The European Union's decision to suspend preferential trade benefits to Sri Lanka because of human rights “shortcomings” during the island’s 26-year civil war is expected to have a significant impact on the latter's export sector.

Generalised System of Preferences Plus (GSP+) allowed the island to export some 7000 items to the EU on a duty free basis. Chief among the beneficiaries of this facility was Sri Lanka’s garment industry which is also its biggest foreign exchange earner, providing employment to 300,000.

Other beneficiaries includes the cable manufacturing sector, leatherwear, fisheries and ceramic exports.

Commenting on the decision made by the EU on February 15, A Sukumaran, a clothing exporter who is chairman of the Joint Apparel Association Forum, an industry body said: "It will have an impact on the industry".

"Over 50 percent of our apparel exports go to the EU. Whatever apparel qualifies for GSP Plus, costs will go up by about 10 percent. Many of our buyers have told us we have to bear the extra cost." Sukumaran added.

Loss of the GSP+ benefits would mean Sri Lankan exporters would be charged an import duty of about 9.6 percent by EU member states.

"It will be extremely costly for exporters," said Sukumaran.

"I do not think many are working on 10-15 percent margins. Unless some of the buyers are ready to bear part of the burden it will be a problem."

However, some garment industry figures are optimistic. Kashyapa De Silva of Clariant, a Swiss based manufacturer of dyes and chemicals for the industry says that despite the “loss” of the E.U. market, there is enough scope for the garment industry to expand in the US market.

According to De Silva, the local industry’s advantage is quality, which cheap, mass market producers of garments such as China and Bangladesh are unable to match.

However, many analysts have said they fear factories would be forced to close, resulting in large-scale lay-offs of workers.

There was more bad news for the Sri Lanka's exports industry with Kenya overtaking Sri Lanka as the top tea exporter in 2009.

According to Tea Board of Kenya, the country exported 342 million kilogrammes to 47 world markets, accounting for 22 per cent of the world tea exports last year.

In a statement, the Board said, "We did dislodge Sri Lanka as the leading tea exporter last year and hope we will continue maintaining the same position”.

Out of the 40 per cent of all global tea bags used in making the popular beverage, at least 10 per cent of its content is Kenyan, it added.

It said, Sri Lanka, formerly number one tea exporter, sold 280 million kilogrammes, representing a shortfall of 29 million.

Analysts attributed the success to the efforts made in research and development. 

U.N. Secretary-General Ban Ki-moon plans to ask a panel of experts to advise the world body on "accountability issues" relating to possible human rights abuses in Sri Lanka, Reuters reported quoting spokesperson Martin Nesirky as saying.

Ban has said an investigation of war crimes allegations should be handled by the High Commissioner for Human Rights in Geneva, Navi Pillay, who has called on Sri Lanka to investigate the allegations itself – albeit with outside help, Reuters added.

Calling the action "unwarranted" Sri Lanka said, "[n]o such action had been taken about other states with continuing armed conflicts on a large scale, involving major humanitarian catastrophes and causing the deaths of large numbers of civilians due to military action."

"I am convinced that Sri Lanka should undertake a full reckoning of the grave violations committed by all sides during the war, and that the international community can be helpful in this regard," Navi Pillay told the U.N.'s Human Rights Council in Geneva on Thursday.

Ban told Sri Lanka's President Mahinda Rajapakse that he intended to "go ahead with the establishment of a panel of experts," according to Nesirky.

Gordon Weiss, a former UN spokesperson for Sri Lanka who had detailed knowledge of the ground battles and who resigned from the UN after 14 years and returned home to Australia, in an interview to the ABC News said, Sri Lanka’s military massacred as many as 40,000 Tamil civilians in the final onslaught against the Liberation Tigers in 2009.

Several rights groups have accused Sri Lanka and the LTTE of war crimes during the conflict's final phase and they have demanded an independent probe of the allegations, as has U.N. special rapporteur for extrajudicial executions Philip Alston.

Recently, an independent tribunal in Dublin after two days of in-camera hearings from more than 20 eye-witnesses who escaped Sri Lanka's slaughter of Tamil civilians concluded that Sri Lanka committed war-crimes, but the tribunal stopped short of declaring that the crimes amounted to genocide.

The Sri Lankan government has denied charges of deliberately targeting civilians and other human rights breaches.

Professor Francis Boyle, an expert in International Law, earlier noted that the U.N. Secretary General has the power to order and publish not only investigations into the violations of member countries in the conduct of war, but also the "entire role played by the United Nations Organization and its Officials," during the wars.

