four hours was all that the Liberation Tigers of Tamil Eelam (LTTE)
took to dispel the euphoria generated by the ‘successful’
Tokyo donor conference aimed at strengthening the peace process in
LTTE issued a hard-hitting statement from its Kilinochchi based
headquarters in the Wanni on June 11. While reiterating its
hardline stance on the question of establishing an interim
administrative structure for the Tamil majority North Eastern
Province of Sri Lanka, the LTTE also made it crystal clear that it
would not be bound by any provision in the unanimous declaration
adopted at the tail end of the conference in Japan.
the Tigers went on to complain about international interference in
Sri Lankan affairs and even implicitly censured the accredited
or unwilling to publicise its inner motivations in keeping away
from Tokyo, the LTTE increased pressure on Prime Minister Ranil
Wickremesinghe to yield on the interim issue. The international
community, however, felt that the LTTE’s course of action was
inappropriate and that the Tigers should have participated in
Tokyo in the interest of the Tamil people.
the LTTE defying such opinion, the international community too
began flexing its muscles. It became a matter of prestige,
particularly for the hosts. A strong signal that the world would
not be cowed by Tiger threats had to be sent.
congratulatory words of US Deputy Secretary of State, Richard
Armitage to Japan for not capitulating to LTTE “blackmail” is
indicatory of this international mindset. The Tokyo summit,
therefore, went ahead in spite of the LTTE boycott.
two day sessions resulted in an unprecedented bonanza for Sri
Lanka. Earlier it was envisaged that Sri Lanka would get US$ 3 to
3.5 billion for a three year period. The Tokyo conclave went far
beyond these expectations. A staggering amount of US$ 4. 5 billion
for four years from 2003 to 2006 was pledged.
appeared that the donor community wanted to impress upon the LTTE
that its absence would not hinder support for the peace process in
anyway. Contrary to predictions in the Tiger camp that envisaged
aid will decrease because of LTTE non-attendance, the Tokyo summit
resulted in a massive increase that left the Sri Lankans
generosity displayed by 51 countries and 22 international
organisations at Tokyo was not unconditional. Even though the
Tiger absence prevented a joint signatorial obligation by both the
government and the LTTE the donors did make certain stipulations
governing the pledged aid that linked aid to progress in the peace
attention was paid to the plight of the north east and recognising
the LTTE’s importance in this regard; the door was left open for
a Tiger re-entry. These formed part of the Tokyo Declaration and
relevant excerpts are as follows:
conference notes that during the past sessions of the peace talks,
significant progress was achieved. Donors remind the government of
Sri Lanka and the LTTE of the importance for both parties to make
their utmost efforts to further promote the peace process founded
upon the principles reflected in the Oslo Declaration. Donors
recognise the urgent need to support the people in the
conflict-affected areas of the north and east, and make
allocations towards this purpose.
regard to the north and east, priority-setting and
project-implementation will take place with the government working
in partnership with the LTTE, and with adequate safeguards for the
interests of all communities. The conference expects that the
government will ensure that the assistance pledged by the donor
community to the reconstruction and development of the north and
east is utilised specifically for that purpose.
conference also urges the parties to move expeditiously to a
lasting and equitable political settlement. Such a settlement
should be based upon respect for human rights, democracy and the
rule of law. In this regard, the conference looks forward to the
parties reaching early agreement on a human rights declaration, as
discussed at the sixth session of peace negotiations at Hakone.
conference welcomes the LTTE’s commitment to the negotiated
peace process and urges the LTTE to return to the peace talks as
soon as possible. The people in the conflict affected areas of the
north and east must be able to enjoy the dividends of peace
immediately. Manifest commitment by both the government of Sri
Lanka and the LTTE to further the peace process will be necessary
for the provision of international assistance to the
reconstruction and development of the conflict affected areas of
the north and east.
by the donor community must be closely linked to substantial and
parallel progress in the peace process towards fulfilment of the
objectives agreed upon by the parties in Oslo. The conference
encourages the government of Sri Lanka and the LTTE to enter into
discussions as early as possible on a provisional administrative
structure to manage the reconstruction and development aspects of
the transition process.”
with clear milestones
process would need the expeditious development of a roadmap with
clear milestones indicating the path towards a mutually acceptable
final political solution. With this in view, the international
community intends to review and monitor the progress of the peace
process closely, with particular reference to objectives and
Full compliance with the ceasefire agreement by both parties.
