The Government And The USA..Millennium Challenge Corp.
YAHAPALANA AND THE UNITED STATES OF AMERICA Part 9
By KAMALIKA PIERIS
MILLENNIUM CHALLENGE CORPORATION (MCC)
TheMillennium Challenge Corporation (MCC) is a United States foreign aid agency established by the U.S. Congress in 2004. The Millennium Challenge Compact is a US grant for development work in foreign countries.
On August 13, 2018, the MCC delivered to the U.S. Congress a Congressional Notification of its intent to negotiate a Millennium Challenge Corporation Compact with the Government of Sri Lanka. On 25th April 2019, the Board of Directors of the Millennium Challenge Corporation of USA approved a five-year, $480 million Compact grant to the Government of Sri Lanka.
According to MCC criteria, countries must qualify as low income or lower middle income countries according to the World Bank’s classification in order to be eligible for MCC grants. On the 1st of July 2019, the World Bank classified Sri Lanka as an upper middle income country with a per capita income in excess of $ 3,895. However, by that time the MCC grant for Sri Lanka had already been passed and in any event according to MCC criteria, when a country’s classification changes, it will retain its former classification for a further two years.
When a country is awarded a Millennium Challenge compact, it sets up its own local MCA accountable entity to manage and oversee all aspects of implementation. Sri Lanka has set up Compact Development Team in the Policy Development Office of the Office of the Prime Minister. This will later be replaced by MCA-Sri Lanka, which will deal with the work of the Compact.
The MCC Compact has not been received well in Sri Lanka. According to various foreign policy analysts, MCC is one of the US government’s best “arm twisting” tools for encouraging political, social and economic reforms that are prescribed by the US foreign policy. The USD 480 is not a big sum today, critics said. The present government would borrow 480 million USD in a single afternoon through the issue of Sri Lanka Development Bonds.
The MCC’s approval of the $480 grant for Sri Lanka was announced by government just days after the Easter Sunday attacks – when one would imagine that Sri Lanka’s investment credentials were at an all-time low. The secrecy, the odd timing of the announcement and other aspects would suggest that the MCC is being imposed by the US for its own purposes, rather than for the benefit of Sri Lankans.
The MCC was developed in secrecy by a team located in the Sri Lanka Prime Minister’s office. There has been no public discussion on it, said Lasanda Kurukulasuriya. The government has been inexplicably secretive about the whole MCC project, said Chandraprema.
The controversy over the MCC has now been at the forefront of political discourse for months but the government has done nothing to enlighten the public the benefits that it is supposed to bestow on Sri Lanka.
Neither the government nor the MCC has published anything that would enlighten the public any further. Even though money has been allocated for this project, nobody has seen a proper project description or a diagram of how that effect is to be achieved, said Chandraprema. One analyst, (name withheld) who it appears seem to have seen the document, said the MCC Compact is not a Compact at all.There are annecures and cross referecnes and the agreement si difficult to understand. It has ‘shall’ only twice and that is for US, not Sri Lanka.
There is uncertainty as to the current status of the Compact whether it has been signed by the President, as the Chairman of the National Physical Planning Council, and whether it has been gazetted or not. Various observations have been made.
MCC Sri Lanka Compact is expected to be signed in the near future, pending Congressional notification, according to a MCC press release of May 2019, reported the media. The Agreement between the MCC and the GoSL is yet to be signed said the Prime Minister office in June 2019. .According to the Standing Orders of Parliament, this compact will be reviewed by the Oversight Committee and will be open to the interested parties, PMs Office added. The agreement would also be presented to Parliament after obtaining Cabinet approval.
The Prime Minister office made a statement on the MCC project in June 2019, in reply to a query from the National Joint Committee. The statement was made public. It appears to be the only official statement by Yahapalana on the MCC projects.
The statement said that MCC’s Board of Directors selected Sri Lanka for a threshold programmed in December 2015 and elevated Sri Lanka to eligibility for a compact in December 2016 after continued improvements in performance as measured by the MCC scorecard.
