Though the government of Sri Lanka and the LTTE have made no official pronouncements on the agenda for 'talks on talks' in Thailand between the two parties, the establishment of an interim administrative council (IAC) is expected to figure prominently in them.

The IAC, as the name suggests, is not a permanent institution, but created for the purpose of carrying out developmental and administrative work in the northeast till a more permanent structure is evolved through negotiations.

The IAC is also an experiment because the LTTE, primarily is a military formation, expressed a desire to enter the political process, but did not contest parliamentary elections. The council is a method whereby the LTTE's demands may be accommodated without getting into legal and administrative tangles.

Substantial autonomy

Thirdly, the body will be, in a way, the prototype of what might eventually be established if a permanent solution to the ethnic conflict is found within a united Sri Lanka. This is because the establishment of the IAC recognises two important matters: substantial autonomy has to be granted to the northeast, and that the supremacy of the LTTE in the northeast has to be acknowledged for the viable functioning of institutions.

The IAC is however not expected to involve itself in any direct political functions. The Tiger's political campaign is to be undertaken by the political offices established by that organisation in the 'cleared' areas.

One of the LTTE's concerns, reportedly, is the massive outlay of finance required for the development, reconstruction and rehabilitation of the northeast in which the council will be engaged. Since such sums are not available with the Treasury of the Sri Lanka government, the Tigers are looking to alternative ways of financing these ventures.

An obvious avenue will be from the generous promises made by the international community to contribute towards the development of the northeast. The question however is the conduit through which these monies are going to be transferred.

The LTTE has reportedly indicated its wish that these monies be channelled directly to the IAC without going through the central government. Both the government of Sri Lanka and the overseas donors have to however accede to this request. The consent of the government will mean a significant step forward in centre-periphery relations.

Control of finances to sub-national units is an issue that has bedevilled centre-periphery relations even in other countries. Certain countries permit direct foreign investment in the sub-national units, while others do not. Finance commissions calculate disbursement of central government grants to the periphery depending on the revenues the sub-national units can raise, the quantum of foreign investment earmarked for them etc.

Centre-periphery relations

The role of the finance commission is to see that the peripheral units having greater access to funding are not allowed in to outstrip the others to the point that there is unbalanced development within the country. Uneven development can in turn lead to distortion of the national economy and affect social and political progress.

In Sri Lanka however, the preoccupying concern is not uneven development, but a convoluted view of sovereignty. In other words, that the jurisdiction of the state will be impaired if foreign sources are allowed to invest in the provincial councils directly without going through the line ministry of the central government created for that purpose - the Ministry of Finance and the Treasury.

In its first draft (1995) of the proposed new constitution, the PA government did permit the regional councils to negotiate funding directly from foreign sources. But in its subsequent draft (1997), the PA had withdrawn that.

The other source of finance that is expected to be absorbed into the IAC will be the decentralised budget (DCB) allocated to members of parliament to the northeast.

This brings us to the question of non-governmental funding. The LTTE has expressed its dissatisfaction over the functioning of international NGOs (INGOs) in the northeast in general, and in the 'uncleared' areas in particular. Some of the implementing agencies have been accused of either not executing their projects, or siphoning off the funding for other uses. The question is whether INGO and NGO funding too will come within the purview of the council, or whether these organisations will enjoy complete autonomy in implementing their projects.

While these are some of the monetary issues that concern the Tigers, there are also the administrative functions of the IAC that needs looking into. It is likely the LTTE will want incorporate, or at least supervise, some of the functions of the administration - at least those which are required for developmental purposes. This would require appropriating or supervising some of the functions of the district secretaries and divisional secretaries in the northeast, who are the representatives of the central government.

Interestingly, the district and divisional secretaries of a number of districts of the area were present when the LTTE opened its political offices in the northeast. This gesture by the bureaucracy could have been through 'goodwill' but if so, it seemed a gesture they were mighty over-anxious to display. Shorn of the tamasha, the opening of LTTE offices was a political act done in government-controlled territory. One wonders whether the gesture indicates the close co-ordination the LTTE will have with government officials through IAC, which was anyway in existence in the past too, albeit unofficially.

Monetary issues

There will be no less ambiguity when the powers of the Northeast Provincial Council (NEPC) are either appropriated or come under the supervisory control of the LTTE. It will be unrealistic to think otherwise because the provincial councils were set up as devolved bodies mainly to undertake development activity. But it will be interesting to see the mechanics whereby this is accomplished because if a school is to be reconstructed co-ordination with the provincial director of education (PDE) will be required as much as the council having to deal with the PDHS to rehabilitate hospitals.

It has to be also noted that the NEPC now functions under the governor, who is a representative of the central government after the EPRLF-run provincial government under Chief Minister A. Varatharajaperumal was dissolved in 1990.

The setting up of the IAC also throws up the question of the transfer of power. When the NEPC was functioning under the EPRLF, one of the biggest obstacles for the effective transfer of power from the central government to the council, were racist bureaucrats who were reluctant to give up power. They were assisted no doubt by the megalomania of President R. Premadasa who was then head of state. Let us hope that Sri Lankan officialdom is wiser today, 12 years later, or that the LTTE has driven sufficient respect into the bureaucrats for them to realise the Tigers cannot be trifled with as the EPRLF.

Bills and debates

Despite speculation the LTTE would make the TNA obsolete, the Tigers have done nothing of the sort. It appears however that parliamentarians of the TNA will not be part of the IAC. They will function as two separate bodies. The LTTE told the TNA, when the latter's members met them in the Wanni that the MPs would be expected to raise in parliament matters affecting the Tamils such as the army not moving out of schools and places of worship and other violations of the ceasefire agreement.

During discussions, the Tiger leadership had also said that the TNA could co-ordinate with S. P. Thamilchelvam, head of the LTTE's political wing, on matters regarding parliamentary affairs such as bills and debates. The Tigers however do not recognise Sri Lanka's parliament.

Finally, the legal basis under which the IAC is to be set up has to be considered. Though the interests the LTTE entertains on this matter is not known, there are at least three sets of ideas that are under consideration by decision-makers in the south regarding this matter. One is to set the IAC up under emergency regulations, but that is inconceivable because its existence will depend on the successful passage of the motion to extend the emergency every month in parliament.

The other two seem to be more stable. One is through the 13th Amendment to the constitution. This will however be unsuitable because the president has the power to dissolve the IAC. In fact under the present set up where President Chandrika Kumaratunga has displayed great animus against the LTTE, any organisation run by the Tigers will have to function under the shadow of such a threat.

Asymmetrical devolution

The other option is to set up the IAC after introducing a new amendment to the constitution. Its setting up will grant special powers to the northeast thereby testing the possibilities of working an asymmetrical system of devolution. A body set up under the 13th Amendment however will not function as an institution within an asymmetrical system because under this amendment devolution to all provinces has to be uniform.

Pushing through another amendment might therefore see the prototype of the setup that might come about if the LTTE and the government reach an accord. It might therefore be worth considering seriously, though it will need a bipartisan consensus between the UNF and PA if it is to be pushed through parliament.

The setting up of the IAC throws up a number of technical problems that have to be sorted out during negotiations in Thailand. And it is best it done to the satisfaction of everyone if the interim administrative council is not to suffer the same fate its predecessor did in 1987, leading to discord and eventually, war.