"The previous U.N. Secretary General Kofi Annan so ordered two separate investigations concerning the roles played by the United Nations during the genocides in Rwanda and Srebrenica, respectively," Boyle noted.

Observers have asserted, however, that ban on media and eviction of international NGOs from battle zones, while the slaughter was in progress, and for months after the conclusion of the battles, have provided enough space for the Sri Lanka Government to destroy material evidence from battle zones that can establish Sri Lanka's culpability in such crimes.

Spokesperson for the US-based pressure group, Tamils Against Genocide (TAG) said, "United Nations has a moral obligation to be more proactive in conducting investigations into war-crimes allegedly committed by member countries that are not signatories to the Rome statute. Non-signatory countries enjoy some level of protection, and options to obtain justice in International Criminal Court (ICC) for victims who suffered egragious rights violations by non-signatory member countries are limited, and available only if the Security Council initiates the investigation, or an "active" prosecutor exercises his proprio motu powers under Article 15 of Rome Statute. However, prosecutor Moreno Ocampo has, in a recent interview at the CNN, expressed reservations on using his own powers to investigate Sri Lanka.”

"Non-signatory status does not create a positive right to commit jus cogens norms violations," TAG spokesperson added.

UN Secretary-General Ban Ki-Moon plans to setup a panel of experts to advise the world body on "accountability issues" relating to possible human rights abuses in Sri Lanka, Reuters reported quoting UN spokesperson Martin Nesirky.

In a telephone conversation with Sri Lankan President Mahinda Rajapaksa on Thursday, March 4, Ban informed he intended to "go ahead with the establishment of a panel of experts," Ban's spokesman Nesirky told Reuters.

"He also explained that such a panel would advise him, the secretary-general, on the way forward on accountability issues related to Sri Lanka," Nesirky said.

Rights groups and Western governments are pressing for some kind of accountability for thousands of civilian deaths in the last months of the island's 25-year war against the Liberation Tigers of Tamil Eelam (LTTE), which aimed to create a separate homeland for the island's Tamils.

Human rights groups have accused Sri Lanka of war crimes during the conflict's final phase and they have demanded an independent probe of the allegations, as has U.N. special rapporteur for extrajudicial executions Philip Alston.

Alston publicly urged Ban to appoint an international panel to investigate presumptive war crimes in Sri Lanka. These include the urging of LTTE leaders to emerge with white flags, after which they were executed. Ban's chief of staff, the Indian diplomat Vijay Nambiar, was a go between conveying the Rajapaksas' message that emerging with a white flag held high would ensure safety.

However, it is not clear if Ban's expert panel would go as far as human rights groups would like, reported Reuters. The concern arises due to Ban's past actions, or the lack of it,  in relation to Sri Lanka and the UN's failure to follow through even on what few commitments it made about Sri Lanka.

Following what even the UN called the "bloodbath on the beach," Ban visited Sri Lanka in May 2009 and issued a statement about reconciliation with the Tamils and accountability for war crimes. But in the months that followed he took no action.

Inner City Press reporting on Ban's inaction over Sri Lanka's activities during the war said "it is important to note that what Ban is belatedly doing about 30,000 deaths in the first half of 2009 is less and later than what he did for 160 deaths in Guinea in September."

Professor Francis Boyle, an expert in International Law, earlier noted that the UN Secretary General has the power to order and publish not only investigations into the violations of member countries in the conduct of war, but also the "entire role played by the United Nations Organization and its Officials," during the wars.

"The previous UN Secretary General Kofi Annan so ordered two separate investigations concerning the roles played by the United Nations during the genocides in Rwanda and Srebrenica, respectively," Boyle noted.

Observers have asserted, however, that ban on media and eviction of international NGOs from battle zones, while the slaughter was in progress, and for months after the conclusion of the battles, have provided enough space for the Sri Lanka Government to destroy material evidence from battle zones that can establish Sri Lanka's culpability in such crimes.

Spokesperson for the US-based pressure group, Tamils Against Genocide (TAG) said, "United Nations has a moral obligation to be more proactive in conducting investigations into war-crimes allegedly committed by member countries that are not signatories to the Rome statute. Non-signatory countries enjoy some level of protection, and options to obtain justice in International Criminal Court (ICC) for victims who suffered egregious rights violations by non-signatory member countries are limited, and available only if the Security Council initiates the investigation, or an "active" prosecutor exercises his proprio motu powers under Article 15 of Rome Statute. However, prosecutor Moreno Ocampo has, in a recent interview at the CNN, expressed reservations on using his own powers to investigate Sri Lanka.

"Non-signatory status does not create a positive right to commit jus cogens norms violations," TAG spokesperson added.

