Black Box by Capt Vasabha  The US Millennium Challenge Corporation (MCC) Compact deal has turned into kryptonite for the United National Party (UNP), following the publicising of the MCC Expert Committee report last week and the revelation that two agreements to the tune of $ 10 million were signed under the deal. The UNP, issuing a statement, has refuted the allegations levelled against the former Yahapalana Government by the Committee. The UNP said that according to media reports, Committee Chairman Prof. Dr. Lalithasiri Gunaruwan’s committee report alleges $ 10 million was provided by the MCC to the then Government following the signing of two agreements with the MCC in 2017 and 2018, adding that Dr. Gunaruwan goes on to charge that there is no record of these finances at the Finance Ministry. The statement notes that the US Embassy to Sri Lanka and the Maldives has categorically denied that the MCC had released any funds to the Sri Lankan Government. According to the UNP, this official denial by the US Government has called into question the credibility of the report and suggests the President and the Government are using official resources to slander the UNP during an election campaign. The UNP further charged that the Sri Lanka Podujana Peramuna (SLPP) made these same baseless accusations during the presidential election last year, and have once again resorted to employing shameless tactics to mislead voters. The UNP statement further read that during the 2015-2019 Yahapalana Government, several preparatory agreements were signed and that these agreements were produced before Parliament for scrutiny and debate. Going further, the UNP has urged the Government to publicly state whether they will be signing the MCC agreement, and if they aren’t, they must inform the public of their final decision. However, the External Resources Department (ERD), which records all external transactions, does not have any record of the money despite the two agreements being signed for it. It is in this backdrop that US Secretary of State Mike Pompeo telephoned Sri Lanka’s Foreign Affairs Minister Dinesh Gunawardena last Monday (29) evening. Pompeo, during the conversation, had reaffirmed the partnership between the two countries. US State Department Spokesperson Morgan Ortagus, speaking of Pompeo’s telephone conversation, said: “Secretary of State Michael R. Pompeo spoke yesterday (29) with Sri Lankan Foreign (Affairs) Minister Dinesh Gunawardena to reaffirm their partnership with the people of Sri Lanka and their commitment to supporting the country’s development and sovereignty. Secretary Pompeo and Foreign (Affairs) Minister Gunawardena discussed their mutual interest in combating the Covid-19 pandemic and shared commitment to economic stability and sustainable growth. “The two leaders also discussed the US’ ongoing Covid-19 assistance to Sri Lanka, which totals almost $ 6 million to date, and reviewed the longstanding US-Sri Lanka co-operation on health and humanitarian issues,” the Spokesperson noted. “Additionally, the Secretary and the Foreign (Affairs) Minister talked about their shared democratic traditions, respect for human rights, and the importance of transparency for the long-term stability and prosperity of the people,” Ortagus added. Meanwhile, Sri Lanka’s Foreign Affairs Ministry, issuing a statement on the telephone conversation, stated that Gunawardena had briefed the US Secretary of State on the MCC Compact review report during the telephone conversation on Monday evening. Gunawardena has also briefed his US counterpart on the forthcoming parliamentary election and thanked the US for the support extended in the reconciliation and resettlement processes in Sri Lanka. US-Sri Lanka co-operation in their Covid-19 response, such as the supply of personal protective equipment (PPE) to the US by Sri Lanka, donation of ventilators to Sri Lanka by the US, and Covid-related bilateral assistance amounting to $ 5.8 million in economic recovery initiatives, were also discussed. Defence and security matters, counterterrorism, and international economic co-operation had also featured in the conversation. The Foreign Affairs Minister took the opportunity to convey Sri Lanka’s felicitations for the forthcoming US Independence Day on 4 July. President Gotabaya Rajapaksa has meanwhile directed all cabinet ministers to submit individual proposals on the MCC Compact. The proposals are due to be submitted to the Cabinet this week. Leaked cable By mid last week, the MCC saga took a new twist with news websites reporting on a WikiLeaks cable detailing how in 2006, the former Governor of the Central Bank of Sri Lanka (CBSL) had lobbied to secure an MCC grant for Sri Lanka. The respective cable was publicised through the following web link: https://wikileaks.org/plusd/cables/06COLOMBO1608_a.html. The Black Box reproduces below the text published under the above-mentioned link: “COMPONENT OF POTENTIAL COMPACT COLOMBO 00001608 001.2 OF 002 1. (SBU) Summary: Senior Millennium Challenge Corporation and Government of Sri Lanka officials agreed to proceed with development of a proposed $ 590 million MCC Compact that