The Government of Sri Lanka, with the help of the Center for International Development (CID) at Harvard University, conducted constraints analysis (CA) to identify constrains which hampered the economic growth in the country and identified three binding constraints, 1. Access to land 2. Weakness in transport and logistics infrastructure and planning and 3. Policy instability. Yahapalana government then decided to focus on the two of these, access to land and improvement in transport.
The Government of Sri Lanka and MCC then consulted with hundreds of individuals from government, the private sector, and civil society in small group discussions and one-on-one meetings to understand the root causes of the transport and land binding constraints and potential activities that would address those root causes. The Government of Sri Lanka and MCC also launched multiple rounds of due diligence to identify potential projects that could meet MCC’s investment criteria, continued the statement
On the basis of such engagements and analyses, the Government of Sri Lanka submitted project proposals to MCC for consideration in November 2017. They received a grant of US$ 480 million, to be used over a five-year time period. There would be two sets of projects, Transport Projects and Land Projects.
The following activities are proposed under the TRANSPORT DEVELOPMENT PROJECT, continued the statement.
1) Establishing an Advanced Traffic Management System (ATMS) covering the Colombo Metropolitan area to improve the efficiency, capacity and safety of the CMA road network to improve flow rate, reduce travel time and congestion, reduce traffic emission and reduce accidents.
2) Bus Transport Sector Modernization (BTSM) programme will make a significant improvement to the speed and quality of the public bus system combining state owned and private buses.
3) Developing and improvement of 137 km road sections in the Central Ring Road (CRR) covering and connecting Sabaragamuwa, Uva, North Central and Central Provinces to markets in the Western Province.
4) Connected to this Road development is a study to locate and finance, locations for wholesale storage of Agro produce in collaboration with private investors at locations on the CRR Road network, to improve post-harvest management of produce.
Under the LAND ADMINISTRATION PROJECT, the following activities will be done:
5) Preparation of Parcel Fabric map and inventory of state land.
6) Improvement of Deeds Registry.
7) Improvements of the land valuation system.
8) Land Grants Registration and Deed Conversion Activity.
9) Land Policy and Legal Governance Improvement Activity.
The above activities will be implemented in the following 7 districts with the limited funds available for the land sector. (Kegalla, Kandy, Matale, Kurunegala, Anuradhapura, Polonnaruwa and Trincomalee) Further we requested to include Gampaha district as well, said the statement
The statement ended by saying that the copy of the report can be accessed through: https://assets.mcc.
Analysts ignored the transport projects and pounced on the land projects. These had serious implications. The MCC Land plan includes four ‘Economic Corridors’, they said. Colombo-Trincomalee will be developed as the main economic corridor with three other sub-corridors, while Anuradhapura and Kandy are to be developed separately as metropolitan areas. These economic corridors have been identified and mapped out. They extend from Trincomalee to Colombo and Colombo to Hambantota, and also in Oluvil in East and Kilinochchi in North.
Critics observed that the Colombo-Trincomalee project will carve out an economic corridor from Colombo to Trincomalee, taking in Colombo, Negombo, Kurunegala, Dambulla and Trincomalee, covering 1.2 Million acres, in a manner that physically divides the territory of Sri Lanka into two distinct parts. It has been alleged that the MCC envisages an electric railway line that would bisect the country in a straight line linking Trincomalee with Colombo. The underlying purpose of the MCC compact was to divide Sri Lanka into two distinct parts, said critics. That the so called economic corridor is to serve the interests of the U.S.
The excuse given was that the corridors were to help economic growth in economically poor areas. Critics pounced on this. The majority of the Districts within the economic corridor do not qualify on grounds of poverty, they are below the national poverty headcount index of 4.1 Districts with high levels of poverty are outside the proposed corridor.
NATIONAL PHYSICAL PLAN
The corridors will be based on a new National Physical Plan (2018 – 2050) which is expected to replace the earlier Physical Plan (2011 – 2030) prepared in 2011. While the earlier Physical Plan addressed development over the entire territory of Sri Lanka, the revised Physical Plane has deviated from this holistic approach and focused development along “growth corridors” observed critics. These districts overlap with those coming under the MCC.
A National Physical Plan has to carry out certain procedures for it to be accepted as an official document. It has to be prepared under the Town and Country Planning (Amendment) Act (No. 49 of 2000). The earlier Physical Plan had followed all the procedures required by the Act. The question is whether the revised Physical Plan has followed the due process as required by the Act.
