Colombo hails Tigers' truce

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Colombo (Reuter) - President Chandrika Bandaranaike Kumaratunga of Sri Lanka yesterday hailed a foreign-supervised truce with Tamil rebels due to start tomorrow as "the dawn of a new era", after a 12-year war which has cost 30,000 lives.

Proposals for power-sharing in the north and the east, where the Liberation Tigers of Tamil Eelam (LTTE) are fighting for a Tamil homeland, would be put to the rebels soon, she added.

Mrs Kumaratunga, who is also Finance Minister, said peace would also yield an economic dividend. The war costs the government $400 million a year. "The fundamental obstacle to increased foreign investment is Sri Lanka's costly and prolonged ethnic conflict," she told the opening of a new parliamentary session.

The truce, the first since June 1990, was agreed between government and rebel representatives when they met for a second round of peace talks in rebel-controlled Jaffna on Tuesday.

The two sides also agreed on a 40bn-rupee (£526m) rehabilitation plan for the north.

President Kumaratunga later told a news conference the truce, which would initially last for two weeks, would be monitored by committees based in Jaffna, Mannar, Mullaitivu and Vavuniya in the north and Trincomalee and Batticaloa-Amparai in the east.

She said each would have two members from the government and two from the rebels, with a representative from a foreign country chairing it. The Netherlands and Norway have agreed to serve and a response from Canada is being awaited. Oslo said it would supply observers, with a military background.