Sri Lanka shuns West, looks East
for aid By Feizal Samath
COLOMBO - Sri Lanka's government, under
pressure over human-rights violations, is
abandoning support from traditional but
rights-sensitive partners such as the United
States and the European Union and turning to
countries like China and Iran to finance
infrastructure projects.
Relations between
the country's traditional partners and the
government turned frosty in recent months as the
US, the EU and international human-rights groups
raised concern over growing rights violations.
Recently, World Bank officials were told
by a senior functionary of the treasury: "We don't
need your money [with all those strings]."
Foreign affairs analysts and economists
say President Mahinda
Rajapakse's nationalist
government is relying on "outside" support because
foreign aid in the form of grants and concessional
loans comes with strings attached, which the
government does not want to accept.
Last
year, the International Monetary Fund (IMF) pulled
out of Sri Lanka and has no programs in the
country, while the World Bank recently completed a
series of consultations with civil society groups,
including farmers and journalists, seeking input
for a new three-year country strategy. The real
reason however, according to a civil society
activist, was to "use us to put pressure on the
government because the authorities don't listen to
the World Bank any more."
Nanda Godage, a
retired diplomat and commentator, says there
appears to be a "clumsy" policy in relation to
foreign affairs. "Normally, the Foreign Ministry
should have a [well-researched] paper assessing
relationships and the economic and political
fallout [of sidelining parties such as the US and
the EU]. We need to diplomatically tackle
institutions like the bank and the IMF instead of
being blunt with them."
Godage said Sri
Lanka is better off not antagonizing the World
Bank and the IMF, which are controlled by the US
and the EU. ''We are making enemies out of
friends."
Sri Lankan Foreign Minister
Rohitha Bogollagama and Foreign Secretary Palitha
Kohona are known to be at loggerheads over various
issues, while Rajapakse has also independently
taken decisions on foreign policy.
Another
sore point in foreign policy will come to the fore
when Iranian President Mahmud Ahmadinejad visits
Sri Lanka on April 28 on the first stop of his
first Asia tour. When Rajapakse visited Iran last
year, Washington voiced concerns.
The
Sunday Leader newspaper said this month that
Israel is unlikely to respond to a Sri Lankan
request for arms sales because of this country's
increasing ties with Iran. The paper said these
concerns were communicated to Sri Lankan Prime
Minister Ratnasiri Wickremanayake during a recent
visit there.
Financial support from the
US, the EU and the multilaterals has dwindled
since Rajapakse won the presidential poll two
years ago, ended a shaky ceasefire with Tamil
rebels and ordered troops to wipe out the rebels
from their northern and eastern lairs. Security
forces have been successful in the east, where the
rebels have retreated into the jungle, and
residents face a provincial poll next month.
Fierce fighting is continuing in the north
amid widespread allegations against the government
of human-rights abuses through abductions and
harassment of the private media. The government
denies all charges but is unable to dispute
mounting evidence, particularly on abductions.
Analysts say with that Western aid tied to
governance, transparency and spending discipline,
conditions the government has rejected, Rajapakse
has been compelled to woo "friendly" countries to
help with many infrastructure projects, such as
super highways, railways, ports and airports.
China and Iran have come to the country's aid
rescue with loans, albeit at commercial rates of
interest.
China is funding a coal power
plant and a harbor with more than US$700 million,
while negotiations are underway for another $450
million loan for two highways.
Iran,
meanwhile, is granting $450 million for a
hydropower project and investing $1 billion in an
oil refinery. It recently provided a seven-month
credit facility so that Sri Lanka's entire crude
oil requirement could be sourced from Iran.
All this is in addition to other support
these two countries have been providing to Sri
Lanka. Rajapakse this month visited China, his
second visit in the past two years. He has yet to
pay official visits to the US or to any of its
European allies.
Jehan Perera, director of
the National Peace Council and a newspaper
commentator on the peace process, says that
countries such as Sri Lanka need to maintain good
relations with larger and more influential
countries. "Shutting out one section of the
international community is not helpful especially
when that section has had long standing relations
with us," he said.
Most analysts agree
that the current government's foreign policy may,
in the short term, find solutions to immediate
needs but is disastrous in the long term. Sirimal
Abeyeratne, an economist at the University of
Colombo, says spending discipline [conditions on
loans] is necessary for countries such as Sri
Lanka where spending is wayward and used for
projects other than the intended purpose.
Ravi Karunanayake, a former trade minister
and now an opposition politician, believes the
country is falling ever deeper into debt as the
government resorts to costly commercial borrowings
as against soft loans and grant aid. "We'll be
paying through our noses for generations to settle
this debt," he said.
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