would include projects on irrigation and agriculture, roads, and small and medium enterprise promotion. MCC officials explained that their due diligence process would continue for at least 12 months and that it would be at least 18 months before a compact, if one is concluded, entered into force. This time span was necessary for completion of international-standard environmental and social impact assessments related to Sri Lanka's proposed construction of dams, and would also allow time for the two sides to identify policy approaches that would ensure the proposed projects delivered sufficient economic returns and would be adequately maintained over the long term. End Summary. “2. (SBU) Senior Millennium Challenge Corporation (MCC) officials met with Sri Lankan lead MCC liaison Nivard Cabraal (CBSL Governor) (on) 27 September to discuss critical elements of Sri Lanka's proposed $ 450 million MCC Compact. The MCC delegation was composed of Eurasia Managing Director Frances Reid, Environment and Social Assessment Managing Director Margaret Kuhlow, Economic Analysis Managing Director Franck Wiebe, and Country Director for Sri Lanka Darrius Nassiry. Ambassador Blake and Econoff also attended the meeting. “3. (SBU) The MCC delegation informed Cabraal that MCC had identified three aspects of Sri Lanka's proposed compact that would require accommodation from Sri Lanka in order to meet MCC's due diligence requirements. First, the proposed dam-supplied irrigation projects would require international-standard environmental and social impact assessments that would take 12 months to conduct. These would have to be completed before a compact could be signed. Second, Sri Lanka would need to be willing to conduct a good-faith discussion with MCC on ways to improve the economic benefits of the proposed projects, especially in the irrigation and agriculture sectors. Finally, Sri Lanka would need to show clearly how it intended to adequately budget for long-term operations and maintenance expenses for the proposed roads and irrigation systems. “4. (SBU) MCC delegation emphasised that the overarching goal of any investment it would make in Sri Lanka would be to ensure that the investment reduced poverty and delivered economic growth. Governor Cabraal affirmed that the Government of Sri Lanka (GSL) had the same desire and therefore was willing to work with MCC to satisfy its concerns. He recognised that there was no way to reduce the duration of the impact assessment process. He explained that radical policy changes would not be possible, but were not necessary in order to ensure strong economic benefits from the programmes. Instead, existing laws allowed sufficient flexibility for new agricultural practices to be pursued. Finally, he assured MCC that operations and maintenance expenses for projects that produced high returns would definitely be covered in order to ensure that the returns endured. “5. (SBU) With the two sides agreeing that they had mutual interest in identifying a workable way forward, they agreed to use the remainder of the MCC delegation's visit to discuss implementation issues in greater detail. On 28 September, (the) MCC delegation met with Mission USAID (United States Agency for International Development) staff to discuss USAID anti-corruption, infrastructure, community consultation, and local governance programmes in Sri Lanka; with Sri Lanka's Ministry of Plan Implementation and Central Environmental Authority to outline the required features for adequate environmental and social impact assessments; and with the Federation of Chambers of Commerce and Industry of Sri Lanka, regarding the small and medium enterprise component of the proposed compact. “6. (SBU) Comment: Post welcomes the mutual decision to proceed with MCC compact development. The MCC team's frank description of its minimum economic, environmental, and social requirements was important to ensure that Sri Lanka has a realistic understanding that seeking MCC funds for irrigation projects will lengthen MCC's due diligence process into 2008. While the GSL would have liked to get started with MCC projects sooner, it has now decided to take a slower but more ambitious course. Post will continue to assist MCC in ensuring that the GSL understands that MCC remains in its due diligence phase and that MCC will only invest in Sri Lanka when it is convinced that the investment will deliver sufficient returns in terms of poverty reduction and economic growth. “7. (U) MCC delegation cleared this cable. COLOMBO 00001608 002 OF 002” Cabraal responds Responding to the news reports of his role in initiating the dialogue with the US on the MCC, former CBSL Governor Cabraal posted on social media that at the time, he and the Rajapaksa Government explored the possibility of such an agreement in 2006, but it did not include any conditions that were harmful to Sri Lanka. He said that in 2019, the Yahapalana Government had agreed to such conditions that were detrimental to the country, and that the present Government would not sign the agreement unless such detrimental conditions are removed. Cabraal did not specify the nature of these detrimental