The Colombo stock exchange hit a new record high of 3843.67 points on Monday, March 1 but foreign investors continued selling their holdings amidst political and economic concerns.

The All-Share Price Index .CSE of the Colombo Stock Exchange share price gains were led by retail buying.

"It's retailer-driven and the market will further go up due to retailers," said Jaliya Wijeratne, director of institutional sales at SMB Securities.

"Foreigners have been leaving due to problems in their own countries." Wijeratne added.

However most analysts said the exit of the foreigners was due to Sri Lanka's own political and economic concerns as other emerging markets are still seeing foreign investment inflows.

A recent decision by the International Monetary Fund to withhold the third tranche payment of a eight tranched loan, President Rajapakse's populist tax cuts and volatile political landscape has had an adverse impact on sentiment of foreign investors, closely monitoring Sri Lanka as a "frontier economy" since the end of the war.

Analysts say many investors will take a wait-and-see approach until they are sure about a degree of political and economic stability under relatively prudent fiscal management.

Foreigners were net sellers for 15 million rupees worth of shares on Monday, March 1. They have been net sellers in 30 out of the 37 trading sessions so far this year.

Foreigners, who had been net buyers since 2001, turned net sellers in 2009, selling 785.3 million rupees worth of shares. They have sold a net 5.1 billion worth shares so far this year and 2.54 billion rupees since the January 26 presidential election results were announced.

The bourse is still up 13 percent so far this year, following a 125 percent rally in 2009, one of the best in Asia.

China has emerged as Sri Lanka's biggest single lender in 2009, overtaking the World Bank and the Asian Development Bank, the treasury said Wednesday, March 3.

China lent 1.2 billion dollars to build roads, a coal power project and a port in the island's south last year, more than half the total of 2.2 billion dollars in foreign aid in 2009.

Project loans accounted for 1.9 billion dollars of the total, with another 279.6 million dollars in grants, the treasury said ahead of the 2010 budget.

Western donors have curbed aid to Sri Lanka over human rights issues and the government's handling of the final weeks of a 37-year-old conflict with Tamil Tiger separatists, which ended last May.

The US has scaled back military assistance to Colombo, while Germany and Britain have pruned their aid to Sri Lanka. The European Union is also set to withdraw trade concessions to Sri Lanka from August.

As ties with allies in the West have soured, President Mahinda Rajapakse has deepened ties with Japan, India, China and Myanmar, as well as Iran.

"The government of China, Asian Development Bank and the World Bank were the three main donors who accounted for 1.9 billion dollars or 84.3 percent of the total commitment in 2009," the report said.

Japan and the Manila-based Asian Development Bank have in the past been the biggest lenders to the island.

Dismissing the response by Colombo that Ban Ki Moon had not appointed panel of experts on other countries where there are "continuing armed conflicts on a large scale, involving major humanitarian catastrophes and causing the deaths of large numbers of civilians due to military action," as "simply untrue nonsense," Francis A. Boyle, professor at the University of Illinois College of Law, said that during the past year alone UN Human Rights Council had authorized Goldstone Commission investigation into Israel war crimes against Palestinians in Gaza.

Noting that the "United Nations is just beginning to do the right thing for the Tamils," Prof Boyle urged that "Tamils around the world could do the same thing for establishing an International Criminal Tribunal for Sri Lanka (ICTSL)."

"Of course this statement by the Government of Sri Lanka (GoSL) is simply untrue nonsense, and the GOSL knows it. During the past year alone the UN Human Rights Council authorized the so-called Goldstone Commission investigation into Israel war crimes and crimes against humanity perpetrated against the besieged 1.5 million Palestinians in Gaza. The Goldstone Report ultimately found that Israel had indeed inflicted war crimes and crimes against humanity against the Palestinians—just short of genocide," Boyle pointed out.

"Any appointment of such a panel as intended, would compel Sri Lanka to take necessary and appropriate action in that regard," Sri Lanka's President had told the UN Secretary General, local media in Colombo reported. The reports did not clarify what the "necessary and appropriate" actions are likely to be.

"The UN Human Rights Council has so far done the right thing for the Palestinians. Unfortunately, the GoSL was able to manipulate anti-Western sentiments there in order to block similar action by the Human Rights Council when it came to the investigation of the GoSL’s own international crimes against the Tamils. So now one year after the GoSL’s genocidal massacre against the Tamils, the United Nations is just beginning to do the right thing for the Tamils. But better late than never," Boyle added.