Such procedures should include preparing a Draft Physical Plan and conducting hearings with experts, professionals and general public and obtaining provisional approval of the Minister concerned after which it is gazetted with maps and plans, for scrutiny by the public, for them to propose revisions to be incorporated in the Draft Plan. It is after following such procedures that the final version of the National Physical Plan is submitted to the National Physical Planning Council for approval.
The revised National Physical Plan 2050, prepared by the National Physical Planning Department of the Megapolis and Western Development ministry, has been approved by the National Physical Planning Council and the National Economic Council (NEC) of Sri Lanka and is expected to be gazetted shortly said Daily News in February 2019. It is yet to be made public, although it is said to be ‘completed,’ said analysts in June 2019.”
Critics wanted to know whether the President as the Head of the National Physical Planning Council has approved the Plan. What is the status of this new Plan?If the final Physical Plan had not followed the required procedures prior to the approval of the National Physical Planning Council, how legitimate would be the final version of the Plan, even if it was approved by the President and the Council, and consequently, the status of the Compact negotiated with MCC, they asked.
Analysts have seen a connection between the MCC Land projects and the Yahapalana plans to dispose of state land. The State Land (Special Provisions) Bill was gazetted on 27.03.19.” This is a Bill to grant absolute title to state lands held by citizens who hold land grants. Its validity is for seven years.
The move will enable those occupying these lands to sell or transfer ownership legally and also obtain other facilities such as bank loans and use the deed as a valid document for school admissions, said Yahapalana .
The Bill covers lands granted under the provisions of the Land Development Ordinance, lands disposed under the provisions of the Land Grant (Special Provisions) Act or lands provided under the Crown Lands Ordinance granted for agricultural purposes, under a land settlement programme or a colonisation scheme. Those holding land grants and permits for more than 10 years will be benefited by the new legislation. They are entitled to apply and be eligible to get an Absolute Land Grant up to five acres in extent under the provisions of this Act.
The provisions of this Act apply to holders of grants under the provisions of the Land Development Ordinance, instruments of disposition under the provisions of the Land Grants (Special Provisions) Act, and instruments of disposition of lands under the Crown Lands Ordinance granted for agricultural purposes or colonization schemes”.
The Committee will forward its observations to the Land Minister on all applications for Absolute Land Grants and the relevant documents, and the minister will forward them to the President. Once the President issues the Absolute Land Grants, those will be registered in the Land Registry. The grantee of an Absolute Land Grant will have the right of transfer of the land to the heirs or with the consent of all heirs in writing to sell such land to any person.
A 20-member ‘Land Grants Committee’ consisting of Ministry Secretaries, Heads of relevant institutions and two nominees of the President and the Prime Minister will be appointed for the administration of this Act. However, any land which is used for paddy cultivation can be sold only to another farmer. President had wanted that the land could be sold only for a person in the adjoining Grama Niladhari division preventing persons from outside areas from buying lands on a large scale.
The Absolute Land Grant issued by the President will be conclusive proof of absolute title to that land. It will be admissible and valid before any court, institution or authority for any transaction, business, transfer of title, as security for a bond or for any other purpose.
Prime Minister said that large extents of land had been distributed among the people under the D.S. Senanayake administration. Those lands were given under the Land Development Ordinance of 1932. “People were given licences. Later people were given letters when they were settled. Sometimes people were settled without any documentation. None of these groups have deeds to show outright land ownership,” he said. Without land deeds those people faced a number of issues and at times they were asked to leave. “With these deeds you can use your land freely. “For a country to develop people must have the ownership of land,” he said.
Wickremesinghe said that the government was distributing one million deeds to the people granting them outright ownership of their land. “People who have been using plots of land for over a decade will get outright land ownership.”
The Bill has been virulently opposed. The Bill has been submitted without the approval of the Cabinet of Ministers, said critics. The Bill with amendments proposed by President should be presented for Cabinet approval before it is submitted to Parliament. But Lands Minister has submitted the Bill to Parliament without presenting it to Cabinet, said Dayasiri Jayasekera. Critics want to know whether there was a connection between this decision and Millennium Challenge Corporation Agreement (MCC) which the Government is expected to sign with the United States of America.