conditions. “While it is true that the US Government had offered ‘aid’ in the form of certain projects in Sri Lanka through the MCC in 2004, the discussions in 2006 merely centred on what components could be included in such a programme,” Cabraal has said. “The alleged ‘WikiLeaks’ attributed to then US Ambassador Robert O’ Blake also indicate that the proposed components of a possible MCC agreement in 2006 were completely different to what has been agreed to by the Yahapalana Government in 2019,” he has said. “Furthermore, there was also no mention of any terms and conditions that would govern the agreement at all at that point of time in 2006. In any event, the Mahinda Rajapaksa Government would have never agreed to any conditions that would have put our country at any risk whatsoever,” he has added. Neighbourly love While Sri Lanka’s ties with the US have been put to the test by the debate over the MCC Compact, Sri Lanka is engaged in a dialogue with India to finalise a debt relief loan that has already been discussed at several high-level exchanges. The matter was taken up for discussion with the Indian Government heads during President Gotabaya Rajapaksa’s first official visit to neighbouring India soon after assuming office and during Prime Minister Mahinda Rajapaksa’s first official visit to India. The Indian Government is, however, waiting for the green light from the Sri Lankan Government to go ahead with the virtual meeting to discuss and finalise the debt relief package. A decision on fixing the Indo-Lanka virtual meeting to finalise the debt relief loan was to be taken at the Cabinet meeting last week. Co-Cabinet Spokesperson Minister Dr. Bandula Gunawardana has said that no decision had been taken on holding a virtual discussion on the matter yet. “The matter is expected to be discussed at the upcoming cabinet meeting and I expect a decision will be taken with regard to the meeting,” the Minister said. Meanwhile, India is holding “close and constructive” discussions with Sri Lanka, on Colombo’s pending requests for rescheduling its debt repayment and for currency swap facilities under bilateral and South Asian Association for Regional Co-operation (SAARC) arrangements, the Indian High Commission in Colombo was quoted as saying last Tuesday (30 June). Indian High Commissioner Gopal Baglay had held discussions “at senior levels” in Colombo last Monday and Tuesday, the statement issued by the Indian High Commission said, on taking forward ongoing discussions. Meanwhile, the East Container Terminal (ECT), which was agreed to be a tripartite development agreement between Sri Lanka, India, and Japan during the former Government, has come under the spotlight with certain sections of trade unions affiliated to the Colombo Port demanding the Government not handover the port to the Indians. The issue arose with the arrival of cranes to be installed at the terminal. However, with several trade unions launching a work to rule campaign, Prime Minister Rajapaksa, mid last week, said there were no plans to handover the ECT to India. Subsequently, last Thursday (2), the workers called of the strike as the Prime Minister promised to discuss the matter. The next morning (3), a meeting got underway between Colombo Port Workers’ Union representatives and the Premier. Movie time Leaving aside their hectic workloads, the President and Prime Minister last week took some time to engage in some entertainment. Both President Rajapaksa and Prime Minister Rajapaksa last Sunday (28) attended a special debut screening of the Sinhala film “The Newspaper”. The film was screened at the One Galle Face PVR cinema. The movie was co-directed by Sarath Kotelawala and Kumara Thirimadura and co-produced by Minister Dr. Bandula Gunawardana, Ravindra Guruge, and H.D. Premasiri. Principal Advisor to the President Lalith Weeratunga and Prime Minister’s Secretary Gamini Senarath had also attended the special screening. Military personnel, health workers, as well as media personnel have the opportunity of receiving one screening of the movie free of charge. CBK’s birthday Former President Chandrika Bandaranaike Kumaratunga last Monday (29) celebrated her 75th birthday. The former President gave precedence to religious observances to mark her milestone. Accordingly, a series of meritorious observances, starting from the releasing of a cow at her ancestral home in Horagolla on Sunday (28) to religious observances in Anuradhapura, were organised. On the 29th morning, Kumaratunga participated in a milk rice pooja at Ruwanweliseya and offered alms to the Buddhist monks at the venue. She later made her way to the Jayasrimaha Bodhiya in Anuradhapura to continue with her religious observances. She was joined by a few friends, staff, and loyal supporters. RW’s date with CID Last week saw UNP Leader Ranil Wickremesinghe facing quite a conundrum and this time with the Police Department’s Criminal Investigation Department (CID). The CID was directed by court, following a request by the Attorney General (AG), to record statements from former President Maithripala Sirisena and former Prime Minister Wickremesinghe over the Central Bank Treasury