Effective delivery mechanisms relating to development activity in
the north and east.
Participation of a Muslim delegation as agreed in the declaration
of the fourth session of peace talks in Thailand.
Parallel progress towards a final political settlement based on
the principles of the Oslo Declaration.
Solutions for those displaced due to the armed conflict.
Effective promotion and protection of the human rights of all
Effective inclusion of gender equity and equality in the peace
building, the conflict transformation and the reconstruction
process, emphasising an equitable representation of women in
political fora and at other decision-making levels.
Implementation of effective measures in accordance with the
UNICEF-supported action plan to stop underage recruitment and to
facilitate the release of underage recruits and their
rehabilitation and reintegration into society.
Rehabilitation of former combatants and civilians in the north and
east, who have been disabled physically or psychologically due to
the armed conflict.
Agreement by the government of Sri Lanka and the LTTE on a phased,
balanced, and verifiable de-escalation, de-militarisation and
normalisation process at an appropriate time in the context of
arriving at a political settlement.”
Tokyo Declaration, therefore, laid down some basic expectations of
the donor community as to how the peace process should continue.
While the LTTE had escaped being a signatory to specific
guarantees, the declaration certainly outlined some behavioural
explicit condition that money allocated to the north east should
be spent only in those areas and that the government should work
in partnership with the LTTE to that purpose was quite favourable
to the Tigers. Thus, Colombo too could not ignore the LTTE in
utilising aid. Continuous aid depended on the pace of peace,
thereby making the LTTE indispensable in sustained procurement.
himself announced the government’s decision to install what he
termed a “provisional administrative structure” for the north
east. He invited the LTTE for direct talks to formulate the
structure. This meant that the Tigers could re- enter the process
again and determine the modalities of reconstruction and
development in the region. A needs assessment study had allocated
US$ 1. 38 billion for north eastern utilisation.
this enticing carrot, the LTTE feared the hidden stick more. After
decades of being a law unto themselves, the Tigers were not
prepared to accept international dictates in spheres like “human
rights for all people; recruitment of underage children as
combatants; phased, balanced and verifiable demilitarisation,”
Tiger response was swift and brutal. Commenting on the resolutions
and declarations adopted by the donor community at the Tokyo
conference, the LTTE’s statement said that the document has no
binding obligations on the organisation.
LTTE was not involved in the deliberations or in the formulation
of these declarations. We have not been consulted on the set of
propositions and resolutions enunciated in the Tokyo Declaration.
The Colombo government, with the active assistance of the
facilitator and its international ‘tactical allies’ has
formulated this strategic paper to super-impose its own agenda on
the LTTE. This is unacceptable to us,” the LTTE statement said.
it was patently clear that the LTTE regarded the Tokyo outcome as
an exercise in entrapment and an effort to impose conditions on
it. It was not prepared to accept those conditions. It was the
LTTE’s version of an ‘aid without strings attached’
Tigers went on to deliver what was perhaps a severe indictment of
international involvement. It charged “the government of Ranil
Wickremesinghe for complicating the peace process by allowing
undue and unwarranted interference by extra territorial forces in
the ethnic conflict, which is an internal political affair that
has to be resolved by the parties in conflict,” according to the
Chief Negotiator Anton Balasingham in a previous letter to
Wickremesinghe had made veiled references to the international
factor in Sri Lanka. Now this official LTTE statement was bluntly
critical. It accused the Colombo government of conspiring with its
international tactical allies in imposing conditions on the LTTE.
somewhat uncomplimentary reference to Norway for providing
“active assistance” in this enterprise was intriguing. Oslo
had become facilitator due to the consent of the then government
under President Chandrika Kumaratunga and the LTTE.
