COLOMBO, Feb 9 (Reuters) – Sri Lanka’s president has dissolved parliament before legislative elections on April 8, a senior government official said on Tuesday, a day after a leading opposition figure was arrested on military offences. The legislative poll will follow last month’s presidential election, in which incumbent Mahinda Rajapaksa beat former army commander General Sarath Fonseka by a landslide. [ID:nSGE6180DY] "The elections will be held on April 8 and the new parliament will convene on April 22," Chandrapala Liyanage, a media officer at the president’s office told Reuters. Parliament completes its six-year term on April 22. After losing the presidential poll, Fonseka accused his former commander-in-chief of vote-rigging, vowing to challenge the results in court and stand for parliament. Troops arrested Fonseka, who quit the army in November to enter the presidential race, and the government said he would be court-martialled on charges of conspiring against the president. Under Sri Lankan military law, the armed forces can arrest and try personnel who have left service for up to six months after their departure, defence spokesman Keheliya Rambukwella told a news conference. "Still investigations are going on and information is emerging from the investigations," he said. TAMIL TIGERS’ DEFEAT Sri Lanka’s Government Information Department on Tuesday said Fonseka’s comments to reporters, quoted by the BBC, that he would testify in a war crimes probe proved his disloyalty to the troops he led to defeat the Tamil Tiger rebels and end a 25-year war. "This report of BBC confirms beyond doubt that the retired general was hell-bent on betraying the gallant armed forces of Sri Lanka who saved the nation from the most ruthless terrorist group in the world," the statement said. Opposition politicians who backed Fonseka’s election bid condemned his arrest, and vowed to seek legal redress. "To all of us it is evident that this is a government which is not simply dictatorial but fascist and they are all out to humiliate him, harass him and go on a journey of vendetta," Sri Lanka Muslim Congress leader Rauff Hakeem told reporters. The general had stood side-by-side with Rajapaksa in May after the defeat of Tamil Tiger rebels, but fell out later over what he said were false accusations of planning a coup. He also complained a promotion had sidelined him by stripping his powers. He then became the common candidate of several weakened opposition parties with divergent ideologies, who united solely for the purpose of beating Rajapaksa. Some of the parties had earlier criticised him sharply for his conduct of the war.[ID:nSGE61809X] The campaign turned bitter and personal, with Fonseka and Rajapaksa trading allegations of corruption and misconduct. (Writing by Bryson Hull; Editing by Charles Dick)

COLOMBO (Reuters) – Sri Lanka’s government on Tuesday said defeated presidential candidate General Sarath Fonseka was “hell-bent” on betrayal and would be court-martialed on charges of conspiring against the president.

Fonseka lost by an 18 percentage point margin to President Mahinda Rajapaksa in a January 26 election, after which he accused his former commander-in-chief of vote-rigging, vowing to challenge the results in court and stand for parliament.

Sri Lankan troops arrested their former chief on Monday. The government said the general, who quit the army in November to enter the presidential race, would be tried for conspiring with opposition politicians while still serving.

Under Sri Lankan military law, the armed forces can arrest and try personnel who have left service for up to six months after their departure, defense spokesman Keheliya Rambukwella told a press conference.

