Jan 7 (Reuters) - Sri Lanka's military pressured the Tamil Tiger's last stronghold on the northern Jaffna Peninsula from the north and south on Wednesday, and the army said the separatist rebels seemed to be pulling back. [ID:nCOL408072]
Since the Liberation Tigers of Tamil Eelam (LTTE) lost their self-proclaimed capital of Kilinochchi to the army last week, many are asking if the 25-year war is nearly over. Not quite, but here are some scenarios of what could happen next:
SHOWDOWN IN THE EAST:
With Kilinochchi now in army hands, the LTTE is confined to a wedge-shaped piece of northeastern Sri Lanka of roughly 600 square km (232 sq mile). Analysts have said the Tigers are shifting their heavy weapons and toughest fighters to the eastern port of Mullaittivu and a few towns in the jungle between there and the central A-9 road. The next big army target is Elephant Pass, the gateway to Jaffna. Winning it is at once a matter of strategy and pride to the military, which suffered one of its worst losses of the 25-year war there in 2000. If the military takes Elephant Pass -- and few doubt they will -- all of its firepower can be aimed at Mullaittivu for a final showdown.
ARE THE TIGERS NOW TOOTHLESS?
Many analyst say the rebels are down to around 2,000 capable fighters and have little future as a conventional force. The military is now much better equipped and trained than in the past, has President Mahinda Rajapaksa's full backing and experienced, confident leadership. But the LTTE still can carry out suicide bombings in the capital Colombo, and did so hours after the government announced Kilinochchi's fall, killing three airmen at air force headquarters. Many fear more of the same. Fonseka has said he expects the hardest core of the Tigers to go underground and conduct hit-and-run attacks once the ground war nears its end. He also said the army is ready for that.
WHAT ABOUT CIVILIANS IN THE WAR ZONE?
Aid agencies estimate there are around 230,000 Tamil civilians who have fled their homes in the war zone, and are suffering without much shelter. Rights groups last month accused the Tigers of forcibly conscripting them as fighters or labourers. The LTTE denies that. Many are afraid of government refugee camps where they are scrutinised as potential LTTE sympathisers. With most civilians in the Mullaittivu area, that could slow the offensive because the military has pledged no civilian casualties, keenly aware that too many could prompt neighbouring India or other international powers to press for a ceasefire as has happened in the past.
IS INDIA GOING TO INTERVENE?
Despite protest from Tamil politicians in India, Indian Prime Minister Manmohan Singh has made it clear he has no plans to stop Rajapaksa's war. Singh's government lists the LTTE as a terrorist group. After the Mumbai attacks by Islamist gunmen made terrorism a major election issue in polls due by May, he is unlikely to be the least bit sympathetic. He and Rajapaksa have agreed that the underlying grievances of the Tamil people must be dealt with politically, a view shared and urged by much of the west.
DOES MILITARY SUCCESS MEAN EARLY ELECTIONS?
With the military riding high, Rajapaksa has plenty of political support. Signs of early polls abound -- the election budget this year has been quadrupled, polls are set in two provinces in February and the main opposition United National Party (UNP) has assumed a campaign stance. Allies had said Kilinochchi's fall was one possible trigger being considered by Rajapaksa for an early poll, but had cautioned plenty of other factors were in play. The UNP's main criticism is over the government's handling of the $32 billion economy.
WHAT ABOUT THE ECONOMY?
As predicted, both the Colombo Stock Exchange .CSE and the sliding rupee currency .LKR= got a boost from Kilinochchi's capture. But they both went straight back to moving on their own fundamentals as they have throughout the quarter-century war. Both have recorded impressive performances in that time, but have been hampered in the last year by a gloomy macroeconomic climate. Sri Lanka is suffering from expensive short-term foreign debt, declining forex reserves and a high deficit. Key exports like tea and garments are also hit by the global slowdown. Despite a sovereign rating cut last month, most analysts say default is unlikely. The government said growth was likely to slow to 5.0-5.5 percent this year. [ID:nCOL411052]
IS ANY OF THAT A RISK TO RAJAPAKSA?
Not really, especially with popularity for the war so strong. Rajapaksa's mainly rural power base has been largely shielded from economic woes through his populist budgets and development projects. Rajapaksa is also counting on a flood of post-war reconstruction money to come in after fighting ends. (Writing by Bryson Hull; Editing by David Fox)
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