ENB310308: Praise worthy Pillaiyaan and Pol Potist Pirapakaran- Hindu Editorial

ஈழத்தமிழர் பிரச்சனையில் இந்திய அரசின் நிலைப்பாடே HINDU பத்திரிகையின் நிலைப்பாடு.
INDIA APPLAUSE PILLAIYAAN DEMOCRACY!-ENB

Opinion - Editorials
Democratic way forward
President Mahinda Rajapaksa and his government have taken a significant step forward in their project of finding a political solution to Sri Lanka’s ethnic conflict by
going in for Provincial Council elections in the Eastern Province in May. This will be the first democratic exercise of its kind in nearly two decades. The ground was
prepared by the peaceful conduct of local body elections in March in Batticaloa district. In briefings to diplomats and journalists, Foreign Minister Rohitha
Bogollagama characterised these local body elections as a first step, proceeding from the proposals of the All Party Representative Committee (APRC), in “a
continuing process for greater devolution of power, with the objective of achieving a final and durable political settlement.” The devolution exercise was within the
framework of fully implementing, for the benefit of “the areas it was most intended to serve,” the 13th Amendment that was enacted in 1987 following the Indo-Sri
Lanka Agreement. Predictably, this move has both incensed and unnerved the militarily beleaguered Liberation Tigers of Tamil Eelam and the parties of the Tamil
National Alliance (TNA) that dance to its Pol Potist tune. Fighting for survival in the one-and-a-half northern districts under its control against a relentless onslaught by
the Sri Lankan armed forces, the LTTE seems paranoid over the fact that the elections to the nine Batticaloa district local bodies were free from untoward incidents
and irregularities; that the breakaway Karuna group, the Tamil Makkal Viduthalai Puligal (TMVP), now led by Pillian, won eight of these local bodies; and that the
government, having thoroughly exposed the LTTE’s pretence to be the sole representative of the Tamils of the North-East, has unveiled a credible idea of the shape
of things to come in the region of conflict.
What is also clear is that the LTTE is training its propaganda guns at India once again. First, it issued an unusually sharp statement against official Indian policy for
allegedly encouraging “the military approach of the Sinhala state” and for its “anti-Tamil” moves, in particular the recent hosting of a visit by Army chief Lt. Gen.
G.S.C. Fonseka, whose itinerary included a trip to Jammu & Kashmir. Secondly, the Tigers have tasked some key TNA Members of Parliament to lobby pro-LTTE
political leaders in Tamil Nadu to make a noise against the conduct of Provincial Council elections in the eastern province. Ironically, this stand is based on the
argument that such an exercise in the East, as distinct from the North-East, would violate the provisions of the 1987 India-Sri Lanka Agreement. Nobody of political
consequence in Sri Lanka other than the LTTE regards the ‘merger’ of the North and East as a live issue for the conceivable future. The 2004 Karuna revolt, and the
military support given to the breakaway group by successive Sri Lankan governments, put paid to the political claim of an indivisible Tamil homeland comprising the
Eastern and Northern provinces. In October 2006, the Supreme Court of Sri Lanka dealt a constitutional blow when it ruled the temporary merger of the two
provinces, which came as part of the Indo-Lanka Agreement, to be null and void. Although the judgment was on technical grounds, it is instructive to remember that
the main contention of the petitioners was that the fundamental rights of citizens in the Eastern province stood violated by the absence of an elected Provincial Council.
Through this successful first step, the government has proved a point: V. Prabakaran’s Tigers have indeed been tamed in the East. The TMVP’s triumph may have
come in a one-horse race, following the decision of the TNA as well as the United National Party and the Janatha Vimukthi Peramuna not to contest. For the
Provincial Council election, which will cover the three districts of Batticaloa, Trincomallee, and Amparai, the government’s hand has been strengthened by the sound
decision of all the mainstream political parties, including the UNP and JVP, to contest. India has endorsed the APRC recommendations, including elections to the
Eastern Provincial Council, as a “welcome first step” and the LTTE’s strategem of getting the TNA to lobby pro-LTTE fringe political groups in Tamil Nadu to
pressure New Delhi to prevail on Colombo to halt the May Provincial Council contest is unlikely to cut any ice.
The third step envisaged by the Sri Lankan government is the establishment of an interim set-up in the North, as recommended by the APRC. In practical terms, this
will mean the presidential appointment of a Governor for the North, to be assisted subsequently by an advisory council. The ground realities in the North and East are
quite different. The LTTE, although militarily weakened and demoralised, must still be reckoned a resourceful fighting force in the mainland North. The Army is the
main distributor of basic necessities in a substantial part of the province and a lot of hard work and time will be needed before normality can be restored here. There
can be no military solution to Sri Lanka’s principal national question but without effective military operations against the Tigers, the political process could not have
made the progress it has in the East. The LTTE has no faith in any devolution of power solution within one Sri Lanka; it stands committed to Tamil Eelam through
armed struggle and has shot down even constitutional proposals that mooted some kind of federal solution. But there is no excuse for the political constituents of the
TNA, in the company of chauvinist elements in Tamil Nadu, to come in the way of democratic arrangements that should bring relief and representation to the hard-
pressed people in the region. There should be no question of India falling again for LTTE strategems and tactics.

