The history of MCC Agreement in Sri Lanka dates back to 2016 when the United States Government first approached the Sri Lankan Government to sign the deal. The Millennium Challenge Corporation (MCC) is a U.S. Government agency that aims to promote economic growth in developing countries through grants and funding.
The MCC Agreement in Sri Lanka was meant to provide economic development assistance to the country by investing in areas such as transportation, land, and agriculture. The grant worth $480 million was to be disbursed in two tranches, and the Sri Lankan Government was required to contribute $8 million towards the grant.
However, the agreement was met with opposition from some political parties in Sri Lanka who raised concerns about the impact of the deal on the country`s sovereignty and national security. They argued that the MCC Agreement would enable the U.S. Government to set up a military base in Sri Lanka and compromise the country`s neutrality in foreign relations.
The controversy surrounding the MCC Agreement led to a delay in its implementation, and in March 2021, the Sri Lankan Government announced that it would not proceed with the deal. The decision was made following an assessment by a committee appointed by the Government to study the agreement`s impact on national security and sovereignty.
The U.S. Government expressed disappointment at the Sri Lankan Government`s decision and stated that the MCC Agreement was designed to benefit Sri Lanka`s economic development without any geopolitical or military implications.
In conclusion, the MCC Agreement in Sri Lanka has been a contentious issue, with some supporting it as a means to achieve economic progress and others opposing it due to concerns about national security and sovereignty. The decision not to proceed with the deal highlights the complexities and challenges of foreign aid and investment in developing countries.