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US puts on hold discussions over Lanka's participation in MCC amidst political crisis

Press Trust of India  |  Washington 

The US has put on hold its discussions with on its potential participation in an American aid initiative on poverty reduction due to the disruption in the country's democratic process following the ouster of

plunged into a political crisis after dismissed Wickremesinghe and replaced him with former strongman Mahinda Rajapaksa.

Rajapaksa has failed to muster support of the majority in the Parliament.

"Because of this disruption to Sri Lanka's democratic process, we have put on hold discussions about Sri Lanka's potential participation in (MCC) programmes," a told when asked about the relationship with Colombo and the

The latest move by the could be seen as a setback for Sri Lanka, which was expecting a major investment from the US in the island nations transport and land sectors.

The proposed MCC Compact was designed to spur economic growth and investment by the private sector to reduce poverty and increase economic opportunities for its people, according to MCC who visited Sri Lanka in September this year for talks with Sri Lankan authorities.

The believes that the steps taken by Sirisena were unconstitutional and wants the country to get back to its democratic process at the earliest.

Just before Sirisena dismissed the Wickremesinghe government, Sri Lanka and the US were in the final stage of the discussions. The MCC was to fund the compact entirely through grants which do not need to be repaid rather than loans.

Discussions on the MCC would now resume only after the constitutional crisis in Sri Lanka is restored through democratic means.

"We are concerned about the extra constitutional steps that Sirisena has taken," the told

"The longer the situation continues, the greater the risk of ethnic turmoil and violence," warned the

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 29 2018. 11:40 IST