Political parties and police are amongst the most corrupt in Sri Lanka, according to a survey of South Asian countries by Transparency International.

The anti-corruption organization surveyed six countries and found that more than one in three people said they pay bribes when dealing with public services.

“In previous surveys of this nature, only Sub-Saharan Africa had a higher rate of bribe-paying,” Transparency International said in its press release.

Sri Lanka's president, Mahinda Rajapaksa, presented members of the military with new houses on Saturday.

The ceremony, held in Kalutara, is the seventh phase of the 'Api Venuven Api' housing project aimed at giving Sri Lanka's military families houses. Construction work has been undertaken by the army itself.

Floods add to IDP woes in Vanni (21 Dec 2011)

A huge project to develop the Sri Lankan capital Colombo is going to be implemented by the Sri Lankan military, in an attempt to minimise costs to the government.

"The construction work will be entrusted to the engineering services divisions of the Sri Lanka Army, Navy and Air Force so that construction costs would be kept to the minimum," Minister Keheliya Rambukwella said on Thursday.

Several parts of Colombo are marked for modernisation, including several markets and bus stand complex.

The Sri Lankan Ministry of External Affairs has announced it will take legal action against organisations that have criticised the LLRC, ColomboPage reported on Friday.

Deputy Minister of External Affairs, Neomal Peiris said that certain human rights organisations have made false allegations about the LLRC report to the international community.

He expressed his regrets over the behaviour of those organisations.

The Sri Lankan Army set up military check points at the two main entrances to the University of Jaffna on Thursday, reported Tamilnet.

Deploying extra soldiers to the areas, all students were checked on entering and leaving. Students at the Jaffna University Student Union were forced to leave in order to end the questioning by the Sri Lankan army.

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Sri Lanka is among the highest-risk financial systems in Asia’s emerging markets, said a report by a credit ratings agency, citing the rapid growth in credit.

"Hong Kong and China were joined by Indonesia and Sri Lanka in the December 2011 assessment [of high-risk financial systems], although Vietnam dropped out as credit growth eased," said a report by Fitch Ratings.

The higher credit leveraging by banks and growing asset prices were cited as reasons for the revised risk warning.

Though Fitch upgraded Sri Lanka’s credit rating in July 2011, the agency ended the year warning that “foreign direct investment has been surprisingly slow to recover after the end of the country’s long civil war in 2009.”

Fitch also expressed concern about the devaluation of the Sri Lankan rupee in November 2011.

The LLRC report "falls short of addressing the evidence of war crimes and crimes against humanity" said the British All Party Parliamentary Group for Tamils (APPG-T), adding, "it is important now that the international community holds Sri Lanka to their obligations under international law to allow for an international independent investigation".

Read the statement, released Thursday, here in full.

Sri Lanka’s President Mahinda Rajapaksa has slammed the Tamil National Alliance for criticising the LLRC report and calling for an international investigation.

Talking to reporters on Tuesday morning, the president accused the TNA for still harbouring an ‘LTTE mentality’ and denounced the call for an international investigation as ‘treacherous’ and harmful to the country.

"They think and act like the LTTE. The LTTE behaved similarly. They came to talks (with the government), put conditions and withdrew," Rajapaksa said.