THE MILLENNIUM CHALLENGE CORPORATION COMPACT LAND GRANT TO SRI LANKA:
Challenge of the hour is Innovative Green Planning
Prof. Nimal Gunathilake
It was recently reported that the Board of Directors of the Millennium Challenge Corporation (MCC) of USA has approved a five-year, $480 million Compact grant to the Government of Sri Lanka on 25th April 2019. This is aimed at reducing poverty through economic growth in Sri Lanka (Sunday Observer, 28 April 2019). The MCC Sri Lanka Compact is expected to be signed in the near future, pending congressional notification, according to a MCC press release.
In order to provide the background information on the development of this grant process to the readers of this article, I have depended heavily on the following MCC Sri Lanka website (https://www.mcc.gov/where-we-work/program/sri-lanka-compact) and the US Embassy press releases available on the web (https://lk.usembassy.gov/millennium-challenge-corporation-official-visits-sri-lanka-to-continue-progress-on-compact-development/, http://www.colombopage.com/archive_19A/Apr26_1556286277CH.php) etc.
The MCC is a U.S. Government corporation chaired by the secretary of state and acclaimed to be an innovative foreign assistance agency of the United States Government, established in 2004 that has already signed similar Compacts with 29 countries around the world. The US Congress funds the Millennium Challenge Account and MCC administers its resources.
The Compact to be signed with Sri Lanka shortly, seeks to assist the Sri Lanka Government in addressing two of the country’s binding constraints to economic growth: (1) inadequate transport logistics infrastructure and planning; and (2) lack of access to land for a) agriculture, b) the services sector, and c) industrial investors.
Consequently, the Compact for Sri Lanka has come up with two projects for funding: i) a Transport Project and ii) a Land Project. These projects have been formulated after completing a series of feasibility studies that were needed to develop a high-quality, evidence-based and sustainable program on ‘constraints – to - growth analysis’ and preparing a ‘country scorecard’ assessing the annual performance of 20 parameters in three policy categories: i) Ruling Justly, ii) Investing in People (including natural resource protection receiving high marks for Sri Lanka), and iii) Encouraging Economic Freedom. These studies were carried out by the Sri Lanka Government with MCC’s assistance since December 2016 and completed in September 20, 2017 in order to identify the most binding constraints that prevent private-sector led growth in Sri Lanka.
The Transport Project aims to (i) increase the relative efficiency and capacity of the road network and bus system in the Colombo Metropolitan Region and to (ii) reduce the cost of transporting passengers and goods between the central region of the country and ports and markets in the rest of the country. This transport component of the proposed Compact would improve road networks and the bus system in the Colombo Metropolitan Region, and improve road connectivity between the central region and ports and markets in the Western Province. The Compact would upgrade more than 300 kilometers of urban and interprovincial roads.
The Land Project:
Under the Land Project, which is the main focus of this article, the Compact is expected to improve land administration, and strengthen land rights and tenure security. The goal of the Land Project is said to be to increase the availability of information on private land and underutilized state lands or all land in Sri Lanka to which the Government is lawfully entitled or which may be disposed of by the Government (“State Lands”) in order to increase land market activity (A Land Bank). The Land Project would then be increasing tenure security and tradability of land for smallholders, women, and firms through policy and legal reforms.
One of the key binding constraints to economic growth identified with respect to land availability is apparently the difficulty of the private sector in accessing state-owned land for commercial purposes. As such, the goal of the Land Project is to increase the availability of information on private land and underutilized state lands or all land in Sri Lanka to which the Government is lawfully entitled or which may be disposed of by the Government (‘State Lands’) in order to increase land market activity.
The Land Project would expect to increase tenure security and tradability of land for smallholders, women, and firms through policy and legal reforms. Improvement of land administration processes is expected to be done in 08 districts, improving the land valuation system, upgrading 10 land registries and preparing what is known as ‘Parcel Fabric Maps of all state and private land’ to facilitate the activities of the Survey Department.
The Compact budget allocation given for the Land Project in the following document (http://www.colombopage.com/archive_19A/Apr26_1556286277CH.php) is summarized in the table above.
In addition to the above details, I was unable to find further information on each of the activities for which funds have been allocated as given in the Compact budget allocation.
National Physical Plan 2018-2050
Parallel to this MCC project, a revised National Physical Planning Policy for Sri Lanka and the plan 2018-2050 has been prepared by the National Physical Planning Department (NPPD) under the Megapolis and Western Development Ministry in consultation with various stakeholders, over a period of one and half years. It aims to promote and regulate the integrated planning of economic, social, physical and environmental aspects of land and territorial waters of Sri Lanka.
