Foreign Aid &
Lanka's Military Expenditure
[Revised 5 October 2006]
"...Even if peace dawns and no shot is fired thereafter, we will be paying
for our military purchases until 2008..." Sri
Lanka Prime Minister, Ranil Wickremasinghe, July 2002
Lanka's Rising Military Expenditure in Billion Rupees...
Rising military expenditure -
1977 to 1986 -
1995 - 1996
- 1997 - 1998 -
- 2000 - 2001
- 2005 - 2006
Sri Lanka's structural dependency on foreign aid
Foreign aid fuels Sri Lanka's genocidal war
For & Against giving Aid
Sri Lanka economy driven by military expenditure
Sri Lanka's military expenditure increased from 0.75 billion
Sri Lanka rupees in 1977 to a budgeted 139.6 billion for the year 2007 - an
almost two hundred fold increase. During the same period, foreign aid to Sri Lanka has kept pace with
Sri Lanka's increasing military expenditure. It is not simply
that Sri Lanka's economy is structurally dependent on foreign aid - it is also that
that dependency shows a clear in built increasing trend.
Without foreign aid, Sri Lanka would not have been able to continue its
against the Tamil people - and it may
well have found
the need to talk with the people of Tamil Eelam on an equal basis and structure
a polity where the two peoples, the Sinhala people and the Tamil people, may associate
with each other in equality and in freedom. And foreign aid has been forthcoming
because each 'aid donor' is intent on
securing its own strategic interests in the Indian Ocean region - and this is true,
whether the aid donor is the US,
Sri Lanka has sought to use the political space
provided by the countervailing strategic interests of the US, India and China in
the Indian region (with supporting roles for Pakistan, European Union and Japan)
to advance its own interests and acquire the military capability to subdue
Tamil resistance to alien Sinhala rule.
1977 - 1986
During the nine year period 1977 to 1986, Sri Lanka's military expenditure increased
eight fold. In February 1986, 11 Non Governmental
Organisations commented at the UN Commission on Human Rights:
"Since 1977, (Sri Lanka's) defence spending has increased by 800 percent , that
is, from Rs 750 million to Rs 6 billion. Although defence expenditure for 1985 was
estimated at Rs 3.7 billion it rose to Rs 6 billion. The amount estimated for
defence for 1986 is Rs 5.84 billion."
Nine years later, in 1995, Sri Lanka's military expenditure was estimated at Rs. 24
billion ($444 million). The actual amount spent during the year was Rs. 34 billion. This
was more than a five fold increase on the figure for 1986 and
times the figure for 1977.
In the following year,1996, the budget allocation for military expenditure was
increased to a then unprecedented Rs. 38 billion ($707.7 million). However, the actual
expenditure was Rs.46 billion - a 35% increase on 1995. Sri Lanka's Deputy
Secretary of Treasury P.B. Jayasundera, explained in April 1997:
"Sri Lanka's defence spending in 1995 was 34 billion rupees, but rose sharply to nearly 46 billion, or about six
percent of gross domestic product, last
year (1996) as the war escalated. Jayasundera
said the big increase was largely because previous
budget forecasts had been made on the assumption that there would be no escalation in the conflict. "There was a gross underestimation in terms of events," he said." (Reuters Report, 2 April 1997)
A study on the Cost of the War undertaken by the Sri Lanka Marga
Institute released at a National Peace Council convention in Colombo on 5 January
1998 found that the total war cost in 1996 amounted to Rs 165 billion or 21.3
percent of GDP, and was more than three times the direct budgetary expenditure on
Sri Lanka's budgeted military expenditure for 1997 saw an increase to Rs.44
billion ($758.6 million) from the budgeted amount of Rs.34 billion for 1996.
This amounted to 6% of GDP and 22% of total government spending. Reuters reported on
2 April 1997:
" Sri Lanka, waging a protracted war against Tamil Tiger rebels, does not expect a rise in defence spending this year, a top finance ministry official
said on Wednesday. P.B. Jayasundera, deputy secretary of treasury, said military spending should not top the proposed budget of 44 billion rupees ($758.6 million) for 1997.
"The 1997 budget is more a military type of budget, which has fully accommodated the military
requirement," he said. "Each
plane crash does not mean that we have to add something," Jayasundera said in reference to the tiny air force, which has lost six aircraft in operations against the
rebels this year.
