IMF Board approves $2.6 billion loan for Sri Lanka

WASHINGTON: The International Monetary Fund (IMF) on Friday approved a financial assistance of $2.6 billion to Sri Lanka to support the country's economic reform programme and its "much needed post-conflict reconstruction and relief efforts". The Executive Board of the IMF has approved the fund of which the first installment of $322.2 million will be made available immediately. The remaining amount will be phased in, subject to quarterly reviews. This is the first major financial aid to Sri Lanka after the end of the more than three-decade-old civil war in the island's north which resulted in the defeat of LTTE rebels. Key objectives of Colombo's economic reform programme supported by the fund are "to strengthen the country's fiscal position while ensuring the availability of resources for much needed post-conflict reconstruction and relief efforts," the IMF said in a press release. The programme is intended to rebuild international reserves and strengthen Sri Lanka's domestic financialsystem. It also aims to lay a strong macroeconomic foundation that will help the authorities approach the broader international community for support in post-conflict reconstruction. Following the Executive Board discussion on Sri Lanka, Takatoshi Kato, Deputy Managing Director and Acting Chairman, said the global financial crisis has had a significant impact on Sri Lanka's economy. Kato said that persistently high budget deficits forced the island government to rely on short-term financing from international markets. "The government's ambitious program, supported by the IMF, intends to restore fiscal and external viability and address the significant reconstruction needs of the conflict-affected areas, thereby laying the basis for future higher economic growth," he said. "Reducing the central government fiscal deficit, while preserving spending on health and education and protecting the most vulnerable in society from the economic downturn, is a central goal of the government's programme," he said. To that end, the authorities have put in place revenue enhancing measures and intend to introduce reforms to reduce tax exemptions and broaden the tax base beginning in the 2010 budget. This, together with savings on military spending and possible concessional donor financing, should help finance the considerable reconstruction spending needs, Kato said. "The program aims to rebuild reserves to prudent levels while allowing the flexibility in the exchange ratenecessary to boost the competitiveness of Sri Lanka's exports. At the same time, the central bank's policies will aim to control inflation while ensuring adequate credit to the private sector," he added. Suggesting to take difficult reform measures, Kato said the island government should take advantage of the opportunity created by the end of the conflict "to ensure national reconciliation, restore macroeconomic stability and promote strong and durable growth".

Suicide bombers, gunmen attack east Afghan city

KABUL: Taliban fighters wearing suicide vests and armed with AK-47 rifles and rocket-propelled grenades attacked the main police station on Saturday in the southeast city of Khost, triggering hours-long gunbattles that left seven militants dead and four people wounded, officials said.

Also on Saturday, a British soldier was killed by a roadside bomb during a patrol in the Lashkar Gah district of Helmand province, the focus of major offensives by US and British forces against the Taliban. The soldier was the 20th British service member killed in Afghanistan this month and the 189th since the war began in 2001.

The attack in Khost began in the afternoon when at least six Taliban fighters wearing explosive stormed the area around the main police station and a nearby government-run bank. All were all shot and killed before they could detonate their explosive vests, the interior ministry said in a statement.

A seventh attacker detonated a car rigged with the explosives near a police rapid reaction force, wounding two policemen, the ministry said. Two civilians - a woman and a child - were wounded in the attack on the bank, the ministry added.

Interior ministry spokesman Zemerai Bashary said all the attackers had been killed, but residents reached by telephone from Kabul said sporadic firing could still be heard late in the afternoon.

Dhaka remembers its first prime minister

DHAKA: A 1971 letter signed by then Indian prime minister Indira Gandhi, acknowledging Bangladesh's provisional government led by Tajuddin Ahmed,

is part of an exhibition to commemorate Ahmed's 84th birth anniversary.

In April 1971, India recognised the provisional government that was formally inaugurated in a tiny enclave at Meharpur in Jessore district. It was headed by Syed Nazrul Islam as the acting president and Tajuddin Ahmed as the prime minister.

Among the exhibits is a page from Tajuddin's personal diary recording his thoughts on the day Mahatma Gandhi was assassinated Jan 30, 1948, New Age newspaper said on Sunday.

Rafiqul Islam of the Liberation War Museum, also a freedom fighter, said the 60 exhibits include records of the freedom movement and the early days of struggle after independence.

Tajuddin was the prime minister through the 1971 struggle and made way for Sheikh Mujibur Rahman, the country's founding father. He later served under him as the finance minister.

All three were assassinated in 1975.

Fresh Indian arms row erupts in Nepal

KATHMANDU: A fresh row over Nepal’s defence minister Bidya Bhandari’s meeting with her Indian counterpart A K Antony in New Delhi last week erupted in the Himalayan republic on Sunday with the opposition Maoist party accusing the government of trying to foment a civil war and blocking parliament.

