Government freezes war payments as financial crisis hits Treasury

By Our Defence Correspondent
All was quiet on the Northeast Front this week, but in Colombo things turned definitely gloomy when the government made it known to the army, navy and air force that it is virtually freezing payments on weapons purchases due to the continuing financial crisis, according to sources in the Ministry of Defence.

Top brass in the armed forces have been told that almost all payments for various military hardware are being delayed and deferred indefinitely. Although the forces can continue to negotiate and sign contracts with foreign and local suppliers, payments for these items would not be forthcoming from the Treasury for some time, sources said.

What this means is that the armed forces will not be receiving much in the way of heavy weapons, battle tanks, aircraft, warships, and vehicles, in the near future. This effectively rules out major offensive operations by any of the forces, using anything but the resources that they have right now, The army frequently launches major operations in the northeast within weeks of receiving shipments of weaponry and battle tanks.

However, in the event of major defeats at the hands of the Tigers, the government will have no option but to approve emergency funds for purchases. Whether the government will be able to raise such funds is another question.

What all this means is that after 19 years of war, the country has finally come to the point where it is financially unable to have any hope of winning. There are no more ways for the government to raise funds on a substantial scale, with the privatization of state industries not bringing in much money any more, and the high cost of living making higher taxation of the private sector and the general public meaningless.

Of course, this makes little difference in reality, since the armed forces lost the ability to win the war, after the massive debacles in the Wanni in November of 1999, and subsequently, the fall of Elephant Pass and the LTTE’s march towards Jaffna town.

The LTTE lost the ability to win the war when it failed to capture Jaffna town, a year ago, and has not been able to launch a single major operation against the forces since then for lack of resources.

However, the recurrent expenditure of the armed forces, which is for daily items including food, day-to-day requirements of ammunition, and salaries, will not be affected yet as these are covered under a different area of the government’s budget.

The financial crisis is actually not just the result of high military spending in the last six years. The government’s inability to control the skyrocketing cost of living has hit the state sector just as hard it has hit the general public. The Sri Lankan rupee’s plunge versus the dollar over the last year, coupled with the rapid hikes in fuel prices, have had a serious impact on the government by sharply increasing expenditure, quite apart from crippling the private sector that provides tax revenue for the state.

Sadly, the government has not been able to come up with a formula to control the situation, and the current crisis was looming-for several years now. It was only a matter of time, before this happened. Fortunately, the LTTE is too weak and in no position to take advantage of the situation. However, with the collapse of the Norwegian peace initiative, prospects for a peaceful settlement are also virtually non-existent. But the political developments with the Sri Lanka Muslim Congress this week may be the only ray of hope for ending the war, if the People’s Alliance is driven out of office and the United National Party adopts a different stance towards the war.

Meanwhile, the strengthened naval blockade off Mullaitivu continues, with heavy gunboats and fast patrol craft spending many days at sea continuously, in order to deny LTTE arms ships the opportunity to unload into boats and get through to Sea Tiger bases on the northeast coast such as Mullaitivu, Alampil and Chalai. The navy’s top brass are worried over the fact that such extended periods at sea will cause breakdowns in the engines and other machinery of these vessels, which were built mainly for short stints in relatively shallow waters, and not for the extended periods of time in deeper waters that they are being operated at the moment.

The failure of the navy’s recently acquired offshore patrol vessels to make an impact on the blockade, continues to irritate the navy’s top brass. These vessels were purchased at a colossal cost last year, specifically for the purpose of patrolling deeper waters in the shipping lane off Mullaitivu, and even have facilities to operate helicopters off their decks, which the navy wanted to use to maximize their ability to search a wide area of the sea. The navy even embarked on the setting up of its own maritime air wing, recruiting ex-air force personnel and drawing up detailed plans, only to have the programme scrapped due to its high cost, when Vice Admiral Daya Sandagiri took over in January as navy chief.

The vessels have proved to be white elephants, as their large size and slower speed make them easy targets for the Sea Tigers, especially as they are without the cover of helicopters. The navy simply doesn’t have the numbers of gunboats and fast attack craft that are needed to escort these ships, and is forced to keep them out of harm’s way. One of these offshore patrol vessels SLNS Sayura, which was purchased from the Indian Navy late last year, appeared off the Mullaitivu coast this week for the first time since it arrived about eight months ago. In the past, it had only patrolled areas outside the northeast, such as between Kalpitiya, Colombo and Kirinda. It had made a few short trips to Batticaloa, which was deemed safe as the Sea Tiger boats are found only starting from the coast of the Trincomalee district.

But this time, it sailed up to the Jaffna Peninsula and returned without incident.

The ship, which was 12 years old when bought at a colossal cost, requires a crew of about 130 officers and men, whose services could be far better utilized in smaller warships. For example, a fast attack craft requires only about 12 personnel, and a heavy gunboat, about 20. The purchase of the vessel is actually a result of the Elephant Pass-Jaffna debacles in early last year. When the Tigers were marching on Jaffna town, the government appealed to the Indian government for help, but none was forthcoming.

So the Pakistani ruler, General Pervez Musharaf, was approached, for help. General Musharaf has excellent ties with the Sri Lanka Army, since he was on a visit to Colombo hosted by Sri Lanka’s top brass, when the then Prime Minister Nawaz Sharif tried to sack him. Gen. Musharaf returned to Pakistan from Sri Lanka and toppled Sharif’s government.

Musharaf immediately organized weapons and ammunition for Sri Lanka, during the Jaffna crisis, and played a large part in helping keep the Tigers out of Jaffna town. However, these close ties with Pakistan irritated its archrival the Indian government, and President Kumaratunga quickly sent a team from the Ministry of Foreign Affairs to sooth wounded egos in New Delhi. As part of this diplomacy, the Indian government made it known that it would be nice if Sri Lanka purchased something from them as well, and offered the Sayura. Anxious not to offend the Indian government, the Sri Lankan government quickly agreed, and the surprised Sri I,anka Navy found itself with this useless vessel. The navy was not consulted before the purchase was agreed to. But then, the diplomatic protocol of the time did not allow for this.

The navy saw several promotions of senior officers this week. Commodores H. S. Ratnakeerthi, Sarath Weerasekera, C. N. Thuduwewatte and L. D. Dharmapriya were promoted to Rear Admirals; Captain P. L. N. Obeysinghe was made a commodore; and commanders R. W. Wijegunaratne and A. R. Amarasinghe became captains.