behind the dollars
Next Tuesday, the Co-Chairs of the country's Peace Process will
sit down together and discuss the future of Sri Lanka. These are
the countries that were identified as the " international safety
net " by the Ranil Wickremesinghe Government when it embarked
on a bold effort to turn the tide in the two-decade long virtual
civil war in the country. The Co-Chairs were to underwrite, both
the political and financial initiative Colombo was to venture into
with the LTTE.
making negative noises about this " international safety net",
the UPFA, when in Government simply got on board the same bus. Tied
as we are to the complexities of the international financial systems,
and the pathetic economic conditions we have got ourselves into
over the years, there is a limit to which we can push the frontiers
on this score.
newspapers ran front-page stories hailing the fact that the world's
great nations decided, at what was called the Paris Consortium,
to write off the debts - or to have a debt moratorium - for tsunami-striken
nations, such as Sri Lanka. For a nation that has had to live for
years on hand-outs and accustomed to receiving aid packages and
long-term loans and doles due to its own mis-management and corruption
at high levels, this was manna from the heavans.
last week in Geneva, the US told our Finance Minister that there
was a problem in writing off such debts. This did not hit the headlines,
though. The US concern was that, unless there was an IMF programme
for Sri Lanka, it will not be in a position to subscribe to the
debt moratorium as grandly announced at the post-tsunami Paris Consortium
the previous week.
is a great need for Sri Lankans not to get carried away with the
mind-boggling dollar-talk following the tsunami disaster. The UN
Secretary General was one of those to warn us early about the pledges
made by the western world, and what was actually pulled out from
the purse and given.
cited what happened following the Iran earthquake disaster, as an
example. Now we have got carried away with the thought that foreign
currency is coming in a flood, and even our humble Rupee is standing
tall as a result. It is true, that a lot of foreign money is coming
in. And the fact that the President's Office has yet to tell this
country how it intends to account for these funds is a damning indictment
on its Government, and unfortunately, its people. The UN itself
is embroiled in corruption scandals following the Iraq oil- for-food
programme, which cut close to Dr. Annan himself - now vesting its
sins on Sri lanka and the other tsunami victim nations.
assumption of Tokyo was to overwhelm the LTTE grip through economic
development and normalcy, the underlying assumption being that peace
was needed to achieve economic growth. There has been some success,
but this is exactly the reason the LTTE began playing up. But the
tight-fisted approach of the donors, and their reluctance to release
funds for economic development until the peace process got going
also did not help.
explicit link between Tokyo aid and the progress on the peace process
needs to be reviewed by the Co-Chairs. That the LTTE, and for that
matter, the JVP, are not dazzled by the green backs waved before
their eyes, is a fact. For one thing, the leadership can get by
without these big bucks.
issue here is whether their should not be some fresh thinking, a
new approach to linking the peace process with foreign aid. The
donor nations need to take a fresh look at releasing some of this
money into the economy. There must be economic activity to mobilise
the people into doing things, and getting paid for their labour.
Idle hands are a devil's workshop.
way to move funds, both those pledged in Tokyo and tsunami relief
appears to be split the funds to the Government of Sri lanka and
to the LTTE. How these donor agencies are treating the sovereign
Government, and the LTTE with moral equivalency is developing into
a real problem. The Colombo Government, hamstrung with its own weak
accounting practices, appears to cede control to the World Bank
and the UNDP in the post-tsunami void.
nations cannot stick by their 2003 approach now in 2005. If freedom
is to win over tyranny worldwide, these donor countries must abandon
the moral equivalency between a sovereign State and a terrorist
organisation. While any self-respecting nation would want to break
out of the reliance on handouts, grants and loans, and rely more
on trade and investments, a report in the Wall Street Journal shows
how the Sri Lankan private sector paid US $ 250 million in duties
in 2003 facing average US duties of approximately 15 % when rich
Scandinavian countries, some of the biggest aid donors to countries
like Sri Lanka, paid less, exporting 12 times more in value to the
US, and facing an average duty of just 1 %. Surely, we need a new