Narayan Kaji Shrestha Prakash, the Maoists’ parliamentary party deputy chief, told the house Sunday that the government of Prime Minister Madhav Kumar Nepal was trying to derail the peace process by buying arms from India.

Bhandari’s New Delhi trip and her meeting with Antony is being regarded with suspicion by the Maoists with their chief Pushpa Kamal Dahal Prachanda last week cautioning Nepal that any move to buy arms from India would derail the peace process.

The former guerrillas refused to believe the prime minister who in the morning told a parliamentary committee that the arms sale reports in India and Nepal’s media were “unwarranted rumours”. Nepal told the querying MPs that the defence minister did not sign any deal to buy arms and that his government would not go against the peace pact.

In 2006, the Maoists and the major parties had signed a comprehensive peace agreement which forbids either side from making subsequent fresh recruitments or restocking their arsenals.

The row was fuelled by the new tourism and civil aviation minister Sharad Singh Bhandari reportedly saying that the government needed to buy fresh arms and ammunition for the practice sessions of Nepal Army soldiers, who could not be expected to “stay in their barracks practising Ram Dev’s yoga exercises.”

India stopped providing lethal military assistance to Nepal, including its Insas group of firearms and helicopters, in February 2005 as a rap on the knuckles for King Gyanendra, who had ignored South Block’s advise to stage a coup and set himself up as the all-powerful chairman of a handpicked cabinet.

Suu Kyi trial enters final phase in Myanmar

YANGON: The trial of Myanmar democracy leader Aung San Suu Kyi entered its final phase on Monday, with the prosecution scheduled to deliver its closing arguments, a government official said.

Suu Kyi, 64, is charged with violating the terms of her house arrest by harboring an uninvited American man who swam to her lakeside home and stayed for two days. She faces a possible five years in prison.

Suu Kyi's lawyer Nyan Win said he expected the verdict to be delivered in two to three weeks. The official, who demanded anonymity since he was not authorized to speak to the press, said the lawyer for American John W. Yettaw, 53, of Falcon, Missouri, will also give his final arguments. Two female companions of Suu Kyi were to present statements before the court.

Diplomats from the United States, Singapore, Australia, Japan, the Philippines and Malaysia were allowed to attend the session, one of the diplomats told reporters.

Washington, which has posted no ambassador to Myanmar, is represented by the deputy chief of mission, Larry Dinger.

Yettaw was charged with criminal trespass, which carries a maximum jail term of three months. He also faces a municipal charge for swimming in a non-swimming area and is accused of immigration violations.

Yettaw has pleaded not guilty and explained in court that he had a dream that Suu Kyi would be assassinated and he had gone to warn her.

``I will try my best to defend my client. I will argue that he did not violate the restriction order and I will try my utmost to get him lesser punishment,'' Khin Maung Oo, Yettaw's lawyer, said over the weekend.

Tried on the same charges as the Nobel Peace Prize laureate are Khin Khin Win and her daughter Win Ma Ma, who have long been Suu Kyi's companions during her house arrest. Both are members of Suu Kyi's National League for Democracy party.

The trial has drawn condemnation from the international community and Suu Kyi's local supporters, who worry the ruling junta has found an excuse to keep her behind bars through elections planned for next year.

At an Asia-Pacific security forum last week, U.S. Secretary of State Hillary Clinton offered Myanmar the prospect of better relations with the United States, but said that depended in part on the fate of Suu Kyi.

Myanmar state media rejected the criticism, accusing Clinton and others calling for Suu Kyi's release of ``interference.''

The trial started May 18. The court had approved 23 prosecution witnesses, of which 14 took the stand. Only two out of four defense witnesses were allowed.

Myanmar, also known as Burma, has been under military rule since 1962. Suu Kyi's opposition party won national elections in 1990, but Myanmar's generals refused to relinquish power. Suu Kyi has been under house arrest for 14 of the past 20 years.

