Politics

In the throes   of Tiger rivalry

Relatives of the two youth protesting on the main highway, Army patrols in Chenkalady, A Police officer guards the LTTE office in Batticaloa after it was bombed and PLOTE head in Batticaloa, Baheerathan shows his injuries

By Amantha Perera in the East  

Since his defection, Vinyagamoorthi Muralitharan alias Karuna and cadres loyal to him have been carrying out sporadic targeted attacks against the LTTE. In return, Karuna associates and sympathisers have been murdered.  The internecine killings that had dipped following the tsunami have once again increased in the east. Last week The Sunday Leader journalist Amantha Perera and freelance  photographer Buddhika Weerasinghe reached a hideout used by Karuna cadres for the first time since the defection. The Karuna cadres led by Mangalan Master had taken refugee at a Tamil village named Thivichchenei in the Polonnaruwa District. 

The road that leads to Thivichchenei in the Polonnaruwa District is nondescript. The tar road crisscrossing acres of paddy fields  turns into a dirt track closer to the village, just like at any other village deep in the rural areas.

Then again it is not usual to find a youth armed with a powerful machine gun manning a bunker at the entrance to the village like at Thivichchenei. The young man with the gun was a member of a group that is waging the war in the east on behalf of renegade former LTTE Eastern Commander, Karuna.

The hamlet of 78 Tamil families has been paying host to the group led by Mangalan Master, a senior Karuna lieutenant, since the group arrived and set up operations at the village about seven months ago. According to military sources, there are about 60 armed Karuna group members, including very young cadres, in the village.

"They (villagers) treat us well," a member at the guard post said while awaiting instructions from Mangalan Master whether to allow the journalists in. Approval was not granted and we had to turn around at the entrance.

The village lies about 10 kilometres from the main Habarana-Valachchenei highway, and is a traditional Tamil village that lies next to a Muslim village sharing the same name. According to military sources in the area, the renegade LTTEers were welcome by both communities when they defected last April and have been operating from the village ever since the arrival.

"They were clothed, given shelter and fed by them," soldiers in the area of the village said.

The area is dotted with military encampments and there is one about two kilometers from the village on the main access  road. However, at the village that lies north west of Welikanda, there was no presence of government security in any official form. It is totally under the control of the Karuna clan.

Access denied

However, villagers in the area said that most of the time access was denied to outsiders to Thivichchenei.

It is an open secret even in Batticaloa  that armed Karuna members operate out of the village. All along the way villagers kept saying, "Yeah! We have heard that armed men are there, but we don't know."

The soldiers at the last army check point were nervous of the snoopy journalists but did not prevent them from proceeding.

Eleven months after he fled to government held areas, a year after he rebelled against LTTE Leader Velupillai Pirapaharan, after countless denials by the government that it was not providing any support to the rebels and avowals that there was no presence of Karuna supporters in any way in the east by the LTTE and hundreds of murders and irrational killings, we had finally reached a hideout used by Karuna men inside government controlled areas. And it was nothing more than a quiet village hamlet.

Roads connect Thivichchenei to another village further north, Omadiyamadu, yet another base used by Karuna cadres according to the LTTE. The Tigers have constantly said that Karuna cadres were using the border area from Omadiyamadu to Aralaganwilla close to Maha Oya as a staging ground for attacks until recently when they changed tune by blaming all the attacks on military intelligence.

The calm at Thivichchenei had been shattered long before last week. It was obvious that the internecine violence between the erstwhile comrades in arms during the last eight months had driven fear into the civilians. "You talk about one, the other kills you; you talk about the other, the reaction is the same," a villager who for very obvious reasons wanted no attributions, said.

The LTTE has indicated since the defection that several groups aligned with Karuna like the one led by Mangalan Master have been operating in the border areas that separate the Batticaloa and Polonnaruwa Districts.

Violence has now spread deep into the Sinhala dominated areas of Welikanda and  Sevanapitiya. On March 7, six people including a Sinhalese were killed in Kolankanwadeiya, a village close to Sevanapitiya. The military blamed the LTTE for the murders saying the victims were supporters of the Karuna faction.

The LTTE has denied any involvement and blamed the Karuna group for the killings and the subsequent propaganda blamed them. Last week there were reports that said it may have been a contract killing carried out by the Karuna faction.

SLMM Head in Batticaloa, Steen Joergensen confirmed to The Sunday Leader the monitors too had heard the story but had so far not made any breakthrough to the murders during their inquiries.

