29 January 2007
Sri Lanka announced securing 4.5 billion dollars worth of overseas aid pledges, but foreign donors insisted that the nation risked losing the cash unless there was peace.
Investment Promotions Minister Sarath Amunugama said Tuesday that foreign donors pledged help to build roads, ports, coal power plants and highways during the final day of the two-day aid review meeting in the southern town of Galle.
"International donors expressed satisfaction at our economic track record and we have got commitments up to 4.5 billion dollars this year," he told reporters.
He did not specify a timeline and did not give details on the precise amounts promised by individual donors and lending institutions.
The comments came after donors and international lenders warned Colombo that it could face a cut in assistance unless it made peace with the Tamil Tigers and ended the conflict.
"Building on the successful response we received today, the government is now working up to raise 9.0 billion dollars in pledges for long-term development work in the next three years," Amunugama said.
Sri Lanka had originally planned to convert 1.5 billion dollars in aid pledges received for this year's development work into firm commitments amid rising concern that the island was heading for more violence.
The European Union, a key backer of Norwegian-led peace efforts, showed its displeasure by sending low-level diplomats for the Sri Lanka Development Forum opened by President Mahinda Rajapakse, diplomats said.
The EU has also been critical of the government's human rights record in the face of escalating fighting with the Tigers. Late last year Germany announced a halt in new aid to Sri Lanka and asked others to follow suit.
But the government appeared determined to resist pressure from international donors and lenders to link aid to progress in the island's faltering peace efforts with Tigers.
"We are now increasingly looking at securing bilateral aid from friendly countries like China and India, who are keen to help us in our development work," Amunugama added.
The United States, breaking ranks with its European partners, sent ambassador Robert Blake, but he issued a warning to Sri Lanka against pursuing a military solution to the separatist conflict.
"We remain unwavering in our conviction that there can be no military solution to this terrible conflict," Blake said, raising government eyebrows at the first ever aid meeting attended by the island's military top brass.
Blake urged Sri Lanka to "seize the opportunity to forge a power-sharing deal that can form the basis for talks" with the separatist Liberation Tigers of Tamil Eelam (LTTE).
Diplomats and lenders attending the closed-door conference feared that the government might not take their warnings seriously.
"Some of the biggest lenders to Sri Lanka came out strong for a power-sharing deal," a delegate said, adding that they had the impression that the authorities were unmoved.
"The tone suggests that they (the government) imply that donors should support the war," said Harsha de Silva, an economist at LIRNEasia, a regional economic think-tank.
However, Sri Lanka's chief peace negotiator Nimal Siripala de Silva dismissed donor concerns, saying the government could not resume talks unless the Tamil Tigers agreed to negotiate.
Sri Lanka believes that donors should separate aid from the conflict and allow the administration to press ahead with its own economic agenda.
"We are not ready to accept any conditions linking aid with peace," Sri Lanka's Central Bank governor Nivard Cabraal told AFP.
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