Amid refusal by Sri Lanka to accept the demand of the United States, Britain and other allies for a ceasefire, the West may hold up $1.9 billion aid to the island nation, which has inched close to a historic victory in the battle with the LTTE guerrillas, a news report said on Thursday.
The Western allies are reluctant to bail out unconditionally the government in Sri Lanka, which has dismissed their concerns about civilian casualties and human rights issues as global warnings over humanitarian crisis grew louder in the past few months, according to diplomatic sources.
According to a report in The Times, which quoted Western diplomats, the United States is threatening to block a $1.9 billion (£1.2 billion) emergency loan to Sri Lanka from the International Monetary Fund (IMF) because of its outright dismissal of their concerns about civilian casualties and human rights issues in the conflict zone.
Sri Lanka’s Central Bank said last Wednesday that the IMF deal was in an "advanced level of finalisation". However, according to The Times, US officials have written to the IMF’s executive directors and the Sri Lankan Government saying that it would be difficult for Washington to back the loan in the present circumstances.
"There’s a lot of discomfort in being seen to bail out the Sri Lankan Government," one Western diplomat was quoted as saying by the British daily.
The British and French foreign ministers said they had failed to prevail upon Sri Lankan government to announce a "ceasefire" in its offensive against Tamil Tigers and allow international aid agencies access to the war zone.
"We tried very hard... We insisted... But it is upto our Lankan friends to end the offensive and allow aid to the civilians trapped by fighting," Bernard Kouchner, the French foreign minister told newsmen after talks with the Sri Lankan government on Wednesday.
British foreign secretary David Miliband also said that their talks with Sri Lankans have made no "breakthrough". He said that "We told the Lankans that truce is to help trapped civilians and not to help LTTE."
Sri Lanka pushed for the loan early last month to help it overcome a financial crisis brought about partly by the global economic downturn and partly by its surging military expenditure of $1.6 billion this year and $1.5 billion last year, the report in the London daily said.
The United States, Britain and other allies are anxious "not to lose their only real leverage over the Government in continuing negotiations" over the plight of tens of thousands of civilians on the front line or in internment camps.
"The Americans want to play with the question of the IMF loan," Jean-Maurice Ripert, French envoy to the UN, told Inner City Press — a news service covering the United Nations — on Tuesday.
Sri Lanka has resisted growing diplomatic pressure to stop its offensive to allow the tens of thousands of civilians trapped in the region to escape. Some 110,000 people who fled the fighting have been detained in the congested state-run camps, where food, water and medical essentials are in short supply.
According to The Times, it was the first public admission by a Western official that Washington may be responsible for an apparent delay in the IMF emergency loan — which can be disbursed in ten days.
The IMF said last night, however, that the loan was still being discussed. The United States officially denies using the IMF loan in its diplomacy with Sri Lanka over the war but admits that it is under discussion among different branches of the US administration. "There are discussions currently under way within the US Government", said a spokesman for the US Embassy in Colombo.
Many officials are also concerned over potentially bad publicity from rights watchdogs if they support the financial aid to the restive nation. Human Rights Watch (HRW) and other groups have urged the US and Britain not to approve the loan.
"It can’t remotely expect the international community to bail it out of that mistake without taking some steps to meet global concerns about the way it’s waging the war," said Tom Malinowski, HRW’s Washington advocacy director. A rights group in the US is seeking a court order saying that approval of the loan would violate American law.
The LTTE has been fighting since 1983 for an independent state for the Tamils, alleging marginalisation of the community by governments dominated by the Sinhalese.