Kumaratunga has been critical of the Norwegian role in recent
times and members of her party had even denigrated the
Scandinavians as “salmon eating busybodies.” Now the LTTE too
was expressing its disapproval for different reasons.
meant that ‘locus standi’ for a Norwegian role in Sri
Lanka was diminishing. With the LTTE having announced a temporary
suspension of the peace talks, Oslo too had been circumscribed.
Norway was present in Tokyo as a delegate nation and not as
facilitator. Earlier it was expected to be a co-chair of the
conference. Now its role was shrinking further.
enough it was the LTTE that had insisted upon international
mediation saying that Tamils could not trust a Sinhala government.
Now the Tigers were saying that it “is an internal political
affair that has to be resolved by the parties in conflict.”
assertion is somewhat reminiscent of the time India was involved
directly in Sri Lankan peacemaking. The very same LTTE that said
“we love India,” did an about-turn later and described India
as an outsider intefering in a dispute between brothers.
compulsions that arose from severe economic and political
bankruptcy have compelled the government to seek the ultimate
refuge in the so-called ‘international safety net’ to resolve
the economic and political crisis of the country.
seeking this ‘safety net’ the Colombo regime has shifted the
peace process from third party facilitation to the realm of
international arbitration by formidable external forces that has
far-reaching consequences to the political and economic destiny of
the island,” the LTTE’s statement declared.
had been describing the international role as a “safety net”
in a bid to reassure the Sinhala people of the viability of the
peace process. This attempt to strengthen the process has
seemingly had a counterproductive effect. The LTTE suspects
Wickremesinghe as using that net to trap the Tiger. The
international safety net was an entrapment device in Tiger eyes.
in Tiger perception, the international dimension was becoming a
problem. As long as LTTE’s wishes were fulfilled
unconditionally, international “interference” was ‘good.’
The moment it sought to introduce universal standards of human
rights and democracy it was ‘bad.’
is wrong with external forces as long as the political and
economic destiny of the country is shaped according to Tiger whims
and fancies. Any sign of deviation and the tryst with destiny has
to be censured and possibly ended.
international donor community, pledging massive amounts of aid,
was entitled to lay down some conditions. The Tigers, however,
were reversing the proverbial saying about “he who pays the
piper calls the tune.”
LTTE wants the money as well as call the tune. If this is not
agreed upon, then international involvement is criticised. With
both President Kumaratunga and the LTTE becoming critical of
Norway’s facilitatory efforts, the continuing role of Norway as
facilitator has become tenuous and questionable.
a stinging blow to Wickreme-singhe’s hopes of an early
rapprochement, the LTTE reiterated its position that it would
“participate in the negotiating process only when the Sri Lankan
government puts forward a clearly defined draft framework for an
interim administrative structure for the north east.”
LTTE also rejected in its statement “the offer made by the Prime
Minister, Mr. Ranil Wickremesinghe of a ‘provisional
administrative structure’ within the laws of the land as a
re-statement of his previous position with a new terminology.”
are disappointed to note that the Prime Minister’s statement
does not offer anything new. The so-called ‘provisional
administrative structure’ is the new name given to the apex
council proposed by him for development and rejected by us as
extremely limited and inadequate,” the LTTE statement said.
Prime Minister has not responded to our call for a draft framework
for an innovative and effective politico-administrative structure.
