Sri Lanka casts wider donor net

Analysis: Frustrated at the strings attached by traditional sources, the government is turning to regional allies willing to provide 'unconditional' aid.

COLOMBO // Now that its decades-long war with Tamil separatists has ended, Sri Lanka is preparing for a major phase of development. But in doing so, the country appears to be turning away from its traditional western donors in favour of regional allies whose assistance comes without the same unpalatable demands. According to government officials, money from these Asian and Middle Eastern countries, including Libya, Iran and Myanmar, does not have strings attached. That, however, remains to be seen. No aid, not even from your own backyard, comes without concessions, even if not explicit. When the Iranians offered credit support to Sri Lanka two years ago, Iranian firms were subsequently offered a project in the country.

According to recent media reports, Sri Lanka wants the group of four - the EU, Japan, Norway and US, that were its main development partners in the early 2000s - to be expanded to include countries Sri Lanka views as less likely to veto aid based on human rights concerns. The US and the EU have criticised Colombo for its failure to minimise civilian casualties when it was finishing off the Tamil Tigers, with the UN Human Rights Commissioner threatening to sue the country for what it termed war crimes.

Mahinda Rajapaksa, Sri Lanka's president, has brushed aside these concerns, snubbing key officials from the West who visited Sri Lanka to urge a suspension to the fighting. The Lakbima, an English-language newspaper, said at the weekend Mr Rajapaksa made the request to expand the member group to include "more members from friendly Asian nations", when he met Yasushi Akashi, Japan's special envoy on the Sri Lankan peace process, in Colombo.

The group of four was formed during the Aid Sri Lanka conference in Tokyo in June 2003, in which many countries took part. At the summit they pledged more than US$2 billion (Dh7.3bn) after Sri Lanka signed a peace treaty with the rebels. The group was assigned to co-ordinate the aid package with the Sri Lankan government and since then has been meeting regularly among themselves and with the government to push for peace and implementation of the committed aid.

Whether this package, yet to be disbursed six years on, is still available is unclear. But Mr Rajapaksa's message to the group of four appears to be that if a new post-war development package is to be organised, countries friendly to Sri Lanka - and however unfriendly to the West - must be brought to the table. It would be politically suicidal for Mr Rajapaksa to ignore his "new internationals friends"; after all, they came to his aid when western powers pressed for stopping the war as his troops were nearing victory.

Since being elected three years ago, Mr Rajapaksa has warded off "interference" from the West on issues such as human rights and International Monetary Fund aid with strings attached. However, earlier this year, the IMF offered a US$1.9 billion standby credit facility to the government to offset the impact of the global slowdown. The columnist Jehan Perera says Mr Rajapaksa's request to expand the "Tokyo co-chairs" beyond the original four is probably because the government is not getting enough donor assistance from them.

"It is trying to pressure them by getting in some other countries that are more amenable to giving unconditional aid to become the majority in the co-chairs. Of course, this is meant to reduce the power of the four, and make them a minority in the group that they set up," he said, adding that the government hopes the enlarged group will decide by majority vote to give developmental assistance without conditions.

However, Mr Perera said the reverse could happen. "The co-chairs may not be willing to accept others joining in. Why should they? This is a group they themselves set up." If the group of four refuses to accept Mr Rajapaksa's proposal, Sri Lanka would be forced to rely on new allies such as China, India and Iran, a development most analysts here agree would cause concern for the EU and US. Furthermore, they would still like a piece of the "development action" in Sri Lanka, with or without strings attached.