The government seems to be in a mighty hurry to grant outright ownership to those who have their land holdings under the Land Development Ordinance of 1935, said critics. The government wants to neutralize the Land Development Ordinance, Crown Land Ordinance and Lands Grant Act by way of the proposed Lands (Special Provisions) Bill. These had ensured the state land provided to the needy families remained with them.
The introduction and the implementation of the Land Development Ordinance 1935 was one of the most important welfare measures taken before independence. It was a very effective rural development strategy followed during pre and post independent period, explained critics.
The initial objectives of the Land Development Ordinance were (a) protecting peasant farmers as a group (b) alleviating land hunger among the poorest of the poor (c) relieving population pressure of the villagers in the wet zone of the country, (d) increasing food production particularly paddy (e) developing the scarcely populated dry zone.
The land alienation was done under different types of schemes such as major settlement schemes, village expansion schemes, highland settlement schemes, middle class schemes, and youth settlement schemes and regularization of encroachments. The land alienated originally was crown land. Latterly with suitable crown land not being available land from other sources such as estates were acquired and alienated under this Ordinance.
Under the Ordinance the allottee could not fragment the land, mortgage the land or dispose of it without Government Agent’s permission. The tenure was liable to cancellation for any default. The allottee’s land was a protected holding. Selection of allottees was done at a land Kachcheri by the Government Agent or his representative. Landless peasants from the area with large families were given preference and on selection were issued a permit. The land could be passed on, only to a nominated successor by the allottee. This prevented fragmentation of peasant holdings.
When the permit holder had fulfilled the requirements stipulated in the permit he was entitled to receive a grant of his allotment. The grantee was able to freely dispose of his allotment without the consent of the Government. However, The LDO requires peasant holder to obtain the prior consent of the Government Agent before disposal. The restriction has been designed to prevent the passing of land intended for the peasantry to the richer classes or high income groups. The LDO ensures that no State land shall be alienated to any person other than citizens of Sri Lanka and declaring that any alienation made in contravention of this provision shall be invalid.
The Bill would have far reaching consequences the country couldn’t cope up with. Since farmers are chronically indebted, the reforms underway will in all likelihood lead them to sell their plots. “We’ll have to struggle with thousands of families being homeless with the selling off of their property overnight,” critics said. A farmer who owned about a quarter acre of land, after selling it to a multinational company would himself be destitute after some time.
Well organized unscrupulous politically influential persons would rapidly procure land received by the landless. The project would cause a massive displacement of people, especially smallholders. It will drive poor peasant families off the state land they had settled on for generations, critics said.
The concept of the village having a temple, agricultural land and a tank would be gone. Factories would crop up in farm lands. The agricultural economy would fall. The natural environment might change for the worse.
Critics have also seen in Bill as a move to enable Yahapalana to sell off state land to foreign companies. Through this Bill government seeks to dispose of large tracts of land in a short time, to make them quickly available for investors.
The Ranil Wickremesinghe administration was also attempting to create a cheap labour force needed to facilitate the implementation of neoliberal economic policies, by amending` land laws, said the Movement for Land and Agricultural Reform, MONLAR.
Providing land deeds may look like a progressive move but we have to look at the reasons said MONLAR. On the one hand there is a serious crisis in the rural economy, created by the policies of successive governments, especially the present administration. On the other hand, large multinational companies have made small time farmers bankrupt and are buying off their agricultural land. The only thing that has held back these predatory companies and the neoliberal economic policies are the so-called antiquated land laws. By giving desperate people, an asset that they can sell the government has ensured that these lands will be sold off.” They will sell their small holdings for a pittance. The net result will be the rise of a generation of poverty stricken landless population in rural areas.
MONLAR said that they had looked at all documents approved by the Cabinet between January 2015 and April 2019 on land reform, recommendations given by the World Bank and International Monetary Fund (IMF) to the government on the land rights of the people and bi-lateral trade agreements between Sri Lanka and other countries had the potential projects that would deprive the people of their land rights.
