Political and Internal Developments

President Mahinda Rajapaksa announced the lifting of emergency regulations in the Parliament and it is most likely to lapse in September. The emergency regulations have been on and off since 1971 that superseded the normal laws. The parliament renewed it every month.

The continuation of the emergency regulations even after LTTE’s military defeat in May 2009 has brought widespread criticism of human rights organisation and western countries. Although the US and India have welcomed its abrogation, a sense of caution remains. Because, the draconian Prevention of Terrorism Act (PTA) still remains in place, which allows warrantless arrests; searching of anyone suspected of involved in ‘terrorist’ activities and the defence minister can order detention up to 18 months. Even though the removal of the emergency regulations is attributed to international pressure, much of Jaffna still remains under military control.

As the battle lines for the forthcoming phase of local bodies elections is drawn, two political parties representing the people of Indian origin have decided to contest in coalition with the ruling UPFA for the Nuwara Eliya Municipal Council. The National Union of Workers (NUW) lead by MP Palani Digambaram expected to contest at least one seat and P. Radhakrishnan lead United People’s Front (UPF) planning to field two candidates under UPFA symbol for the same municipality. On the other hand, the UNP Matara District leader Mangala Samaraweera accused the government of engaging in media campaigning to encourage division in the UNP to create friction between factions to disrupt the unity of the party workers.

Notwithstanding the stalemated negotiations between the government and the Tamil National Alliance (TNA), the External Affairs Minister Prof. G. L. Peiris has said that bilateral talks between the government and the Tamil National Alliance (TNA) and the Parliamentary Select Committee (PSC) on the national issue could take place simultaneously, because the PSC was not a substitute for the negotiations.

The Sri Lankan government in its efforts to develop the northern region has decided to go ahead with the ‘Uthuru Vasanthaya’ programme, estimated to cost Rs 21 billion, despite opposition criticism. The Ministry of Economic Development had set aside Rs 250 million for de-mining activities, Rs 600 million for Resettlement of IDP’s, Rs 2,300 million for housing for the IDP’s and Rs 300 million for livelihood development activities. Further, Rs 6,300 million was allocated for the IDP’s to clear their lands, especially those being resettled in the High Security Zone lands under the food for work shramadana programme. Further, Rs 570 million has been set aside for development of agriculture, Rs 3,000 million for irrigation, Rs 1,200 million for providing power and energy and Rs 3,200 million for the development of roads. In addition, Rs 1,600 million had been set aside for development of social infrastructure (repair and reconstruction of schools and hospital buildings) and Rs one billion for reconstruction of public buildings.

The Sri Lankan Tea Board has said that the total reported production of tea has decreased. The total tea production from January to July 2011 was 195,672,379 kgs, as against 196,720,141 kgs, produced during the corresponding period of 2010, showing a decrease of 1,047,762kg or 0.5 per cent. One of the reasons attributed to this decrease is the crises in the Middle-East and Libya, who were major importers. Moreover, the cost of production has also increased as the wage payments have gone up in the war aftermath. This brings additional concerns to rebuilding the economy as already coconut production has been affected by war, disease and urbanisation, since both these products constituted Sri Lanka’s major export components.

The decreasing export of tea and coconut in addition to burgeoning post-war defence build-ups and infrastructural projects are shooting up the budget. The Treasury announced that the government’s estimated expenditure next year would amount to Rs. 2000 billion, marking a 7 per cent increase against this year’s expenditure. The government’s recurring expenditure would be Rs.1075 billion, and the capital expenditure Rs.1, 030 billion. It is estimated that Rs.335 billion will have to be spent for the payment of salaries and other allowances of public servants and another Rs. 108 billion for pension payments. Next year’s budget will cover the 2012-2014 period.

Foreign Relations

The Sri Lankan government is facing increased criticism on the diplomatic front over war crimes even after having hired three foreign PR firms in the run-up to the forthcoming Sessions of the UN Human Rights Council in Geneva. It has even accused India Globe of carrying out a campaign to malign Sri Lanka among international community. Further, the Sri Lankan government has said that it was ‘unreasonable’ for the international community to expect it to complete processes in a post-conflict situation, which have taken other countries in similar situations, many years to accomplish.

The talks between Sri Lanka and Pakistan to review the Free Trade Agreement (FTA) have recently concluded in Colombo. The PSFTA, which came into effect in 2005, has boosted the bilateral trade from $147 million in 2004 to $ 342 million in 2010 – a growth of 133 per cent. After the review, Sri Lanka will allocate importation of the entire basmati rice quota of 6,000 metric tonnes to the private sector from 2012; Pakistan will restore the same level of competitiveness as agreed before for Sri Lanka’s betel leaves by adjusting the current margin of preference; Pakistan will consider granting concessionary market access for electrical items such as electrical switches and bottle cooling machines; Pakistan will remove crude coconut oil from their ‘No Concessions’ list as agreed earlier and Sri Lanka will consider categorising only products imported from Pakistan as handicrafts.

Relations with India

In the latest incident involving Indian fishermen, three Tamil Nadu fishermen were injured in an alleged attack by a group of their Sri Lankan counterparts while fishing in Indian waters off Kodiakarai. A group of fifteen fishermen from Akkaraipettai were surrounded and attacked by a group of about 30 Sri Lankan fishermen. The Sri Lankans allegedly snatched the fish catch, mobile phones, fishing nets, GPRS instruments and other valuables of the Tamil Nadu fishermen and attacked them with wooden logs and knives, injuring three of them. In a further development, External Affairs Ministry officials told the Chennai High Court that the possibility of issuing guns for Indian fishermen to protect themselves in case of mid-sea attacks is ruled out that such a course of action would lead to law and order problems and result in anarchy'. The officials said the Lankan Navy had denied involvement in any of the incidents in which Indian fishermen were reported or alleged to have been killed or missing or presumed dead but even though the Lankan Navy denied any involvement, the Indian government had continued to raise the matter with Sri Lanka.

The latest entrant to fight for the Tamil cause in Sri Lanka is the Bharatiya Janata Party (BJP). The BJP has initiated a campaign to mobilise funds from Chennai public for providing relief to the displaced Tamils in Sri Lanka. Further, apart from starting a street campaign in Chennai to collect funds, a state-wide campaign is also planned in the later stages of the campaign. This attempt has widely been perceived as a desperate measure BJP has taken to gain some foot hold in Tamil Nadu, which it failed to do so far.

In a related development, the External Affairs Minister S.M. Krishna has said that ‘the issues relating to the UN chief’s expert panel report on Sri Lanka had not yet come up for discussion in the formal agenda of any UN inter-governmental body and, therefore, India was waiting to take up a position in this regard. The Government of India has and will continue to reiterate with Sri Lankan government the need for speedy resolution of certain issues, including early withdrawal of emergency regulations... investigation of human rights violations...,’. However, apart from expressing dissatisfaction over the reply, members of Tamil political parties staged a walk-out from the parliament.

The negotiations between India and Sri Lanka on the CEPA have resumed, though it was finalised in 2008, opposition from a group of industrialists and professionals fearing flooding of Sri Lankan market with India products and professionals has delayed it. The draft documents suggest that India has created more access to Sri Lanka, while Sri Lanka had tabled specific areas open to India, in terms of sector and number of professionals allowed matched by investment.