Contrary to Mr. Wickremesinghe’s statement to the international
donor community, we seriously differ in perception in connection
with what the LTTE leadership proposes and what his government
offers. While our leadership has proposed an interim
administrative framework, a politico-administrative structure for
the north east with wider participation of the LTTE, the Sri
Lankan government has offered a council with a structure and
mechanism for the development of the region. The Prime Minister is
taking cover behind the laws and constitution of Sri Lanka, which
have effectively institutionalised racism against which the Tamil
people have been struggling for decades,” the statement
the LTTE and Mr. Wickremesinghe’s government also hold starkly
divergent views as to the nature of the final political solution
to end Sri Lanka’s protracted ethnic conflict. While the Prime
Minister envisages piecemeal reforms to the present constitution,
the LTTE has proposed a radical transformation of the system of
governance in Sri Lanka, through the institutionalisation of a
new, secular and equitable constitution which recognises the
Tamils’ right to self-determination and homeland. It is whilst
recognising that this is an impossible task for Mr.
Wickremesinghe’s fragile ruling coalition that our organisation
proposed the establishment of an interim administration,” the
LTTE statement further said.
there was any chance earlier that talks could resume on a
‘re-defined agenda’ on setting up an interim administration
for the north east, those hopes were dashed by the LTTE statement.
Four aspects of LTTE strategy were highlighted in the statement.
the LTTE was not going to rush into any type of discussion to lay
its hands on the pledged aid. It wants to ostensibly set up a
mechanism beforehand. The government may have been successful in
persuading the donor community to pledge money for an exercise in
placing the development cart before the conflict resolution horse,
but the LTTE was going to insist on a north eastern administrative
structure under its full control being set up before financial aid
the LTTE wanted the framework of Wickremesinghe’s proposed
provisional structure to presented in writing. There were two
reasons for this. One was that Wickremesinghe’s earlier
pre-election promise of an interim structure had been merely
conceptual. Later, from a Tiger perspective, he had backtracked.
the Tigers wanted a specific outline instead of vague intentions.
Two, the Tigers know that there are legal and constitutional
hurdles to setting up an innovative structure. Written documents
would help the LTTE to gauge government opinion better and perhaps
suggest improvements and alterations.
the LTTE wants to emphasise the divergence in perspective between
itself and the government. The LTTE sees the interim structure as
one having great politico-administrative powers encompassing the
government perceives it as a provisional arrangement for
rehabilitation and reconstruction needs alone. The Tigers want it
to be an extra-constitutional authority. The government envisages
it as conforming to the laws of the land.
though Balasingham has said that the Tigers are not seeking an
interim administration as an end unto itself, there is no doubt
that if the provisional structure is ‘innovative’ enough for
the LTTE it would continue with this arrangement for an extremely
long period under the guise of ‘exploring’ federalism.
the LTTE wants to de-link international involvement from the
workings of the interim mechanism. Wickremesinghe has set about
conceptualising the structure as one spending the money pledged in
Tokyo for the north east. This means an enhanced role for the
donors in monitoring and indirectly supervising projects.
also means the LTTE should adhere to the minimum levels of good
governance required. This is anathema to the Tigers. The LTTE,
living in a world of its own, wants to use the money without
interference. So it is quite particular about the proposed
structure and wants to ensure international non-involvement.
is against this backdrop, therefore, that the LTTE has issued its
recent statement concerning the Tokyo summit. In one stroke it has
undermined the success of the Tokyo conference. It has also been
daringly defiant of international opinion by asserting its
independence towards the Tokyo Declaration.
continuing its politics of brinkmanship, the LTTE is hoping to
pressure a beleaguered Colombo into granting all that it desires
on a platter. It remains to be seen, however, as to whether this
dangerous course of action will result in the LTTE gaining its
desired ends or lead to a complete collapse of the fragile peace.
may not talk, but the
money soon will...
partiality of the proverbial drowning man to clutch at
straws is legendary. But faced with an alternative, like
say, grabbing weakly at an archaic Kadirgamar-ism, a
drowning male or for that matter female or even more for
that matter a big cat, will readily do so.
I observe cleverly as is my usual style, that the Tiger
variety has now clutched at the straw of internal affairs
and the Kadirgamar-ism of illegal intervention.
