Millennium Challenge Compact — A Distilled Picture from Welikala

Aswin Welikala*

I am shocked and saddened by how gullible my own people are to the manipulations of politicians and their lies. I am also shocked by the complete inability of people to read a public document instead of deciding to trust fake YouTube videos designed to spread lies. Since I took the effort to read the #MCC Agreement, I thought of summarising it for those who haven’t been bothered to do so but have an opinion on it.

*What is the MCC?*

The MCC is a US grant giving organisation set up in 2004. It’s purpose was to change the way aid was given by making the countries receiving aid to have more control over their grant and to design projects around what those countries actually need.

Usually aid grant giving has centred around what the grant giver wants to support as opposed to what the receiver really needs. USAID is another US grant giving organisation. It has been in Sri Lanka for about 56 years and has given over USD2 billion in grants.

When the MCC was set up in 2004, the SL government applied to receive funds but because of the country’s situation at the time, it didn’t go through. Negotiations recommenced in 2015.

*Why is the MCC grant so large?*

MCC grants are usually large. Examples of these are:

  1. Armenia: USD235m
  2. Benin: USD687m
  3. Burkina Faso: USD 408m
  4. El Salvador: USD 740m
  5. Ghana: USD 1billion
  6. Mozambique: USD500m
  7. Philippines: USD433m
  8. Senegal: USD1 billion
  9. Tanzania: USD700m

*What will the Sri Lankan Govt do with the money?*

The MCC project for Sri Lanka is focused on two key projects:

  1. Land titling and eRegister.
  2. Traffic and road sector improvement. 

*Land project*

The purpose of the land project is to increase the availability of information on private land and under-utilized state lands. Funding will go to recommence stalled land projects in Sri Lanka – namely the eLand Registry and Bim Saviya.

In 1998, Sri Lankan passed the Land Titles Act to convert from the outdated land deed system to land titles. The current land deed system is outdated, requires decades of land deeds to prove ownership and has led to decades long litigation over people fighting to prove ownership. The only people who benefit from the present system are lawyers who drag their clients through years in court.

Most countries switched to land titles and away from deeds about 30-40 years ago. Sri Lanka was finally going to switch after the 1998 law. However, nothing happened after the 1998 law as it’s quite an expensive exercise to do the conversion.

In 2007, President Mahinda Rajapaksa’s Govt started Bim Saviya – which was converting the land deed system to titles. But again, except for Colombo and a few areas, it ran out of money to finish the conversion. The grant money from MCC will be giving money to finish Bim Saviya and it’s related eLand Registry project.

The other portion of the grant will be going to map Government land, identify utilised and un-utilised government land and create a register of government land. 85% of all land in Sri Lanka is owned by the government. The government doesn’t have a central registry of this land. Most departments have no idea what land it owns. This means that land is heavily under-utilised in Sri Lanka.

Land available for agriculture or industry is not used appropriately. This registry will allow for the government to know what it owns and where.

The money will also go to a gender inclusion programme to ensure that women have equal right and access to land. For example, permits and grants by the Govt are usually given to men and the eldest son then inherits it in accordance with land law. Therefore women face barriers to use land grants for productive purposes. It places women and children at risk when they are divorced or the husband abandons them. The government will use part of the money to prepare new policies and draft new laws to redress this gender imbalance.

These monies will be going to the Land Department, Valuation Department and ICTA.

*Transport project*

The second and largest portion of the grant (only about USD 70 million is going for the land project) is for the transport project. The purpose of the project is to increase the efficiency and capacity of the road network and reduce the of transport in order to facilitate the flow of passengers and goods between the centre of Sri Lanka and ports and cities.

Money will be spent in upgrading the road network in Colombo and the provinces, introducing an Advanced Traffic Management System like Singapore’s, a Bus Transport Service Modernization  and upgrading the Central Ring Road Network.

The Traffic Management System is primarily for and around Colombo. It will involve setting a central command for traffic management, smart traffic lights that can respond to changing traffic patterns, better road marking, etc.

The bus project involves converting all buses into low floor, low carbon, GPS and CCTV equipped buses. Putting in bus lanes and bus rapid transit pathways. The aim of this project is to improve the speed and quality of buses, reverse the trend in declining bus use and make them safer for women. There will be a five year bus sector reform programme that will be funded. This includes structural reform to how the bus network is run and a transition from the current fare box, compensation model to a performance based system to private buses and introducing smart card payment systems.

The second part of the transport project is improving five sections along the existing road network connecting Central, Sabaragamuwa, Uva and Eastern provinces with the Western province. The Avissawella – Ratnapura road, Beragala-Wellawaya road, Dambulla-Naula road and connecting Dambulla to the provincial boundaries of the central and north central province Ratnapura – Pelmadulla road.

The project will bring the existing roads up to Class A standard.

*Are the Americans going to take over Sri Lanka?*

No. Definitely not through the MCC grant. Even the North Koreans seem to have applied for an MCC grant and it’s unlikely they will want the Americans to take over, ever. All monies from the grant will be utilised by Government agencies and departments.

*Are there any onerous conditions*?

The conditions of the grant are pretty standard for donor funding and definitely not even a tenth as onerous as loans given to the Government. Loan funding create indebtedness [unlike] grant funding.

*What benefit will the Americans have by giving us this money?*

The same benefit why there has always been grant funding and why Sri Lanka has received billions of it already. Sri Lanka receives regular grant funding from the US, EU, India, WB, China etc. A more developed, prosperous and stable Sri Lanka is in the interests of all our trading and economic partners. Partner and friendly countries have a history of helping each other. It gives soft power to the giving countries and helps build better ties and economic relations.






  • Email Comment from GUS MATHEWS in London sent to Michael Roberts, 12 November 2019 

    In many countries the USA is considered as the ‘devil incarnate’ within acceptable reasons especially in view of the recent debacles concerning Iraq, Libya and more recently Syria that was stymied due to Russian involvement. Going further into the 1950’s the ousting of a democratically elected Mosaddegh government of Iran by the USA and replacement by the demagogic Shah that even today has international repercussions.


    The ‘MCC’: viewing it superficially ticks all the boxes as an altruistic grant by the USA especially for the digitising of land registry in Sri Lanka. However, as Sanjeewa intimates, whether the MCC is independent of SOFA and ACSA is a moot point that requires further investigation and it is imperative for one to ensure that it does not propel Sri Lanka into some grand plan that the USA may have for the future containment of China.


    There are precedents to the practice of annexation of island countries by the USA when the USA deems it intends to be a regional power in International waters. In 1898 the USA annexed Hawaii and dethroned the Hawaiian monarchy when it decided to become a Pacific power. In similar vein will Sri Lanka become a ‘sine qua non’ servicing the need for the USA to become an Indian Ocean power purely for the containment of China?


    To quote Virgil from Aeneid ‘Timeo Danaos et dona ferentes’ alluding to Homer’s Iliad that has now morphed into an English proverb as ‘Beware of Greeks bearing gifts’





Filed under accountability, american imperialism, centre-periphery relations, charitable outreach, economic processes, island economy, land policies, legal issues, politIcal discourse, power politics, self-reflexivity, sri lankan society, the imaginary and the real, transport and communications, truth as casualty of war, welfare & philanthophy, working class conditions, world events & processes

3 responses to “Millennium Challenge Compact — A Distilled Picture from Welikala

  1. Janaka Perera

    In order to get a correct perspective it is necessary to take all three agreement MCC, ACSA and SOFA altogether

  2. Pingback: Lanka & Bolivia, Graphite & Lithium – e-Con e-News

Leave a Reply