President highlights economic gains of rice replacing wheat

Rohan MATHES
COLOMBO: President Mahinda Rajapaksa yesterday asserted that a great national economic victory had been won through the increased consumption of rice in the
country, instead of wheat-flour based products.
Addressing the 18th General Summit of the SLFP at Temple Trees yesterday, President Rajapaksa said: “I am exceedingly glad at the fall in consumption of wheat-
flour based products. This is a greater achievement than even the liberation of the East from the terrorists.
Despite the fact that we possess very fertile lands, the consumption of wheat was forced upon us, initially by the provision of wheat free of charge, and later on credit,
until we were addicted to it.”
He pointed out that growing more food and stepping up productivity was the only way forward to bring down the inevitable global phenomenon of inflation, develop
the country and enhance the livelihoods of its people, while simultaneously eradicating terrorism in all its forms and launching multi-faceted mega development projects
in diverse spheres.
“We must nevertheless seek a solution for the escalating cost of living,” the President pointed out, noting that he would resume the ‘Kitchen War’ kussiye yuddhaya
immediately after resolving the conflict in the North.
He pointed out that despite diverse obstacles and economic advice to the contrary, his Government has launched new and mega infrastructural development projects,
increased salaries, pensions and the recruitment of staff to the public service which now stands at over 1.1 millions.
He stressed that with all the ongoing development and progress, the inculcation of social, cultural, moral and spiritual values, was also of paramount importance for a
just society, and such programmes as Mathata Thitha had been launched with success, for that purpose.
“It is in this backdrop that Ranil Wickremesinghe is indulging in canvassing for the LTTE in the international arena, by striving to deprive the country of the ‘GSP plus’
facility. The UNP’s objective is to cause chaos in the South and distract our focus in the North and hinder our operations there,” he noted.
President Rajapaksa was of the view that such action by the UNP was highly disastrous for the country and its people and urged them to refrain from such vindictive
action.
With special reference to the achievements of the SLFP founded by the late Prime Minister S.W.R.D. Bandaranaike and nurtured by other great party leaders, he
urged them not to be complacent, but to relentlessly seek new party membership to consolidate the party further.
“The masses who have seen the new development work of the Government and are convinced and satisfied, are yearning to join our party. We should be prepared
to accept and take them into our fold. You should not be preoccupied only in collecting the preferential votes, but should consistently seek new votes too,” he said.
He urged party organisers not to remain complacent merely because the opposition parties were weak and bogged down in their internal problems but to ensure they
are not distanced from the people.
“Do not stray away from the people. Keep in mind that you enjoy those high positions, solely due to your party, the SLFP. You are obliged and duty-bound to
protect and consolidate the party,” he said.
He also urged the party membership to maintain a close rapport and liaise closely with trade unions which bear the brunt of the working community. “Our Trade
Unions should be strengthened,” he added.
Recalling a recent meeting with the health sector trade unions, who had threatened a ‘sick note ‘ campaign, the President said he had cautioned them of their
obligations and duties by reminding them of the dedication and commitment of the ‘War Heroes’ in the battlefield. He asked them of the consequences if the war
heroes too took ‘sick leave’.
He said these heroes liberated the East, which the people in the area will never forget. Twenty eight parties supported him at the Presidential Election to ensure that
terrorism would be defeated and the country was heading in that direction successfully.
“We are firmly determined to eradicate terrorism and usher in peace and prosperity,” he said.

Proposals at SLFP's 18th convention

Several constructive proposals mooted by the Central Committee of the Sri Lanka Freedom Party were unanimously approved at the 18th convention of the SLFP,
at Temple Trees under the patronage of President Mahinda Rajapaksa yesterday.
President Mahinda Rajapaksa addressing the 18th General Summit of the SLFP at Temple Trees yesterday. (Centre) a section of the large crowd at the Summit and
(Right), President Mahinda Rajapaksa in conversation with Minister Amarasiri Dodangoda. SLFP General Secretary and Minister Maithripala Sirisena and Ministers
D.M. Jayaratne, Jeyaraj Fernandopulle and Nimal Siripala de Silva were also present.Pictures by Sudath Silva They are: Acknowledge efforts to defeat terrorism and usher in an era of peace based on devolution of power to suit all communities, through All Party
Representative Committee (APRC) initiatives while commending all relevant stakeholders who support the process under the leadership of President Mahinda
Rajapaksa.
To bestow the convention's honour to all friendly States and international organisations for extending unconditional support to the Sri Lankan Government's cause, in
rooting terrorism from all its manifestations and ushering in an era of peace.
To extend gratitude and honour to all parties and leaders, which support directly and indirectly to propagate the country's development under the leadership of
President Mahinda Rajapaksa in line with the vision of the Mahinda Chinthana.
To honour the commitment of the trade union movement and the working class which plays a pivotal role under trying conditions and which has never lost belief in
President's leadership and the commitment of the heroic Forces to usher in peace and prosperity.
To request the Government to take viable steps in bringing down the Cost of Living while improving efficiency of the State sector and minimising corruption. Also use
the "Grow more food" campaign to propel the local agricultural industry.
To acknowledge the efforts of President Mahinda Rajapaksa and Security Forces in ushering a new dawn in the East by establishing democracy through the political
process after decades under the suppression of terrorism. To extend gratitude to the Security Forces and Police who are waging a battle to root out LTTE terrorism,
which has caused immense damage to life and property in a close to three decades of brutal and fascist terror unleashed by the tigers.
A proposal by the SLFP Youth Wing too received approval which while attributing terrorism as the root cause of problems faced by the young generation today
urged the Government to continue its march forward unabated to usher in peace and development while taking steps to liberate the people in the North from the
clutches of terrorism as in the East.

