By P.K.Balachandran/Daily Express
Colombo, November 7: Misconceptions abound about the US Millennium Challenge Corporation’s grant assistance of US$ 480 million for land registration and transport modernization in Sri Lanka.
The MCC “compact”, which was passed by the Lankan cabinet recently, has drawn much flak from Lankan nationalists who fear that it would enable American and other Western investors to grab land and take over Sri Lanka through a plan to build an “economic corridor” linking Colombo and Trincomalee.
The palpable anxiety shown by the US to push the deal through before the end of the present pro-Western government’s tenure, only added to the peoples’ suspicions.
If Sajith Premadasa wins the November 16 Presidential election, the MCC compact will be presented to parliament presto and it will be passed given the government’s majority in the House.
Hopefully, the government will take the opportunity to explain to the MPs that the MCC is not a loan but a grant, and how it will be useful in regularizing land holdings by replacing deeds or permits with proper titles, and explain the advantages of making land a commercial commodity which can used as a resource for productive ventures. The MPs would also have to be told how the administrative and decision making structure will be entirely in Sri Lankan hands.
In a long statement on the MCC, the US embassy has clearly said that there is no plan to use the scheme to enable Americans to buy the land which had been given individual titles in place of renewable government permits.
Woven into the MCC scheme are modern Western principles of organization such as rationality, transparency and accountability. By learning to abide by these principles of good governance, Sri Lankan personnel would be able to replicate them in other spheres of State administration. MCC projects will in the long run help tone up the Lankan administration which needs to be modernized if Sri Lanka is to be a commercial “hub” of South Asia and the Western Indian Ocean Region.
Apart from good intentions, the MCC is also a key US foreign policy plank to win over developing countries which are coming under the influence of rising China. China is not only executing large scale infrastructure projects in the developing countries but is also doing grassroots level development work of immediate benefit to the common man. In this context, the US feels the need to respond with its own development assistance programs through grants.
MCC’s aims are many. Firstly, it is to reduce poverty through economic growth. It believes that aid is more effective in countries where there is good governance, personal and economic freedom, and investment in people. An MCC program in any country has to be owned by the people of that country from the start.
All MCC projects must be based on correct data and analytical rigor. Such rigor has to be applied to resource allocation, project design, and results measurement. Lastly, transparency and accountability must be embedded in all aspects of the partnership—before, during, and after the compact period.
The MCC’s unique model increases partner-country capacity and promotes sustainability, accountable fiscal stewardship, and transparent procurement processes that outlast the lifetime of the compacts.
The MCC is highly rational. It chooses projects based on cost-benefit analysis and beneficiary analysis. The Economic Rate of Return (ERR) should be higher than 10%. The project should ensure reduction of poverty. Monitors track progress through the life of the compact, making adjustments to programs as and when needed.
In Sri Lanka, the MCC will be an extension of USAID which, over the past 56 years, has given Lanka grants to the tune of US$ 2 billion. In 2004, when the MCC was set up, the then Lankan government applied for a grant, but because of the war, the grant was not received. Negotiations recommenced in 2015 after the Yahapalanaya government was established and an agreement has now been concluded.
Land and Transport
The MCC compact with Sri Lanka has two projects: 1. Land titling and eRegister of lands. 2. Traffic and road improvement. The purpose of the land project is to increase the availability of information on private land and under-utilized State lands. The stalled “eLand Registry” and “Bim Saviya” projects will be re-started.
According to a knowledgeable source, in 1998, the Sri Lankan parliament passed the Land Titles Act to convert the outdated land deed system to a land titles system. The current land deed system requires decades of land deeds to prove ownership. This has led to long drawn out litigations over ownership.
The 1998 law was only partially implemented because of financial constraints. In 2007, Rajapaksa regime re-started the “Bim Saviya” project. But again, work could not go beyond Colombo district and a few areas.
“The MCC grant will be going into mapping government land, identifying utilized and un-utilized government lands, and creating a register of government lands. It is pointed out that 85% of all land in Sri Lanka is owned by the government, but according to an informed source, the government does not have a central registry of this land,” the source said.
“Most departments have no idea what land it owns. This means that land is heavily under-utilized. Land available for agriculture or industry is not used appropriately. This new land registry will allow for the government to know what it owns and where,” the source said.
US Embassy’s Statement
According to a US Embassy statement, projects under the five-year US$ 480 million grant will benefit at least 11 million (or 54% of) Sri Lankans.
Of the total of US$ 480 million, US$ 350 million will go into the transport project with an estimated Economic Rate of Return (ERR) of 19%.
“The transport project seeks to increase the relative efficiency and capacity of urban and provincial transport infrastructure in the Western, Central, Sabragamuwa and Uva Provinces. It will upgrade physical roadway networks, modernize traffic systems, and introduce policy and regulatory reforms. These investments will reduce severe traffic bottlenecks, create safer, more reliable public transportation, and lower the transport costs required to connect people and goods with booming markets,” the statement said.
The US$ 67 million land project has an estimated Economic Rate of Return of 26% and aims to expand and improve existing government initiatives to increase the availability of spatial data and land rights information. The project will initially focus on districts in the Central, North-Western, North-Central and Eastern Provinces.
According to a reliable source, money from the land project will also go to a gender inclusion program to ensure that women have an equal right and access to land. It is pointed out that land permits and grants by the government are usually given to men.
“The eldest son then inherits it in accordance with land law. Women face barriers to using land grants for productive purposes. This system places women and children at risk when they are divorced or the husband abandons them. The government will use part of the MCC money to prepare new policies and draft new laws to redress this gender imbalance,” the source said.
Of the US$ 480 million, US$ 63 million will be used to support technical assistance, feasibility and design studies, project administration, and monitoring and evaluation, the US statement said.
“These funds will help the Government to effectively design, implement, manage, and monitor the compact program. The Government of Sri Lanka will establish a local entity staffed by Sri Lankans to coordinate implementation by the ministries and departments mentioned above.”
“This entity will be accountable to a Sri Lankan Board of Directors comprised of eight government officials and three representatives from the private sector and civil society,” the US statement clarified in an effort to douse speculation that the project is a Trojan Horse for an American takeover of Lankan land administration.
(The featured image at the top shows Lankan Finance Minister Mangala Samaraweera defending the MCC)