On 12 October 1997, a lead feature in the Sinhala owned Sri Lanka Sunday
Times was compelled to point out:
"...two long years after the crisis purchases have flooded the battlefields with both expensive, sophisticated
military hardware as well as with
obsolete, unserviceable items, there are no signs that the cost of the protracted guerrilla war has receded. To the contrary, it is showing an upward trend giving a message to
every Sri Lankan. To the tax payer, its a
message that they would have to continue to pay to sustain the war effort. To all others, indirect taxes on goods including consumer items is a daily reminder.
None other than Justice, Constitutional Affairs, Ethnic Affairs and National Integration Minister, Dr. G.L. Peiris, has
in his role as Deputy Minister of
Finance, declared that the highest allocation in the budget for next year, Rs 45 billion, has been made to the Defence Ministry. The current year's (1997) allocation is Rs
44 billion. Like the current
year's allocation which exceeded the allocated amount (due to the mounting cost of procurements), there is no doubt, there will be a repetition this year too.
Whilst the allocations have been made on the basis of recurring costs and new procurements, colossal unexpected losses of military hardware warrant
additional expenditure. Events in the
battlefields of Wanni this week underscore this reality."
In the event the actual military expenditure for 1997 was Rs. 46.6 billion.
The budget allocation for military expenditure for 1998 was initially Rs.44 billion.
This was later increased by Rs.8 billion. Reuters
reported on 13 August 1998:
"Sri Lanka's defence spending is expected to rise sharply in rupee terms in 1998
as the campaign to wrest control of a key northern highway from the Tamil Tiger rebels
drags on, the deputy finance minister said on Thursday. "We started by allocating 44
billion rupees ($663.3 million). We would now need to increase it roughly by eight billion
rupees," Gamini Peiris told a news conference."
In the event, a month later
on 24 September 1998, the Sri Lanka government announced an increase not of 8 billion
rupees, but of 12.2 billion rupees amounting to a 28% increase on the original
allocation for 1998. Associated Press reported:
" The ruling party on Wednesday asked parliament for 12.2 billion rupees (US$ 184
million) more than the 44 billion rupees (US$ 665 million) which was budgeted for the
military for 1998. Parliament is likely to approve the increase later this month,
officials said. The government did not give a reason for the increase, which brings the
total defense spending to 56.2 billion rupees (US$ 850 million). (Associated Press
Report, 24 September 1998)
The Sri Lanka Budget deficit in 1998 was expected to be 7.8%, sharply higher than the
previous forecast of 6.5%.
"Sri Lanka Deputy Finance Minister Gamini Peiris said the budget deficit in 1998
was expected to be 7.8 percent of the gross domestic product (GDP), sharply higher than
the previous forecast of 6.5 percent.He blamed rising defence expenditure as the main
cause for the increase" (Reuters Report, 11 November 1998)
On 5 November 1998, Sri Lanka announced yet another ' unprecedented'
allocation for military expenditure in 1999 to 47 billion rupees, up from the
originally estimated 44 billion rupees in 1998 (later extended to 56.2
billion rupees). In contrast, the allocation for health for 1999 at 12.46 billion rupees
compared to an actual expenditure of 15.0 billion rupees in 1997 and an estimate of 11.09
billion rupees for 1998. A Budget deficit of 7% was forecast.
On 5 October 1999, the Budget Estimates tabled by the Sri Lanka Finance
Minister estimated a 11.5 percent increase on defence over that for 1999. The
government estimated that defence spending will reach 52.43 billion rupees (728 million
dollars), compared to the estimated 47 billion rupees in 1999 and 44 billion rupees in
1998. However, in the past, defence spending has overshot original budget estimates by 20
to 25 percent. The recurrent defence expenditure for the calendar year 2000 would total
41.5 billion rupees while 10.9 billion rupees has been earmarked for capital expenditure.
The Appropriation Bill presented in the Sri Lanka Parliament showed that the
Government's total expenditure next year will be 291 billion rupees.
