The Sri Lankan government spent a substantial $5.5 billion to defeat the separatist Liberation Tigers of Tamil Eelam (LTTE) during the final four years of war beginning 2006.
The fourth Eelam War began in the middle of August 2006 and ended with the death of LTTE chief V Prabhakaran in May, 2009. During this period, Sri Lanka’s defence budget rose steadily from $1 billion in 2006 to $1.7 billion in 2009.
On an average, around 4 percent of the country’s gross domestic product or GDP was spent on defence, Ajith N Cabraal, governor of the Central Bank of Sri Lanka revealed this week to a government panel investigating the last years of the civil war.
The expenditure that amounted to LKR 605 billion (5.5 billion US dollars) for four years included cost of aircrafts, ships, tanks, ammunition, other equipment, training, food for soldiers, uniforms, Cabraal told the Lessons Learnt and Reconciliation Commission (LLRC).
(The country’s defence budget, however, has not been reduced after the end of war; currently, it is around $1.9 billion)
In his deposition to the LLRC, Cabraal said the rebels themselves maintained an ``efficient and often ruthless system of tax collection’’ and collected “taxes” in many forms: levies on goods, persons, activities besides ransoms for kidnappings and as consideration for “non-abduction.” Besides, the LTTE collected “In-kind contributions – supply of meals, services, houses, lands, organising of activities, gold and jewellery contributions.”
“The LTTE also operated its own network of banks and in fact, had its own `Central Bank’ in Kilinochchi (the rebels’ administrative capital in northern Sri Lanka),’’ the Cabraal told the LLRC.
The LTTE also had an international network to gather funds. One source, according to the Central Bank governor was “Contributions from various “legitimate” businesses owned by LTTE in many capitals across the world: eg. Petrol stations, grocery shops, video parlours, travel agencies, communication centres.’’
In his testimony, Cabraal also mentioned the 41 Central Bank employees who lost their lives as a result of the suicide attack on the Central Bank on January 31, 1996. At least 91 people were killed and more than 1400 injured in the attack.