Money, revival come slowly to Sri Lanka's old war zone

Sun Aug 1, 2010 2:28am EDT
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By Ranga Sirilal

KILINOCHCHI, Sri Lanka (Reuters) - The war's over, but men with guns remain in Sri Lanka's former battle zone in the north, where recovery is wobbling along despite few basic services and too little lending.

Small, green shoots of Sri Lanka's recovery from a 25-year war are beginning to show in the form of microfinance loans for people displaced by the climax of the battle between the government and the Liberation Tigers of Tamil Eelam (LTTE).

The LTTE ruled the northern and eastern portions of the Indian Ocean island, nearly a fifth of its land mass, until government troops routed them in a final battle in May 2009. Nearly 300,000 people were displaced in the fighting.

President Mahinda Rajapaksa's government has largely ignored external calls for a "political solution" to heal the ethnic divide that fueled the war in favor of an economic revival in the war zone he has dubbed the "Northern Spring."

That, he says, will help unite the country's Tamil minority and Sinhalese majority.

"I'm satisfied with the present situation, but we are going through hardships with a lack of basic facilities like sanitary facilities, water and shelter," rice farmer Michael George, 36, told Reuters after receiving a 100,000 rupee ($888.70) loan to cultivate his paddies.

A key to the "Northern Spring" has been an aggressive central bank push to get new bank branches opened in the main cities of the north, Jaffna and Kilinochchi.

The LTTE had declared the latter the capital of the separate nation it wanted to create for minority Tamils.   Continued...