WWW Virtual Library - Sri Lanka

 

A war lined with gold

 

Sri Lanka's arms dealers, a shadowy bunch of politicians, servicemen, bureaucrats and their relatives and friends, who conclude multi-million-dollar deals nearly every day pocketing hefty commissions are the only beneficiaries of the intensified military campaign against the Liberation Tigers of Tamil Eelam (LTTE).
 
Copyright 1998 Indian Express Newspapers (Bombay) Ltd.
By Nirupama Subramaniam  
 

The bloody and drawn-out ethnic conflict in Sri Lanka has left a trail of broken homes and dead bodies, but for some businessmen, the dark clouds of war hold nothing but gold linings.

Sri Lanka's arms dealers, a shadowy bunch of politicians, servicemen, bureaucrats and their relatives and friends, who conclude multi-million-dollar deals nearly every day pocketing hefty commissions are the only beneficiaries of the intensified military campaign against the Liberation Tigers of Tamil Eelam (LTTE).

Armour-plated, helicopter Mi-24 gunships from Russia, anyone? A package of five, please, with spares for US $18 million, price marked up to cover the dealer's commission of seven to 10 per cent.

T-56 automatic weapons from China? A consignment of 10,000 for about US $20 million. The dealer makes $200 on every rifle.

Tanks from east Europe? Get six with spares, six reconnaissance vehicles and 12 armoured personnel carriers to make one armoured squadron, all for $8 million. The dealer takes 10 to 15 percent.

``Two or three such deals, and you can retire,'' says a retired army officer. However, retirement is the last thing on Lankan arms dealers' minds as the conflict in the north-east threatens to worsen in the coming months.

According to a former officer who was in the 1986 Vadamarachchi operation, the arms for that offensive came in 40 to 50 containers from Israel, the biggest order in those days. Today, one consignment alone takes up 200 containers.

There is money to be made in the days ahead as the conflict escalates: aircraft, patrol ships, communication and electronic-surveillance systems, armoured vehicles, airborne data processors, personal weapons, light machine guns, heavy artillery, cars and trucks. The list of what an army at war needs is endless and those in the business are already licking their lips in anticipation.

Teams from the armed services are constantly travelling the world looking for weapons. Much of the buying since the outbreak of ``Eelam War Three'' in 1995 has been doneunder the category of ``Crisis Purchases'' so that normal tender procedures are not necessary. It is a situation tailor-made for nepotism, cronyism and corruption. A few dealers have cornered the market and have exploited the Government's distress shopping to line their own pockets, assisted by those in top positions.

``It would not be incorrect to say that there is a Bofors here every day,'' says former air force vice-marshal Harry Goonetilleke. President Chandrika Kumaratunga said earlier this year that her government had succeeded in stamping out corruption in most sectors of government except defence. Accusations of malpractices in defence deals have been made in Parliament against a former air chief and a minister.

Recently, a Sunday newspaper revealed how a government-to-government agreement between Sri Lanka and China for the purchase of military hardware through the authorised Chinese trading arm, Norinco, had been bypassed in case of a deal worth $80 million. Instead, it was awarded through SriLankan and Chinese middlemen to Bomtec of the People's Liberation Army.

According to the grapevine, the commission paid out was 20 per cent. In another purchase, tender specifications were reportedly blatantly fixed to suit one particular bidder.

While arms dealers corner the lion's share of profits to be made from the war, there are plenty of thers raking in the crumbs, from suppliers of cloth for uniforms to contractors for meat, vegetables and even laundry. So much so that economists estimate that nearly 2 per cent of Sri Lanka's economic growth now is from purely war-related activities.

An indication of the money at stake comes from the 1998 defence expenditure. After originally fixing 45 billion Sri Lankan rupees for it in the budget, Parliament approved last month a supplementary estimate of 12.2 billion rupees, bringing the total to a staggering 57.2 billion rupees.

Analysts reckon that about 30 per cent of this -- roughly 17 billion rupees -- has gone into the purchase of hardware. Andprofits? ``With the prevailing commission rates averaging around 10 per cent, we can say without doubt that in this year alone, arms dealers have walked away with profits worth nearly 2 billion rupees,'' Goonetilleke estimates.

Not many were surprised when one of the leading arms dealers in Sri Lanka, through whom the Air Force makes about 80 per cent of its hardware purchases, put up a glass, steel and concrete building almost overnight in the heart of the capital at an admitted cost of around 650 million rupees. It is mockingly referred to as the War Memorial.

He is said to pamper politicians with lavish gifts but apparently recovers much more than he spends to send his executives on paid luxury holidays to Dubai with shopping money.

Another dealer, who used to run a video parlour a few years ago and travelled around on a motorcycle, is now the owner of a house with a swimming pool just outside the capital, valued at 35 million rupees, with a fleet of the latest cars at his command, including twoJaguars.

With these neo-plutocrats doing some aggressive selling, it is not surprising that Sri Lanka has sometimes bought hardware totally inappropriate to ground conditions. For instance, in 1994, it bought six Kfir-Mach(2) fighter-interceptor aircraft from Israel for $9 million in spite of the advice of experts that these were useless for Sri Lankan conditions.

``The Kfirs are mainly used for fighting in the air, but we have bought them to fight the LTTE, which does not have an air force,'' points out Goonetilleke. ``It's like using a sledgehammer to kill a mosquito. What we really need are ground attack craft and combat helicopters.''

Copyright 1998 Indian Express Newspapers (Bombay) Ltd.

 


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