"I already have a proposal for the establishment of an International Criminal Tribunal for Israel (ICTI) that is currently pending before the United Nations General Assembly," Professor Boyle pointed out, and added, "Tamils around the world could do the same thing for establishing an International Criminal Tribunal for Sri Lanka (ICTSL). The UN General Assembly would have the power to establish an ICTSL as a “subsidiary organ” under U.N. Charter Article 22. That way, the concerned GoSL members (e.g., Rajapaksas, Fonseka, General Staff et al) could be held accountable for their international crimes against the Tamils without needing any prior reference by the U.N. Security Council to the International Criminal Court, which would be subject to a likely Great Power Veto—for example by China.

"But there is no veto in the U.N. General Assembly. We would just need a majority vote in the UN General Assembly to set up an ICTSL. Concerned Tamils around the world should contact their respective governments of current nationality or legal residence and ask them to sponsor my proposal for establishing an International Criminal Tribunal for Sri Lanka by the United Nations General Assembly," Boyle said.

While Colombo plans allotting lands for ‘retired’ Sinhala army personnel in the so-called 'resettlement' schemes of Tamil North and East of the island of Sri Lanka, China and India compete in proving who is the best facilitator of Colombo in its demographic onslaught, Eelam Tamils circles said.

China has emerged as Sri Lanka’s biggest single lender in 2009, revealed Colombo sources adding that China’s top aid to the North was spent particularly on creating conducive environment for Colombo’s occupying armed forces there.

India is already helping Colombo’s communication strategies disrupting Tamil demographic contiguity. In the meantime, relieving Colombo from Western pressure, Indian envoy in Colombo said Sri Lanka could export more garments to India under Comprehensive Economic Partnership Agreement.

Tamils sources also said that a proposed World Bank aid for taking census in the North and East has already evoked calls from the south that the number of Tamil parliamentary constituencies has to be now reduced, citing population decrease in the Tamil homeland since 1981.

The situation is for the perusal of those in the West who still pretend of not knowing what is genocide, those who try to teach that what the Eelam Tamils face is not genocide and those who deceive them and deceive others that the crisis in the island could be resolved within united Sri Lanka by restructuring state, Tamil circles further said.

While whatever happening in the name of re-settlement is eyewash – creation of slums of paupers under the supervision of the occupying army, the Colombo government has extensive plans to allot lands to retired army personnel to have permanent control over the Tamil population, reliable sources in the South told TamilNet.

For nearly two decades now, thousands of SLA soldiers are occupying private houses amidst densely populated areas in the Jaffna peninsula, keeping the people under open prisons.

In the recently conquered Vanni, buildings in good shape are invariably occupied by the troops and even Colombo's Tamil civil servants find it difficult to get back their quarters.

Last year, SLA Commander, General Jagath Jayasuriya told Colombo newspaper Daily Mirror that the military had ordered pre-fabricated buildings from China to build military camps that were to be installed in the 'liberated' North.

China topped backing Colombo through 1.2 billion dollar loan in 2009, which is more than half of total 2.2 billion foreign aid Sri Lanka received in that year, Colombo sources said.

Sri Lanka now relies more on China, India, Iran, Japan and Myanmar, observers point out.

China’s ascendancy as the top abettor of Colombo raise eyebrows in Indian media, but the same media fails to see what their own government is doing in the island, Tamil circles said.

Even though the West is reluctant to accept the justification in Tamil demand for independence, at least there are now powerful voices in the West that political solution is the priority before anything else in the island.

But whether the Indian strategy is collaborating with Colombo in permanently erasing the political aspiration of Eelam Tamils in order to make Sinhalese agree for ‘economic and strategic incorporation’ with India is the question in the minds of Eelam Tamils. Their suspicion is substantiated by India’s actions spanning well over six decades.

India continues playing a negative role oppressing Tamils in the island further and further for its gains from the Sinhala state, Tamil circles say. Sections of media and ruling families among Tamils of the subcontinent, greedy of their own financial empires, being in the forefront in the subjugation of Eelam Tamils is the topmost irony, Eelam Tamil circles in the island further said.

The crisis in the island and power manoeuvrings denying justice to the victims arise because of international community's irresponsibility in not taking direct control of a region affected by genocidal war, in the early stage itself, according to Tamil political circles.

Presenting her report to the annual session of the UN Human Rights Council in Geneva, UN High Commissioner for human rights, Navi Pillay criticised Sri Lanka for failing to examine abuses committed during the civil war last year between the government forces and Tamil Tigers.

Human rights abuses in Sri Lanka are damaging prospects for reconciliation after 25 years of civil war, Pillay, a former UN war crimes judge, told the council.

“In Sri Lanka, the opportunity for peace and reconciliation continues to be marred by the treatment of journalists, human rights defenders and other critics of government”

Repeating her call for an independent investigation into war crimes allegations in Sri Lanka, U.N. High Commissioner for Human Rights Navi Pillay told the U.N.'s Human Rights Council she was singling out outstanding cases in different countries.