BOI Signs 6 Agreements worth US $ 61.67 million

The Board of Investment of Sri Lanka signed Agreements for six new projects.
Dhammika Perera, Chairman / Director General, signed the Agreement on behalf of the BOI. Dr. Sarath Amunugama, Minister of Enterprise Development and
Investment Promotion formally presented the investors with the BOI Registration Certificates.
The six agreements amounted to US $ 61.67 million. These projects cover a range of sectors and will generate 1,250 employment opportunities.
Vista Clothing (Private) Limited
A Rs.91 million investment, Vista Clothing is a project to manufacture garments for the export market and is under the Nipayum Sri Lanka 300 Enterprise
Programme . This venture, located at Weerabugedara in the Kurunegala District, is expected to provide 430 employment opportunities. The venture expects to
commence commercial operations in four months. Ajith Thilakarathna (Managing Director) signed the agreement on behalf of the company.
Sasiri Garments Lanka (Private) Limited
The agreement signed with Sasiri Garments Lanka is also for a project to manufacture garments for the Export Market.
With an investment of Rs 35 million, this venture is expected to provide employment to 550 and will be located at Medawachchiya. The company expects to
commence commercial operations in June. T M S Karunaratne (Managing Director) signed the agreement on behalf of the company.
Info Serve (Private) Limited
Info Serve signed an agreement to set up a knowledge processing outsourcing centre with an investment of US $ 150,000.
Regent Infortec (Private) Limited
An agreement to set up an institute to provide training for the BPO industry was signed with Regent Infortec. The venture is an investment of US $ 100,000 and will
provide employment for 15.
Agro Harapan Lestari (Private) Limited
Agro Harapan Lestari is a venture to set up a Regional Operating Headquarters company with an investment of US $ 250,000.
The venture is expected to provide 25 employment opportunities. Chandana Tissera (Director) signed the agreement on behalf of the company.
Havelock City (Private) Limited
The agreement signed with Havelock City is for the construction of the "Commercial Complex". This is an investment of US $ 60 million sponsored by Overseas
Reality (Ceylon) Limited and Mireka Capital Land Limited.
It contains more 500,000 square feet in area. The complex will include features such as Shopping Mall, Office Space, Multiplex Cinema, Individual Shops,
Department Stores, International Food Court and Independent Parking Area.
H Z Cassim (Director) and Ralph D Lanerolle (Managing Director) signed the agreement on behalf of Havelock City Limited.
=================================

Paper no. 2652 28-Mar.-2008

Incident analysis: Sinking of SLN Dvora craft on 22nd March 2008
Guest Column byCommodore RS Vasan IN (Retd)
The sinking of a Sri Lankan Navy Fast Attack Craft P 438 on the night of 22nd March was reported. However, it appears that this incident has not been fully
analysed or even if such an analysis was undertaken by the SLN the details have been withheld got obvious reasons. The Sri Lankan Government sources on 23rd
March 2008 published a report with headlines ‘ Navy Fast Attack Craft sinks in mystery blast; 6 crewmembers survive ‘ The full report is given below: -A Sri Lanka Navy Fast Attack Craft (FAC) has been caught in a possible underwater blast this morning (March 22). According to the defence sources, the locally
built P438 deployed in northeastern coastal waters off Nayaru has sunk due the blast that occurred around 2.30.a.m.
Upon the receipt of the SOS message from the sinking craft other sea units have immediately launched a search and rescue mission in the area. According to the naval
sources, 6 of the 16 crewmembers, including the Officer in Charge of the craft have been rescued so far.
The survivors have reported an underwater blast that damaged the boat's hull and caused it to be sunk in a short time. According to the survivors there has been no
sea confrontation nor any LTTE craft were present in the area. Navy suspects the blast has caused by a possible sea mine or due to some underwater weapon
developed by the terrorists.
Search and rescue mission continues.
The SL Navy’s report on its web, which had little, more details had this to say about the incident: -
One locally built fast Attack craft out the two on routine patrol off Nayaru caught in an explosion in the wee hours today-the 22nd March, around 0200 hrs.
The boat being caught in the explosion started to take in water making it difficult for the crew to manoeuvre it to safe area. The impending consequence was
unavoidable peril leaving the crew with no alternative other than abandoning the craft. Then they got onto life rafts and started drifting. Six members of the crew have
thereafter been rescued by other boats. A search operation is still underway.
It is suspected that LTTE had unscrupulously laid sea mines in a bid of avenge due repeated losses in the recent past.
The report clearly suggests that there were no other boats in the vicinity nor was there a sea confrontation. The report indicated that the Navy suspected that either
sea mines were used or “some underwater weapon’ developed by the terrorists. This analysis examines the possibilities of what could have caused the FAC to sink.
The Tamilnet quoting LTTE sources reported the sinking and credited three sea tigers including two women for the sinking of the attack craft. The names were given
out, as Lt. Col. Anpumaran, Major Niranjani and Major Kaninila were the Black Sea Tigers killed in action. While the SLN said that there was no confrontation and
the sinking took place due to a possible sea mine, the Tamil net claimed that the three black tigers engaged the attack craft. While the Tamil net said that fourteen
crewmembers were dead, the SLN reported rescuing of six of the crewmembers.
Use of Sea mines. Discussions on the type of mines and their impact have been discussed in paper number 2573 .....carried on 31 January 2008 by this website. When the SL Navy made the announcement about the use of sea
mines on its side of the IBL as a deterrent against the LTTE craft, it was obvious that if the SL Navy could use it, the LTTE could also resort to the use of mines in
select areas. Knowing the technical and innovative ability of the LTTE the use of sea mines is hardly beyond their ability even if they have to improvise due to severing
of the supply lines from the sea. As the readers are aware, the sinking of over a dozen sea going ships of the LTTE at extended ranges from the Sri Lankan shores
has affected the capability of the LTTE. However, this has only forced the LTTE to find substitute material from the southern states of India.
Despite this limitation, it would not be a surprise, if some improvised floating sea mines were released by the LTTE in the expected patrol areas of the SLN craft
based on intelligence and observation of movement of vessels. Depending on the depth in the area the possibility of using moored or ground mines in the area of
operation of the SL Navy cannot also be ruled out. This incident of sinking of P 438 as it is reported to have taken place in deep waters indicating the ability of LTTE
to strike in deep waters by using its underwater means be it mines or divers.
As per some reports on the official website The Sri Lankan Navy has not ruled out the possibility of a limpet mine being attached by the divers. However the fact that
the Tamil net mentions about the engagement lasting 40 minutes prior to the sinking of the boat, precludes the use of limpet, mines. It is pointless to first attach a limpet
mine and then engage the craft by black tigers.
Were underwater scooters/divers used? Some discussions are in order about “some underwater weapon” as reported to have been developed by the terrorists.
What could this be is a question that would have many answers. One has to only go back to the reports carried some five years ago on 15th April 2003. The full
report carried under the heading “LTTE use talks to obtain underwater scooters” is available on http://www.spur.asn.au/News_2003_April_15.htm
It was reported that the LTTE team had used its negotiating team in March 2003, during the CFA period to procure 34 underwater scooters from Denmark. The
underwater scooters are mostly used by under water divers for sports and recreation. However, knowing the penchant of LTTE for innovation, they obviously
decided that this could be used as a weapon. It is not known as to the fate of these 34 scooters and if the Sea Tigers used the same scooters. But if that could be
procured then, one could procure the item under underwater sports category even today. A mere Internet search for underwater scooters revealed so many
manufacturers from China to Australia to Norway. The range of underwater scooters allowed one to buy a scooter for as low as 800 dollars and up to 2000 dollars
depending on one’s need.
Majority of the scooters are lightweight contraptions (15-20 kg), which could give an underwater speed of up to 1- 3 knots and could stay underwater at
considerable depths for up to more than an hour. Using this device, a trained diver could easily remain underwater in the vicinity; carry enough explosives strapped on
one’s person and carry out limited manoeuvre to detonate next to the patrol vessel with out being spotted. After all the LTTE is not new to loading boats, trawlers
and humans with explosives for suicide attack. Essentially, this concept is nothing new as the concept of human torpedoes is as old as torpedoes themselves. The
essential difference is that the scooters are much smaller than the chariots used by two divers for clandestine operations and enhance the staying capability of a
frogman. There has been recorded use of divers on chariots for under water warfare by Italians, Germans, British and the Japanese during World War II. While
some of them, which carried two frogmen, were designed to attach limpet mines to the underwater hull portion or propellers, the Japanese did contemplate the use of
suicide divers.
It may be recalled that two frogmen were caught off Colombo on 17th Jun 2006 in an unsuccessful attempt to attach explosives on ships in the harbour. The divers
who were caught did not succeed in swallowing the cyanide pills to commit suicide.
In conclusion, since the LTTE has acknowledged the loss of three of its cadres, the use of underwater scooters/chariots and explosive strapped black tigers this
modus operandi appears to be the most probable cause of sinking of the patrol craft. The LTTE/fishing boats could also have been used to lure the patrol boat
towards them thus bringing the craft in the harms way. While the type of threat itself is nothing new, if it is clearly established that a human torpedo or a sea mine of
what ever description was used against one of the patrol craft successfully, then it does change the aspects of sea control by the SL Navy in its areas of operations.
The Sri Lankan Navy which has enjoyed recent successes in its sea encounters has every reason to be worried about the type of the renewed under water threat that
it faces now. It would now need to reevaluate its operational tactics adopt new methods to counter the threats posed by the Sea tigers.
(The author with distinguished naval and coast guard service for over 34 years is presently with Observer Research Foundation and is steering the Maritime Security
Programme under the aegis of International Security Studies (ISS), headed by General VP Malik former Army Chief)