The National Physical Plan prepared for 2011-2030, which was gazetted in 2011 is now considered as outdated, apparently because several key national and international developments have taken place since then. The new plan for 2018-2050 has been approved by the National Physical Planning Council (NPPA) and the National Economic Council (NEC) of Sri Lanka and is expected to be gazetted shortly (Daily News: Thursday, February 28, 2019).
The new plan for 2018-2050 has proposed to develop Colombo-Trincomalee as the main economic corridor along with three other sub-corridors, while Anuradhapura and Kandy are also to be developed separately as metropolitan areas. The key component of the plan is the proposed Colombo-Trincomalee economic corridor, which consists of one-third of the country’s population. This corridor encompasses the Colombo Megapolis and the Metro Regions of Negombo, Kurunegala, Dambulla and Trincomalee.
According to the proposed NPP 2018-2050, the future development initiatives in the corridor, such as industrial estates, cultural development zones, tourism zones, urban service centers will be concentrated in the above mentioned six major population centers (metro regions) in the corridor. The main purpose of infrastructure development is apparently to attract foreign and local investments to these areas, for individual developments. More details on this plan are expected to be made available in the near future through a study conducted by the Asian Development Bank.
From information available in the public domain so far on the two proposed development projects referred to above, it is likely that the six metro regions (viz. Colombo Megapolis and the Metro Regions of Gampaha, Negombo, Kurunegala, Dambulla and Trincomalee) identified by the National Physical Plan 2018-2050 would overlap, at least partially, with the eight districts identified by the MCC grant for improvement of land administration in them, initially over a period of five years.
Environmental and socio-cultural concerns
The preparation of a new National Physical Plan prioritizing the development of the proposed economic corridor from Colombo to Trincomalee, and succeeding in securing an outright grant to economically develop eight districts associated with this corridor is much appreciated. Additionally, in these early stages of planning, one has to consider weather adequate provisions have been made in the proposed projects as land related socio-cultural and environmental safeguards.
Some of the proposed areas of economic development selected for these projects are replete with proven examples of most sustainable agro-ecological heritage systems such as the cascade systems which have gone in to disuse due to a number of factors. However, it is indeed heartening to see that they are re-emerging as agro-ecological systems that are ideally suited for a densely populated small country like Sri Lanka. After all, much of Sri Lanka’s agro-based economy is driven by small-holders (e.g. tea, rubber, coconut, spices, vegetables and rice paddy). It is also encouraging and reassuring that these Globally Important Agricultural Heritage Systems (GIAHS of FAO) are being revived at present in some districts like Polonnaruwa and Anuradhapura.
From the limited information available in the public domain as yet on this MCC Land Compact, it appears to be a mega-project of the scale of the Mahaweli Development Project of the 1970s. This being so, we earnestly hope that a sound and comprehensive strategic environmental impact assessment (SEA) as well as a robust socio-cultural impact assessment under land use planning process would be carried out during this early planning stage and be made available to public in advance. These assessments could benefit from a plethora of lessons learnt on social, cultural, environmental, and economic and health issues emerging from the Mahaweli Development Project which is now nearing 50 years since its inception with the construction of the Polgolla barrage and its associated infrastructure development projects.
On the environmental front, many lessons can be learnt from the implementation of the environmental impact assessment carried out by the USAID contracted TAMS team especially on human-animal conflicts in the face of human settlements and agro-industrial development under the Mahaweli Development Program. Likewise, the more recent development projects like the Moraghakanda-Kaluganga multi-purpose development project also could shed more light on the corrective measures already taken in mitigating the above issues.
Land Valuation System Improvement Activity
One of the major activities proposed under the MCC Land Grant is the land valuation system improvement (land value is the value of a piece of property including both the value of the land itself as well as any improvements that have been made to it) is a very important issue that comes up repeatedly alongside the socio-environmental impact assessments in land-use planning under various development projects.
At this point in time, it may be premature to address this issue without access to the context-specific details of the concept and the action plans with respect to this proposed land grant activity. Yet, it may still be worthwhile to look at the valuation of lands in a holistic manner including the all-important ecological services they render which are still being given the lowest priority in land-use planning in Sri Lanka.
This is because no economic value has been tagged to most of the ecological services such as regulation of climate, flash floods, soil erosion, provisioning of clean water, pollination services etc. nor have they been addressed adequately in the current Environmental Impact Assessment processes in Sri Lanka. I have addressed the issues pertaining to the valuation of ecosystem services with specific reference to forestry sector and national planning in Sri Lanka on several occasions (file:///C:/Users/HP/Downloads/6255-22141-2-PB.pdf; file:///C:/Users/HP/Downloads/7937-27898-2-PB.pdf;).
