March 18, 2003	Tuesday	Muharram 14, 1424

COLOMBO: Aid donors funding the reconstruction of parts of Sri Lanka will be keeping a close eye on peace talks beginning today (Tuesday) after the most serious clash between the government and rebels since they agreed to a truce.

The government and Tamil Tiger rebels meet in Japan for their sixth round of talks since they signed a ceasefire in February last year but their discussions could be tense after the navy sank a rebel ship last week.

“The international community would be much more comfortable committing to large-scale reconstruction if there was progress at these talks and talks to follow,” said John Cooney, the country director of the Asian Development Bank, Sri Lanka’s second biggest aid donor after Japan.

The talks to end one of Asia’s most protracted ethnic wars are likely to focus on better implementation of the ceasefire agreement, financial aspects of power sharing, and economic development of war-shattered northern and eastern regions.

Donor aid to rebuild the country is considered crucial to end the war for a separate state by minority Tamils, which has killed more than 64,000 people since 1983, by convincing people they will benefit from peace.

Eleven rebels were killed on March 10 when the navy sank their boat, which the navy suspected of smuggling weapons. The rebels said the boat was a merchant vessel and had done nothing illegal.

PROJECTS: The World Bank was chosen in January to administer a fund for reconstruction and the resettlement of an estimated one million people displaced by the war.

That fund will come into operation later this month.

“It isn’t designed for big infrastructure projects. It will support the return of internally displaced people and the improvement of services for those people that stayed behind,” said Peter Harrold, the World Bank’s country director.

More than $60 million was pledged at a donor conference in Oslo late November. Harrold said the fund would be used to improve health, education and to help women traumatised by war.

Other planned projects are ice plants for fishermen and rice-storage facilities for farmers — priorities agreed by a joint government-rebel committee.

Harrold said the World Bank was likely to approve a soft loan to reduce poverty before the June conference, and the government was also confident of raising a loan from the International Monetary Fund.

There have been fears a war in Iraq would divert donor attention but Cooney played down the impact of another Middle East war.

“It is crystal ball gazing of a high order, but I don’t think so,” he said.

“The sorts of funding that might go into Iraq in a post-conflict situation are probably not the same sort of funding that would come to Sri Lanka,” he said.—Reuters