The London based Financial Times reported on 30 May 2000:
"As a peace initiative brokered by Norway got under way in
February, R.A. Jayatissa, the bank's research director, estimated that an end to the war
could raise Sri Lanka's trend growth rate by 2 percentage points a year and more than
double per capita income over the coming decade. But as the Tigers continue to inflict defeat after defeat on
the demoralised army, this peaceful vision has been lost in the scramble to find more
money for the war.
In nominal terms, declared defence spending has risen from Rs1.3bn in 1983 to
Rs53bn ($709m) in 1999. In this year's budget, the government of President
Chandrika Kumaratunga emphasised that, as a proportion of gross domestic product, planned
outlays of Rs52.4bn had dropped from 5 per cent to 4.7 per cent. P.B. Jayasundara, finance
secretary to the treasury, said in February the defence budget was designed to underpin
the peace process and "will sustain the status quo rather than intensified military
But now the government has sanctioned an extra Rs12bn military spending in a
desperate attempt to hold back the Tigers' latest offensive in the north. This
will raise the declared defence budget to around 6 per cent of GDP and, in total, dwarf
projected spending on education and health - respectively Rs29.3bn and Rs15.7bn. It will
also deepen the distortions in the economy and further blight Sri Lankans' hopes of rapid
The extra sum, mostly for heavy guns and Israeli jet fighters, is being raised by
increased taxes on alcohol and tobacco and a rise in the National Security Levy. This
war tax, introduced as an interim measure in 1991 at a rate of 1 per cent, is now 6.5 per
cent and levied on almost all goods and services. The revenue it raises exceeds all income
tax receipts, and, along with other extraordinary levies, such as the Save the
Nation Contribution, a surcharge on income tax, has had the effect of postponing urgently
needed tax reform.
The war has sabotaged much else besides. A declining fiscal deficit, down from an
average 10 per cent of GDP to just under 8 per cent last year, is spiralling again. This
has a scatter-gun effect, ranging from the uncertainty it creates about investment
conditions to the postponement of financial sector reforms. The war makes politically
sensitive changes, such as labour market reform, all but impossible. And, of course, it
scares off all but the hardiest foreign investors."
The British Refugee Council, Sri Lanka Monitor reported in December
2000:"..The international institutions and foreign nations participating in the Sri
Lanka Development Forum (Paris Aid Group) on 18 December 2000, declared that ‘social
exclusion driven by ethnicity, language and religion had resulted in reduced
opportunities over decades and created the extreme tensions which drove the
conflict’ in the island.
The delegates noted that there was a “disconnect” between policy and the
experience of the people despite the Sri Lankan government’s assertion of
commitment to improve judicial, legislative and administrative systems. The
World Bank’s South Asia Vice President Meiko Nishimizu emphasized the need for
efficient institutions and good governance. She made clear that economic growth
without equity and social harmony among citizens could become a ‘destabiliser’
in the region.
Ms Nishimizu pointed out that war expenditure had risen to 6% of the GDP.
Ahead of the Forum sessions, the International Working Group on Sri Lanka (IWG),
a consortium of NGOs, had pointed out that while 25% of government expenditure
is needed to fund the war effort, defence outlays rose by more than 50% in 2000
to around $1 billion. The IWG had urged governments to develop an explicit
strategy for peace building within donor programmes and a coherence throughout
all elements of foreign policy in relation to Sri Lanka..."
of India reported on 9 February 2001
"On 8 February 2001, Sri Lanka announced an unprecedented Rs 63.39
billion defence allocation for the current year in the provisional budgetary
estimates presented to Parliament.
The appropriation bill, revealing the government's
balance sheet for 2001, showed that its borrowing limits had been expanded to
Rs 247 billion, a huge 67 per cent of its projected expenditure of Rs 364
billion... Last year, Sri Lanka's budget was derailed by the protracted war
against Tamil separatists, with massive defence spending inflating original
estimates by almost two-thirds. An interim budget presented in December showed
that increased outlay on weapons purchases pushed defence spending in 2000 up
to Rs 83 billion, compared to the estimates of Rs 52.43 billion made earlier
in the year... Saddled with steadily depleting foreign reserves, which stood
at $900 million at the end of last year - down 45 percent compared to a year
earlier - the government moved on January 23 to avert a financial crunch by
freeing the rupee from a managed float. The latest tally sees the local
currency having depreciated by a huge 27.5 per cent against the dollar in the
last 12 months."
