http://www.atimes.com/atimes/South_Asia/JD24Df02.html
Sri Lanka shuns West, looks East for aid
By Feizal Samath
COLOMBO - Sri Lanka's government, under pressure over human-rights
violations, is abandoning sup****t 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" sup****t
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 *****sing
relation****ps 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, Wa****ngton 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 sup****t 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, ****ts
and air****ts. 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 sup****t 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.
(Inter Press Service)
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