Armitage, a bloke well in with the affairs of you natives,
has been concerned that the eye of history will
judge very harshly those who don’t seize this opportunity for
peace. Well put Sir. Clap clap. But has he forgotten the eye of
Tiger chaps, bless their souls are fellows if you will, who have
grown up with an innocent belief in Santa Claus and the Tooth
Fairy. They see the international community as swooshing down the
chimney, leaving a large bag of gold, caskets of silver and
goblets of myrrh near their political beds and tip toeing off
before they awake. These beds they loathe to share with any other
fellows, lest they have to share the goodies also.
the type of unsporting donor who was all too prevalent in Tokyo,
the one who preferred to link the participation in the peace
process with the handouts was not their glass of palmyrah arrack.
Kadirgamar chap who has suddenly become the Tiger’s quotable
quote, I glean from discarded native newspapers, was a chap not
only detested by his own kind for scampering hither and thither in
a dither like a demented zither, denying propaganda spewed out by
Goebellian machines, but also regarded as bit of a trailing
arbutus by the diplomatic community for his inclination to be a
insular kind of bloke, he detested any modicum of interest in your
native isle shown by foreigners. He had the uncomfortable habit of
calling people names. ‘Sissy’ he hissed at Shane Warne.
‘Interferer’ he hinted at Kofi Annan. As I said, a man with a
remarkable talent for nicknames.
the single most pressing reason for Kadirgamar’s demise from the
international circuit was his annoying tendency to repeat the
words ‘internal affair’ in a frenzied sort of way, in the
hearing of highly placed US diplomats sipping Martini’s and
spiking olives at cocktails.
he talking about Sri Lanka’s civil war or a possible intimate
moment a British High Commissioner had shared with a Peruvian
Deputy on the lawn of a Rumanian Counselor’s residence? These
ambiguities were making the diplomatic corps sick with unholy
anxiety. What next? They felt. A bit of a pill this Kadirgamar,
such, talking in loud whispers in a suspicious manner about
interference, illegal intervention and internal affairs, not to
mention territorial borders and all that sort of thing, especially
in this new borderless world was not going to get the man
anywhere. I mean to say Sir. If this world were not borderless
some one please explain to me how Uncle Sam’s boys and a few of
our own blokes, of a morning recently, were able to pack a few
tanks and guns and things into their back packs, cleverly bypass
Iraqi immigration and customs, enter the modern Babylonian state,
and bring down the idol of Nebuchednezzar. Or was it Saddam? How
easily one forgets? Names, I mean.
judge of my surprise when the big cats, having rummaged feverishly
through old newspapers stacked up for the paper man, dug up the
famous Kadirgamar-ism and popped it into the system as a reason to
stay out of the peace process.
Gad Sir! You natives never cease to amaze me.
the one hand that delightfully pink chap, your pee em, announces
at the Tokyo conference about a ‘provisional administrative
structure.’ On the other hand the Tigers are sniffing at it in
disdain, while accusing your native government of using the
international community to twist its arms into submission.
Were these chaps born yesterday? Me thinks that was the general
idea all along. I most liked the line about not ‘allowing undue
and unwarranted interference by extra territorial forces in ethnic
conflict, which is an internal political affair that has to be
resolved by the parties in conflict.’ Isn’t that a mouthful of
Tiger chaps, most of them chefs who have turned accountants or was
it vice a versa, yearn for the paper work. No job is finished till
the paper work is done. Accustomed to burning the midnight oil,
soaking the foot in cold water, fermenting the forehead in balm
and bending the back over a profit and loss sheet, these chappies
have put their foot down. The one not soaking in the hot water.
peace talks they say, until Ranil puts forward a ‘clearly
defined draft framework’ for the structure proposed by him.
Meanwhile I learn from my trusty native slave that the Tiger
chappies do not feel that any documents signed or declarations
adopted by the donor community in Tokyo are binding on them.
