The Sunday Times Economic Analysis

The Sunday Times Economic Analysis By the Economist

Foreign aid in the balance?
Is the foreign aid commitment at the Tokyo Conference next month in the balance? Many of the pronouncements of foreign donors appear to give just that impression. An expected large dose of foreign aid of around US $ three billion appears to rest on whether the LTTE would or would not attend the conference.

We need not go into the antecedents of how the LTTE transgression began, except to indicate that it arose out of their legal impediment to attend the meeting in Washington. Efforts by the Norwegians and the Japanese to get them to Tokyo have so far failed. This is to be expected. Even if the LTTE has decided to come for the conference owing to the advantages it offers them, they are likely to announce their decision at the last moment, after making it a moral victory for them.

Meanwhile we see the mockery of foreign government delegations bending backwards pleading that they attend the conference. Many commentators are of the view that the LTTE cannot possibly not attend the conference as it would tarnish their image too badly. They may lose the chance of being considered as genuinely interested in the peace process.

Once again their image as a terrorist group would come to the fore. At the time of writing however the Tigers are playing it hard to get. These considerations apart, there are important aid issues to ponder over. The impression given is that if the LTTE does not attend the conference, the aid package would be drastically reduced. Such a reduction of aid it appears would affect the overall aid given to the country, not only the aid for reconstruction of the North and the East for which such assistance was expected. The approach of the donors that the attendance of the LTTE is vital gives far too importance to a terrorist group.

The latest threat that if the LTTE does not attend the conference, the attention of donors would be directed to other disaster areas strengthens this importance of the LTTE and depreciates the rights of an elected sovereign government. Is this the correct approach?

For far too much during the 15 month period aid donors and foreign governments, not to mention our own government, have pandered to the wishes of the LTTE and turned a blind eye to their aggressions. Now once again the Tokyo Aid Conference is providing the LTTE a chance to demonstrate their indispensability. What aid donors must impress on the LTTE is that they would be the losers not merely in terms of the aid for reconstruction of their "homelands", but also to their right to speak on behalf of the Tamil people. If they prevent the full flow of funds for the reconstruction, where the Tamil people have suffered so much, they cannot any longer be considered the representatives of the Tamil people. It would be time to call them what they really are, a terrorist group that dictates from the barrel of a gun.

Foreign governments must take up this position and attempt to help the Tamil people sans their self-proclaimed saviours. Such an approach will no doubt change the mind-set of the Tigers. There are several economic issues that arise from the non-attendance of the LTTE. The donors are quite justified in looking at their aid commitment in the context of the prospect of the peace. This certainly pertains to both the aid commitments for the country as a whole as well as the aid specifically for the North and East.

There can be no doubt that the economic possibilities and opportunities would vary on the state of peace in the country. A permanent peace offers considerably more economic opportunities for the country. Therefore the criteria on aid would be tempered by this consideration. Their avoidance of the conference, would lack conviction for donors to commit substantial amounts of aid.

The participation of the LTTE will be of direct relevance. Without clear evidence of a permanent peace the donors would undoubtedly be reluctant to commit aid of a substantial amount. This is a particularly serious concern for the Tamil people, as the non-commitment of aid at this meeting may mean that donors would turn their attention to other demands from Africa, Iraq and Afghanistan.

The loser is the country as a whole and more specifically the Tamil people. The LTTE stance is one that attempts to erode the sovereignty of the government. Aid or no aid this must not be allowed to happen.

Back to Columns