IMF Loan to Sri Lanka Should Not Serve "Quasi Military" Purpose, UN Official Says

Byline: Matthew Russell Lee of Inner City Press at UN
www.innercitypress.com/imf2srilanka032709.html

UNITED NATIONS, March 27 -- A day after the Sri Lankan government's as well as the Tamil Tigers' killing of civilians was criticized in a session of the Security Council, the purpose of its $1.9 billion loan request to the UN-affiliated International Monetary Fund was questioned at the UN.

Two weeks ago in Washington, Inner City Press asked IMF spokesman David Hawley to describe any safeguards that the loan proceeds wouldn't be used in connection with the government's military actions in north Sri Lanka or its detention camps for internally displaced people. Mr. Hawley said that negotiations were continuing.

Since then, the IMF has received extensive written opposition to the loan request as made, most of it quoting the Sri Lankan Central Bank's statement that the aim of the IMF loan is to "continue with the resettlement, rehabilitation and reconstruction work in the Northern Province, and the continued rapid development of the Eastern Province," which it deems key "not only to uplift the living standards of the people in the areas affected by the decades long conflict, but also to successfully implement the government's efforts to bring a sustainable solution to the conflict."

UN's Jomo Kwame Sundaram, use of Sri Lanka's IMF loan not shown

On March 27, Inner City Press asked the UN's Jomo Kwame Sundaram, Assistant Secretary-General on Economic Development at the Department of Economic and Social Affairs, about Sri Lanka's application for an emergency loan from the IMF and the resulting controversy. He replied that IMF loans generally shouldn't be used for "military or quasi-military purposes." It seems clear that the government's "resettlement" camps serve a quasi military purpose. What then will happen on the loan request? Watch this site.

Footnotes: Inner City Press asked asked Jomo K.S., in the run-up to the G20 meeting in London, for his views on the different proposals of the Stiglitz Panel on which he serves and of Ban Ki-moon, whom as an ASG he also serves. His answer was a model of diplomacy, that the reason Ban would not repeat his $1 trillion call while at Wednesday's stakeout interview with Gordon Brown was that Ban was being "a gracious host."

Some opine that it's Gordon Brown that wants to be seen as saving the world. At Friday's noon briefing, Inner City Press asked Ban's spokesperson if it is true that the World Bank's Bob Zoellick, who for more than a month has been promoting his own proposal that 0.7% of rich countries' stimulus packages be devoted to poor countries, called Ban to ask him to not come out with the trillion-dollar request. Ban's spokesperson said they had spoken, and that she would try to get a read-out. For now, an Inner City Press debate on these topic will appear over the weekend here.

And see, www.innercitypress.com/imf2srilanka032709.html