Transparency in giving aid to LTTE essential - global watchdog on corruption

Transparency International a global non-governmental organisation engaged in the fight against corruption wants the government to reveal its policy on channelling donor funds directly to the LTTE.

Reminding the international community of the lessons of the reconstruction efforts in other conflict zones, including Bosnia-Herzegovina, where corruption is one of the biggest problems facing the country today, the TI wants the western governments and international lending agencies to ensure that funding and lending policies are fully transparent.The following is the text of a statement issued by the TI: "Financial aid to fund reconstruction in Sri Lanka risks being misallocated or diverted into private hands unless transparency and accountability measures are built into the process.

"The topic of corruption in post-war reconstruction can no longer be ignored by the donor community," said TI Chairman Peter Elgen on April 9. "The subject will be focus of a discussion by experts from around the globe at a workshop at the forthcoming 11th International Anti-Corruption Conference in Seoul, Korea, on 25-28 May 2003", he said.

"The manner in which the funds for Sri Lanka’s reconstruction are to be managed must conform to best practices in terms of good governance and transparency," he said. "The international community has a particular obligation to be fully transparent in its aid procedures. Sri Lanka must ensure that funds received go to reducing poverty, especially improving health, education and vital infrastructure projects. Otherwise, the intended effect of this aid will not be met and the Sri Lankan people will be the losers, because they will have to pay back the loans," he said.

"Donor aid is a key incentive to strengthening the ongoing peace talks between the government and the LTTE," said Mr. J. C. Weliamuna, Executive Director of TI Sri Lanka. "Corruption threatens not only to trap vast amounts of the population in poverty, but also to derail the peace talks themselves".

Donor aid has been promised by Japan, the Asian Development Bank, USA, Norway and the EU to rebuild the war-ravaged areas in the north and east of Sri Lanka and to resettle an estimated 1 million people displaced by the war. Some estimates put the sums of grants and loans as high as US$2 billion. The World Bank was chosen in January to administer a fund for reconstruction. Pledges are expected to be made at a donor conference in Tokyo on 16-17 June.

The international community had focused on reconstruction since a ceasefire was signed between the government of Sri Lanka and the Liberation Tigers of Tamil Eelam (LTTE) in February 2002. The 20-year conflict had killed more than 60,000 people. Peace talks between the two sides continue, and donor aid is regarded as a strong incentive to end the war.

TI calls on the government of Sri Lanka to:

• Establish clear lines of accountability for use of the funds received;

• Establish a clear and transparent procedure for allocation of funds, and make public this procedure;

• Make a public commitment that donor aid and loans will be used solely for development purposes and will not be diverted into the private pockets of politicians, regional power-brokers or their cronies nor used for the purchase of weapons and military equipment;

• Follow proper tender procedures when spending aid moneys.

 • Ensure that disbursement of funds is approved by the Parliament and subject to the scrutiny of the Auditor General;

• Disclose its policy on channelling donor funds directly to the LTTE who effectively control the northern and eastern areas of the country, especially as some donors have unequivocally stated that they would not direct funds to a non-government entity (LTTE).

TI calls on western governments and the international financial institutions to:

• Ensure that funding and lending policies are fully transparent;

• Include accountability and transparency provisions in funds or loans and obtain a statement from all parties that corruption will not be tolerated;

• Make immediate plans to prepare monitoring mechanisms — where possible by citizens’ groups in the country such as Transparency International Sri Lanka — to ensure that aid and investment go to targeted projects, such as schools, hospitals and housing.