Eastern Province GDP will double

GDP growth will double in the Eastern Region after liberalisation from the LTTE and the accelerated development plan that is in
place said Rohantha Athukorala, Director, Economics, Government Peace Secretariat, at the Conflict in Sri Lanka-Road Ahead conference organised by the Centre
for Security Analysis (CSA) Chennai and the BCIS of Sri Lanka recently.
The Economic session was chaired by the Governor of the Central Bank, Nivard Cabraal, and the speakers were Dr. Amita Batra, Associate Professor, Jawaharlal
Nehru University, India and Dr. Muthukrishna Sarvanandan.
Athukorala said that the key to driving up the growth further, will be to give priority to establishing market connectivity between the village and town and not just the
construction of highways.
The reason being that market access is the key hurdle that needed to be addressed to spruce up economic activity.
He recommended that the Land Titling Act that had been passed in Parliament be implemented so that through collateral, funds can be raised for investment in
agricultural production which is the back bone of the Eastern economy together with fishing.
He also recommended that the government evaluate the option of providing established agricultural companies land on lease so that the country can increase
productivity in the area.
Another point Athukorala raised was the proper implementation of the Free Trade Agreement at the Indian end, as the basket of goods that are being exported out of
Sri Lanka to India is very different to the basket of goods that is exported to the rest of the world.
Athukorala questioned whether the under utilisation of the quota on Garments and Tea for the second year in succession, below 10 percent, was a result of a Non
tariff barrier(NTB) or a Political trade Barrier(PTB) at the Indian end.
He said that it was very important that the recently signed MOU be strictly adhered to so that the Eastern Province can benefit from International Trade.
The economic reality is that when a market opens up it leads to an increase in per capita income and Athukorala said that private sector organisations should take a
good look at the distribution structure in the Eastern Province so that a greater distribution of products can take place which will benefit consumers and the private
sector organisations with the liberation of the Eastern Province.==================================Hayleys & USAID in partnership to revitalise farming in East and UvaHayleys Group will partner The United States Agency for International Development (USAID)
in a ground-breaking pilot project to revive and advance the potential for linking farmers in two poorer districts to commercial agriculture, the two organisations
announced this week.
The six-month pilot project commencing April 1st will benefit 120 farmer families in the districts of Ampara and Moneragala through the introduction of the latest
knowledge, techniques, and inputs for the cultivation of three cash crops of high revenue potential, gherkins, pineapples and jalapeno peppers on 50 acres of land that
have either lain fallow or been previously used for subsistence farming.
The objective of the project is to motivate farmers in these areas, some of which have been affected by conflict, to embrace modern agricultural practices and to
empower them to substantially improve their incomes from agriculture by switching to cash crops that are in demand.
USAID/Sri Lanka’s Director, Rebecca Cohn, said the Hayleys Group had been selected to implement the project on the basis of the company’s expertise in the
cultivation, harvesting, packaging and marketing of such crops, its successful outgrower programs and the company’s historic and enduring affinity with agriculture.
"Our partnership with Hayleys, that we are creating today, will help build a value chain that will bring sustainable economic growth to those in serious need in the
Eastern and Uva provinces," Cohn said.
She went on to add, "(This) is how people move up the path from poverty to prosperity."
The Hayleys agri business companies HJS Condiments Ltd and Sunfrost Limited account for 34 per cent of the country’s exports of fruits and vegetables. The
Hayleys Group is the sole exporter of gherkins from Sri Lanka and the second largest in Asia, processing more than 8,000 tons a year. It accounts for 50 per cent of
the market for bottled pickles in Japan and is a major supplier to renowned international brands such as McDonalds, Burger King, Unilever and Heinz.

