Parliament Dissolution May Cost Sri Lanka Billions in Aid

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A US $4.5 billion aid package for Sri Lanka is in jeopardy with the dissolution of Parliament by President Chandrika Kumaratunga on February 7 - ten days ahead of a crucial donor meet in Washington.

The reconstruction package for the war-torn country was pledged in Tokyo in June 2003. The US, European Union, Japan and Norway will chair the conference of 49 donor countries in Washington on February 17.

"Deputy Secretary of State Richard Armitage has confirmed that the donor review meeting will be held as scheduled," says a US embassy spokesperson in Colombo.

But in the current political chaos, analysts fear a sharp decrease in funds for reconstruction from donor countries in the West.

This apart, they feel the political instability in the south could spur the LTTE to ask to be appointed the sole authority to manage foreign aid - a demand so far rejected by the international community. [Read more]