 |
| Sri Lanka wants more Israeli-built Dvora gunboats after recent battle losses. |
Sri Lanka is preparing for a major onslaught against the Liberation Tigers, raising defence spending by 45% to $1.29 bln and calling on the international community to help fight terrorism.
And amid analysts’ questions about foreign exchange, Sri Lanka announced a new dollar bond would be launched next year.
Two weeks ago Sri Lanka’s military chief, Air Chief Marshal G.D. Perera, told top defense and military officials from 23 countries that his government needs "a lot of assistance" in handling the “terrorist issue.”
Meanwhile defence spokesman and cabinet minister Keheliya Rambukwella said: "right now the requirement of strengthening the air force, navy and defence sector becomes very paramount. National security comes first.”
Perera was speaking at a gathering on Nov 15 of top defense and military officials from 23 countries including nuclear powers the U.S., France and Pakistan, along with Australia, New Zealand, South Korea and several Southeast Asian nations.
"Sri Lanka is straddled with a terrorist issue and a lot of assistance is required from neighboring countries, not only India and Pakistan but also in the region," AP quoted Perera as saying.
Sri Lanka's government plans to use a budgeted 28 percent increase in defence spending for 2007 to help beef up the military, Reuters reported.
The budget raises defence spending to Rs139.56 billion in 2007 from a revised Rs108.67 billion in 2006.
Parliamentarians voted 133 in favour to 18 against to pass the budget bill. The 18 were all members of the Tamil National Alliance (TNA).
Reuters quoted military sources as saying the navy was likely to look to replace Israeli-made Dvora fast attack boats sunk in recent naval battles with the Tigers, as well as buying more ammunition and weapons systems.
President Mahinda Rajapakse made no mention of defence spending figures in his abridged budget speech to parliament on Thursday, but the budget estimates document shows defence spending will rise to 139.56 billion rupees ($1.29 bln) in 2007 from a revised 108.67 billion rupees in 2006.
"Right now the requirement of strengthening the air force, navy and defence sector becomes very paramount. National security comes first," said government defence spokesman and cabinet minister Keheliya Rambukwella.
"When the sovereignty of the state is threatened it has to be safeguarded," he said. "Defence professionals will have to look into (what to buy) -- basically what you need to defend the country."
"We already know they are acquiring four more Mig 27 fighters, so similarly there will be other armoured vehicles for the army and ships for the Navy," Iqbal Athas, Sri Lanka’s leading defence correspondent and analyst for Jane's Defence Weekly, told Reuters.
"They need some because they have lost some fast attack (naval) craft in battle."
Analysts said the increase in spending was higher than anticipated, expecting the budget deficit to widen due to increased defence expenditure, and wondering where the government will find the money.
"It looks as though they might be planning to upgrade their defence hardware, which means they will have to raise foreign money," Dushyanth Wijayasinghe, head of research at Asia Securities in Colombo told Reuters last month.
"They could do that partly from dollar bond issues and partly from long-term credit lines from (arms) suppliers," he added.
This week Central Bank Governor Ajith Nivard Cabraal told Reuters that Sri Lanka plans to issue its first US dollar bond in 2007 to raise funds for major infrastructure projects such as roads and ports.
Cabraal did not say how much of the money raised from the bond issue would be earmarked for infrastructure projects.
Athas said President Rajapakse's sharp increase in defence spending marked a departure from previous administrations.
"It becomes significant if you look at the past, particularly with the two previous administrations, which sought a de-escalation with the ongoing peace process. All of a sudden we see a diversion from that and an escalation," Athas said.
