By Anusha Ondaatjie
Oct. 9 (Bloomberg) -- Sri Lanka's government plans record spending on defense and public security next year to pay for driving Tamil Tiger rebels from their last strongholds and end a civil war that's left 100,000 people dead.
Defense ministry outlays are forecast to rise to 177.1 billion rupees ($1.6 billion) in 2009 from 166.4 billion this year, according to the government's Appropriation Bill to be tabled in parliament today. The legislation sets out expenditure estimates before November's annual budget.
Sri Lanka's military pushed to within 2 kilometers (1.2 miles) of the Liberation Tigers of Tamil Eelam's northern stronghold this week, bringing President Mahinda Rajapaksa closer to ending the 25-year-old conflict. Peace would allow Sri Lanka to reduce spending on its army, navy and air force from about 5 percent of gross domestic product, compared with about 3 percent in nearby India and Pakistan.
``We need to spend as much on defense because if terrorism is wiped out the country will boom,'' said Vajira Premawardhana, head of research at Lanka Orix Securities Ltd. in Colombo. ``We can afford to cut down on capital expenditure in the short-term as an end to the war will bring in foreign investment.''
While the Bill doesn't break down spending, Sri Lanka in the past had bought ammunition and aircraft from countries including Pakistan, Ukraine and Israel. The military has about 240,000 cadre, Kfir jet fighters and MI-24 helicopters to combat the Tamil rebels, who have transformed themselves from a jungle- based guerilla outfit into a group with land, naval and air wings and the Black Tigers suicide brigade.
Daily Attacks
The military is staging almost daily attacks on rebel bases in the north after the government ended a 2002 cease-fire with the LTTE in January.
The arrival of forces on the outskirts of Kilinochchi, the rebel headquarters about 280 kilometers north of the capital, Colombo, is ``the beginning of the end of LTTE terrorists,'' Defense Secretary Gotabhaya Rajapaksa said this month.
Rebel spokesman Irasiah Ilanthirayan couldn't immediately be reached by telephone for comment.
Still, the army's recent advances are no guarantee that the war will end as the rebels have shown in the past they can recover from military setbacks and will resort to terrorist acts if conventional warfare fails.
The LTTE, deemed a terrorist organization by the U.S., the European Union and neighboring India, reversed a 19-month military campaign in just five days in November 1999, overrunning the army's Elephant Pass base at the neck of the Jaffna peninsula in the island's north.
Guerilla Movement
``The LTTE might not be able to continue as a conventional army for much longer, but they may not be totally eradicated as they are a guerilla movement,'' said S.P. Nathan, an analyst at the National Peace Council, a non-governmental advocacy organization in Colombo. ``The government has to protect the land they capture and this will remain a burden to the country.''
As the army has advanced into the Tamil heartland, the rebels have stepped up suicide attacks in the nation's capital Colombo and towns in the south. Bombs on buses, trains and along national highways have claimed at least 100 civilian lives and injured 400 more this year.
A suicide bomber on Oct. 6 killed more than 25 people including the army's former chief of staff and injured 90. Retired Major General Janaka Perera, the local leader of the main opposition United National Party, was killed as the UNP opened offices in the town of Anuradhapura, home one of Sri Lanka's United Nations designated World Heritage sites.
While the military estimates the Tamil Tigers only have between 3,000 and 5,000 fighters, some defense analysts say the number may be as high as 10,000 and units are able to operate freely in the jungle terrain in Wanni's Kilinochchi and Mullaitivu districts.
Through Force
Tamils, who make up 11.9 percent of the population according to a 2001 census, are discriminated against by the Sinhalese majority, the Tamil Tigers say. The government denies LTTE allegations it's trying to end the conflict through force rather than reaching a negotiated settlement.
Rajapaksa's military spending has strained government finances, making it harder to meet its target of narrowing the budget deficit to 7 percent of gross domestic product from 7.2 percent in 2007. The government will present the 2009 budget in parliament on Nov. 6.
The government is building roads, schools and hospitals in the nation's eastern areas, taken from the Tamils last year in the biggest setback suffered by the group in the conflict.
The former Tamil Tiger commander from the eastern region, Vinayagamoorthi Muralitharan, who is known as Colonel Karuna, took the oath as a legislator for the ruling United People's Freedom Alliance on Oct. 7. He broke with the LTTE in 2004.
``This is the first time perhaps in the last two decades for an all out military effort,'' said Dushni Weerakoon, deputy director of Sri Lanka's Institute of Policy Studies. ``Defense spending is a priority, and they are also looking at reconstruction of liberated areas.''
To contact the reporter on this story: Anusha Ondaatjie in Colombo, Sri Lanka at anushao@bloomberg.net.
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