Commercial agriculture in Ampara, Moneragala

Hayleys Group and the United States Agency for International Development (USAID) will partner in a ground-breaking pilot project to revive and advance the
potential for linking farmers in two poorer districts to commercial agriculture, states a US Embassy press release.
The six-month pilot project commencing on April 1 will benefit 120 farmer families in Ampara and Moneragala districts through the introduction of the latest
knowledge, techniques, and inputs for the cultivation of three cash crops with high revenue potential. Gherkins, pineapples and jalapeno peppers will be grown in 50
acres that have either lain fallow or been previously used for subsistence farming.
The objective of the project is to motivate farmers in these areas, some of which have been affected by the conflict, to embrace modern agriculture practices and to
empower them to substantially improve their income from agriculture by switching to cash crops that are in demand.
USAID/Sri Lanka’s Director, Rebeecca Cohn, said the Hayleys Group had been selected to implement the project on the basis of the company’s expertise in
cultivation, harvesting, packaging and marketing of such crops, its successful outgrower programmes and the company’s historic and enduring affinity with agriculture.
Cohn said, “Our partnership with Hayleys, that we are creating today, will help build a value chain that will bring sustainable economic growth to those in serious need
in the Eastern and Uva provinces. This is one way in which people can move up the path from poverty to prosperity.” she said.
“This is one of the most exciting projects in the agriculture sector as it seeks to bring modern agriculture and successful practices employed in Hayleys’ agribusiness to
a long neglected area of our country,” Mr. Zaheed said.
“The success of the pilot project could be the catalyst for an agricultural renaissance in the Eastern and Uva provinces through a conversion to modern practices and
concepts.
“He said Hayleys would provide extension services to support this transition and help set up farmer organisation, outgrower programmes, infrastructure, and
collecting centers in these districts to ensure sustanibility of the results achieved through the pilot project.
The successful outcomes from this pilot project are expected to be speedily replicated on a commercial scale and could be a model for others interested in the
agricultural development of the Eastern region and other poorer areas of the country, Zaheed added.
A formal agreement between USAID and Sunfrost to implement of the project was ratified on March 26 at the office of the latter in the Biyagama Free Trade Zone.
Among the activities covered by the mandate of the project are the identification of farmer families, selection of land plots on scientific basis, soil testing for pH and
micronutrients, workshops and training programmes for farmers, involvement of government and NGO representatives in the two districts, regular visits by experts
from Hayleys to the project sites for technical assistance, extension services, monitoring and evaluation and assessments of and reporting on increased farmer
productivity and income and best practices implemented.
One area of focus will be the introduction of efficient post-harvest processes to minimise post-harvest losses.
The farmers selected to participate in the pilot project belong to the three ethnic communities predominant in the two districts, Sinhalese, Tamils, and Muslims,
Zaheed said.

S.Lanka economy to weather US, EU slowdown-c.bank Fri Mar 28, 2008 By Shihar Aneez
COLOMBO, March 28 (Reuters) - Sri Lanka's economic growth should not suffer significantly from a possible U.S. recession and an anticipated slowdown in the
European Union, the country's central bank said.
Soaring global commodity prices, however, will keep the island's double-digit inflation high, a senior central bank official said late on Thursday.
"A slowdown in advanced economies, especially the U.S. and the EU, will not have a significant impact on Sri Lanka," Nandalal Weerasinghe, director of economic
research department at the central bank, told an economic forum.
"But volatile world commodity prices will have a significant effect on domestic inflation."
Annual inflation measured on a 2-month moving average hit 18.1 percent in February, the highest since 1990, and the central bank has predicted inflation to stay
within 16-20 percent until June this year.
Weerasinghe said Sri Lanka's exports, dominated by garments and textiles, would be less affected by a downturn in industrialised countries than shipments of more
expensive goods.
"In any economic slowdown, the first lines of casualties are the high end industrial luxury goods. So we will be the last in the line to be hit by the recession."
The central bank's trade statistics show the share of the U.S. market in Sri Lanka's exports has been falling in recent years, while shipments to the EU were on the
rise.
Exports to the United States accounted for 25 percent of the total earnings of $7.74 billion in 2007, down from nearly 40 percent five years earlier, while the share of
exports to the EU has risen over the same period to 39 percent from 29 percent.
Highlighting Sri Lanka's limited economic relations with the United States, Weerasinghe said U.S. tourist arrivals have accounted for only 4 percent of the island's
tourism revenue and U.S. firms did not count among major foreign investors. Some economists, however, challenged the central bank's view, saying close ties linking
Asian powerhouses such as India and China with the United States and Europe meant there would be a knock-on effect on the rest of the region, including Sri
Lanka's $27 billion economy.
"The U.S. recession will affect the EU in mid this year and Asia by the end this year," said Howard Nicholas, senior lecturer in economics at the Institute of Social
Studies in the Netherlands. ($1=107.85 rupees) (Editing by Tomasz Janowski)