Let us wait and see shall we? By George, let us wait and see.
my words you impoverished Griseldas. Even if the Tigers refuse to
talk, the money soon will.
great aid bonanza!
the 10 year period 1993-2002 Sri Lanka’s net receipts of foreign
assistance amounted to Rs. 207 billion. However, at last week’s
donor conference in Tokyo, the nation was pledged an unprecedented
aid package exceeding Rs. 400 billion. This included a sizeable
outcome of the conference was hailed by the local business
community, which saw it as an endorsement of the government’s
initiatives on the peace front and economic policies. The Colombo
stock market reacted to the news by a rise in the indices.
were however expressed on Sri Lanka’s poor track record of aid
utilisation, which has been under 20% in the past. An unanimous
opinion was that the country should speedily implement development
programmes and build its infrastructure to catalyse future
economic growth. Special emphasis was also laid on rebuilding the
north and east.
Minister Ranil Wickre- mesinghe was quick to promise speedy
implementation of projects and optimise the aid pledged. He stated
that the nation “has to overcome the delays, the blockages and
the inertia of its bureaucratic apparatus and transform it into
one capable of speedy implementation where work is done
would also have been heartened when Finance Minister K. N. Choksy
stated that the government has taken steps to increase aid
utilisation to 45% by the end of next year from the 2002 figure of
was initially expected that Sri Lanka could obtain an aid package
of around US $ 3 billion at the Tokyo Conference on Reconstruction
and Development of Sri Lanka. However, the participants who took a
positive view of developments in the country ultimately pledged a
record US $ 4.5 billion over the four year period 2003-2006.
offered aid amounting to US $ 1 billion, while the European Union
pledged grants of US $ 293 million. The Asian Development Bank (ADB)
also promised to contribute US $ 1 billion and the US pledged US $
is in addition to the US $ 567 million granted by the IMF under
the Poverty Reduction
and Growth Fund and the Enhanced Fund Facility. The World Bank
had also earlier promised aid to the tune of US $ 800
million under its Country Assistance Strategy.
51 countries and 22 international organisations that participated
at the conference also endorsed the government’s ‘Regaining
Sri Lanka’ initiative which they described as a comprehensive
programme to develop the nation on a balanced and equitable basis.
also emphasised the need to provide urgent humanitarian assistance
to rebuild the conflict-hit areas in the north-east. They further
stressed the need to adopt economic policies to reduce poverty,
noting that sustainable development also hinges on economic growth
and job creation as well as encouraging private enterprise.
initial euphoria over the huge aid package is yet to die down, but
it must be remembered that the sums offered are merely pledges.
There yet remain the urgent tasks of obtaining the monies and
implementing the projects. Furthermore, some of the loans and
grants could be withheld if the peace process faces obstacles.
Also, the donors would have imposed other conditions such as the
requirement to source expertise and equipment from those
Frontier Research, Amal Sandaratne noted that concessionary loans
which have to be repaid do not now have the favourable lower
interest rate advantage as much as they did in the past.
pointed out that global interest rates have declined to extremely
low levels with expectations of deflation in the future. For
instance, in Japan the government borrows at rates well below 1%,
close to zero. In the U. S., short-term treasury bills
are under 1%, and a 10 year note is close to 3%.
to Sandaratne, the presently prevailing situation means that if
the Sri Lankan government obtains a loan from Japan at the
supposed low rate of 1% or 2%, then the Japanese government
actually stands to make a profit as their borrowing cost is so
also said that in addition to the general conditions (such as
progress on the peace front), part of the loans pledged will also
carry conditions such as the demand to source expertise and
equipment from the donor country. This may not be in the
nation’s best interest.
that Sri Lanka’s economic situation seems better, Sandaratne
believed the government should consider going for a sovereign
rating. It could also possibly obtain guarantee facilities on
loans from multilateral financial institutions such as the World
Bank and Asian Development Bank, and then source loans from the
international bond market.
pointed out that India has successfully tapped the non-resident
expatriate communities to raise funds. He believes that such a
source could be successfully tapped by the LTTE if they want to
develop the north-east without conditions attached.
said the LTTE can use their network to tap the Tamil expatriate
community to fund projects in the north-east without having to
adhere to the conditions laid down in Tokyo.