Yet again military expenditure took a lion’s share of Sri
Lanka's 2006 budget
"Sri Lanka’s has substantially increased its defence budget for next year to
almost US$700 million, the Sunday Times said this week. The rise of over 20%
comes amid a stepping up of violence in the island’s east between Army-backed
paramilitaries and the Liberation Tigers. In a report titled “Defence takes
lion’s share of 2006 budget,” the Sunday Times said the proposed budget raises
expenditure on the military next year to Rs. 69,470 million (US$690 million), a
rise of nearly Rs. 13,000 from this year’s Rs. 56,300 million (US$ 554 million).
Defence is among several areas that have been allocated increased funding in the
government estimates for the coming year, the paper said.
The total government expenditure for 2006 was estimated at Rs. 568 billion, up
from 438 billion in 2005, in the Appropriation Bill for next year to be
presented by Finance Minister Dr. Sarath Amunugama in Parliament on Tuesday, the
paper said. Some analysts argue Sri Lanka has developed a domestic ‘war economy’
where the defence budget is one of the largest injections of state funds into
the market. "Army recruitment and compensation have become the primary source of
resources transferred into the economy of the rural poor in the
Sinhalese-majority regions of the South," says Prof. Kenneth Bush in his book
"Learning to read between the lines: the intra-group dimensions of ethnic
conflict in Sri Lanka."
The rural economy of the rural poor in the South is “three times more dependent
on 'military remittances' than official poverty alleviation programmes
(Janasaviya and Samuradhi); and more dependent on Army recruitment and
compensation than on overseas remittances," he says. "In effect, successive
governments [have] been using military employment as a grand youth employment
cum poverty alleviation programme," Prof. Bush argues." (TamilNet
report 2 October 2005)
And on 9 November 2006, TamilNet
"Sri Lanka's defence expenditure for
fiscal year 2006 is expected to increase by more than 30% of the
2005 levels to Rs 61b, budgetary estimates submitted to the
legislative body Tuesday revealed.
Breakdown of the expenditure forecast by Sri Lanka's Ministry
of Defence estimate for the "formulation, co-ordination and
execution of policies with regard to defence and safeguarding
the territorial integrity and sovereignty of Sri Lanka,"
Ministry of Defence
Lanka Air Force
Ministry of Defence
Lanka Air Force
|Source: Sri Lanka Budget Estimates Vol-1
While the recurrent expenditures for Sri Lanka Army (SLA) and Sri Lanka
Navy (SLN) account for the biggest increases, the capital
expenditure for the SLN decreased from Rs 4.6b in 2005 to Rs
1.8b for 2006."
And, for 2007, Sri
Lanka plans to double military spending.
Lanka plans to double defence spending next year, Reuters reported Thursday 5
October 2006. Defence spending will rise 100 percent next year to 139.6 billion
rupees from 69.5 billion budgeted for 2006, the appropriation bill seen by
Reuters ahead of its presentation to parliament showed. Overall spending goes up
40% to 804.6 billion rupees ($7.7 billion) in 2007 from that budgeted for this
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. "They could do that
partly from dollar bond issues and partly from long-term credit lines from
(arms) suppliers," he added. "They need to get public sector spending under
control ... and improve tax collection. There's no other way."
Meanwhile, many investors have either cancelled or held back investments in Sri
Lanka’s $23 billion economy amid serious clashes between the armed forces and
the Liberation Tigers, especially since late July when the military launched a
major onslaught against the LTTE.
"The peace process will be key," Wijayasinghe said. "If they can take it
forward, that will relieve a lot of pressure on the inflationary front and
enable the corporate sector to take a longer view." (Tamilnet, 5 October 2006
Structural Dependency on Foreign Aid
The comparison of Sri Lanka's military expenditure with the foreign aid received by Sri
Lanka during the same period is instructive.
