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From the battlefield to the economic and propaganda wars

Mahinda Rajapakse, G.L. Peiris, Lakshman Seneviratne
 and Hillary Clinton

The Western Provincial Council election took a back seat last week as the government faced the harsh reality of the cash crunch though the Central Bank tried to downplay it. Not being able to resort to commercial borrowings from overseas banks and the expected inputs of foreign deposits from the Sri Lankan diaspora not materialising the government had to take stock of the remaining options. Turning to the IMF, seemingly the obvious choice the government bit the bitter pill and resumed negotiations.

Though initially the touted figure hovered in the region of US $ 1.9 billion it now seems grossly under stated. It is in this backdrop that the IMF officials visited Sri Lanka to finalise negotiations last week. Whether an injection of US $ 1.9 billion will match even 50% of the requirement would have been uppermost in the minds of the IMF team and if the touted figure was grossly inadequate it would be a case of good money running behind bad. That the government did not react early was due to focusing on the singular issue and and by the time it woke up the private sector had resorted to drastic cost cutting and shedding of work force. 

No donor agency is going to cough out funds without strings being attached in ensuring that profligacy and waste do not continue. The government insists that this would not be the case.


Be that as it may it appears that the Central Bank has finally begun to ease its tight hold on the rupee allowing it to gradually devalue against the US dollar. With financial reserves running precariously low the decision to float the rupee had to come sooner than later. The gradual devaluation was evident last week and analysts predict the dollar would hit the Rs 125 mark by the end of the second quarter.

The government servants’ proficiency exams, now scuttled, shows the inclination on the part of the government to shed the numbers to trim public sector expenditure but is certain to be re-introduced after the flurry of elections are over.

The Ministry of Consumer Affairs has been working overtime to raise revenue for the government by introducing special commodity levies on a range of food items. Imported sprats, potatoes, B-onions, chick pea, green gram, dhal, sugar and canned fish are amongst those included. Whether prices would rise in proportion to the levies could be seen in the near future even though the prices of these products have dropped in the world market in recent times.

Experience shows that the traders, in difficult times would not pass on these advantages to the consumer and we are sure to hear from the minister that the middle man is playing his usual games.

Amidst the economic woes plaguing the government the UNP seems to have shed their differences at least for the time being. Those clamouring for a leadership change have settled down to offer support to the party’s campaign in the Western Province. MP Lakshman Seneviratne who was amongst those in the forefront calling for changes in the leadership made a stirring speech at a recent media do.

Support for party

Not mincing his words he pledged eternal affiliation to the UNP and said he would only strengthen the party in which his father was a former minister. His call for party reforms was for the betterment of the UNP and not for public debate, he said.

He did not stop at that but went on to lambast Minister Nimal Siripala Silva over the recent controversies in his ministry. Seneviratne also strongly criticised our sister paper Irudina. Irked by Irudina’s exposure post Rukman Senanayake’s unwarranted outburst at the UNP working committee castigating our founder editor Lasantha Wickrematunge after his death, Seneviratne was to state that this paper was critical of the UNP.  

The war in the Wanni has reached a stage where the LTTE has dug in using the available fighting cadres to maximum effect. They have shrunk into a small swathe dragging along whatever armour and now have no option but to defend and inflict as much damage as possible. From the LTTE’s point of view the fighting cadres available would now be in a better position to defend the limited area under its control using the civilian human shield to prevent an all out onslaught from the armed forces.

Precision attacks

The air force meanwhile has intensified surveillance with targeted attacks and over a hundred sorties being conducted in the recent past. This together with ground troops circling the cornered LTTE, the civilians trapped within this area have little choice. A protracted defence by the LTTE would further aggravate the conditions of the civilians leading to disease, hunger and trauma.

Meanwhile Minister of Export Development and International Trade G.L. Peiris made a statement on Tuesday that the war will be over in three weeks. A sweeping statement if ever there was one. Was the Minister privy to inside information of the military ops or was it political propaganda with the provincial elections in mind?

So what will be the fate of the trapped civilians during these three weeks? Will the LTTE let them free or would precision targeting of Tiger leaders weaken them sufficiently to evacuate the civilians?

Whilst the military was fast gaining ground, a war of another kind was being enacted overseas. The government and the LTTE both took their case to the international community mobilising their respective lobby groups. Both fought for space with the UN lobby with gusto. President Rajapakse has stood firm thus far in his resolve to ‘finish’ the military operations undertaken which have cost the country immensely both in terms of lives and money.

Economic melt down

The fall out of this socially, is yet to be quantified and the years ahead would unravel this in real terms. But, with the global melt down of the economy and its impact on Sri Lanka, he would be hard pressed to be single minded in the final thrust given the need for assistance to shore up the balance of payments and keep the economic momentum upto scratch. It is evident that this government is riding along on a single agenda and that certainly is not of the economy. It is often touted by politicians outside the UNP that the rural folk whose numbers matter for winning elections are not within the cross hairs of price movements of consumer goods. This is voiced ad-nauseum but the fat lady will sing by the third quarter for this sector as well.

Sri Lanka being blessed with fertile land does offer a safe umbrella for rural folk to scrape three meals together and this has been the bane in that section of the people resigning themselves to a full stomach and no further expectation. How often do we hear ruling politicians say with pride that the price of domestic gas does not affect the people in the hinterland? That the escalating price of electricity does not bother them?

It is indeed a damning indictment that we live in a country where the rulers consider poverty as an advantage and thus basic needs are requirements of only the upper middle classes of the Western Province.

Credibility factor

Though the government is confident of completing ground operations to clear the remaining area occupied by the LTTE, the envisaged proposals for a political solution is not in sight. The credibility of the government rides on this and the international community has in no uncertain terms made it known that it is not blind. The US ambassador to the UN Susan Rice, Lakdar Ibrahim of the UN, Commissioner UNHCR, Navee Pillai, US Secretary of State Hillary Clinton, US Asst Secretary of State for South Asia Richard Boucher amongst others have voiced their concerns in this regard and that of the plight of the civilians held in the conflict areas. As stated in this column before they too are aware of the financial and social cost this war has on Sri Lanka. Contrast this with the cost of finding a political solution. Both financially and socially. The answer would be at odds between those who are educated and others who are not.

The majority will decide.




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