Sri Lanka Weekly Brief
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August 12, 2011 - August 18, 2011

Political and Internal Developments

The leadership crisis in the United National Party (UNP) appears to be moving towards an uneasy settlement between the warring factions. During the UNP Working Committee meeting, Karu Jayasuriya led reformists and Wickremesinghe faction have agreed to work in unison for the elections to be held for 23 local bodies in October, including Colombo.

They have also agreed to uphold the party constitution, which prohibits any member from criticising the party or its leadership. UNP Deputy Leader Jayasuriya was to lead the election campaign as the chairman of the co-ordinating committee. But a recalcitrant section of the reformists continue to agitate and planning demonstrations, despite Jayasuriya calling for ‘togetherness’ and ‘rising above factionalism’.

Although, perhaps UNP is striving to salvage some pride for the rout in the last round of local bodies’ elections in July in the forthcoming phase of the elections, others such as Democratic People’s Front (DPF) are gearing to take a slice of the pie. DPF is relying on Tamil National Alliance (TNA) support for contesting in the Colombo district, including the Colombo Municipal Council (CMC) with its leader Mano Ganesan as its mayoral candidate. This was seen as a quid pro quo – DPF backed TNA in the second phase of local government elections. But the DPF is to contest the Dehiwela – Mount Lavinia, Moratuwa and Negombo Municipal Councils and the Kolonnawa UC on its own. On the other hand, Sri Lanka Muslim Congress (SLMC) which is a coalition party of the United Freedom People Alliance (UPFA) government is likely to contest the elections for the remaining 23 Local Government bodies on its own under its Tree symbol. Further, SLMC is planning to contest on its own in Kalmunai and Colombo Municipal Council areas, even if it were to concede certain areas to its senior partner SLFP, where the SLMC can show its strength.

Scandinavian countries, including Norway, even though they are pro-active in prosecuting LTTE activists accused for engaging in illegal activities, continue to fund Sri Lanka’s post war efforts towards rehabilitating ex-LTTE cadres and other youth. The Norwegian government has provided funds through the World University of Canada (WUSC) to set up a vocational training facility at the one-time LTTE stronghold at Jayapuram, and two Recognition of Prior Learning (RPL) centers in the Vanni, with the total project is expected to cost Rs. 76 million.

Further, the Ministry of Construction, Engineering Services, Housing and Common Amenities launched a programme jointly with the Ministry of Resettlement to provide houses to families that had been resettled in the North. The project aims to build 1000 houses in Jaffna, Mannar, Killinochchi, Mullaitivu and Vavuniya Districts with 200 houses being built in each district. The NHDA would arrange a grant of Rs 200,000 for each house and another Rs 100,000 would be given as a grant by the Resettlement Authority. The NHDA would provide the necessary technological assistance.

Foreign Relations

Furthering its commitment of ‘firm support in respect of all issues touching Sri Lanka’s interests at international level’, Chinese Premier Wen Jiabo said that ‘China will extend increasing support to infrastructure projects in Sri Lanka and will also back the country’s efforts to promote reconciliation without any external interference’ and ‘China was also ready to "promote communication" between the two countries with regard to infrastructure projects and expand two-way trade and investment’. As a corollary, Sri Lanka entered in to a BOT agreement with China Merchants Holdings (International) Co., Ltd, a listed flagship company of China Merchants Group on 12 August 2011. The total investment in the project is expected to exceed US$ 500 million and it is Sri Lanka’s single largest private-sector foreign investment project. The Colombo South Container terminal comprises a total quay length of 1,200 meters and a depot land area of 58 hectares, with water depth of 18 meters. The project is expected to take two phases, with Phase I to be ready for operation by early 2013. Nonetheless, misgivings about Chinese infrastructural projects are growing as a huge rock layer has been found at the mouth of much vaunted Hambantota port after it became operational.

Not just Chinese and Indian entities, now Russian companies are also lining up to join oil and gas exploration projects. The Russian Oil and Natural Gas giant Gazprom is exploring means to enter oil exploration in the Mannar and Cauvery basin and the natural gas market in the country. Recently, an eight member delegation of Gazprom headed by its Managing Director Gulev Veleriy visited Sri Lanka and agreed that Gazprom sponsor the training of a team of Sri Lankans in one of Russia’s leading institutions in the field of oil and gas technology.

The burgeoning defence budget and continuing economic hardship seems to concern only common man not the government. Even two years after the military defeat of LTTE, Sri Lanka has bought 14 Russian military MI-171 helicopters in the latest deal. Sri Lanka, which has a $50 billion economy, forecast a 6.3 per cent increase in defence spending to 215.2 billion rupees ($1.9 billion) in 2011, which is highest since the end of the war. The government defended its decision to purchase helicopters from Russian state arms exporter Rosboronexport during peace time that the high powered aircraft were necessary to protect the territorial waters of Sri Lanka and the seas beyond.

The cat-and-mouse game between the UN and the Sri Lankan government over war crimes is in action. UN Chief’s Acting Deputy Spokesperson Farhan Haq claimed that ‘the Darusman report has not been formally submitted to the Human Rights Council yet, but it expected to see that concerned Member States would take it up and push for something further’. However, the report could be sent to the HRC in the near future. In a related development, the Lessons Learnt and Reconciliation Commission (LLRC) responded to reports that certain members of the international community had requested Sri Lanka to submit a report on war crimes allegations before the start of the UN General Assembly’s next sessions on 20 September that neither the United Nations (UN) nor the government could pressure the LLRC to complete the commission’s report according to UN schedule.

The state-owned Bank of Ceylon (BOC) has extended a US$ 10 million credit line with an interest rate of 7 per cent to the government of Maldives. Under this new credit line, the Maldivian government would import Sri Lankan agricultural products to support its growing tourism industry. Further, Sri Lanka and Pakistan held talks on aspects of the bilateral FTA in Colombo. The Secretarial Level Meeting reviewed several bilateral trade aspects and also focused on the possibility of mutual tariff concession entitlements on selected items. Pakistan is Sri Lanka’s second largest trade partner in the South Asian region.

Relations with India

The fishermen issue between Sri Lanka and India – though respective governments have reached a sort of rapprochement – continues to fester. Myriad fringe political outfits, such as Naam Tamilar (We Tamils) have taken up issue. Another Tamil Nadu-based outfit, Hindu Makkal Katchi (Hindu People’s Party) attempted to put out to sea allegedly to hoist the Indian national flag at Kachchathivu in the Palk straits. The Tamil Nadu police arrested 43 members, including its state unit President Annadurai. Further, more than 2,000 fishermen did not put out to sea and 600 boats from Mandapam, Rameswaram were anchored on the shore. Meanwhile, the Sri Lanka Navy denied allegations that sailors prevented about two thousand Indian fishermen from fishing in the seas near Kachchathivu Island and looted their catch, as quoted in the Indian media.

Finally, the construction of 50,000 houses under Indian sponsorship and for the Internally Displaced People (IDP’s ) who had been resettled in the North and East has got off the ground with the construction of 1000 houses as a pilot project. An Indian company had been contracted to carry out the construction of the houses with each house having 520 square feet and costing more than one million rupees.

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