1977 to 1987
During the period 1977 to 1986, the aid commitment to Sri Lanka averaged around $500
million, which was a five fold increase compared to the average for 1960-77. In
1987, the aid committed was US$593 million
International Alert commented in 1987:
"The amount of aid committed to Sri Lanka
for 1987 is US $593 million. Aid commitment has averaged approximately $500 million per
annum since the present government came to power in 1977, a five-fold increase compared to
the average for 1960-77. .. Aid has become Sri Lanka's largest source of foreign
exchange. The Sri Lanka economy has become structurally dependent on foreign aid. ... The Sri Lankan government's defence expenditure has roughly quadrupled in little
over two years, to reach approximately 8% of GNP this year."
In April 1995, the Paris Aid Consortium pledged $850 million
as aid to Sri Lanka - a 43% percent increase on the aid committed for 1987.
Again, in November 1996, the Paris Aid Consortium pledged $860
million as aid to Sri Lanka for 1997.
The Paris Aid Consortium, at its meeting held on 27 May 1998, pledged 780 million
dollars of aid to Sri Lanka. The World Bank made what has now become almost a
ritualistic statement about the ongoing conflict. The Bank expressed "deep
concern that the prospects for a quick end to the war were not more encouraging",
"deplored the growing tragic impact of the war on the entire nation" and
called upon " all Sri Lanka's political leaders to rise above partisan politics and
unite in the cause of peace and prosperity".
The award was lower than the $850 million pledged in 1997 because members of the Aid
consortium had generally trimmed their contributions by 10% for the current year.
But Japan did not reduce its contribution. Though Sri Lanka sought to explain the
Japanese decision as an expression of "profound satisfaction with the success that
the Sri Lankan government had been able to achieve in dealing with the variety of very
difficult and complex problems", the economic and political reality may be that given
the crisis in the Japanese economy and in the Asia Pacific region, Japan had a
compelling need to increase (and not reduce) overseas aid and in this way
ensure that Japanese exports have a ready market.
In recent years, Japan has emerged as the largest single aid donor to Sri Lanka. The
Japanese government allocated 52.63 million US dollars to be given to Sri Lanka as a
grant for the 1997, and in addition, Japan also agreed to provide 26.32 million
US dollars for technical co-operation and other projects. The Japanese
government had provided 1.25 billion US dollars as grants from 1969 up to March 1997,
3.5 billion US dollars as loans from 1965 to 1996 and 2.85 billion US dollars in
technical co-operation during the past two decades. (see generally - Japan's Cheque Book Diplomacy)
Sri Lanka secured $2,370 million in foreign aid
Sri Lanka has
secured US$2,370 million in foreign aid from its
donor countries and multilateral lending agencies,
including a $310 million commitment from Japan for
new development projects in the country, Industrial
Development Minister G.L. Peiris said Wednesday.
Peiris told parliament that Japan, the largest aid
donor to Sri Lanka, has also pledged $1,420 million
for ongoing aid projects in the country, after a
series of multilateral aid negotiations in Paris
with donor countries.
Asian Economic News, Jan
And in 2002 Sri Lanka registered a balance of payments surplus despite
large trade deficit
because of aid inflows.
"...The real difference to the balance of payments appears to have come from the much higher official inflows last year. In the first ten months of last year official inflows raised the official component of the reserves by 19 per cent....capital
inflows are contingent liabilities. The monies that come in have to be
repaid or would be taken out in future years..."