Bond Scam during the former Yahapalana Government. Wickremesinghe, upon being informed about the need to record his statement, had agreed to meet the CID last Friday (3). However, when the CID had requested two dates, Wickremesinghe replied that he was able to meet with the CID only either on Thursday (2) or Friday, but not both. He had then been informed to meet with the CID on Thursday and Wickremesinghe had agreed. However, last Monday (29 June), a message had been sent to Wickremesinghe by the CID asking him to appear before the officers probing the Bond Scam the following day, Tuesday (30 June). Wickremesinghe’s office had then informed the CID that he was unable to record a statement last Tuesday since he had a series of prior engagements including several functions at temples. Wickremesinghe had maintained that he was unable to change his previously planned schedule since it was made after agreeing to meet the CID on Thursday to record his statement. The CID had not responded to Wickremesinghe’s request and Wickremesinghe had also not met with the CID last Tuesday. Finally, the CID visited Wickremesinghe last Friday (3) to record a statement on the Bond Saga. MR’s ‘big picture’ Prime Minister Mahinda Rajapaksa last Sunday (28) called on the public to keep the “big picture” in mind when voting at the general election, faulting the Opposition for what he termed “questionable actions” in persecution of nationalist politicians, signing agreements negative to the country and paving the way for foreign interference in Sri Lanka in the past five years. Speaking at an event on 27 June, Rajapaksa said that the actions of the previous Government, specifically its reconciliation efforts including attempts to formulate a new Constitution, were deeply problematic and were only stopped by the presidential election in 2019. He declared that the Government was seeking a two-thirds majority to establish a strong rule that would be able to bring these “foreign and domestic conspiracies” to a halt completely. “The situation that prevailed in this country following the assumption of power by the Yahapalana Government in 2015 was akin to having been taken over by a hostile foreign invading force. They systematically persecuted the nationalist political camp in this country. “They jailed leading Buddhist monks on trumped up charges in order to intimidate the Maha Sangha, which has always been at the forefront of protecting the sovereignty of this country. They went after the elephants and tuskers belonging to the temples in a major way, in order to put an end to the perahera traditions of the Buddhists. “They moved to demoralise and render ineffective our armed forces which defeated terrorism and ensured the territorial integrity of the country. Selected members of the armed forces ranging from the lowest ranks right up to the Chief of Defence Staff were arrested, kept in jail for weeks, months, or years and cases were filed against them on trumped up charges. “The intention behind all this was to create the impression in the minds of the local population and also to convey to the world the idea that these were not war heroes but thieves and murderers,” he said. Rajapaksa went on to severely criticise Sri Lanka’s co-sponsored United Nations Human Rights Council (UNHRC) Resolution, the establishment of the Office on Missing Persons and other reconciliation efforts. He also attempted to downplay the recent controversial comments of Karuna Amman (Vinayagamoorthy Muralitharan), pointing out that the UNP had also undertaken questionable actions in 1989 and argued that while Karuna Amman has given up killing people, the UNP had not given up its attempts to divide the country. He also said issues such as social distancing at the funeral of late Ceylon Workers’ Congress (CWC) Leader Arumugam Thondaman were “minor” points and it was important for voters to distinguish between the two. “My request to the people of Sri Lanka is to always have the broader picture in mind when it comes to politics. Given the threats we are up against, we will be destroyed if we fail to distinguish between what is politically important and politically unimportant. “Various things can be said about the question (of) whether social distancing was observed in the proper manner at Arumugam Thondaman’s funeral or whether someone had been guilty of fixing a cricket match back in 2011. However, these are not politically important matters. “If we allow ourselves to be distracted and forget the broader picture even for a moment, the consequences could be disastrous. That is why I always stress the importance of the broader picture. If people cast their votes on the basis of various minor distractions, we will lose everything; our country, our nationhood, our religion, our culture, and the future of unborn generations. “The people should always ask themselves who can rule this country effectively, ensure economic development, eliminate terrorism, and ensure the security of the nation. Who can safeguard democracy by holding elections on time? Who can build a Sri Lanka where future generations will be able to live freely and be proud of? I need