The target clearly is state owned land. In Sri Lanka, we have freehold properties that belong to individuals or companies and then there is state owned land a portion of which is utilized directly by the government and a portion which remains allocated for other purposes of the republic such as forest reserves and the like and another potion of state land is held by the public under lease or licencing arrangements, pointed out Chandraprema. It is obviously the latter that the MCC is targeting.
Even though such state owned lands have been alienated to individuals under licensing or long term lease arrangements, the tenants on these lands enjoy security of tenure because the government will not simply kick them off the land if it is cultivated and used productively. The lease holder or licensee will be adequately compensated before the government takes back a state land which has been given to private individuals for farming or other purposes. We almost never hear of even the smallest of smallholders being unreasonably evicted from state owned land that had been leased or given to them on a license by the state.
Such land can also be passed down from generation to generation provided the land had been utilized productively. The fact that the land is owned by the state discourages fragmentation of the land and strategic buying up of cheap land by organized parties
Admittedly, recipients of state owned land on lease will face issues when trying to raise money from banks with the land pledged as surety. Banks prefer freehold land. However, this was a problem that had to be dealt with at the level of the banks instead of trying to give leaseholders freehold tenure.
If leaseholds on state land can be bought and sold between citizens of Sri Lanka and their only problem is the inability to use that lease as collateral, the answer to that can’t be the wholesale transformation of such lands into freehold tenures. There is besides, the well-founded fear that if state owned lands which are at present farmed by individuals on leasehold or licensing arrangements are turned into freehold properties, it will not be long before unscrupulous elements lay their hands on these lands creating a landless rural population.
The first attempt to do away with these laws was made in 2003. The UNF had wanted to see large scale organized transferring of ownership of land and this would have certainly become law if not for the Supreme Court ruling given in 2003.
.Justice Shirani Bandaranayake ruled that the disputed Bill should be approved in parliament with a two-thirds majority and by the people at a referendum. The ruling, he said was based primarily on two factors (1) As the subject of land is under the purview of the Provincial Councils, the Bill required the consent of 09 Provincial Councils and (11) The exclusive right enjoyed by the President in respect of granting of land cannot be transferred to the Minister responsible for the subject of lands.
In 2015, Yahapalana UNP revived the project. “It was the same Bill rejected by the Supreme Court in 2003. The cabinet discussed it several times after January 2015. ” it was difficult to see how this law could take effect in view of 2003 Supreme Court ruling.
Critics argue that this Bill would violate the sovereignty of the People as given in entrenched Article 3 of the Constitution, Land cannot be granted to anyone outright without a two-third approval of Parliament and approval by the People at a Referendum all land and all its resources belong to all the people of Sri Lanka as part of their sovereignty. This is inalienable. Governments hold Land in trust, said critics. This has been determined by the Supreme Court in several instances such as the Eppawela case (S.C. 884/99)
State Land is an inalienable right of the sovereignty of the People. In view of this undeniable and uncontestable fact, it is a violation of the inalienable rights of all the People for any government to legislate granting Absolute Land Grants to some of the People, an asset that belongs to all without due process of two-third approval of Parliament and approval of the People at a Referendum.
A Special Determination petition challenging the Bill entitled ‘State Land (Special Provisions)’ was filed before the Supreme Court in July 2019. Convener of the of the Truth Seeker’s Organization has sought a declaration that this Bill shall become law only through a two-thirds majority in Parliament and the approval of the people at a referendum.
The petitioner, Attorney Premanath Dolawatta stated that the concerned bill was presented to Parliament and placed in the Order Paper of Parliament on June 28, 2019. Dolawatta states that the Bill contains 36 clauses and a schedule and the entirety of the Bill violates and is inconsistent with Articles 3, 4, 12(1), 12(2), 75, 154G of the Constitution. The petitioner stated that the purpose of the proposed law is to alienate State lands which amounts to a breach of the duty of the state to be the guardian of state lands holding the same in trust. There have been several other petitions against this Bill.
