Sri Lanka Looks To Trade
Sydney Morning Herald
Monday July 6, 1992
BUTTALA, Sri Lanka, Monday: It is symbolic that President Ranasinghe Premadasa chose this small town in the underdeveloped southern province of Uva to stage his annual Gam Udawa, or village reawakening festivities.
Several years ago this region, which at one time had been the breadbasket of the island, was embroiled in a Marxist uprising led by the Peoples'Liberation Front (JVP). Security forces and death squads quickly brought the situation under control, but thousands remain listed as missing.
Undercurrents of discontent remain. Reports in the independent Sri Lankan press say that three JVP "strike cells" have been planning to attack Gam Udawa, but the attempts were foiled when five "hard core subversives" with a shotgun and grenades were arrested.
Certainly security was tight with armed police, road blocks and a navy presence.
Roads and electricity supply, new university buildings and extensive gardens have been built to showcase the Government program of regional development. The aim is to make rural parts of Sri Lanka more productive in the hope that trade will one day replace the need for aid funding.
The International Monetary Fund and the World Bank are taking a tough line against the Government. Some aid has been suspended and a recent delegation is reported to have demanded tougher controls on the economy in an effort to reduce growing budget and current account deficits. Already taxes have been increased, but the IMF wants them to go higher.
Mr Premadasa is attempting to keep a tight grip on the political situation while partly appeasing outside criticism by throwing open his country to foreign investment. He used the form at Buttala to drive home a message that local people could spur growth through his new initiative of making the whole of Sri Lanka a free trade zone.
He wants foreign investors to develop businesses in all parts of the country not just in three purpose-built free-trade zones that now exist near the commercial capital Colombo. Particularly emphasis is being given to the processing and marketing of agricultural commodities.
Mr Premadasa used the stick to quell the 1989 JVP uprising and now he is offering the people carrots. His actions in the south carry a message to the strife-torn Tamil region in the northern Jaffna peninsula. A combined army, navy and air force operation during the past week launched from Vettilaikerni, on the peninsula, has claimed the lives of at least 500 supporters of the rebel Liberation Tigers of Tamil Eelam (LTTE).
© 1992 Sydney Morning Herald