Fear

On March 14, two Tamil youth from Karapola, a Tamil village about three kilometres from Thivichchenei were dragged out of their houses and shot in the head. Military sources said the Wanni Tigers were responsible for the attack which they said was carried out to drive fear into the villagers who had been accommodative of the Mangalan Master group.

The deceased, Sugu Selvanadan and Subramanium Gunesekera, both aged 20, were friends of Karuna group members according to military sources. "One Karuna member called Murali was a classmate of theirs and they had helped out in field work," they said, referring to villagers helping in with the harvest.

In fact, one of the Karuna group members The Sunday Leader was able to talk to for a little while at Thivichchenei too hailed from the nearby village of Mutugala. The Defence Ministry in a statement issued from Colombo said that the Karapola assailants had been led by a Wanni cadre identified as Madhi.  Earlier it had said that the two were sympathisers of the Wanni faction but later retracted the claim.

The villagers themselves had a different story to tell. They blamed the Karuna group for the murder. They said that one Lakshman - a member of the Karuna group - led the seven members who had assassinated the youth after calling them out of their houses.

On March 16, they brought the two caskets onto the main highway and staged a public protest against the presence of Karuna cadres in the area. The protest was supported by monks at the nearby village temple at Susirigama who said if the demands were not heeded by the authorities, they would join in a massive protest organised for March 29.

According to Kasan, a villager from Karapola, the Karuna group has been harassing the villagers ever since they came in. They had abducted youth from the village to work in the fields and held them incommunicado for days. Kasan's own brother, Jegadasan, has been missing for 15 days after he was taken away by the Mangalan Master group. "We can't make police complaints because they have threatened to kill us," he said.

Military sources in the area however said LTTE sympathisers from Valachchenei and Batticaloa had infiltrated the mourners and were instigating them against the Karuna group. "They are being used to drive a wedge between the villagers and Karuna group."

The same sources said the Tigers had found it easy to infiltrate deep into Sinhala and Muslim areas on the Batticaloa-Welikanda border using the harvesting season as cover. Many migrant workers from Batticaloa and other areas including the uncontrolled areas are in Welikanda temporarily employed in the paddy fields. The military said LTTE members too were among them.

"They hide weapons somewhere; in the night they carry out attacks. By morning they are field workers."

Escalating violence

The violence near the Sinhala areas has now prompted the SLMM office in Batticaloa to open a point-of-contact office in Welikanda. "It will be operational for six months at least," Joergensen said.

Since the murder of former LTTE Political Head for the East, Kausalyan on February 7, killings that came to a halt with the tsunami have dramatically increased. Several reports subsequent to the Kausalyan slaying linked Mangalan Master to the attack. The attack took place at Namalgama, further north on the main highway.

The LTTE has been targeted on several occasions. Its female Political Head for Batticaloa, Kuveni, was shot on February 22 near Akkaraipattu and on March 6, Robert Kandamarasa Udyakumar alias Pushparaja was killed at Kirimichchi which is under the LTTE.

On the night of March 12, a few hours before the Karapola double murders, the LTTE political office in Batticaloa came under grenade attack around 7: 30 p.m. No one among the 15 LTTErs in the office were injured and no serious damage was caused by the explosion that took place in the garden.

However, last week's attack was the fourth on the office since the Karuna defection. The office is located near a police post and LTTE members were pointing at the lethargy of the police in preventing or apprehending the attackers as proof of their charge that the security forces were at least turning a blind eye to the rivals.

The Tigers are now blaming the intelligence units of the army for carrying out the attacks. "We blame the military for the attacks, and people cannot expect us to remain patient forever," LTTE Political Head for Batticaloa, Anubmaran said on the morning of the attack. It was the murder of his predecessor, Ramalingam Padmaseelan alias Senathiraja on July 13 last year that set off the internecine killings in the east.

Anubmaran told The Sunday Leader the Tigers had handed over evidence to suggest the involvement of the military in the attacks. That included photographs of an army like helmet and cigarette butts from the site of a recent attack within areas held by the Tigers.

The Tigers said the Kausalyan attackers too had been in attire similar to that of the military. The guardsman at Thivichchenei was wearing a greenish outfit which would have been difficult to distinguish among army fatigues.

Joergensen of the SLMM however said the monitors had not come across any evidence to suggest a link to the military with regard to the attacks. "We have no evidence the army is doing this," he said.

Despite repeated denials by the Tigers that they are not carrying out  reprisal attacks, targeting of rival political party members and  sympathisers has continued.