Sri Lanka inflation not oil-related or 'imported': IMF study

Mar 28, 2008 (LBO) – Most of Sri Lanka's inflation is not 'imported' or caused by oil, a major new International Monetary Fund research study has found, indicating
that the mainly home grown price rises could be slashed with better economic policies. The IMF study released Saturday that covers a steep rise in Sri Lanka's inflation in 2006 and 2007 found that external 'shocks' such as oil prices - which are often
touted as the reason for inflation by politicians - are not significant in explaining inflation.
"Since late 2006, Sri Lanka’s inflation has increased sharply relative to other economies in the region," the study noted.
"The sharp increase in inflation compared to other countries in Asia points out that increases in oil prices in the recent past (a common shock to most economies in the
region) cannot explain most of the increase in inflation in Sri Lanka."
Oil prices explained only 6 percent of the inflation in 2006 and 2007 measured by the New Colombo Consumer Price Index, a statistical analysis by IMF researchers
covering oil prices, the exchange rate and imports, has showed.
Home Grown Shock
The study found that most of the inflation in Sri Lanka is home grown.
It said that external shocks explained "a small percentage" of price increases and concluded that "domestic shocks likely play a more significant role on inflation in Sri
Lanka," indicating that better economic policies were needed to lower inflation.
"With external shock not playing a major role in influencing domestic inflation, domestic policies can be very important in containing inflation," the study, Pass-Through
of External Shocks to Inflation in Sri Lanka said.
"External shocks appear to explain about 25 percent of the variation in consumer prices and about 32 percent of the variation in core inflation, suggesting that other
shocks that are likely more domestic in nature explain most of the variation in inflation in Sri Lanka."
Sri Lanka's fiscal policy reversed radically in 2004 as the government returned to heavy budget deficits and massive expansion of the public sector with tax-free state
jobs, and state enterprises running losses leading to higher budget deficits.
In 2004, inflation which was close to zero in the first quarter was driven towards 20 percent by the end of the year with oil subsidies themselves being financed with
printed money or central bank credit.
The central bank had come under fire for printing money and financing part of the deficit and causing high inflation, though policy has lately been tightened.
Loose Policy
But authorities have tried to put the blame on 'imported' inflation and 'external shocks' with oil prices taking centre stage, despite other countries reporting much lower
inflation.
"The oil price impact was, however, amongst a number of other factors that resulted in an increase in inflation including expansionary fiscal policy and monetary policy
that is not tight enough," the IMF study said.
The study found that only 25 percent of recent consumer inflation could be explained by 'external shocks with oil (which was subsidized most of the time) explaining
about 6 percent, import prices 11 percent and the exchange rate about 10 percent.
Exchange rate depreciation is also caused by money printing. <>

The island: When desperation leads to blind plunges …

The government has suddenly risen from its slumber. It has waived the import duty on rice (Rs. 20.00 per kilo) with
immediate effect and liberalised rice imports. Now every Tom, Dick and Harry can bring in as much rice as he likes at whatever price. This is how politicians act in
this country. They let the grass grow under their lazy feet and then swing into action.
Government pachagandists are bombarding us with the food prices in the world market in a bid to justify the high Cost of Living. True, a decline in global food
production and the increasing dependence of the industrialised nations on bio fuel due to the present surge in the world fossil fuel prices have resulted in a rise in the
global food prices. But, the present situation in this country is due more to the inefficient handling of the market rather than the global factors. The rice prices are a
case in point. They are soaring owing to profiteering and the alleged use of paddy for animal feed. The once vibrant state institutions which helped regulate the prices
have been rendered impotent. The CWE is teetering on the brink of collapse and it is being kept alive on a heart and lung machine. Corruption has debilitated the co
-operative network thus putting paid to the government’s efforts to keep unscrupulous millers and rice traders at bay.
The government was banking heavily on the current harvesting season to bring down rice prices. But, the recent torrential rains in the rice growing areas have taken a
heavy toll on the Maha crop. The Millers’ Mafia has gone into Over Drive mode to purchase paddy at higher prices than the government’s. Even if the weather gods
had behaved, the government would still have failed to control rice prices with the present harvest, given the efficient manner in which the private traders carry out
their sordid operations. Today, the government is in a far worse predicament than before because of the forthcoming Sinhala and Tamil New Year, which will exert a
heavy demand pull on the market sending prices further up. So, the government out of its desperation may have thought of adopting some extraordinary measures to
control rice prices at least in the short run.
Theoretically, the ad hoc measures in question should yield the desired results. If the rice supply gets a boost from cheap imports, the prices should come down. And
rice traders will be prompted to dispose of their stocks before the arrival of the imports, causing the prices to fall. But, there is no guarantee that everything will go as
planned.
Simply because the government has lifted restrictions on rice imports, everybody is not going to import rice. That will be done only by those who are equipped to
handle imports like the Pettah traders. They will, thanks to the duty waiver, save Rs. 20.00 on each kilo of imported rice. But, will the benefits trickle down to the
consumer? If experience is anything to go by, then they won’t.
In 2006, the government naively experimented with tax concessions to bring down the prices of essential commodities. Import duty on a number of items was
removed. But, the consumer was not benefited in anyway. By the time the government realised its blunder, it was too late. This is what a disillusioned President
Mahinda Rajapaksa told Parliament in his budget speech last November: "Honourable Speaker, despite removing taxes on essential commodities since November
2006 at a cost of around Rs. 10 billion, the impact of such tax concessions did not seep down to consumers other than through Lak Sathosa outlets, co-operative
societies and a limited number of other shops. Therefore, I propose to confine such tax concessions only to Lak Sathosa outlets, Co-operative Societies and Budget
Shops…"
On the President’s own admission, a whopping sum of Rs. 10 billion—with which about ten more flyovers like the newly built one at Kelaniya could have been
constructed—went down the gurgler due to poor targeting of duty concessions. Strangely, the government is repeating the same blunder as regards rice imports.
Private traders are sure to make a killing, while the consumer continues to pay more for rice!
The government has pinned its hopes on the Co-operative Societies in channelling cheap rice to the low and middle income groups, but those places are as bad as or
even worse than the private sector institutions. It was only the other day that we reported 20,000 metric tons of rice imported by some Co-operative Societies from
India had been sold to private traders. The stocks of rice had been delivered to mudalalis straight from the Colombo Port in Co-operative vehicles!
Poor local rice producers will certainly suffer a severe blow from imports. Rains have already devastated their lives and they have no alternative but to sell their flood
-affected paddy for a song. Imports at this juncture will compound their woes as the demand for their produce will further dwindle and buying prices plummet
accordingly. It will be double trouble for the local producer. One is reminded of the proverbial man who was gored by a bull after a fall from a tree. We hope and
pray that the poor farmer won’t be driven to suicide!
Desperate remedies only cause the government, the consumer and the producer to be mired further in crisis, however relieving they may be to the consumer
temporarily. Strategic planning is the only way to avert crises. Stepping up local production, developing storage facilities, building an efficient distribution network,
enforcement of existing laws effectively and the introduction of new legislation, if necessary, to deal with profiteers are some of the measures that need to be adopted
urgently.
Now that the die is cast, we only hope that both the consumer and the producer will be safe and keep our fingers crossed!

