Tigers' desperation

The LTTE, now facing annihilation in a small corner of the Vanni, has still not given up its terror tactics. Reports from the Safe Zone indicate that it has resorted to firing at civilians who had tried to come over to the cleared areas. This is nothing new to a terrorist organisation holding the civilians hostage to slow down a military advance.

The world has called upon the LTTE to let the civilians go, with little success. Nearly 65,000 civilians have crossed over on their own, braving LTTE threats and attacks. Yet thousands more remain in the Safe Zone at the behest of the LTTE, which knows that the civilians are its last remaining hope to buy time to prolong total elimination.

President Mahinda Rajapaksa has once again reaffirmed the Government's commitment to ensure the safety and security of the civilians, in a telephone conversation with UN Secretary General Ban ki Moon. Secretary General Moon has also stressed the importance of the (LTTE) letting civilians go. The same sentiments have been echoed by Sir John Holmes, the UN's top humanitarian official. In the words of Sir Holmes, "if the LTTE truly has the best interests of the Tamil people at heart, they should contribute to ending this unnecessary suffering of the civilian population."

The Government is sending regular supplies of foods and essentials to the Vanni civilians including those in the Safe Zone and has provided facilities to all those who come over. In the context of these developments, President Rajapaksa reiterated his call for all remaining LTTE cadres to surrender to the Forces, so that they can complete the humanitarian mission of liberating all civilians held hostage by the Tigers. There would be no need for further fighting if the LTTE cadres surrender and lay down weapons. It would make the task of rescuing the civilians much easier.

Another disturbing development is that the LTTE is once again threatening Indian leaders including Sonia Gandhi, apparently for not interfering in Lanka's internal affairs. Certain Tamil Nadu politicians have already made the Lankan conflict a major issue, issuing veiled threats against the Indian establishment. The LTTE made one of its biggest mistakes by assassinating former Indian Prime Minister Rajiv Gandhi, but learning lessons has never been the LTTE's forte. Death, terror and revenge are the only words it can understand. Both India and Sri Lanka must be on guard to prevent any LTTE attack on Indian soil. The LTTE must listen to the tide of world opinion turning against it even at this late stage.

A prudent move

Sri Lanka is primarily an agricultural country. Agriculture is the lifeblood of the nation. The present Government, under the Mahinda Chinthana policies, has given all concessions and incentives to farmers island-wide. One of the most effective measures in this regard has been the fertiliser subsidy which has led to a significant increase in the paddy harvest.

Agricultural loans are an essential component in the exercise of developing the sector. Most farmers cannot afford to buy agricultural and transport equipment without loan facilities. Nevertheless, some farmers have been reluctant to apply for loans due to high interest rates charged by banks. This has affected the agricultural sector and the overall impact to the economy cannot be disregarded.

Sri Lanka has weathered the current global economic storm with a healthy growth rate and it must strive to maintain that momentum. Lowering interest rates, at least for identified productive sectors of the economy, is one way of achieving that aim. Lowering interest rates is viable again as inflation and call rates are down. The State banks have once again taken the lead to reduce interest rates. The nascent industrial and services sectors too have to be nurtured in the same manner.

People's Bank has reduced the interest rate on loans issued to the industrial and agricultural sectors with immediate effect. The interest rate on loans issued for the purchase of agricultural implements has been reduced to 18 percent while the interest rate on loans for the purchase of fishing gear and the cultivation of export oriented crops will be 19 percent.

Earlier, the Bank of Ceylon decided to reduce interest rates by two percentage points. The National Savings Bank is slated to take similar action. There is every indication that private banks would follow suit. This is a very healthy trend for an emerging economy as high interest rates tend to stifle economic growth.

The banks will also have a major role to play in the economic rejuvenation of the Eastern and Northern provinces following their total liberation from LTTE terrorism. The banks must reach the Northern and Eastern population with innovative products to stimulate the regions' economy. The Bank of Ceylon has already decided to open several more branches in the two provinces and we hope the other banks would follow.