Rival Tamil parties operating in Batticaloa are equivocal as to who is behind  the attacks - the LTTE.  The Eelam People's Revolutionary Liberation Front (Pathmanabha) (EPRLF) and the People's Liberation Organisation of Thamil Eelam (PLOTE) have written to the SLMM accusing the LTTE of murdering members.

No action

The EPRLF letter listed seven murders of members since February 20. "I want to die at the hands of the LTTE, then only will I be known as a democratic leader," EPRLF National Organiser, Ira Thurairaththinam told The Sunday Leader from the Batticaloa office.

"The attack by the LTTE on our members is continuing and we have complained and no action has been taken by you," PLOTE Batticaloa Deputy Leader, T.S. Baheerathan wrote to the SLMM the day after his office was bombed on March 12. Baheerathan told The Sunday Leader the LTTE uses safe houses in Batticaloa provided by sympathisers to store arms that are used for attacks.

The Batticaloa offices of the EPRLF and the PLOTE are provided security cover by the police and army.

Joergensen said the SLMM inquiries have not revealed anything to lend credibility to the charges. "We simply don't know who is behind them. There are a lot of targeted killings going on. But the civilians are not under threat, it is not like people shopping are being gunned down," Joergensen said.

For the time being that might be true of Batticaloa, but not so in the Muslim dominated Ottamavadi. Three weeks back Karuna told a website that the Wanni Tigers were engaged in making friendly overtures to the Muslims. He reminded them of LTTE atrocities against Muslims, ironically notwithstanding his own complicity in them as then eastern commander. This followed meetings LTTE Political Wing Head, S.P. Tamilselvan held with Muslim leaders.

Soon after the meetings, Muslims from Ottamavadi were targeted. A.R. Raheem, a three-wheel driver, was shot and killed at Kirimichchi, 500 meters from the Pushparaja murder site two weeks back. Several Muslims who had gone to LTTE held areas to collect fire-wood went missing  and protests erupted in Ottamavadi on March 11.

The missing later resurfaced and said they were chased around by a bunch of wild elephants and not marauding Tigers. The  military had initially charged the Muslims were abducted by the Tigers. The Tigers for their part had earlier indicated to the Muslims not to support the Karuna group.

"We are not pointing our finger at any one. This is the work of other groups," President, Ottamavadi Jumma Mosque, Lebbe Hajiar said. The LTTE last week condemned the attacks against the Muslims and said outside forces were trying to disrupt the cordial relations between the two communities since the tsunami.

Bridging the divide

"All bitterness is gone after the tsunami," Hajiar said. The new LTTE political head for the east, Marshall last week initiated several meetings with Muslim leaders from Ottamavadi.

While the Tigers were making efforts to bridge the divide between them and the east's sizable Muslim community, the once friendly ties between them and the security forces are seemingly  waning.

The SLMM's efforts to organise a meeting between the two sides have proved futile. Both sides have also adopted accusatory language in press releases detailing events in Batticaloa.

Joergensen has been meeting with representatives of both parties regularly but has so far failed to clinch a joint meeting. "I don't know why it is so difficult (for both sides) to meet," he lamented. The only positive factor of the meetings other than maintaining a continuous dialogue has been that both the Tigers and the security forces have reiterated their commitment to the ceasefire.

The SLMM mandate limits it from initiating any sort of contact with the Karuna group. "We have had no contact with them. Karuna is not part of the ceasefire," Joergensen observed.

But it is Karuna and those still under him that the LTTE would have to contend with in the coming weeks.

The Tigers have posted two very senior military commanders on either side of Batticaloa.  Banu who is the eastern  military commander operates from south of the town, and Balraj, the overall deputy military commander has been posted to Vaharai and areas further north.

Anubmaran confirmed that Balraj is operating in the area but said the presence of the top military rankers was nothing out of the ordinary. "It is usual. Now people get to know this, but they were moving all the time during the war."

Balraj is engaged in strengthening  cadre levels according to the political office head. Karuna had recruited under-aged children during the ceasefire according to Anubmaran and all of them had been discharged. According to military sources, Karuna had sent home close to 2,000 child soldiers once he severed ties with Kilinochchi.

Child recruitment

Soon after the LTTE wrested control of the east, the SLMM and UNICEF records indicated a sharp rise in complaints of child recruitment in the east. That seems to have stopped, according to the SLMM. "We are still getting reports of forcible recruitment of adults," Joergensen added.