The National Joint Committee also took an interest in the matter. National Joint Committee wrote to the Prime Minister requesting him to release to the public the text of the MCC agreement. They said that websites point out that the MCC agreement will create an economic corridor extending from Trincomalee to Colombo containing a land mass of 1.2 million acres which would be leased for 200 years to America for a sum of 480 million dollars. To accommodate the acquisition of land for this proposed economic corridor, these articles state, that two new laws, namely the State Land Bank bill and Land Special Provision Bill, are to be enacted. , said the National Joint Committee.
Furthermore, these articles indicate that the area covered by this economic corridor will contain Eppawala phosphates, Limonite, Thorium, Monazite and rare earth metals Cerium and Lanthanum. It is also pointed out in these articles that the law applicable within this economic corridor would be the American law and not the Sri Lankan law.
Therefore, if such an agreement is implemented, the country will be divided into two parts by this economic corridor with the northern part being available to create the nation of Eelam as envisaged in the separatist ideology. It is in this northern part that the ancient cities of Anuradhapura, Polonnaruwa and Kurunegala are situated. When Freeport McMoRan, an American Company, in 2000 tried to mine the phosphates in Eppawala that is now within the proposed economic corridor, by acquiring land, this was prevented, as the Fundamental Rights of the people to possess their land was upheld by the Supreme Court, continued National Joint Committee.
When delivering judgment in this Eppawala case, Justice Amarasinghe quoted what Arahat Mahinda had said to King Devanampiyatissa. Therefore, if the land belongs to the people, and the King who was the head of state was only a guardian, what right has a Prime Minister to sign an agreement to establish an economic corridor and deprive the people of the land on which they live.?
However, given the fact that you did sign a peace agreement as the Prime Minister with the LTTE leader Prabhakaran in 2002 sans the approval of the then head of state or the Cabinet, and been made aware that MCC has recommended a 500 million dollar payment to Sri Lanka subject to the approval of the American Congress, would you be kind enough to inform the National Joint Committee and the public the text of this agreement and if it was signed by you on or about April 27, 2019 , the National Joint Committee concluded. The Prime Minister’s office replied and that reply can be found in the first part of this essay.
The upset over land does not end there. For some time now, land rights activists and analysts have warned of potentially disastrous consequences of reforms to land laws contemplated by the Wickremesinghe-led government. President Sirisena said he had blocked two ‘anti-national’ Land Bills the PM sought to introduce. He said these new laws sought to allow foreigners to buy any land in the country, both privately and publicly owned.
“USA has done a study on Sri Lanka and issued a report with recommendations on Sri Lankan lands. They are engaged in surveying the lands in Sri Lanka and have suggested establishing a state land bank. According to these proposals all state lands would come under this bank, allowing these lands to be given to anyone even foreign parties said critics.
The government’s moves to remove the bar on foreigners owning land, the removal of the 50-acres limit on individual ownership, the proposed ‘Land Bank’ (that will bring publicly owned land under a single hub and make it available for private investors), are inter-related.”You need to look at all the factors to see the final outcome” said MONLAR
Lastly, there is an interesting tussle going on regarding land surveys. Trimble Navigation Ltd, a US company based in California, had in October 2015, forwarded a proposal for ‘Title/Tenure Regularisation and Cadastral Registry Modernisation’ in Sri Lanka. This proposal has been rejected earlier in 2010.
A high level committee headed by senior advisor to Prime Minister R. Paskeralingam had recommended this proposal. The Cabinet Committee on Economic Management (CCEM) approved it and Cabinet accepted it. Trimble had asked for USD 170 million and Yahapalana had beaten it down to USD 154 million. The money would come as a loan at an interest of four percent. The loan is to be paid back in 15 years inclusive of a grace period of five years.
The Finance Ministry’s External Resources Department was authorized to negotiate with Trimble to prepare land survey maps and create a streamlined database of 3.6 million parcels of state owned land. Trimble would first survey 2.5mn blocks of land around the country, excluding the Western Province and issue title deeds. Then it would survey 2.5mn plots of land in the Western Province.
The Government Surveyors’ Association (GSA) announced in January 2017, that there was a move to hand over several operations of the Sri Lanka Survey Department (SLSD), including Land Information System (LIS) and Aerial Survey Operations to Trimble Navigation for 15 years. ‘The required plans are already in place to complete the transfer. It appears that the US government had forced Yahapalana to agree to this, said the surveyors.