"I am convinced that Sri Lanka should undertake a full reckoning of the grave violations committed by all sides during the war, and that the international community can be helpful in this regard," she said in a speech presenting her annual report.

Her comments on Sri Lanka and other states will reassure critics of the council who argue that the 47-member body often fails to deal with human rights violations as countries unite in regional alliances to shield each other from scrutiny.

Last May, the council held a special session on Sri Lanka just after the end of the war against the Tamil Tigers, but the government deflected criticism by introducing its own resolution praising its defeat of the separatist group, which was then passed.

Sri Lanka government maintains that there were no war crimes committed and says it will not allow any international investigations.

In an earlier interview with the BBC, Defence Secretary Gotabhaya Rajapaksa said he would not allow any such investigation as “there is no reason.”

William Hague

Thank you very much for your warm welcome.  I am delighted to be here with you this afternoon and honoured to participate in the inaugural Global Tamil Forum conference.  I would like to warmly return the welcome, especially to those of you who have travelled long distances and we are pleased that you have chosen to hold today’s significant event in London. Your community has support in our parliament from all parties across the political spectrum, as evidenced by the large number of MPs who have addressed your conference during the course of the day. We all congratulate you on the establishment of the Global Tamil Forum which unites your diaspora from around the world.

I would like to extend my gratitude to the organising committee and the British Tamil Forum team for their efforts in bringing about today’s important event and for their kind invitation to say a few words on behalf of the Conservative Party. Our leader, David Cameron, has asked me to convey his best wishes to you.  We both share a great appreciation of the significant contribution of the Tamil diaspora to many aspects of our society here in Britain.  That contribution, and indeed success, is built upon enterprise, community, family and taking  responsibility for one’s self.  These are values that the Conservative Party also holds dear and will seek to advance if we are elected to form the next government in a few weeks’ time.  I believe that there is a natural affinity between Tamils in Britain and our Party.  We strongly believe that there is a shared responsibility upon government, business, the voluntary sector, families and individuals to work together for the freedom and prosperity of this country and of the wider world – more so for those countries with which we hold close and historic ties.

Our links with the people and country of Sri Lanka are of course particularly strong.  It was with huge sorrow that we witnessed the tragic unfolding of events last year, and the loss of so many innocent lives.  As the military conflict in Sri Lanka reached its final stages, we shared the pain and anguish of members of the Tamil community in this country and around the world on behalf of their friends, families, and loved ones.  Along with the rest of the international community, we urged the Sri Lankan government to allow a humanitarian ceasefire to grant the innocent civilians safe departure from a zone of war.  When the conflict was finally over we were unrelenting in our call for conditions in the displacement camps to be improved, for humanitarian and media agencies to be given full and unrestricted access, and for people to be returned to their homes as quickly as possible. Whilst approximately 190,000 people have been released, there are many others still housed in Menik Farm camp and we have repeatedly raised this issue with the Sri Lankan government to allow them to leave. We must not forget their plight and their continued confinement will simply sow the seeds of discontent. This could lead to renewed conflict in years to come which would be a disastrous setback for the country.

The military conflict has now come to an end and we welcome the prospect of a future in which Sri Lanka is free from the instability and suffering which has blighted its shores for decades. However we are acutely aware that peace still needs to be won and must be secured if it is to be lasting.  For this reason we strongly urge President Rajapaksa’s government to resolve the difficult political issues that remain and take immediate steps to address the concerns of the Tamil people and those of other minority groups.  Meaningful political reform and reconciliation should be an urgent priority.  This reform will only hold legitimacy if the democratic aspirations of all Sri Lankans, regardless of ethnicity, can be fulfilled. We believe all communities – Sinhalese, Tamils and Muslims - should play a part in the future of the country if peace is to be secured in the long-term.  We also believe there should be a full independent inquiry into alleged war crimes committed by both sides during the final stages of the military conflict. President Rajapksa committed to the UN Secretary General Ban Ki-Moon in May 2009 that the Sri Lankan government would investigate alleged violations but so far little concrete action has been taken. We have urged the Sri Lankan government to establish a thorough independent investigation, with assistance from the international community, into abuses committed by all parties in the conflict. Restoring accountability and justice are vital steps towards healing a divided nation and people. 