Pro-Karuna sources last week said more than 40 LTTE Intelligence Wing cadres and pistol gang members had entered government-controlled areas at Omanthai in Vavuniya on March 17 and reached Batticaloa. They were believed to be working under senior Intelligence Wing cadre Newton, who had been sent from Kilinochchi to the east. There are already at least 25 cadres working under Newton according to pro-Karuna sources.

Bracing for more violence

The east last week appeared to be bracing for more violence. "Killings are going to rise,"  PLOTE's Baheerathan warned. Not missing a beat, the pro-Karuna Tamil National Front released a statement last week calling on Tamils to unite in the effort to defeat Pirapaharan's dictatorial ways.

It said that militant cadres who left the LTTE are stranded and in need of support. The release came under the signature of S. Cheran, who also released the statement claiming full responsibility for the Kausalyan murder.

The military had racked up security in the area. All vehicles entering and leaving Valachchenei are subjected to checks just south of the Valchchenei bridge reminiscent of the war era.

New tents have been constructed for civilians to line in to be frisked and have their baggage checked. Similar additions are coming up at Welikanda as well. The military said the new checking was put in place following the Kausalyan murder. In any event, the east is a bomb on a timer.

The young Karuna cadre manning the bunker was aware of it. "One day we kill them, the next day they kill us," he said.

And it will continue until one day there is only either we or them left in Batticaloa.

Gearing up for a referendum

Chandrika Kumaratunga, K.N. Choksy, Dilan Perera and Wijedasa Rajapakse

By Dilrukshi Handunnetti 

With the post-tsunami fervour to rebuild the nation on a fast decline, the United Peoples' Freedom Alliance (UPFA) has now announced a different programme - a political one as opposed to the developmental one.

Last week saw all the constituent partners of the government shedding their differences to signify support for the holding of a referendum to ask the people of the country whether the executive presidency should stay or go.

The decision to attempt abolition of the executive presidency may have come a decade late, but it comes at a politically opportune time from a President who needs to look for other options to stay on as chief executive. And even undertake an Rs.700 million exercise in a desperate bid to extend her stay.

Meanwhile, her trouble-plagued government is planning a campaign to offer moral justification to the referendum that comes in the aftermath of a catastrophe and a year of unfulfilled political pledges.

As one cabinet minister told this writer, "It is better to do the right thing, even though the decision may be based on political necessity." The government reasoning is that the President is now twice duty bound to abolish the office as her original pledge was made to the Janatha Vimukthi Peramuna (JVP) presidential candidate, Nihal Galappatty whose political grouping is a significant coalition partner of her government today.

Defending a mandate

Interestingly, Kumaratunga has been recently defending her presidential mandate of 62% of the popular support received in 1994 as one given largely for the abolition of the executive presidency - a mandate she is now determined to give some expression.

According to President's Counsel and UPFA Parliamentarian, Wijedasa Rajapakse, the government is studying the possibility of posing three questions before the people at the proposed referendum. However, one question is of foremost significance - the question of the executive presidency.

The other two questions are whether the people considered federalism as the most viable solution to the ethnic question and whether the country required urgent electoral reform.

According to Article 85 of the Constitution, the president is empowered to submit to the people by a referendum every bill or any provision in a bill certified by the cabinet of ministers or which the Supreme Court has determined as requiring the approval of the people at a referendum provided there is a two thirds majority in parliament in favour of such a bill.

Further, the 1978 Constitution specifies that such approval should also be by an absolute majority.

Kumaratunga maybe setting herself an insurmountable task in order to extend her stay in mainstream politics, but there are several legal issues that complicate the very exercise proposed.

The snags

Then there are the more political issues such as getting the minority political parties to support the move. The Tamil National Alliance (TNA), the Sri Lanka Muslim Congress (SLMC) and the Ceylon Workers Congress (CWC) have collectively opposed any move to abolish the executive presidency. This also means not receiving the necessary support for such an exercise, if such is proposed to the house. That also means the government's failure to secure the necessary two-thirds majority in the house.

General Secretary, SLMC, A.T. Hassan Ali told The Sunday Leader that the party would simply oppose any move to abolish the executive presidency which is very much needed for the protection of the minority political needs.

The CWC stance remains the same. Group Leader, TNA, R. Sampanthan confirming the party stance explained that it was mandatory that the office of executive president be continued.

