Phantom aid; The politics of humanitarianism

The US government, which wields considerable influence at the International Monetary Fund (IMF), has sought to delay Sri Lanka's USD 1.9 billion loan appeal. Washington's hesitance is tied to the context of the humanitarian crisis that preceded the defeat and destruction of the LTTE and the killing of its leader, Velupillai Prabhakaran. Sri Lanka needs the IMF loan to service its external debt, which has accumulated as a result of soaring defence expenditure as well as borrowing related to controversial oil-hedging deals. The government is also seeking funds for the reconstruction of the conflict-affected northeast.

The disbursement of the funds has also been a somewhat controversial issue outside Washington, DC. Initially, the United Nations Security Council had determined that it would not block the loan, when the subject came up during informal discussion. The UN Office of the High Commissioner for Human Rights (OHCHR), Britain and France have, however, asked for an investigation into war crimes and violations of the Law of War by both sides. Earlier, the Security Council president, Mexican Ambassador Claude Heller, stated that "all 15 members agreed that such a move or other steps to punish Sri Lanka were unnecessary." The island's two main donors, China and Japan, along with Russia and Vietnam on the Security Council, regard the conflict between the government and LTTE as an internal matter.