Although Presidential elections were held last month and Parliamentary elections will follow in April, elections alone do not signal the existence of a fully functioning democratic system.  Respect for human rights, is a crucial pillar upon which any democracy is built, and we do have long-standing concerns about the human rights situation in Sri Lanka.  Of particular concern is freedom of expression: including that of the national press, and the freedom to lawfully dissent.  The arrest of the Opposition Presidential candidate, General Fonseka, earlier this month was regarded by us as an alarming and serious deterioration in an already difficult situation. It is our belief that the General must be given a fair trial in a civil court where the charges against him can be tested in accordance with the rule of law and along with the rest of the international community we will be watching his trial closely.  Sri Lanka has been proud in the past of its democratic traditions and its vibrant multi-party system.  In restricting such freedoms the government is in grave danger of squandering a precious opportunity to overcome division and conflict and to establish conditions for stable peace.  

Let me be clear to you today that the position of the Conservative Party  is that we fully support the European Commission’s actions over Sri Lanka’s GSP + trade agreement – from its preliminary report in October 2009 to its most recent decision to suspend the agreement due to human rights concerns. However, the door remains open for Sri Lanka to be reinstated in the programme.   Over the next six months we very much hope that the Sri Lankan government will demonstrate rapid and sustainable progress in the areas which the European Commission has identified: such as the effective implementation of the Convention against Torture and other cruel, inhuman or degrading treatment or punishment; the Covenant on Civil or Political Rights; and the Convention on the Rights of the Child.

In addition I would like to say a few words about my colleague Dr Liam Fox’s proposal to establish an independent international fund to help provide basic infrastructure for reconstruction in the northern and eastern areas of the country. Dr Fox is a long-standing friend of Sri Lanka and his plan has the support of religious leaders and parties across the political spectrum in Sri Lanka, in addition to representatives of the Tamil community in this country.  A memorandum of understanding has been signed and further details about the fund will be unveiled shortly. It is our hope that this fund will provide a vehicle through which the international diaspora of Sri Lankan are able to contribute and that it will help to provide a better future for those in greatest need.

We must also not forget that the Commonwealth, an organisation of which Sri Lanka has been a valued member since it joined upon gaining independence in 1948, has a role to play. I have long-argued that the Commonwealth has been much neglected under the present Labour government but with 2 billion people representing all major faiths, and spanning five continents and three oceans, it is an unique forum and can provide a diverse contribution to world affairs. The Commonwealth is ideally placed to help member countries such as Sri Lanka in post-conflict rehabilitation and development given its considerable expertise and we look forward to the Secretariat, its members, and its vast network of civil society groups assisting the government and people of Sri Lankan government to this effect.  Whilst we support the Commonwealth’s decision to decline Sri Lanka’s bid to host the Heads of Government meeting in 2011 due to human rights concerns, I am certain that this organisation will provide constructive support to those parties working to achieve a sustainable peace in the country.

Sri Lanka should now be able to emerge from a very difficult period in its recent history and we believe reconciliation and genuine political reform should begin in earnest. I would like to wish the Global Tamil Forum every success in its endeavour to bring about positive change in Sri Lanka and I am sure that the considerable resourcefulness and energy of the Tamil diaspora around the world will be crucial in this task. We all wish to see Sri Lanka live up to its potential of being a prosperous, stable and dynamic country, built upon freedom, openness and respect for human rights and we very much hope that all Sri Lankans will be able to share equally in its future. 

Sri Lanka missed  the budget deficit targets for 2009 set by the International Monetary Fund as a condition for a $2.6 billion loan, according to data published by the finance ministry.

Meanwhile, following an assement, the IMF announced it would delay a third tranche of the financing until it sees the budget after April 8 parliamentary elections.

The south Asian island failed to achieve the December quarter budget deficit target of reducing the end-2009 deficit to 7 percent of GDP set by the IMF. The deficit instead stood at 9.7 percent.

The IMF had approved the loan in a 20-month programme aiming for prudent fiscal management with certain quarterly targets after identifying Sri Lanka's high deficit as a major weakness. Achieving the targets was required to get the loan payments in a scheduled eight tranches.

"The budget deficit of 469,627 million rupees turned out to be 9.7 percent of the GDP," the Ministry of Finance said on its website www.treasury.gov.lk. This is the worst fiscal deficit since the country hit 10.8 percent in 2001.

According to the the ministry, it will again miss the target for this year as it expectes the deficit will be around 7.5 percent of gross domestic product, versus a target of 6 percent.

"It is expected that the revenue deficit will decline to 1.5 percent of GDP and the budget deficit to around 7.5 pct of GDP in 2010," the ministry stated.

The report estimated 2010 budget revenue at 825 billion rupees and expenditure at 1,263 billion. It expects to finance the 2010 deficit through 102 billion rupees of foreign borrowing and the rest via domestic borrowing.