The National Biodiversity Strategy and Action Plan (NBSAP 2016-2022) for Sri Lanka too, has highlighted this lacuna. One of the key recommendation of NBSAP-Sri Lanka based on the framework of ‘Economics of Ecosystems and Biodiversity (TEEB) for capturing ecosystems service values’ is to mainstream economic valuation of ecosystem services and biodiversity in to national planning, implementation and decision-making by integrating biodiversity and ecosystems service values to national accounting systems – Green Accounting.
The NBSAP (2016-2022) further states that appropriate guidelines need to be developed in order to incorporate Biodiversity and Ecosystem Service Values into regional/ national/ local level planning and plan implementation.
This is to be in compliance with the Aichi Biodiversity Target 2 which says ‘By 2020, at the latest, biodiversity values have been integrated into national and local development and poverty reduction strategies and planning processes and are being incorporated into national accounting, as appropriate, and reporting systems’.
Valuation of ecosystem services and biodiversity of different landscapes has been one of the most critical areas of study needed particularly at a time when large-scale economic development programs are being formulated in a piece-meal approach particularly in the Northern, North-Central, Eastern and North-western regions of Sri Lanka.
An inclusive assessment of the land value i.e. both the value of the land itself as well as any improvements (or the lack of it, leaving as wildlife corridors or watershed restoration areas, for example) that has been made to it with respect to ecosystem services need to be made before deciding on land conversion for large-scale agricultural or industrial development in these areas.
Some of the districts in which the MCC and the National Plan Corridor project ear-marked for development are located in areas where the Mahaweli Development Project influence had been in existence for well over several decades. Therefore, taking a stock of the current situation with respect to environmental, socio-cultural and economic parameters would be helpful as an initial bench mark for management of any avoidable risks. While socio-economic data and their analyses reports may be available over the years, inclusive environmental economic assessments of areas with competing interests, in my opinion, are woefully lacking in the whole of Sri Lanka.
However, there are excellent examples of this kind from our immediate neighbor, India which we could take a cue from. An economic valuation of tiger reserves and snow leopards in India: a value+ study conducted by the Indian Institute of Forest Management, Bhopal has shown that the Tiger reserves in India not only support more than half of the global tiger population and are cornerstones of biodiversity conservation, they also provide a wide range of economic, social and cultural benefits in the form of ecosystem services. (www:iifm.ac.in./cesm/; https://conservewildcats.org/wp-content/uploads/sites/5/WildCats/papers/NTCA_Report2015.pdf; file:///D:/Ecosystem%20Services%20&%20their%20valuation/2019/Economic%20value%20of%20land%20-%20%20MCC/Economic-valuation-guidelines%20-%20Verma%20et%20al.pdf).
The Indian scientists looked at six tiger reserves and estimated that conserving them was equivalent of keeping a secure capital of USD 230 billion which they call ‘stock benefits’ of these tiger reserves. Through economic valuation of ecosystem services from six tiger reserves in India, these scientists demonstrated that enhanced investment in these tiger reserves is economically rational.
In a similar manner, the habitats of the flagship species of Sri Lanka – the elephant, established in the Mahaweli Development area based on a USAID-TAMS study in the 1980s, could be evaluated for their ecosystem services, as a component of the Land Valuation System Improvement Activity of the MCC project on lands.
Some sections of the proposed economic corridor seem to cross the paths of the ecological corridors established for facilitating elephant migration during the USAID-funded environmental component of the Mahaweli Project. Ignorance of such ecological values would influence the well-intended public policies in a negative way. It would also affect the decisions made on investments and funding allocation that may affect protection status of these keystone species with serious implications on human wellbeing. We are already experiencing increasing levels of human-elephant and other human-animal conflicts in these areas.
The MCC grant is said to be an innovative foreign assistance catalyst to promote an environment that supports equity and freedom for the Sri Lankan people. Concurrently, the Government of Sri Lanka maintains its commitment to democratic institutions, pursues sound economic policies, and invests in the welfare and health of its people. The operating model of the MCC grant reflects five principles two of which directly relevant to this article are given below:
Sustainable prosperity and development require good governance, strong anti-corruption measures, sound economic policies, investments in health and education, and attention to issues such as gender equality and environmental protection,
Recipient countries need to take ownership of the design and implementation of development programs to increase their chances of success.
My random thoughts on this MCC Land Project are given in good faith, as we in the recipient countries eventually need to take the ownership of the design and implementation of development programs to increase their chances of success.
In that context, perhaps a broader public dialogue on different aspects (socio-cultural, environmental, health and economic) of this land project, once the details of each component are made more widely available to the public, would be most appropriate. It would, no doubt, help in further refining the design and implementation of this program and thereby enhance its chances of success which is the main objective of this article.
After all, the need and the ‘challenge’ of the hour is ‘innovative green planning’.(END)
The author of this article is an Emeritus Professor at the University of Peradeniya and was a Charles Bullard Fellow in Forestry Research at Harvard University, USA. He could be contacted at savnimg@gmail.com.
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