Arms trade with Sri Lanka – global business, local costs

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China, which has a much smaller but rapidly increasing percentage, are main factors behind this trend.18 Finally, in terms of foreign aid, Sri Lanka is not a major recipient compared to other developing countries, but the aid dependency in terms of, for example, aid as a percentage of central government expenditures increased from 7.3 in the year 2000 to 24.1 in 200519. This increase is, of course, partially explained by the high inflow of aid money following the Tsunami in 2004. In a recent report from the Department of External Resources, it is noted that in a time when many of the traditional aid flows to Sri Lanka are shrinking, “…it is encouraging that Sri Lanka has been able to attract part of the additional funding from countries such as China, India, Iran and Korea both in the forms of direct aid and project related export credit”20. China, in particular, has increased its commitments in Sri Lanka dramatically in the past few years and is also argued to be the biggest lender to Sri Lanka in 2009, overtaking the World Bank and the Asian Development Bank (adb), as well as Japan, which were the biggest lenders to Sri Lanka in the recent past.21 Another recent change, which has affected the international relations of Sri Lanka, as well as its attitude towards the West, is the global environment of a “war on terror”. Partly, this has meant that the Sri Lankan government has received increased support for fighting the LTTE, due to it being on the right side of international politics.22 But the “war on terror” has also eroded some of the Sri Lankan trust in the West, as a moral actor. When the usa, and other western actors, or the un have argued for an end to the fighting due to the high costs involved for civilians, or for the government of Sri Lanka to follow international conventions of Human Rights, the Sri Lankan government has been able to label this “double standards”, with reference to recent developments in places like Afghanistan, Iraq, and Guantanamo Bay. Furthermore, Sri Lanka often gets support for its stance on sovereignty from its “new friends”, such as Russia, Iran and China. A combination of weakening economic dependencies on the Western countries and what is seen

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18 See UNWTO (1997) Yearbook of Tourism Statistics, Vol. II, 49th Ed., World Tourism Organization: Madrid; UNWTO (2008) Yearbook of Tourism Statistics, 2008 Ed., World Tourism Organization: Madrid. 19 World Bank (2007) World Development Indicators 2007, World Bank: Washington. 20 See ERD (undated) Foreign Aid Review 2006, Department of External Resources, Ministry of Finance and Planning: Colombo. Downloaded from http://www.erd.gov.lk/publicweb/FAR2006/FAR2006.pdf; ERD (undated: 1) Partnership for sustainable growth, Department of External Resources, Ministry of Finance and Planning, Colombo. Downloaded from http://www.erd.gov.lk/publicweb/budget2008/BD2008_ENG.pdf (4/3-2010). 21 GOSL, Government of Sri Lanka (2010) “China becomes SL’s top lender in 2009” downloaded at http:// www.priu.gov.lk/news_update/Current_Affairs/ca201003/20100304china_becomes_sls_top_lender_in_2009.htm (4/3-2010) 22 However, as shown in Chapter 2 in this report, this support has not always materialised in actual funding and military aid.


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