The Ceylon News

UN says civilians in Vanni, many of whom are not allowed to leave by the LTTE, are facing a serious shortage of food and medicine

It is among many incidents of LTTE forcibly recruiting civilians and children as young as 14, the UN said in a statement.

"The LTTE continues to actively prevent people leaving, and reports indicate that a growing number of people trying to leave have been shot and sometimes killed," the statement added.

It said fifteen members of the UN staff and 75 of their dependents including children and women are among those prevented leaving by the LTTE.

Civilians killed

Meanwhile, a number of civilians were killed and injured in fighting within the safety zone designated by the government on Sunday, the UN added.

Another 400 sick and wounded were evacuated from Vanni to Trincomalee by the ICRC on Monday

Tamil websites said 134 civilians were killed in air raids on safety zone by Sri Lanka air force.

Sri Lanka military spokesman, Brig Udaya Nanayakkara, denied the accusation.

"The air force does not target safety zone," he told BBC Sandeshaya.

Urging the LTTE to immediately release their employee and stop all forceful recuritment, the UN also calls on both parties to refrain from fighting in areas of civilian concentration.

The tens of thousands of civilians caught in the conflict are facing a severe shortage of food and medicine, according to the United Nations.

No medicine

"Efforts to bring in more food and medicines have not yet been successful," the statement said.

It called on the government and the LTTE to find a solution so that the civilians can be spared of further bloodshed.

Meanwhile, Over 400 sick and injured civilians patients were transferred to Trincomalee by the ICRC on Monday, health authorities in the north said.

Doctors are helpless as the makeshift hospital in Pudumatalan has no medicines available, they added.

Authorities confirmed the UN statement saying that there were no medicine supplies for more than three months and.

Health officials said, that six to seven patients die daily due to lack of antibiotics.

Small injuries end up in amputation due to infection they further said.

ri Lanka may need a bailout from international donors to help pay its debts as the island’s 26- year civil war draws to a close.

Since August, the South Asian nation has spent half its foreign reserves, now $1.7 billion, on supporting its currency, paying debt and buying imports. That doesn’t leave much after the government shells out another $900 million due in 2009. The reserves aren’t getting replenished as the ailing world economy pummels exports and overseas investors flee emerging markets.

President Mahinda Rajapaksa’s government is unwilling to turn to the International Monetary Fund, which requires austerity measures in return for loans. Securing financing from other countries may be challenging for a nation whose credit rating from Standard & Poor’s is the lowest apart from those of Bolivia, Pakistan, Grenada, Argentina and Lebanon. Fitch Ratings downgraded its outlook on Sri Lanka today.

“Sri Lankan authorities have to act fast to beef up the country’s reserves,” said Ashok Parameswaran, senior emerging markets analyst at Invesco Inc. in New York. “Otherwise, they may have to devalue their currency significantly.”

Since December, countries including Russia, Vietnam and Kazakhstan have weakened their currencies rather than use reserves to prop them up. That has made imports costlier, reducing demand for goods from overseas.

Neighboring Currencies

Sri Lanka kept its exchange rate at about 108 rupees per dollar between January and October 2008 to slow inflation, even as the currencies of neighboring India and Pakistan weakened. The Sri Lankan rupee has since dropped to 114.95.

“Sri Lanka has relaxed the rupee in stops and starts, but they need a controlled devaluation,” said Agost Benard, a Singapore-based sovereign analyst at S&P. “The implicit currency peg will have to change and that’s one of the long-term solutions to the nation’s foreign-exchange problems.”

S&P cut Sri Lanka’s rating by one level in December to B, five steps below investment grade. Fitch Ratings lowered the nation’s rating outlook to negative from stable because of “heightened concern” over a “marked” decline in the nation’s reserves. It affirmed Sri Lanka’s rating at B+, which is four levels below investment grade and unchanged since April 2008.

Sri Lanka is banking on currency swaps with central banks, sales of treasury bills and bonds and offering higher interest rates on deposits to citizens living abroad to boost reserves.

Tamil Tigers

Once the northern region of the country is recovered from the Liberation Tigers of Tamil Eelam, peace will lead to more remittances and aid for construction of houses, schools and hospitals, said P. Nandalal Weerasinghe, chief economist at the Central Bank of Sri Lanka. This will provide “some balance of payments support,” he said.

The Tamil Tigers, who have been fighting for a separate homeland, have retreated from most of the northern part of the island nation. They now control a pocket of only 87 square kilometers (34 square miles) in the Mullaitivu region in the northeast, the Sri Lankan Defense Ministry said Feb. 22.

John Keells Holdings Plc, Sri Lanka’s biggest diversified company, last week doubled its stake in Union Assurance Plc, a local insurer, to 74 percent. The company said it’s anticipating that the liberation of Tamil Tigers-occupied territories will spur demand for finance and insurance.

To be sure, the dispute hasn’t ended yet.

