The Millennium Challenge Corporation has approved Sri Lanka as eligible for the body's "threshold" programme, which will release around $30mn worth of funding, providing assistance to the government's efforts to enact reforms in areas which constrict economic growth.
"Sri Lanka has embarked on a remarkable effort over the past year to reinvigorate its democratic institutions, improve governance, and restore protection of human rights," a statement by the MCC said.
The MCC, an independent US government agency working to reduce global poverty through economic growth. allocates budgets depending on how countries score on specific indicators. According to the MCC website, threshold programmes "assist countries to become compact eligible by supporting their efforts to implement key policy and institutional reforms and thereby demonstrate their commitment to MCC’s eligibility criteria" and if implemented successfully will "reduce constraints to faster economic growth and provide MCC critical information about a candidate country’s political will and capacity to undertake the types of reforms that would have the greatest impact in compacts".
A full "compact" would release funding in excess of $900mn, however Sri Lanka will only become eligible on successful implementation of the threshold programme.
Sri Lanka scored red on indicators including political rights, civil liberties, freedom of information, and fiscal policy in the MCC's latest country report. However the government scored well on rule of law, control of corruption and government effectiveness. See the full scorecard here.
The Sri Lankan Embassy in Washington in a statement hailed the approval as "recognition " for progress made under the new government.
"In keeping with the Government’s vision for good governance, strengthening the rule of law, and achieving reconciliation, development, durable peace and prosperity for all, the government of Sri Lanka will work to foster an enduring engagement and partnership with the MCC with the objective of reaping benefits for all the people in the country.
"The selection of Sri Lanka as an eligible country for a long-term partnership with the MCC is a demonstration of the recognition of the progress made by Sri Lanka since January 2015 under the leadership of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe."
The MCC's board of directors is chaired by Secretary of State John Kerry, and includes the US Secretary of Treasury and the US Trade Representative.