Ki'linochchi facing imminent food crisis

[TamilNet, Friday, 28 March 2008, 13:24 GMT]

The food stock for emergency use in Ki’linochchi district has been completely exhausted due to difficulties in bringing in the required food items N.Vethanayagam,
Government Agent (GA) said Thursday, when questioned about the imminent crisis in the region due to the worsening shortage of essential food items.
The representatives of the Multi Purpose co-operative societies (MPCS) have brought to the attention of GA that the stocks in the MPCS have dwindled to an all
time low and a serious food crisis is looming, rapidly deteriorating towards a possible critical situation of hunger and famine," the GA said.
Speaking to the media, the GA provided the following chilling details that portrayed the extent of the impending humanitarian crisis in the district.
“There are 195,812 people residing in Ki'linochchi district and each month 2000 Metric Tonnes (MT) of food items are required for their use.
“Even though we are approaching the end of March, due to difficulty in getting permission for transporting the food items, we are unable to bring in the required quota
for January as well as February through Omanthai check point, resulting in an unprecedented food crisis.
“The representatives of MPCS in the district have already made urgent appeal to me take immediate steps to bringing in the required supplies.
“To further compound and complicate the worsening crisis, relief supplies for more than 28,000 civilians displaced from various districts have not yet been released
from the beginning of this year due to permission being denied for the transport of relief supplies into this district. As a result, the internally displaced people (IDPs)
are also facing serious hardships, GA said.
The normal needs of the district per month (in Metric Tonnes) as provided by GA are detailed below
Flour: 586 Dhal: 195 Sugar: 391 Milk Powder: 176 Soap: 107 Biscuits for infants: 100 Spices for normal use in our homes- Chilly, Corriander, Fennel: 100 Coconut oil and all other types of oil normally used by the people: 78 Biscuits: 58 Chocolate: 30 Bakery related products: 117 Other Items: 234 “The local production has also declined considerably due to serious hurdles and obstacles placed in transporting fertilizers. In addition, the transport of fuel such as
Petrol and Diesel has been completely banned and only kerosene oil is being supplied throughout the district, the GA added emphasizing the urgency of the rapidly
unfolding crisis in the war – torn region.
Meanwhile, the United Nations (UN ) affiliated Inter Agency Standing Committee (IASC), in its latest humanitarian situation report, said last week the Government
Agent (GA) in Kilinochchi had reported that food supplies for February and March have not been transported to the area.
“There has been no approval from the Ministry of Defence (MoD) to transport food items to reach the general public through the Omanthai Entry/Exit point into the
Ki’linochchi District,” IASC said. According to the IASC report the Regional Director, Health Services (RDHS) in Ki’linochchi had also pointed out last week that
no MoD authorization has been granted to transport the first quarter of essential drugs stored in Vavuniyaa.
At a recent meeting between the Security Forces-Wannni Commandant and GA in Vavuniyaa, it was agreed that empty lorries from Wanni to areas controlled by the
Government of Sri Lanka (GOSL) would be allowed through the Omanthai checkpoint on Saturdays.
Subsequently 71 lorries were allowed from the Wanni to move into areas controlled by GOSL.
According to the IASC, the procedures at the Omanthai entry/exit point remain tight for movement of civilian and humanitarian organizations.
It also notes that since February 4, access has been restricted to vehicles traveling from north of Madawaachchi check point, creating additional challenges for civilian
travel across the Mannaar District.
The UN affiliated organization further says restrictive procedures at checkpoints on the A-14 Road, including Uyilangku’lam, continue to cause serious problems with
the supply of essential items, and have also led to sky rocketing prices of the basic items and fuel shortage.