While the nitty gritty is yet to be discussed, Deputy Minister of Ports and Civil Aviation, Dilan Perera proposes a way out for the government - a constitutional reform exercise that would transfer some of the executive powers to the prime minister "to dilute the high powered office - the abolition of which remains a prime need."

Perera, a former deputy minister of justice, argues that a balancing act might be needed to receive the minorities' support in parliament, but insists that the executive presidency must go as it has proved a bane to the country since its introduction in 1978.

However, the drafter of the very constitution that created the powerful office, former Constitutional Affairs Minister and President's Counsel, K.N. Choksy feels that if there is no two thirds majority in support of the abolition of the executive presidency, the holding of a referendum would prove futile as there would be no legally binding effect.

UNP against total abolition

"Of course, there could be any number of non-binding referenda held but then where is the moral authority and the legitimacy required?" Choksy opines. 

He says that the required majority is mandatory and there could never be any derogation of the provision if the matter is to be referred to the people at a referendum.

As for the United National Party's position, he is clear that the party is in agreement to certain amendments, but not for the complete abolition of the office.

He further says that according to Article 3 of the Constitution, sovereignty is in the people and inalienable and that sovereignty includes the powers of government, fundamental rights and the franchise which could be exercised through the legislature.

As for referring very broad and general questions to the people, Choksy believes that questions need to be "explanatory and lucid, not vague."

However, Wijedasa Rajapakse who believes that the holding of a referendum is the correct mechanism to test the pulse of the people, does not feel that questions need to be strictly legalistic as long as the idea is clearly conveyed. "For example, if the question is about federalism, people now know that we are asking whether they accept extensive devolution with separate provincial or state governments. That is clear enough," Rajapakse asserts.

However, he agrees that these questions should not be too general.

One of the points raised by the main opposition UNP, following the call for a referendum on several questions, is that the questions should be more specific so that the people vote for or against specific concerns raised.

In support, they also cite the infamous 1982 referendum held by the first Executive President, J.R. Jayewardene. Despite the moral validity of Jayewardene's referendum which is still believed to be a dubious exercise undertaken by the UNP to extend the life of parliament, it still had been a constitutional exercise with the question being very specific - whether the same parliament should continue for six more years or not.

Accordingly, the UNP also insists on specific questions to be posed to the people.

According to Rajapakse, the third question is possibly going to deal with electoral reforms. While justifying the need for such an exercise, the UPFA for the time being has not considered whether specific models should be proposed when people are asked to choose. "That won't be necessary," says SLFP General Secretary, Maithripala Sirisena.

Electoral reform

Sirisena feels that the country has been needing a new electoral system that does not make candidates kill each other for preferential votes and feels that asking for a straight 'yes' or 'no' to change would suffice.

"All these constitutional and legal concerns cannot be put across to the people in that way. The question has to be simple and general," he argues.

When queried about the many possible electoral reform models, Sirisena says that the SLFP as well as the UPFA have been clear on the model they propose. The government's premise is that there need not be specific models proposed at a referendum.

"Nothing has been really finalised. These questions would be reconsidered and further fine-tuned. Anyway, our lawyers have told us there cannot be legal impediments to broad questions. More specific legal questions might confuse the people," adds Sirisena.

And Rajapakse fortifies the point by adding that people do understand that when they are asked to vote for or against federalism, the real question is whether they are in favour of devolution of power under the 13th Amendment as opposed to federalism.

As for the decision to hold a referendum, the UPFA is now specific. "Yes, we will hold it. It is long overdue and these changes too are long overdue," says Sirisena.

Tsunami funds - who's telling the truth?

"Not a cent" - President and P.B. Jayasundera - "money coming in"

By Mandana Ismail Abeywickrema 

Confusion reigns over donor funding to Sri Lanka in the aftermath of the tsunami with President Chandrika Kumaratunga going public last week that the government is yet to receive even five cents in cash as tsunami aid from foreign donors. The statement was however contradicted by Treasury Secretary Dr. P. B. Jayasundera the same week when he told The Sunday Leader that donor funds have been coming into the country for post-tsunami development work and infact there has even been an improvement in the cash flow.

President Kumaratunga addressing a meeting at Yayawatte in Tangalle to mark the launching of a housing scheme for the tsunami displaced, said the government only had the money which came directly to the President's tsunami fund and the Prime Minister's fund. The total amount collected was close to Rs. 1 billion, which according to the President would be utilised for housing projects for the displaced.