Nepal PM thanks British actress for Gurkha campaign

KATHMANDU: Nepal's prime minister on Monday thanked Joanna Lumley for bringing "justice" to Gurkha soldiers who served in the British army, as Nepalese PM Madav Kumar Nepal with British actress and Gurkha campaigner Joanna Lumley at the Prime Minister's Office in Kathmandu. (AFP) the glamorous actress was feted on her visit to the country. Madhav Kumar Nepal said all Nepalese people recognised the achievements of the 63-year-old star, who spearheaded a successful campaign for Gurkha veterans and their families to be allowed to settle in Britain. "I think the Gurkhas have got justice, whether complete or just to some extent I cannot see," he told journalists after meeting Lumley, famous for her role in thetelevision show "Absolutely Fabulous". "We are all rejoicing over what she has achieved." Lumley, who arrived in Nepal to a rapturous welcome on Sunday, presented the prime minister with a scarf from Scotland, saying she had heard that the winters were cold in Nepal. "We are just so proud to be here and to have it recognised at such a high level," she told journalists after the meeting. "It's just such a tremendous privilege to be here today consolidating the bond (between Britain and Nepal)." Later Monday, Lumley will meet the country's president and address a rally at Kathmandu City Hall before laying a wreath at a Gurkha memorial inside the British embassy here. The blonde actress has been hailed as a heroine by the Nepalese former fighters, who are expected to turn out in their thousands to greet her as she travels around the country this week. Crowds of supporters waited hours at Kathmandu airport on Sunday, braving the monsoon rain and carrying banners that read "Welcome Joanna, daughter of Nepal" and "Gurkha heroes welcome our British heroes". Organisers of her trip said some Gurkha veterans living in remote areas have already started walking to the three towns she is set to visit while in Nepal, where many people live in rural villages with no road access. She is accompanied by her family and by British local government representative Peter Carroll, who in 2007 persuaded her to join the "Gurkha Justice" campaign that he started. She has said that her father, a British major in the 6th Gurkha Rifles during World War II, would have been "overwhelmed with shame and fury" at Britain's treatment of Gurkha veterans. The British government announced in May that all Gurkha veterans who had served at least four years in the army could apply for residency after a climbdown in the face of Lumley's campaign. Previously, only those who retired after 1997 had been eligible to apply. The Indian-born actress, renowned as the cocaine-snorting fashionista Patsy in the hit comedy "Absolutely Fabulous", had become a rallying voice for the men she called the "bravest of the brave". The Gurkhas have been part of the British army for almost 200 years and more than 45,000 have died in British uniform. Around 3,500 currently serve in the British army, including in Afghanistan.

Afghan govt reaches truce with local Taliban

KABUL: Afghan government today struck a local truce with Taliban insurgents and announced a ceasefire in a small part of Northwestern Afghanistan's Badghis Province ahead of the crucial Presidential polls.

The deal reached with the intervention of tribal elders after nearly three weeks of talks is a first time for Afghanistan, where insurgent attacks have soared and thousands more troops have poured in to secure the August 20 polls.

"Since Saturday a ceasefire has been established in Bala Murghab district of Badghis province through the efforts and mediation of elders and influential people of the province," a spokesman for President Hamid Karzai said.

Karzai is the leading candidate at the presidential election in just over three weeks time, although his campaign has been criticised as lacklustre and a spike in Taliban attacks have raised concerns that insecurity may mar the vote.

Karzai's spokesman, Siamak Herawi, said negotiations lasted 20 days and resulted in both sides signing a ceasefire document Saturday that saw the militants pull out of three areas of the troubled district.

"This is a model that other provinces and areas are also trying to use," he claimed.

The deal puts local leaders in charge and would allow authorities to set up election offices and for candidates on the presidential and provincial council ballots to begin campaigning, he said.

Russia 'agrees US troop transit'

A senior Obama administration official has told the BBC that Russia has agreed to let US troops bound for the war in Afghanistan fly through its airspace.
The deal, which opens up an important new corridor for the US military, is to be officially announced when President Barack Obama visits Moscow next week.
Speaking separately, a Kremlin official confirmed a deal was on the table but suggested it referred to weapons only.
The reported agreement marks a major development in US-Russian relations.
Until now Russia has restricted use of its territory for the Afghan conflict, only allowing the US to transport non-lethal supplies to Afghanistan by train, the BBC's Jon Donnison reports from Washington.
The Obama official who spoke to the BBC said that, under the new agreement, US military planes carrying weapons as well as troops would be allowed to make thousands of flights a year through Russian airspace.
In recent years, Moscow and Washington have not seen eye to eye, with disagreements over Nato expansion into Eastern Europe, Russia's conflict with Georgia and America's plans for a missile defence shield.
This new co-operation over the Afghan war could pave the way for an improvement in diplomatic relations, our correspondent says.
'No troop request'
Mr Obama is due to visit Moscow between 6 and 8 July when he and his Russian counterpart, Dmitry Medvedev, are due to discuss reducing each other's nuclear stockpile, as well as Iran and North Korea.
Sergei Prikhodko, Mr Medvedev's top foreign policy adviser, said on Friday that the two presidents planned to sign a "joint agreement on military transit to Afghanistan".
Transit would be by both land and air but mostly by air, he said.
He added that it was unclear if US soldiers or other personnel would be permitted to travel through Russian territory or airspace.
"They haven't asked us for it," he told reporters at the Kremlin.
The Kremlin adviser added:
"Today we sense a desire of our American partners to combine wide co-operation... with a readiness to breathe new life into bilateral trade and economic cooperation."
America's normal supply route to Afghanistan via Pakistan has come under repeated militant attack, and the US and Nato are keen to find alternative supply routes through Russia and the Central Asian states.
The US has about 56,000 troops in Afghanistan while its Nato partners have some 32,000 deployed.
Russia's powerful Prime Minister, Vladimir Putin, has urged the US to move relations forward by shelving plans for a missile defence shield in Europe.
He also fended off a call by Mr Obama this week for Russia to end "old Cold War approaches" to relations. Replying to the US leader's suggestion that he, Mr Putin, had one foot in the past, he said:
"We [Russians] don't stand bowlegged. We stand solidly on our own two feet and always look to the future".

