October 22, 2019
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    MCC agreement will be signed soon, says Minister

    June 30, 2019

    Sri Lanka needs to sustain the cordial relationship with America to continue its trade and international links for the benefit of the country. The anti-American protests and fake news that is spread by certain short-sighted politicians will not yield their desired results as the country has built up resilience for incidents of this nature, Minister of Finance Mangala Samaraweera said. “However, the rumours and false news spread by certain political ghosts regarding the agreements that are to be signed with America will vitally affect its operation. This would in turn hinder the growth trajectory of the country, he said in Colombo last week.

    “The Acquisition and Cross-Servicing Agreement (ACSA) and Status Of Forces Agreement (SOFA) are not new agreements but we only have to renew them. These agreements were signed in 2007 and 1997 respectively. However, the Millennium Challenge Corporation (MCC) agreement, which could not be signed earlier due to the political issues it aroused, is a new agreement which will be signed as early as possible,” he said.
    Stressing the fact that through the MCC agreement, Sri Lanka will be able to obtain a grant of USD 480 million, he said that it could be used to carry out projects spanning over the next five years. The government has planned to spend USD 50 million to modernise bus transport, USD 140 million to develop the delivery of agricultural products, USD 100 million to develop the transport industry and the rest is to set up a Land Ownership office and to deal with land related issues. Being a middle income country, grants are not easily awarded to Sri Lanka, but due to the cordial relationship between the two countries, America was generous enough to provide this grant.
    America is the single biggest trading partner of the country which accounts for exports over USD 3,000 million out of a total of USD 11,666 million. To make Sri Lanka a technology hub in the Indian Ocean, the technology in America needs to be shared. Thus trade relations between the two countries are crucial and he said that there is a high chance that fake news against America would disrupt these and ultimately it is the public who will be affected.
    “The GSP facility is at stake due to the re-imposing of the death penalty. If this happens, the entire export sector will be affected and will have a negative impact,” he said. “Due to the commitment of the Government, Sri Lanka was able to regain global support, but if political conflicts of this kind develop then the entire nation would face the loss,” he added. Meanwhile, Economic Advisor to the Finance Ministry, Deshal de Mel who also addressed the press conference said the government may not completely revise Budget 2019 following the Easter Sunday setback, which adversely impacted revenue streams. “There may not necessarily be a complete revision to the Budget itself,” de Mel said.
    In the immediate aftermath of the Easter Sunday attacks, State Finance Minister Eran Wickramaratne said that the government was to revise Budget 2019 due to the significant impact on revenue streams. At present, Finance Ministry officials are in the process of reviewing Budget 2019 to realign expenditure priorities to meet envisaged fiscal targets for the year, de Mel said. “There has been some degree of impact on revenue. During the first half of the year, there has been a decline in imports. We will make adjustments to ensure that we maintain fiscal targets,” he stressed.

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