COLOMBO, Feb 9 (Reuters) – Sri Lanka’s government on Tuesday said defeated presidential candidate General Sarath Fonseka was "hell-bent" on betrayal and would be court-martialled on charges of conspiring against the president. Fonseka lost by an 18 percentage point margin to President Mahinda Rajapaksa in a Jan. 26 election, after which he accused his former commander-in-chief of vote-rigging, vowing to challenge the results in court and stand for parliament. Sri Lanka troops arrested their former chief on Monday. The government said the general, who quit the army in November to enter the presidential race, would be tried for conspiring with opposition politicians while still serving. [ID:SGE61809X] Sri Lanka’s Government Information Department on Tuesday said Fonseka’s comments to reporters, quoted by the BBC, that he would testify in a war crimes probe proved his disloyalty to the troops he led to defeat the Tamil Tigers rebels and end a 25-year war. "This report of BBC confirms beyond doubt that the retired general was hell-bent on betraying the gallant armed forces of Sri Lanka who save the nation from the most ruthless terrorist group in the world," the statement said. The state-run Media Centre for National Security, in a statement, said Fonseka was being investigated for "certain fraudulent acts and other military offences committed by him". It said a detailed statement would be issued later. Sri Lanka’s stock market <.CSE>, which was one of 2009’s best performers with a 125 percent return, fell 1.3 percent in early trading. It has shrugged off much of the post-election sparring, gaining steadily since Rajapaksa was proclaimed the winner. "People are still in shock," said Prashan Fernando, executive director of Acuity Stockbrokers. "But we expected a market correction and the fall cannot be attributed to Fonseka’s arrest." NO MOOD TO FORGIVE The general had stood side-by-side with Rajapaksa in May after the Tamil Tigers’ defeat, but fell out later over what he said was false accusations of planning a coup and a promotion he complained had sidelined him by stripping his powers. He then became the common candidate of several weakened opposition parties with divergent ideologies, who united solely for the purpose of beating Rajapaksa. Some of the parties had earlier criticised him sharply for his conduct of the war. "I can’t see the purpose being served because it sort of turns up the pro-Fonseka elements once again to vigorously take up his cause," said Col. R. Hariharan, an analyst and retired Indian army intelligence officer who served in Sri Lanka. "The powers that be are not in a mood to forgive." The campaign turned bitter and personal, with Fonseka and Rajapaksa trading allegations of corruption and misconduct. The government since vote-counting began has accused Fonseka, who in May was lionised as a national hero for his role in defeating the Tamil Tigers, of plotting with ex-army officers and loyalists in the army to assassinate the president in a coup. That suspicion, the government said, prompted the deployment of troops to surround the hotel where Fonseka was staying on election night. Police later raided his office and arrested at least 37 of his supporters and staff, including ex-army officers. Fourteen senior army officers were also forced to retire for openly supporting him, and 40 were transferred after the poll. Thousands of civilians were killed in the final months of the war as the army, led by Fonseka, bore down on the Tigers. The United Nations, United States and rights groups have urged some kind of accountability for possible war crimes. Sri Lanka has adamantly refused an external probe, although the president has appointed a commission to look at potential charges. Presidential commissions in Sri Lanka have a long history of taking little action, rights groups say. Amnesty International late on Monday said Fonseka’s comments showed the need for an independent probe, and said the general himself should be investigated since he was the commander in charge during the war. (Writing by Bryson Hull; Editing by Alex Richardson)

COLOMBO, Feb 3 (Reuters) – Sri Lankan President Mahinda Rajapaksa won a landslide re-election on Jan. 26, putting him firmly in charge of the Indian Ocean island nation he led to victory in a quarter-century war in May.

Following is a summary of key risks to watch in Sri Lanka:

* POLITICS

Rajapaksa is proceeding full speed ahead toward parliamentary elections due before April. After he won by a margin of 18 percent over opposition candidate General Sarath Fonseka, the opposition is fractured, demoralised and threatening protests over what it calls a stolen election. Few expect the opposition, a collection of diverse parties that unified only for the purpose of beating Rajapaksa, to succeed in challenging the result nor to stick together at the parliamentary poll. Rajapaksa is aiming to get a two-thirds majority in parliament that would give him a free hand to change the constitution to his liking and trim a cabinet of more than 100 ministers to a more manageable number.