Announcing the delaying of the third tranche of the loan, Koshy Mathai, Sri Lanka's resident IMF representative, told Reuters: "We just want to see their plans once they are ready for the budget. That's the stage when really they will be in a position to enunciate their overall comprehensive plan,".

“For end-December, the government has met the targets agreed under the program for net international reserves and reserve money. Final data for the overall budget balance are not yet available, but the ceiling on domestic budget borrowing -- consistent with the government’s overall deficit target of 7 percent of GDP -- was exceeded by a substantial amount," the IMF noted.

"This mainly reflects faster-than-expected infrastructure project implementation, higher interest payments, and sluggish fourth-quarter revenue growth."

Sirimal Abeyratne, a senior economics lecturer at the University of Colombo, said the government will have to take serious steps to continue the IMF loan, which boosted foreign investor confidence after the end of a 25-year war in May.

"I haven't seen any serious government efforts to reduce the deficit last year in line with IMF target. If it continues without reforms in expenditure and revenue sides, I don't think we could achieve 7.5 percent target this year."

Full suspension of the IMF loan could lead to rating downgrades, volatility in macroeconomic fundamentals, withdrawal of foreign funds from government securities, and increased borrowing, according to media reports.

Sri Lanka's president has rejected the decision by the UN Secretary General to constitute a experts panel to look into human rights abuses in the country's civil war calling it unprecedented and unwarranted and accused the world body  of interfering with the internal affairs of the  country, according to the president's office.

During a telephone conversation, on Thursday March4, UN Secretary General Ban Ki-Moon informed Sri Lankan President Mahinda Rajapaksa of his plans to ask a panel of experts to advise the world body on accountability in context of allegations of human rights violations and war crimes in Sri Lanka.

"President Mahinda Rajapaksa has pointed out that the intention of the UN Secretary General Ban Ki-Moon to appoint a panel of experts to advice him on Sri Lanka is totally uncalled for and unwarranted," Rajapaksa's office said in a statement.

Interestingly, instead of denying any wrong doing, the statement by the president's office chose to cite no such action being taken by the world body about other states where military action has led to massive civilian death tolls.

"No such action had been taken about other states with continuing armed conflicts on a large scale, involving major humanitarian catastrophes and causing the deaths of large numbers of civilians due to military action." the statement read.

The statement from the president's office implicitly acknowledges large number of civilian deaths in its war against the Tamil Tigers. Previously the Sri Lankan government has maintained that civilian casualty due to its military action in the Northeast of the island was minimal.

Last month, a former United Nations official with detailed knowledge of events that unfolded in Sri Lanka in the final months of the war said Sri Lanka’s military massacred as many as 40,000 Tamil civilians in the final onslaught against the Liberation Tigers in 2009.

“About 300,000 civilians, plus the Tamil Tiger forces, were trapped in an area of territory about the size of Central Park in New York,” said the former United Nations’ spokesperson in Sri Lanka, Gordon Weiss.

“They were within range of all the armaments that were being used, small and large, being used to smash the Tamil Tiger lines … the end result was that many thousands lost their lives.”

The statement from president's office further said: "the implementation of such an intention would certainly be perceived as an interference with the current general election campaign being held island wide."

"President Rajapaksa reiterated that any appointment of such a panel as intended would compel Sri Lanka to take necessary and appropriate action in that regard.", the statement further said.

It was not clear what these 'appropriate actions' would be. 

India is considering Sri Lanka's request for additional aid to ensure resettlement of internally displaced persons (IDPs), external affairs minister SM Krishna told reporters on Saturday March 6.

Sri Lanka had conveyed to India that it needs building material to house these IDPs.

"So far, the government of India has been able to support to some extent, and we are now considering how much more can be done," he told reporters Delhi.

Asked about the condition of Tamils in Sri Lanka after the presidential elections, Krishna said, "The conditions are getting better".

Of the 2,80,000 IDPs, lodged in camps in Sri Lanka's north after the end of the war against LTTE last year, 1,80,000 have gone back to their places.

"There are still about 90,000 IDPs in the camps. The rules on (their) movement has been relaxed in the camps." he added. 

The diplomatic rift between London and Colombo widened after Prime Minister Gordon Brown and British Foreign Secretary David Miliband met delegates from a new worldwide Tamil union despite "strong protests" from the Sri Lankan government, British newspapers reported.

The British government's decision to engage with the GTF has provoked "deep concerns" in Sri Lanka, which claims the organisation is a front for the Tamil Tigers (LTTE), reported The Guardian.

The British acting high commissioner in Colombo, Mark Gooding, was summoned before the island's foreign minister and urged to tell Miliband to cancel his address.