“Although there is the possibility of outright military defeat of the Tamil Tigers, a potentially different style and lower-intensity conflict will continue to pose a risk to growth prospects and public finances,” S&P’s Benard said.

Still Raiding

Tamil Tigers launched an air raid in the Sri Lankan capital, Colombo, on Feb. 20. Their two aircraft were shot down, one crashing into a building housing the Inland Revenue Department and the second north of the city.

Sri Lankan police yesterday arrested a Tamil newspaper editor in connection with the air raid, prompting a protest by media rights group Reporters Without Borders.

At the end of November, Sri Lanka had 1.4 trillion rupees ($12 billion) of foreign debt outstanding. Its total debt is 3.4 trillion rupees, or 75 percent of the nation’s gross domestic product, according to S&P.

Liabilities increased as Sri Lanka, which spends a fifth of its annual budget on defense, borrowed from local and foreign sources to build roads and ports, among other spending. The nation’s budget deficit has averaged 8.7 percent of GDP in the past decade.

Debt ‘Distress’

Sri Lanka must reduce reliance on dollar-denominated short- term commercial borrowings to ease public debt “distress,” the IMF said in October. It called on the government to weaken the rupee as part of a “comprehensive policy package that would underpin confidence in the currency.”

The central bank said Jan. 19 that it will neither let the currency fall nor approach the IMF for a bailout to pay for imports and repay its debt.

On Feb. 19 Governor Nivard Cabraal said the central bank received $200 million from Malaysia, declining to reveal the terms of the deal or whether it was a swap or any other facility with Bank Negara Malaysia. Bank Negara didn’t respond to an e- mail sent by Bloomberg News for comment.

“It’s unlikely that Sri Lanka will go to the IMF for funds,” said Dushni Weerakoon, deputy director of the Institute of Policy Studies in Colombo. “At whatever cost, they will try to raise small sums from other countries.”

VAVUNIYA, Sri Lanka, Feb 26 (Reuters) - The Tamil Tigers gave V. Rasamalar no choice in how she would die -- the separatist rebels told her she would die alongside them in Sri Lanka's war zone.

But the mother of two escaped heavy fighting and fled to an army-controlled area. She and her children are now living with about 1,000 other refugees in a military-run transit camp in the northern city of Vavuniya.

"The organisation said we were going to die anyway if we crossed to the army-controlled area and told us to die with them," said 48-year-old Rasamalar, who fled the northern town of Udayarkattu when soldiers fought their way into it.

More than 36,000 Tamils since Jan. 1 have fled to government-controlled areas, running from the final battles of a 25-year-old war and Liberation Tigers of Tamil Eelam (LTTE) rebels who tried to force them to stay.

"After a long time, at least me and my two children are relieved from hearing the sound of shells and life in a bunker," she told Reuters at a school converted into one of 15 temporary homes for Tamil refugees.

On the run for weeks or months, refugees say they faced the wrath of the rebels, constant combat, perpetual fear and little food or water.

"There is scarce food. Even 15-year-old youth are being forcibly recruited by the LTTE. We were not allowed to leave the war zone. This is the situation of over 200,000 Tamils in that area," S. Selvekumar told Reuters.

Formerly a security guard for an international aid agency, Selvekumar escaped at night in a boat that was rescued by the Sri Lankan navy. But he left his sister behind and still does not know now where she is.

"DON'T KNOW THEIR FATE"

Aid agencies estimate that 200,000 Tamils are now squeezed into a 12-km long stretch of land on the northeastern coast which the army has declared as a no-fire zone. The government says there are no more than 70,000 people there, along with the LTTE.

Soldiers are less than 5 km (2 miles) away, and commanders expect they will face a final showdown with the Tigers there -- one in which they will have to fight carefully to prevent any civilian casualties.

Ariyakutti Velayutham, a 72-year former manager of a Hindu temple who escaped on a Red Cross ship bringing out sick and wounded people, now spends his days fearing for the safety of his children and grandchildren.

"I do not know the fate of my two sons, a daughter, and a grandson who had been hiding from being forcibly recruited by the LTTE," he said in the presence of government officers.

He said the LTTE had fired artillery from populated areas, "compelling the army to target us". The military denies targeting civilians, but has acknowledged some may have been killed.

"There were radio messages by the LTTE saying that once we got into government-controlled areas, females would be raped and males would be tortured, but nothing has happened," he said.

Some refugees complained that life in the refugee camp is just as hard as life in LTTE territory.

"I sometimes feel that we are now imprisoned in this refugee camp, after being held as prisoners by LTTE for a long time," 42-year-old S. Babu told Reuters.

At one camp, Reuters saw more than 100 refugees trying to speak to relatives over a camp wall.

The government says the restrictions are temporary, to give them time to weed out LTTE infiltrators and to ensure the rebels do not try to repeat a suicide attack that killed 30 people on Feb. 9 at a refugee registration centre.

The government plans to transfer most refugees to temporary villages with schools and other facilities, with homes for each family. The government says people will be placed with others from their home areas. (Editing by Bryson Hull)