Designs 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.

Despite 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.

Recently, 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.

However, 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.

There 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.

He 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.

The 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.

The 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.

The 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.

One 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.

Donor 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 world order.

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