Britain threatens to stop aid to Lanka

From Neville de Silva in London

The British government is putting the squeeze on Sri Lanka, threatening to stop a grant of £41 million for breaching international obligations and for "unjustified" military spending.

The British threat to cut off the grant came a few days ahead of the Colombo visit of foreign office minister Kim Howells who offered to talk to the Tamil Tigers as part of an effort to play a greater role in the Sri Lanka conflict.

Britain's twin track policy is seen as part of its carrot-and-stick approach that dovetails into an overall European effort to save the LTTE from the current military pressure by Colombo, as India did when the Tigers were cornered in Vadamarachchi some 20 years ago, analysts here said.

Britain’s International Development Minister Hilary Benn has written to Sri Lanka seeking assurances that it would demonstrate in the coming year that Colombo is meeting the concerns raised by the British government, well informed sources said

Mr. Benn in his letter to Treasury Secretary P.B. Jayasundera says he wants to be assured that Colombo would adhere to certain criteria before he puts his signature to the transfer of the £41 million which Britain promised following the Asian tsunami to meet Sri Lanka's debt reduction under the multilateral debt relief initiative.

Britain had promised to provide £41 million over 10 years to meet the cost of Sri Lanka's debt to the World Bank International Development Association. This would have allowed the Sri Lanka government to redirect a similar sum from its own resources for tsunami recovery and poverty reduction.

But now Britain claims that Sri Lanka is guilty of a significant violation of international obligations, particularly human rights, an instigation of hostilities and an unjustified rise in military spending. It believes that instead of spending the sum released on tsunami recovery and poverty reduction it has gone on a spending spree for military hardware and logistics.

The use of economic aid as a pressure point is in keeping with the call made by the German development minister when she announced two months ago that Berlin was stopping aid and called on other EU countries to do the same.

While analysts here see the British move as an attempt to save the LTTE which it banned six years ago as a terrorist organisation, from a lot of grief, it is also an attempt to get its foot in the peace process.

Observers here said that Britain's policy is not to talk to organisations designated as terrorists. If now it is offering to talk to the LTTE on Colombo's behalf to kick start the peace process, observers wonder whether Britain is planning to lift the ban on the Tigers.