also notes that the funds pledged do not necessarily translate
into monies. He pointed out that about US $ 5 billion was pledged
for Afghanistan, but their ability to utilise that aid was
limited; also because the world was distracted by the Iraq war
very little aid has actually reached that country.
of the Sri Lanka Association of Investment Professionals, Ravi
Abeysuriya said the onus is now on the government and citizens to
adopt a bipartisan approach and make best use of these funds to
usher in prosperity and generate sufficient income to repay the
debts and improve the living standards of the populace.
noted that Sri Lanka had no option but to borrow, since our
capital productivity is low.
stressed that the funds should be utilised most productively to
generate income, so that the country will be better off even after
paying its debts.
would like to see, as in China, the transport and power sectors
being developed,” he stated. He added that attention should be
paid to developing the highways network and providing power at
rates comparable to other countries in the region.
pointed out that previous governments that have borrowed funds
have not put the monies to the best use, and as a result we have
accumulated a huge debt burden which is already 105% of GDP. He
was referring to a Central Bank report which stated that the
country’s total debt burden - as a percentage of GDP - was
105.3% at the end of last year, with domestic debts accounting for
59.8% and foreign debts 45.5%.
also noted that Sri Lanka has received Rs. 207 billion during the
last 10 years as loans and grants. He however lamented that the
nation has largely failed to put these loans and grants to the
best possible use. Loans from 1993 to 2002 totalled Rs.135 billion
while grants amounted to Rs.72 billion. It was also stated that
our debt servicing ratio for 2002 was 13.2%, which is fairly high.
He said that lending to Sri Lanka has been conditional, and part
of the monies revert to the donor countries. It was also noted
that during the past 10 years, 35% of the aid utilised has been in
the form of grants.
also said that the utilisation of foreign aid pledges in previous
years has been under 20%. This fact was also recently referred to
by ADB President Tadao Chino. Chino praised the government’s
intention to streamline its project implementation procedures and
establish management structures to improve aid utilisation.
to Abeysuriya, Sri Lanka has a poor track record of utilising
donor funding and channeling it to the majority of people living
below the poverty line. He also stressed that the monies pledged
for resettlement and rehabilitation should be channelled to the
affected, so that they can upgrade their quality of life.
National Chamber of Commerce of Sri Lanka, Asoka de Z. Gunasekera
said the aid package is a clear indication that donor countries
and funding agencies such as the WB and ADB have the fullest
confidence in the government’s peace initiatives and its
sincerity in implementing the development programmes laying
special emphasis on the north and east.
added that the ministries and state agencies responsible for
implementing the projects utilising the huge funds “should
quickly get on the job and utilise this funding as early as
pointed out that three prominent business chambers in the island
had made recommendations to the governments of Sri Lanka and Japan
regarding areas where the funds should be utilised, laying
emphasis on the development of infrastructure. They had also
proposed measures to overcome delays.
are happy that funding agencies and donor countries are very
eagerly supporting the peace initiative,” he said. He added that
the government should involve the LTTE in the development
programme of the north-east.
Ceylon National Chamber of Industries, Ranjith Hettiarachchi said
that project contracts arising from the aid pledged should be
given to local construction firms rather than foreign companies.
He emphasised that local firms have the necessary expertise and
capability to handle most of the projects.
said that at a meeting by the private and public sectors about a
month ago, it was decided that the funds should be utilised for
the development of the power sector, highways and transport
(especially the railway system) and uplifting IT education in the
and efficiency in the utilisation of funds was also emphasised.
Spokesman Dr. Sarath Amunugama commenting on the Tokyo donor
conference said he is happy that the event took place.
However regarding the US $4.5 billion in aid that the
country was pledged, he said “this quantum of money
assistance consists largely of loans so every cent will have
to be repaid with interest so there is no reason for
Lanka is falling into a debt trap. The UNP, particularly
when the Prime Minister was in the then opposition,
constantly warned the government against getting into debt.