Sri Lanka Sunday Times, Colombo, January 19, 2003
Foreign Aid fuels Sri
Lanka's Genocidal War
Though foreign aid pledged by the Paris Aid Consortium
and others does
not go directly to the Sri Lanka military, such aid has enabled Sri Lanka to release its
own funds to fuel its war against Tamil resistance to alien
Sinhala rule. International Alert commented in 1987:
....Almost none of the aid (Sri Lanka) receives is
defence-related, and indeed project aid (unlike commodity or food aid) is closely tied to
particular items of non-defence expenditure. But to the extent that it frees resources
that would otherwise be spent upon these projects, it enables the government to run a
larger defence budget than would otherwise be possible, though this effect is hard to
....More indirectly but no less importantly, aid enables a given
defence budget to be sustained at less cost to the overall economy in terms of inflation
and consumer shortages, and may thus diminish the political unattractiveness of pursuing a
military solution to the problem"
In recent years, the Sri Lanka navy has acquired water jet-propelled attack craft
from Israel and patrol boats from France, while China has sold an anti-submarine
warfare vessel and gunboats and landing craft. China was a major supplier of
arms to Sri Lanka - and this brought with it corruption as well. Reuters
reported on 27 April 1997:
" The Sri Lankan navy will partly pay the Chinese supplier involved in a
controversial $63 million arms deal that will leave the country with a huge stockpile
of ammunition, a newspaper reported on Sunday. Naval chief Vice-Admiral Cecil
Tissera told the Sunday Leader newspaper in an interview that the navy, which
is investigating the deal, would only pay for what it used. The remaining
ammunition would be kept in a bonded warehouse for the Chinese company in Sri Lanka,
he said. Tissera said the Chinese company had sent 150,000 rounds of 25 mm and
35 mm shells, whereas the annual consumption of these shells by the Sri Lankan navy
was only 3,000. "
John Zubrzycki, reported in a Special to The Christian Science
Monitor on 12 August 1998:
"Uncovering evidence of corruption within the military can be risky for
journalists who are already subjected to strict
censorship when reporting on the war. When Iqbal Attas, an investigative reporter for
Colombo's Sunday Times, began closing in on evidence of massive kickbacks in a
combat-aircraft deal, armed men broke into his house, pointed a gun at his head while his
terrified wife and daughter looked on, and then fled. Mr. Attas later identified one of
the assailants as the personal bodyguard of a former Air Force commander implicated in the
deal. The war has become a very big industry," says Attas. "Look at the
sophistication of the Army and the Air Force ... and yet they claim that the LTTE numbers
only a couple of thousand soldiers."
The comments of the World Bank, after the Paris Aid Consortium meeting on 18 November
1996 are not without relevance:
"The bank said the highest priority for Sri Lanka was peace and said donors
were prepared to offer more aid if a settlement to end the island's civil war were
reached. 'Deploring the cost of the hostilities and human suffering (donors) hoped
that negotiations leading to a peaceful settlement could be initiated without delay'
the bank said. "
This view was reiterated by the Asian Development Bank in its Annual Report on 23 April
" The government has said the budget deficit in 1997 was 7.5 percent of GDP and
aims to reduce it to 6.5 percent this year. ...The war escalated last year after the
military launched a fresh offensive to capture a key northern highway. Government
officials say Sri Lanka spends nearly six percent of GDP on its security forces and the
war. "The status of the ongoing civil conflict is a key determinant of the
country's long-term development prospects," the bank said. (Reuters
Report, 23 April 1998)
For & Against Giving Aid
In 1987, the arguments for and against giving foreign aid were summarised by International Alert:
"A number of arguments are from time to time
advanced in support of the view that, in current circumstances, aid to Sri Lanka should be
curtailed, reduced or made subject to stringent conditions on its use. These include the
i. that aid should not be given to countries that
consistently and consciously violate human rights;
ii. that aid has made it possible for the Government of Sri Lanka to increase its military
iii. that Sri Lanka's dependence an aid gives donor countries great influence for good or
ill which in the current crisis they would be irresponsible not to use;
iv. that the existing aid does not reach those who need it most - the victims of ethnic
On the other hand arguments are advanced:
i. that donor countries should not interfere in
the internal affairs of Sri Lanka;
ii. that reductions in aid would be negated because other donors would step in to fill the
iii. that reductions in aid might destabilise an already unstable political situation;
iv. that those who would suffer most from reduced aid would be the poorest groups whom it
is most desired to assist. "
The arguments summarised by International Alert ignore one
important aspect of all foreign aid - the
strategic and economic
interests of the donor country.
'Aid' is more often than not linked (directly or
indirectly) to the commercial interests of the donor country. Indeed, the word 'aid'
itself is a misnomer. It is directed to promoting private industrial and trade interests
of the donor country. Castis put the matter, perhaps somewhat harshly, when it
declared in 1993:
"Do Western governments give this money to
the (Sri Lanka) regime without being aware of the (human rights) situation? ... The
reasons are economic benefits... Nowadays, imperialism takes the form of foreign
Perhaps, aid donors (not only from the West but
also from Japan and the East) should ask themselves
whether their own long term economic and strategic interests will be served by supporting
a government which seeks to impose the rule of one people on another people. Economic
development requires peace and stability and these are unlikely to exist where the rule of
one people by another alien people prevails.
