• LTTE threatens Britain
• Moonesinghe flouts parliament call
• Journalist denied travel permit in act of vengeance
• Much-sought-after economic rescue package coming

LTTE threatens Britain

By Chris Kamalendran

"We have informed Norwegian facilitator Erik Solheim that we have no intention of following the peace process," LTTE's Chief spokesman Anton Balasingham said in an interview due to appear in a Colombo-based Tamil weekly today.

In the interview, made available to The Sunday Times yesterday, Dr. Balasingham, disclosed that he had received information that the British Government would proscribe the LTTE as a terrorist organisation. He said he had raised this issue with Mr. Solheim, who met him in London, after a three-day visit to Sri Lanka. He had asked Mr. Solheim how the LTTE could be described as a terrorist organisation when it was "fighting for the liberation" of the Tamils. In a war situation, the protagonists commit atrocities and that was "natural", Dr. Balasingham has said.

Analysts in Colombo said Dr. Balasingham's move was a desperate attempt to pressure Norway and the international community into persuading Britain not to proscribe the LTTE.

The interview is due to appear in the "Sudar Oli" Tamil Weekly published in Colombo and owned by the publishers of the Jaffna based Tamil daily "Uthayan". On January 17 Dr. Balasingham, in a telephone interview with the Uthayan warned the Government it would resort to war to push back the security forces in the North if it did not accept their month-long Christmas Eve ceasefire. However, days later, the LTTE extended the unilateral ceasefire until February 24.

Dr. Balasingham told "Sudar Oli" that he had asked Mr. Solheim to use his good offices and prevent the British Government from proscribing the LTTE.

British High Commission spokesperson Alison Kemp told The Sunday Times that Home Secretary Jack Straw was drawing up a list of foreign terrorist organisations to be proscribed under the new law, Terrorism Act 2000, which comes into force later this month. 

"The Home Secretary will make his decisions using criteria set out in the Act and taking into consideration factors including the nature and scale of a group's activities, the threat it poses to Britain, the extent of its presence in Britain, and our need to support the international community in the fight against terrorism," she said.

Ms. Kemp said the British Government had received representations on proscriptions from a number of foreign governments and organisations and "we have taken note of their views."

In a move contrary to the position now taken by Dr. Balasingham, LTTE's political wing leader Thamil Chelvam, had hinted at the group's willingness to hold peace talks with the Government without resorting to violence.

This position has been conveyed to Jaffna's Bishop Thomas Saundranayagam and Mannar's Bishop Rayappu Joseph when they visited uncleared areas in the Wanni last week. During talks they held, Thamil Chelvam has accused this Government of not demonstrating a willingness to hold peace talks. He had said the LTTE was still awaiting a positive response.

In London, Mr. Solheim's meeting with Dr. Balasingham came after the former's visit to Colombo where he met Government and Opposition Leaders.

Mr. Solheim during his latest visit proposed a Memorandum of Understanding (MOU) which he recommended should be signed by the Government and the LTTE. Among the main elements was an undertaking that the government would lift a so called embargo on supplies to the LTTE dominated areas and in return the LTTE would not strike in the south. During talks with President Kumaratunga, she is learnt to have told Mr. Solheim that international observers who may be called upon to monitor the provisions of the MOU should also ascertain whether food and medical supplies to civilians in the Wanni did not reach the LTTE. She expressed the view that the call for a ceasefire was to score points in the international scene. She had also countered LTTE arguments that a ban on it by the British Government would disrupt the peace process. She had pointed out that the British Government was negotiating with the Irish Republican Army (IRA) after banning it.

Moonesinghe flouts parliament call

Instead, Mr. Moonesinghe went ahead with the presentation of his credential in Teheran on Friday.

President Chandrika Kumratunga, Prime Minister Ratnasiri Wickremanayake and Foreign Minister Lakshman Kadirgamar are learnt to have discussed the matter after The Sunday Times reported the committee's decision to recall him last week. 

The committee's decision came after UNP members raised questions over a declaration Mr. Moonesinghe made about his children. If Mr. Moonesinghe, who last year crossed over from the UNP to the PA, were found guilty of having submitted a false declaration, Parliament could punish him for misleading the House under the Parliamentary Powers and Privileges Act. It is learnt, Mr. Moonesinghe has been advised not to return to Colombo and face the Committee, in an apparent stand-off with Parliament.