53% of Sri Lanka's external military training provided by India
"A major part of the training of Sri Lankan Armed Forces, i.e. upto 53%, is carried out in India. There has been a significant increase in the number of training slots
offered to Sri Lankan armed forces personnel in recent years. For 2006-7, the allotted slots are 870 with 545 for the Army, 216 for Navy and 109 for Air Force. In
2005-06, 977 courses were offered; and for 2007-08, courses requested are 2579 with 1208 for Army, 518 for Navy and 853 for Air Force. Besides this, there is
continued cooperation in terms of exchange of visits and cooperation between Navies. Indian Coast Guard extended assistance to Sri Lanka in containing oil spill off
Galle in Sept 2006."
_________________________________
(March 28, Chennai, Sri Lanka Guardian) Addressing the large demonstration of the Tamil Protection Movement (TPM) opposite the Memorial Hall in Chennai
Thursday, Viduthalai Chiruththaikal Kadchi (VCK, Liberation Panthers Party) President Thol. Thirumavalavan, condemning the Indian government for giving red
carpet welcome to Sri Lanka Army (SLA) Commander Lt. Gen. Sarath Fonseka, charged that one of the primary objectives of Fonseka 's visit to India was to seek
a substantial increase in the number of Sri Lankan Armed Forces being trained in India. "There has been a three hundred percentage increase in the number of training
slots offered to Sri Lankan armed forces personnel between the year 2006-2007 and 2007-2008," he charged.
The TPM President said that the Indian Government, by giving a red carpet welcome to the SLA Commander, had hurt the sentiments of the sixty million Tamils of
Tamil Nadu.
Thirumavalavan said that, according to the website of the Indian Ministry of External Affairs, 53% of the Sri Lankan Armed Forces were trained in India.
He maintained that this "shocking number might be disbelieved if the source of information was some Sri Lankan Government website, or some other private
website," but this was not the case. He pointed out that ever since Congress came to power there has been manifold increase in the training given to Sri Lankan
Armed forces.
He accused New Delhi of advocating dialogue and diplomacy publicly while clandestinely training Sri Lankan Armed forces. He said that Indian Government had
betrayed the Tamil people and the Tamil society by aiding the genocidal Sri Lankan Government.
In his emotionally charged speech, he said that the training imparted by India would be used by the SLA to kill the innocent children, such as the tragedy that took
place when Sri Lanka Air Force bombed the Chegnchoalai orphanage complex in Mullaiththeevu. "Indian military aid would only increase Tamil genocide in the
island," he added, and vowed that the Tamil people of Tamil Nadu would "never be mute spectators against such atrocities."
Presently 53% of the external training of Sri Lankan forces are taking place in India as per the "Brief on India-Sri Lanka Relations" available on the Indian Ministry of
External Affairs website. With Congress at the helm of affairs in New Delhi, the number is expected to shoot up drastically, he warned.
Not only does India train the Sri Lankan Armed Forces, it also conducts training programmes for Sri Lankan Police. According to information available on the
Ministry of External Affairs website, 465 Sri Lankan Police officers have been trained since December 2005. Simultaneously, another 400 Sri Lankan Police
personnel were being trained in India for maintenance of public order.
The document released by the Indian Ministry of External Affairs on 26 February, 2007, and posted in its website, titled 'Brief on India-Sri Lanka Relations', which
was referred by Mr. Thirumavalavan, states the following under Defence Cooperation:
"A major part of the training of Sri Lankan Armed Forces, i.e. upto 53%, is carried out in India. There has been a significant increase in the number of training slots
offered to Sri Lankan armed forces personnel in recent years. For 2006-7, the allotted slots are 870 with 545 for the Army, 216 for Navy and 109 for Air Force. In
2005-06, 977 courses were offered; and for 2007-08, courses requested are 2579 with 1208 for Army, 518 for Navy and 853 for Air Force. Besides this, there is
continued cooperation in terms of exchange of visits and cooperation between Navies. Indian Coast Guard extended assistance to Sri Lanka in containing oil spill off
Galle in Sept 2006."
Thirumavalavan appealed to the state government to impress upon New Delhi the need to talk to Sri Lanka to put an end to military action against the Tamils. He also
pointed out that 62 Indian fishermen were kidnapped by the Sri Lanka Navy only during Sarath Fonseka's Indian visit. He wondered how the Indian Government
could give him a red carpet welcome in such circumstances.
Since 1983, more than 300 Tamil Nadu fishermen had succumbed to attacks from the SLN, but even once the Indian Government had not condemned the killing of
its own fishermen, he said. He urged the Indian Government to retrieve Kachchatheevu since it was the only solution to protect Tamil Nadu fishermen from the Sri
Lanka Navy.
Coming down heavily on the de-merger of the North and East, he said that it was a challenge to India and the Indo-Sri Lankan Accord inked by J R Jayawardene
and Rajiv Gandhi. He observed why Congress politicians, in spite of their devotion to Rajiv Gandhi, remained silent when the pact signed by their late leader was
being trampled upon.
Thirumavalavan pointed out that the very people who were condemning the divisive feelings between Sinhalese and Tamils were instigating sectarianism between
Tamils of the North and the East. The de-merger of the North and East was a "conspiracy of Sinhala chauvinist forces who wanted to engineer a permanent divide
among the Tamils," he alleged and urged the Tamil Nadu Government to "interfere in this matter and undo the de-merger which posed a threat to Tamil unity."
Thirumavalavan thanked Dr. S. Ramadoss for publicly coming in support of the Eelam Tamils despite being a part of the Congress-led United Progressive Alliance
that ruled India.
He maintained that both the VCK and the PMK would work together for the cause of the Eelam Tamils, within and outside the Tamil Nadu state legislative assembly.- Sri Lanka Guardian