"The Foreign Minister in this context emphasised that Foreign Secretary Miliband, by participating at today’s GTF Meeting in London, would unfortunately lend credibility to an organisation which is propagating the separatist agenda of the LTTE, and would be acting in a manner inimical to the national interest of Sri Lanka and its legitimate government," the Foreign Ministry later said of Bogollagama’s meeting with the British diplomat.

However, not only did Miliband go ahead with the address but Brown also held a private meeting with a group of delegates in the Commons.

A Foreign Office spokesman told The Guardian Miliband's participation was part of the government's ongoing efforts to bring about peace in Sri Lanka.

"The GTF publicly states that they are committed to the principles of democracy and non-violence," he said.

"The UK will continue to engage with all Sri Lankan communities focused on achieving a lasting and equitable peace through non-violent means."

A spokesman for the GTF said Colombo's reaction to its meetings with the British government was typical of the Sri Lankan state's attitude.

"It obviously shows that they are not serious about finding a peaceful solution," he added.

Meanwhile, hundreds of Sri Lankan ruling party activists demonstrated outside the British High Commission in Colombo on Monday March 1, denouncing what they called London's support for Tamil separatists abroad.

Demonstrators carried posters showing Miliband and British Prime Minister Gordon Brown with devil's horns grafted onto their heads.

They were led by former member of parliament Wimal Weeravamsa, a key supporter of Sri Lankan President Mahinda Rajapaksa.

"What the British government is trying to do (by its support to the GTF) is to revive Tiger terrorism, and by extension, it is supporting the division of this nation," Weeravamsa told the protesters.

The protestors handed in a petition protesting against Miliband's attendance at the meeting.

After the protest, the demonstrators pasted large placards of Brown and Miliband, dressed in Tamil Tiger outfits, across the walls.

Miliband used his address to the inaugural conference of the Global Tamil Forum at the Commons to urge the Sri Lankan government to embark on a "genuinely inclusive political process".

He also repeated calls for an investigation into allegations that both the Sri Lankan state and the Tamil Tigers violated international humanitarian law during last year's fighting.

The already-strained relations between the two countries deteriorated further last November after the UK and Australia blocked Sri Lanka from hosting the next biennial commonwealth heads of government meeting in 2011 in protest at Colombo's military repression against the Tamil population.

Earlier this month the EU suspended preferential trade benefits to Sri Lanka over concerns about its human rights record.

The presence of Chinese in Sri Lanka owned island of Kachchatheevu, considered as a threat to the security of India, is confirmed by a group of journalists and social activists from Tamil Nadu.

More than thirty pre-fabricated structures with Chinese names were found on the island of Kachchatheevu located on the sea boundary between India and Sri Lanka by Tamil Nadu journalists and social activists who participated in the recent annual festival of Kachchatheevu St. Antony’s Church, according to Dinamalar, a Tamil Nadu daily.

The pre-fabricated structures, however, were unoccupied but evidence of people living in them was observed by the visiting journalists from Tamil Nadu who were not permitted to photograph them by Sri Lanka Navy (SLN) soldiers. The presence of Chinese in the island of Kachchatheevu is seen as a threat to the security of India by its citizens, Dinamalar added.

Sri Lankan fishermen and the SLN soldiers to whom the journalists spoke during the festival confirmed that Chinese men who were staying in Kachchatheevu had been temporarily moved out due to the festival.

They were further told that a program of joint patrol surveillance training for SLN and Chinese navy soldiers is in progress in Kachchatheevu.

‘Attacks on Tamil Nadu fishermen’, ‘Tamil Nadu fishermen chased off from Kachchatheevu by SLN’, ‘Chinese surveillance tower in Kachchaitheevu’, ‘China targeting India’ are some of the recent allegations raised by Tamil Nadu fishermen.

The allegation of a Chinese surveillance tower had caused quite a stir in India and when questions were raised Sri Lanka government had categorically denied any presence of Chinese in Kachchatheevu, the journalists said.

It was suggested that representatives from both countries should jointly investigate into the allegation visiting Kachchatheevu but it did not materialize due to reluctance of Sri Lanka, they added.

Hence, journalists and social activists from Tamil Nadu had participated in the festival with the aim of finding the true situation in Kachchaitheevu using the opportunity of visiting Kachchatheevu which is out of bounds for anyone.

Sri Lanka had permitted devotees from Sri Lanka and Tamil Nadu to attend the Kachchatheevu St. Antony’s Church festival this year after nearly 23 years.

The festival had not taken place from 1978 t0 2001 after which though important rituals were allowed until 2005, devotees were not permitted to take part in them.