Political analysts said presidential powers would be invoked to over-ride a committee decision if it goes against Mr. Moonesinghe. They cited the precedence set by President J. R. Jayewardene when the High Post Committee rejected the appointment of Upali Wijewardene as chairman of the GCEC.

At last Thursday's High Post Committee meeting chaired by Prime Minister Wickremanayake, when UNP MPs raised the issue again, they were told that objections should be made in writing. On that technicality, the issue was postponed for March 5. It is unlikely that the envoy will turn up on that date either.

Journalist denied travel permit in act of vengeance

N. Vithiyadharan, Associate Editor of the Jaffna-based Uthayan newspaper, said EPDP member N. Madhanarajan, who unofficially overseas RRAN operation, had told him that permission could not be granted because the Uthayan failed to publish the EPDP press release.

The RRAN comes under the purview of Northern Rehabilitation Minister Douglas Devananda, who is the EPDP leader.

The EPDP's press release was a response to a TELO allegation that the party was collecting money from government institutions.

Mr. Vithiyadharan, said he, however, obtained the travel permission after talking to Army Commander Lionel Balagalle.

It is alleged that the RRAN is being run like an EPDP party office with politicians, instead of government officials, taking decisions on whether to grant travel permits. It is also alleged that supporters of the EPDP's rival parties are often denied permission.

A RRAN official said it was beyond his control as he had been told to get EPDP clearance before issuing travel permits.

EPDP officials were not available for comment at the time of going to press.

Much-sought-after economic rescue package coming

They said the IMF bail-out package was expected to be finalised in the next few weeks with either a fund team arriving in Colombo to tie up the loose ends of the deal or a Sri Lankan delegation flying to Washington to formalise the facility.

The World Bank and the ADB were also offering support facilities to "strengthen the economy," one source said. The offers come at a time when Sri Lanka is looking for ways to firm up foreign reserves which have hit critically low levels of US $950 million in 2000 compared to a comfortable US$ 2.5 billion, about two years ago.

The foreign reserves' crisis forced the Central Bank to free float the US currency last month, triggering speculation in the money markets and sending the rupee into a spin. But the situation was brought under control with the Central Bank issuing a warning to some bank dealers against speculative trade.

The dollar has settled at around the 86-89 rupee (per dollar) levels in the past two weeks as exporters — blamed for sparking the initial crisis by holding onto their overseas earnings — put back dollars in the market. That, dealers said, eased pressure on the dollar.

Visits by IMF and World Bank officials in the past two weeks led to reports in the money and stockmarkets of a possible bailout in the current crisis. But officials from these two agencies have been tightlipped about rescue packages. They had insisted that the visit of an IMF team — when the dollar was floated — was a routine review mission, while a trip last week by World Bank's South Asia Vice President Mieko Nishimizu was also not unusual.

No details of the extent of financial support were available though market analysts have been speculating on a US$400-500 million IMF package. News, for the first time, of the World Bank and the ADB also lending support was expected to boost market (money and stocks) sentiment next week, analysts said.

Political analysts, however, believe the offers of support may come at a price. 

"The IMF package is bound to put further restrictions on Sri Lanka including the removal of wheat and petroleum subsidies," said one analyst. He said the Treasury was however opposed to the removal of subsidies, because it could cause further hardship to the people.

The IMF, which welcomed the move to free float the rupee, wants the government to cut subsidies, reduce the budget deficit, cut war spending, initiate pension reforms, privatise public utility ventures and trim state expenditure. The World Bank and the ADB are also expected to urge the government to trim the budget in return for help.

Central Bank officials said the foreign exchange markets had calmed down after initial confusion when the rupee was allowed to free-float. They said if the market continued to stabilise in the next few weeks, the bank would consider lifting the tight restrictions placed on commercial banks like the 90-day limit of export proceeds or controls on overnight dollar positions.

Private sector economists and analysts viewed with concern the government's planned expenditure for this year where defence spending is seen sharply rising to 63 billion rupees from 52 billion rupees last year. 

"This is a worrying phenomena. We all thought war spending would come down now that Sri Lanka has acquired all the equipment it needs to fight the LTTE while on the other hand we also expected spending to fall if and when peace talks resume," the research director at a local stock brokerage noted.

Analysts said actual spending this year could reach the 2000 levels. "You never know what could happen during the year. It may be peace or all-out war," the research director said, adding that an increased war budget would put further pressure on interest rates. The government borrows heavily in the commercial money markets to fund state spending.

Return to Front Page Contents