He is not only getting into a debt trap but he got in and
closed the gate,” he added.
stated that every Sri Lankan living today and the
generations to come will have to repay the loans to which
many conditions have been attached.
went on to say that he does not know the reaction of the
LTTE with regard to the continuation of the peace process.
are directions from the World Bank, International Monetary
Fund and the Asian Development Bank that there should be
large scale restructuring of banks and the public sector,
to him, large-scale dismissing of workers and shutting down
of government agencies will lead to a total attack on the
this assistance and drift towards the right there will be
tremendous suffering experienced by the working class,”
we do not know what projects this money will be used for,
whether it will be in the north or south. We should also
know whether the LTTE will drop their demand for a separate
state before the country underpins these loans for the
Workers Congress Leader Mano Ganesan stated the pledges
demonstrate the confidence of the international community in
the peace process, but not necessarily
in the government.
is a principal need for a federal system in the north and
east and we are happy that
the Prime Minister is openly talking about this, as
previously the word federalism in the political sense was
considered a bad word.”
not for the peace process, there would be no donor aid or
international aid, pointed out Ganesan.
to The Sunday Leader, Lanka Sama Samaja Party General
Secretary Batty Weerakoon said, “Aid is not the only
important issue here, the aid given will help any government
that is accepting the capitalist system.”
are grateful to get the large amount of aid but the main
question is the peace process itself,” he added.
significance of this aid is that the international community
has accepted the present position and the LTTE cannot have
its own way.
the aid negotiations the international community went ahead
with whatever contributions they could make, explained
is something the LTTE did not anticipate. Now they have to
climb down and change their own stance.”
to The Sunday Leader regarding the Tokyo donor conference,
EPDP MP V. Thavarasa emphasised on the development
activities that would arise from the money granted.
said that all the parties concerned in the north and east
should have participatory roles in the decision-making and
should also be a political solution between the government,
LTTE and other parties so that a setback (non-participation
of the LTTE) of this nature will not happen.
there were no political issues discussed, except federalism.
Therefore with the help of all parties a political solution
should be found first, Thavarasa said.
stock market reaction
unprecedented aid pledged at the donor conference in Tokyo
buoyed sentiment in the Colombo stock market.
All Share Price Index which closed on Friday (June 6) at 903
basis points, rose to 915 on Monday and 918 on Tuesday.
of Research, Asia Securities, Dushyanth Wijesinghe said
sentiment was basically driven by the fact that funds
pledged could raise the rate of economic growth in the
future, especially with a large proportion of funds being
deployed to develop infrastructure.
noted that one of the main reasons behind the stifling of
economic growth has been the inadequate infrastructure in
areas such as transport and power.
felt the upturn in the market last week could be partly
attributed to the positive sentiment arising from the donor
conference and also the very positive corporate results for
the financial year ended March 31, 2003
to him, there should be a market correction. He added that
the outlook for corporate earnings is very positive, and
they are looking at a 22% corporate earnings growth in the
current year. This figure could be higher if the north-east
situation improves. With regard to the aid pledged,
Wijesinghe noted however that the real issue concerns the
deployment of funds, and what really is necessary is that
appropriate structures be in place to utilise the funds.
system to implement foreign funded projects
Minister Ranil Wickremesinghe has announced that the
government is introducing a completely new organisation to
implement foreign-funded projects. This will also
incorporate the External Resources Department.
said that it will ensure a timely and professional tendering
process, and would have the ability to bring in the best
qualified individuals and firms from outside government to
manage and implement projects. Transparency and
accountability will be significantly improved, he pledged.
to him, the new system will provide the basis for
substantial improvements in the utilisation of the
assistance necessary for the reconstruction and
rehabilitation in the north-east and other conflict affected
areas. It will also provide the foundation for the economic
transformation of the nation and raise incomes and reduce
Prime Minister also noted the weaknesses of the bureaucracy
in handling foreign-funded projects. “Our public service
is too large, too poorly paid and lacks the capacity to
handle the increased rates of project design and
implementation,” he said.