However, according to Dr. Jayasundera tsunami aid pledged by foreign donors are coming into the country, and he added that approximately US$ 450 - 500 million in expenditure is expected to be incurred by the donors through various redevelopment projects for 2005.

Three-phase process

Explaining the mechanism involved in aid pledged, Dr. Jayasundera observed that it is a three-step process, which is also time consuming.

The first he said is the pledge made immediately after the disaster, which is then converted into commitments by the signing of an agreement between the relevant parties and the final step is expenditure, where the donor would meet the monetary requirements to complete the respective project.

So far, the country has received US$ 150 million from the World Bank, US$ 250 million from the International Monetary Fund (IMF) for immediate budgetary support, US$ 80 million from the Japanese government, in addition to funds made available by several INGOs.

Dr. Jayasundera noted that since December 26, 2004, the government has spent close to Rs. 10 billion on relief work with Rs. 6 billion being recoverable.

He further observed that 2005 would be a year that would reflect the country's continuous economic improvement.

Dr. Jayasundera dismissed statements of an imminent economic crisis as being politically driven.

He said that while any economy would have to face risks, it is important to recognise and manage them for the betterment of the country.

Improved performance

The substantially improved performance in the agriculture sector, especially the bumper paddy harvest is expected to reasonably reduce rice prices in the coming months.

Prices of food items, which escalated due to the drought that prevailed last year, although still fairly expensive, are expected to come down in the next few months, according to Jayasundera.

"Food production has been better than last year," he said.

The performance in the industries and services sectors is also expected to be buoyant this year.

Dr. Jayasundera noted that in the industries sector, the apparel sector is expected to top US$ 3 billion in exports.

However, the country is still experiencing the lagging effect of high petroleum prices as well as last year's drought.

"The country is still on a high fuel structure," Dr. Jayasundera said.

He explained that the country was never at a profit making level in the fuel sector to reduce prices.

The lagging effects of the drought were reflected in agricultural goods, which in turn compounded the problem of rising inflation.

Dr. Jayasundera is hopeful that with the reduction in rice prices and the coming of harvest, vegetables too would come down in price.

Be that as it may, the Colombo Consumers' Price Index (CCPI) for the month of February 2005 was 4004.8. This shows an increase of 18.1 index points or 0.5 per cent from the January 2005 index number of 3986.7. This is an increase of Rs. 36.62 in the expenditure value of a "market basket" when compared to January 2005.Short supply

The increase in the CCPI for February 2005 is mainly due to the increase in prices of beef, most varieties of fresh fish, eggs, some varieties of vegetables, betel and arecanuts. These price increases can be mainly attributed to the short supply of locally produced agricultural consumer goods to the main markets in Colombo city.

However, prices of rice, bread, wheat flour, dried chillies, lime, red onions, coconut oil, dried fish - salaya, coconuts, and potatoes have decreased during this month.

The annual inflation rate on the basis of 12 months moving average increased to 10.1 percent in February 2005 from 8.8 percent in January 2005. It is however interesting to note that the annual inflation rate runs into two digits again in this month after February 2003.

Dr. Jayasundera pointed out that it would take time for the market to adjust its prices to reflect the economy's positive side.

He said that if the current economic trends continue, inflation could be reduced in the next few months.

He however noted that the greatest challenge faced by the country is bringing down the cost of living.

In this aspect, the Treasury Secretary highlighted the importance of prudent management of the public sector enterprises.

Strain on coffers

Dr. Jayasundera observed the plight of the Ceylon Electricity Board and the Ceylon Petroleum Corporation, as putting much strain on the Treasury.

He also noted that there would be some concern with regard to balance of payments, as it is expected to be higher than last year with the increase in imports in the aftermath of the tsunami.

The fiscal deficit in 2005 is estimated to increase due to expenditure on relief, rehabilitation and reconstruction work.

As pointed out by Dr. Jayasundera tsunami related expenditure is expected to be funded entirely through foreign donor assistance, the private sector and NGOs.

However, looking at the positive side, Dr. Jayasundera said that the stabilising of the exchange rate would reflect on the market by end April or May.

Revenue measures taken - the new VAT system and other taxes imposed - are expected to help consolidate the budget for the year.

Also, according to Dr. Jayasundera, the IMF's immediate budgetary support is expected, along with the debt relief offered by bilateral donors amounting close to US$ 250 - 300 million.

"The year can now be planned to reduce pressure on the exchange rate and borrowings," he said.

Year 2005 is expected to be a development driven one, which in turn is expected to portray the country's resilience and continue with the growth momentum.