be reduced if no new land is opened up.    

The MCC is  silent on the energy  bottleneck  asphyxiating Sri Lanka’s development. The  CEB mafia” is alleged  to be one factor. Even though the President  may have appointed Viyathmaga”, or Eliya” etc., it is no secret that government high ups rely on their personal confidantes who point the way to proceed”. How can we understand why the government is  likely to approve more coal power for  Sri Lanka? It is  committing  to a very costly long-haul  at a time when alternative energy sources have already become not only competitive, but cheaper and healthier  than fossil fuels.   The MCC, by pushing highway development, follows the traditional developmental template destined to  collapse due to lack of firm power. All developmental schemes must  integrate their milestones”  with the projected power generation milestones. The committee that is looking into the MCC must ask if this holistic essential has been addressed.


Unfortunately, most development programs” usually written WITHOUT  integration with energy policy are mere routes to create disaster. Disaster and collapse in small economies are attractive opportunities for global capitalism because  deep pockets  can purchase valuable assets at fire sale prices when disaster happens. The MCC will facilitate all that unless correctives are included.