Many killed in Afghan explosion

At least 25 people, including a number of children, have been killed in an explosion in central Afghanistan, officials say.
The blast in Mohammad Agha district in Logar province happened after a truck carrying timber overturned on a road.
The vehicle blew up as the authorities were trying to remove it and clear the road, local police told the BBC.
Meanwhile, Nato says two of its soldiers have been killed in a roadside bomb attack in the south.
No further details were immediately available.
A US and UK military offensive against the Taliban is underway in the troubled southern province of Helmand.
Foreign forces have sustained heavy losses in recent days in Afghanistan, including at least seven British soldiers killed in the past week.
'Truck exploded'
Logar province lies immediately to the south of Kabul and is a major centre for the Taliban insurgency.
The explosion happened on a main road from southern and eastern Afghanistan that leads into the capital, Kabul, early on Thursday.
The residents of Soark Abad village found an overturned truck with a punctured tyre and called in the police, a senior ministry of education official told the BBC.
"Two police vehicles arrived at the spot. As soon as the vehicles arrived, the truck exploded," Gen Aminullah Amarkhel said.
"The power of the explosion was so powerful that it shattered the glasses of nearby houses and scattered wood, debris and other things around. A lot of people working in the farms also got hurt."
Fifty-year-old Mohammad Sarwar, who was at the scene at the time of the blast, described the force of the explosion to the BBC.
"A loud explosion threw me several metres away. All I heard was cries and shouts of people, especially children, asking for help," Mr Sarwar said.
Gen Amarkhel said that based on the evidence about the kind of explosives in the blast, officials believed that this was a well-organised attack by insurgents.
Local police officials said that the explosives were possibly intended for an attack in Kabul.
Authorities had earlier told the BBC that it was not clear whether insurgents were responsible for the explosion.
Four of the dead were police officers but the rest were civilians including many children, police authorities in Mohammad Agha told the BBC.
The BBC's Bilal Sarwary says that the key Kabul-Gardez highway that connects Kabul with south-eastern Afghanistan passes through Logar province and Taliban and al-Qaeda militants have targeted Afghan and international forces there before.
Afghan intelligence officials believe that militants use the province to smuggle weapons and fighters in to the Afghan capita

Pakistan petrol tax row continues

A lawyer has challenged in court the new petrol levy imposed by Pakistan's government on Thursday.
Advocate Shoaib Shahid argued that under the constitution Pakistan's president has no powers to impose taxes through an ordinance.
Correspondents say it is the latest move in a mounting row over oil prices.
On Thursday Pakistan introduced an ordinance imposing a petrol levy after the Supreme Court cut a carbon tax imposed by parliament last month.
The Supreme Court's ruling brought down oil prices by over 10 %.
But officials said the government would lose $1.52bn because of the tax cut.
President Asif Ali Zardari's ordinance introduced on Thursday effectively returned oil prices to their previous levels.
Prior to the court order, one litre of petrol was being sold at 62.13 rupees (77 US cents) and diesel at 78 cents.
Following the court order, petrol prices on Wednesday fell to 63 cents while that of diesel fell to 66 cents.
Officials said they feared the loss of revenue as a result of the court decision would increase the budget deficit beyond the limit approved by the International Monetary Fund (IMF), which is funding the Pakistani budget.
'Controversy'
Court officials say the petition may come up for hearing on Monday.
The legal challenge has deepened the controversy over petroleum prices, the BBC's M Ilyas Khan in Islamabad says.
Oil prices - fixed on 01 July through the finance bill for the year 2009-10 - were back to previous levels on Thursday in line with the presidential ordinance.
The row has left investors shocked and consumers furious.
It has also sparked a debate on whether the judiciary can intervene in legislative matters of parliament and aspects of the core financial policy through which the executive runs the affairs of the state., our correspondent says
The government in Pakistan is often criticised for relying heavily on indirect taxes which are easy to collect but are a burden on the poor.