The Annual Human Rights Review by US State
Department, and the existence of organisations such as International Alert, suggest that
the so called 'developed' world is not unmindful of the dangers caused by ignoring human rights issues.
At the same time, the support that rulers such as
President Suharto of Indonesia received from the international community during the
past two decades and more, suggests that
even genocide may be
acceptable, so long as it is completed (quickly) without drawing too much public
attention. On this view of the matter, the efforts of organisations such as International
Alert may be seen to be more in the nature of palliative 'public relations' exercises
directed to 'managing' public opinion and securing the stability of existing regimes
rather than addressing the
needs of the oppressed, crying for
The fate eventually suffered by Suharto may have
a wider significance and the remarks of Amnesty International in a full page
advertisement in the London based Guardian on 12 March 1994 in the context of East Timor
may have a broader relevance:
''When governments pretend not to notice suffering, to whom can peoples.. turn for
help? The United Nations? Alas, the deeper you delve, the redder the faces. The cynicism of realpolitik extends even to the UN Commission on
Human Rights... When Amnesty attended the Commission in Geneva last month to urge action
on Indonesia and East Timor, we met only embarrassment. The governments to which we spoke
repeated what they have been promising us for thirty years: they will pursue a policy of
The question is sometimes asked as to how long Sri Lanka can afford to continue to
allocate more than Rs.50 billion an year for 'military expenditure'. Economist
Dr. Saman Kelegama, executive director of the Institute of Policy Studies (IPS), declared
at a seminar of the Sri Lankan Association of Economists in early February 1999:
"Spiralling defence costs, which average 50 billion rupees a year now, has created
a large (budget) deficit and curbed foreign investment. The budget deficit, as a
percentage of GDP, rose to a high of 18.3 percent in 1980 but fell to around 7.0 percent
in 1998, largely because of lower government spending in non-defense sectors, and the sale
of the government's assets like the national carrier, Air Lanka, and plantations.
More than anything else, the government's financial policy is driven by military
concerns. Sri Lanka by 1996 had a bigger army than countries like Malaysia, the
Philippines and Australia, whose populations are much larger.....The government has been
resisting devaluation because of its impact on military expenditure. Defence
spending would (then) rise because most (equipment) is imported."
Today, in 2006 the military expenditure is set to increase to 140 billion
rupees. However, views such as those expressed by Economist Dr. Saman Kelegama
in 1999, ignore that which the Sri Lanka
government may well see as the economic advantages of a continuing war. For
instance, M.M. Jayawardene of the Kotalawala Defence Academy speaking at the same seminar
was quick to point out that high defence expenditure has had a positive
effect on the economy and was not just a drain on the government exchequer.
"Defense becomes paramount when there is a threat, internally or externally. When
defence plays such a vital role in society, the social contract has to be adjusted.
The war has been a source of employment. Large numbers of rural youth have
enlisted in the military. And their remittances have brought prosperity in the villages.
Forty percent of the defence bill goes to salaries and wages and one can argue that, with
the bulk of recruitment coming from rural areas, these areas get large inflows of funds.
There were other benefits like education and training that filtered into the village,
and when one takes this positive aspect of defence spending, the cost or the burden on the
exchequer would be moderated. (I acknowledge that) the high defence spending has led
to large budget deficits and cuts in social welfare measures. (But)... in the short
term, defence spending has a sound positive impact while in the long term there
is a negative impact on economic growth."
The reasoning is not without significance. Sri Lanka may see the enlistment of rural
youth in the Sri Lanka armed forces as an answer to the problem of rural unemployment and
as a way of reducing the movement of the rural population to urban areas, in search
of jobs which are difficult to find. It may take the view that even if those who
enlist, eventually die at the frontline, their remittances would 'have brought
prosperity in the villages'.
But, what is the duration of the 'short term' during which 'defence spending' will have
this so called 'sound positive impact'? How long will it take before deficit
budgets, inflation and army desertions take their toll? How long will it take
before foreign 'aid donors' insist on further devaluation? How long before
cuts in social welfare measures begin to bite and increase the need to resort to further
repression to quell discontent? As other countries have learnt (and as foreign aid donors
know only too well) militarisation is no panacea. Economic development will not come
without peace - and peace will not come without justice.