SRI LANKA: International donors say civil war is choking Sri Lanka's economic development.

Civil war is choking Sri Lanka's economic and development potential, International donors said on Monday (January 29), urging the government to resume talks with Tamil Tiger rebels and forge peace. Sri Lanka's main donors are taking part in the annual conference which was declared open by President Mahinda Rajapaksa. The two day development forum is being held in the historic southern Sri Lankan port town of Galle. Donors estimate that conflict between Sri Lankan government forces and the Liberation Tigers of Tamil Eelam's (LTTE) has shaved between 2-3 percentage points a year off gross domestic product since the war began in 1983, and say that the president's 10-year plan to lift four million rural Sri Lankans out of poverty depends on peace. Apparently emboldened by the capture of a key eastern rebel stronghold, the government has vowed to wipe out the LTTE military machine -- and analysts expect a war that has killed more than 67,000 people to deepen. The Tigers, who say they are fighting for an independent state for minority Tamils in the northeast, say they distrust the government and warn their guerrilla warfare capability remains intact. Addressing delegates, World Bank Vice President Praful Patel said that the fighting was a major problem. "I caution that we cannot spend two days discussing development plans if we do not place the conflict squarely in our sights as the largest obstacle. A development vision cannot exit independently of the conflict. In this regard we appreciate the government's agreement to discuss the conflict up front," Patel told the forum. "The past year has not been good at all for the families of the more than 3,500 Sri Lankans killed as a result of increased hostilities nor has it been a good year for the additional over 200,000 persons displaced by the conflict. It has not been a good year for the whole population of the north and east who have gone through serious difficulties and distress. And the tensions among the citizens island-wide have ben heightened by the recent attacks some not very far from where we meet today," he added President Mahinda Rajapakse has vowed to push ahead with efforts to find a political solution to the conflict, but the forum comes a day after a mass defection from the main opposition party to the government left a cross-party pact to seek a permanent peace defunct. Aid agencies complain the government has hampered their access to areas of the northeast under rebel control, forcing some to shelve or abandon projects altogether. The government has budgeted 1.28 billion U.S. dollars in defence spending in 2007, up nearly 30 percent from last year. It is forecasting the economy will grow around 7.5 percent this year, up from around 7.0 percent in 2006. "No amount of development assistance by the United States or any other donor can have any lasting impact however, without finding a permanent solution to the conflict that has plagued Sri Lanka for more than 25 years. We remain unwavering in our conviction that there can be no military solution to this terrible conflict," said U.S. Ambassador Robert Blake. He said he hoped Sri Lanka would seize the opportunity to forge a power-sharing proposal that could form the basis for talks with the LTTE that might finally bring an end to the conflict.

ITN Source | January 30, 2007

Tags:. .eastern. .budgeted. .urging. .citizens. .cannot