COLOMBO: The president of Sri Lanka said on Wednesday there would be peace on the troubled island only after more fighting to crush separatist rebels as he unveiled the nation’s biggest-ever war budget.
“It is essential to completely wipe out terrorism,” President Mahinda Rajapakse told parliament, estimating defence spending this year of 155 billion rupees ($1.4 billion) rising to 166.44 billion in 2008.
“Otherwise there can be no political solution,” he said in a Sinhalese speech broadcast live on television.
The separatist Tamil Tiger rebels did not appear interested in a negotiated settlement to the tropical island’s drawn out ethnic conflict and had to be defeated, he added.
“I wish to emphasise that the fight against terrorism is not a fight against the Tamil people,” the president said. Security was beefed up around parliament, which is located on an island in a man-made lake, for the budget speech.
Fighting between troops and rebels has escalated in recent months in the 35-year-old conflict. Official figures show that more than 5,400 people have been killed since December 2005, including a top rebel leader last week.
The president projected a 2008 budget deficit worth seven percent of the island’s $ 27 billion economy. Domestic and foreign borrowing is expected to plug the gap.
The defence budget next year amounts to just under a fifth of total government expenditure, which is expected to be 1.04 trillion rupees ($9.32 billion), up from an original forecast of 925 billion rupees.
The government had originally forecast 2007 defence spending of 139.4 billion rupees. The latest figures show it plans to spend more on defence, including 181 billion rupees in 2009 and 191 billion rupees in 2010.
Rajapakse, who is the finance minister too, also proposed sharp increases in import levies, mainly on cars, widescreen television sets and other luxury goods. He also announced a new environmental tax on every household which uses a car, telephone or electricity.
But Rajapakse reduced taxes on petrol to ensure price stability amid record global crude oil prices.
The budget came amid heavy fighting on Wednesday between troops and rebels in the north of the island.
The rebels claimed they repelled a Sri Lankan military advance into their territory, injuring 70 Sri Lankan soldiers and loosing one of their cadre, the pro-rebel Tamilnet.com website said.
However, Sri Lanka’s defence ministry claimed that 30 rebels and six soldiers were killed, and another 25 soldiers wounded. The Tamil Tigers are leading a campaign for independence for minority Tamils in the majority Sinhalese nation of 19.5 million people.—AFP
