Missing the bus, again!

Just as The Sunday Times FT predicted in September this year, it is now confirmed that Sri Lanka won’t be able to access nearly $600 million worth of grant aid from the Millennium Challenge Account (MCA).

The US-funded Millennium Challenge Corporation (MCC), which handles the MCA, in a short statement on its website said the proposed funding of $590 million for Sri Lanka has been put on hold pending improvement in the country’s security situation.

In an editorial in the September 2, 2007 issue, we said “Sri Lanka lost a golden opportunity to some US$500 million worth of grants (free cash) from the Millennium Challenge Account (MCA) of the US government this year having haggled over various projects. No decision has been made yet whether Sri Lanka will have access to these funds which some chambers were also hoping to get. However we have learnt that this funding is now off the table.”

The report said the MCA wanted home-grown projects and the government couldn’t come up with any. Thus a good opportunity was lost for free cash while the government is now discussing a costly loan that generations of Sri Lankans would have to pay, it said.

In the meantime while such opportunities are lost, the politicians continue to play ‘pandu’. On Thursday for example, two politicians from the ruling United People’s Freedom Alliance (UPFA) and the United National Party (UNP) were breathing down each other’s necks in a thrust-and-parry argument over the 2008 budget.

The UNP parliamentarian was arguing over the US$500 million bond issue, its high interest rate and debt burden to the country and how it has been used not for its intended purpose, rising cost of living and the massive cabinet. The UPFA minister spoke of large scale infrastructure development and the fulfilment of the Mahinda Chintana as positive signs and also added that the government was compelled to resort to commercial borrowings as cheaper funds were not available. At the end of the debate in which representatives of the JHU and the JVP also took part, there were no winners or losers and many questions remained unanswered. It was an unproductive effort and sometimes became a ‘koheda yanna mullay poll’ discussion (like most debates) with no proper responses to questions raised - which goes to show that while the country is struggling to move forward the politicians will survive through these talkshows and pat-on-the-back efforts.

This was a debate over the cost of funds and interest rates and breathing fire over it when the country had that chance of getting aid and we blew it – while at the same time costly funds are squandered by the ruling party politicians.

While the MCC says the grant aid is on hold due to US concerns over the security situation, there were many other reasons why Sri Lanka lost out on this opportunity.

Some government officials especially in the Ministry of Finance dragged the process when proposals had to be submitted promptly. Proposals from private sector and civil society groups were also not considered by powerful officials though welcomed by the MCC and its consultants. Chambers also made detailed proposals and even had meetings in Washington with the MCC who were quite impressed but these too didn’t get the support of the government.

It is reliably learnt that MCC officials were concerned about the lack of transparency and integrity over government preparations in presenting any proposal.

The inability to access these free funds - available since 2005 -- because officials failed to get their act together serves as a grim reminder of how easy it is to go unpunished in the country, even if you don’t serve – as public servants are bound to under the constitution.