not spell it out, every Sri Lankan knows the answer to those questions,” he added. UNP goes digital UNP Leader Wickremesinghe last Sunday (28) insisted that the UNP does not have a secret deal with the SLPP. Speaking at the launch of the digital meetings for the 2020 general election by the UNP, Wickremesinghe said that his party supported the Government in its efforts to control the spread of the coronavirus. He said that some people claimed that this was part of a deal with the Government. However, he insisted that all he wanted was to save the lives of the public. “We have not signed any deals with the Government. We have not signed any deals with the SLPP. Our deal is with the public,” he said. According to the UNP’s election campaign, priority is to be given to holding digital meetings where the party leadership will address several political meetings in one sitting. The Election Commission (EC) meanwhile is engaged in a dialogue with the health authorities to explore the possibility of increasing the number of participants at political meetings attended by party leaders to 500 persons. According to the health authorities, political meetings could accommodate only 100 persons in line with the social distancing regulations. EC’s grief The decision to block out the former President’s name in plaques was a regional regulation, the Election Secretariat stated. “Blocking out candidates’ names displayed on plaques set on buildings, development projects, or places where foundation stones were laid is an impractical exercise. It is not a directive issued by the Election Secretariat. It is possible that the regional election offices took such a decision,” Commissioner General of Elections Saman Sri Ratnayake said. Two weeks ago, former President Maithripala Sirisena was asked to refrain from distributing school stationery that was arranged for a school in Polonnaruwa. Media reports noted that the stationery that was to be distributed bore the former President’s name. The Polonnaruwa Election Office had advised the former President to refrain from distributing such material as it was viewed as non-adherence to election campaigning guidelines. Nevertheless, one of the key concerns of the EC was the delay in issuing the gazette notification outlining the health guidelines to be followed during the election. The issuing of the gazette has been delayed for several weeks since the EC and health authorities reached an agreement on the content. The delay, it was later learnt, was on the part of the AG. The document was held up at the AG’s Department, awaiting his approval. However, last Wednesday (1), the delay in issuing the health guidelines for the forthcoming general election was resolved with the AG granting approval for the guidelines prepared by the Health Ministry. The Health Ministry, after preparing the set of guidelines last month, had sent the document to the AG for approval. The gazette notification is expected to be published now since the AG has approved it. The delay in issuing the gazette raised much concern among health authorities as well as the members of the EC, while the Public Health Inspectors (PHIs) threatened to stay away from Covid-19-related duty during the general election period. CC to go on The Constitutional Council (CC) meetings would be held as usual despite the resignation of one of its members representing civil society, Dr. Jayantha Dhanapala, until a new council is formed by the next Parliament, according to CC member and former Janatha Vimukthi Peramuna (JVP) parliamentarian Bimal Ratnayake. He told The Sunday Morning that the vacancy could be filled only after the next Parliament is convened and up until then, the Council would meet as usual as the quorum could be met despite one absentee. Furthermore, Ratnayake said a new CC would be appointed under the new Parliament. It is learnt that the reason behind Dr. Dhanapala’s resignation was the fact that he resides in Kandy and is unable to attend the meetings on a regular basis. Speaker Karu Jayasuriya is the Chairman of the CC while Prime Minister Mahinda Rajapaksa and Opposition Leader Sajith Premadasa are appointed to the Council in their official capacities. Minister Mahinda Samarasinghe was appointed the President’s Representative. R. Sampanthan and Thalatha Atukorala were appointed with the concurrence of the Prime Minister and Opposition Leader. Former MP Bimal Ratnayake was appointed the Minority Party Representative. Dr. Dhanapala, Ahmed Javid Yusuf, and Prof. Naganathan Selvakumaran are also in the CC, representing civil society. As per the 19th Amendment to the Constitution, it is the duty of the Speaker, as Chairman, to ensure nominations for appointments to the CC-appointed seats (the non-ex officio members) are made, whenever an occasion for such nominations arises. Members can vacate the office by resigning in the form of writing addressed to the President. The President shall, within two weeks, if there is a vacancy of any of the appointed members, appoint another person to succeed that member. The newly-appointed member shall hold office for the remainder of the unexpired term of his/her predecessor.