COLOMBO, Feb 3 (Reuters) – Sri Lankan President Mahinda Rajapaksa won a landslide re-election on Jan. 26, putting him firmly in charge of the Indian Ocean island nation he led to victory in a quarter-century war in May. Following is a summary of key risks to watch in Sri Lanka: * POLITICS Rajapaksa is proceeding full speed ahead toward parliamentary elections due before April. After he won by a margin of 18 percent over opposition candidate General Sarath Fonseka, the opposition is fractured, demoralised and threatening protests over what it calls a stolen election. Few expect the opposition, a collection of diverse parties that unified only for the purpose of beating Rajapaksa, to succeed in challenging the result nor to stick together at the parliamentary poll. Rajapaksa is aiming to get a two-thirds majority in parliament that would give him a free hand to change the constitution to his liking and trim a cabinet of more than 100 ministers to a more manageable number. What to watch: – Whether Rajpaksa can secure two-thirds majority. This would be broadly positive for markets because it would allow decisive policymaking. He is likely to make overtures to some opposition parties to secure this. – The types of parties Rajapaksa keeps in his rejigged coalition, should he win. That will to a large degree show the types of policies he will follow. – How the government deals with a coup plot it says Fonseka’s supporters tried to hatch, or any large protests that materialise. If it acts with too heavy a hand, it risks some backlash at home, plus further damage to international ties. * FISCAL REFORM AND MANAGEMENT Although foreign direct investment into Sri Lanka has picked up now the war is over, investors say there are plenty of reforms that need to be made on both the macro- and microeconomic levels — in particular reducing the corporate tax rate and the bureaucracy for starting a business — before it starts to gather steam. Sri Lanka has vowed to bring down its budget deficit to 6 percent in 2010 under targets specified in a $2.6 billion International Monetary Fund (IMF) loan. What to watch: — Any sign of an erosion in fiscal discipline. Credit rating agencies say adherence to the IMF plan is crucial for international investor confidence in Sri Lanka. — Progress in efforts to raise revenue collection or rein in public-sector spending. Rajapaksa pledged pay raises to public employees during the election. How he pays for this will be a good indicator of what tack his government will take. — The official full-year 2009 budget deficit numbers. They will be the first big measure of how well Sri Lanka is doing against IMF targets. * THE RUPEE CURRENCY AND INFLATION Under Central Bank Governor Ajith Nivard Cabraal, inflation has fallen from more than 28 percent in 2008 to single digits. He expects it to stay there for the rest of the year. But it has been rising for five straight months and hit 6.5 percent in January. The governor says he is willing to tighten monetary policy to keep it in check, after loosening policy last year to spur private-sector credit growth. Cabraal has also said he expects to revoke most of Sri Lanka’s strict currency controls to spur investment and allow the rupee <.LKR> to float more freely, but appeared to back off during the election. What to watch: — Any monetary tightening, and the corresponding reaction of both the inflation rate and the rate of credit growth. Both will give a clearer picture of overall economic health. — Any move to relax the currency controls, and the subsequent reaction of the rupee’s exchange rate. * INTERNATIONAL RELATIONS Western countries, and groups in the Tamil diaspora, are pressing for some kind of accountability for thousands of civilian deaths at the end of the war. Sri Lanka is adamant its soldiers did not violate international law, and that for now has cost it enhanced European Union trade preferences known as GSP+ worth $100 million a year. However, Sri Lanka’s willingness to turn to countries like China and Iran appears to have prompted the West to take a softer line. India remains a steadfast ally, and its influence is likely to help that trend continue. What to watch: — Whether Sri Lanka can reach a deal with EU to get GSP+ back. The reinstatement of the trade concession would help Sri Lanka’s garment industry, its top foreign exchange earner. — The extent of Western redevelopment aid, versus that from India and China, largest donors since the end of the war so far. * TAMIL RELATIONS The government says 70 percent of more than 280,000 internally displaced people who fled the end of the war against the Tamil Tigers have been relocated from the main refugee camps, but most are still in transit facilities while de-mining work is being completed. This has done nothing to help smooth over the strained relations between the Tamil minority, and the Sinhalese majority to which Rajapaksa belongs. Those were the root of the conflict the Tamil Tigers waged for three decades. Key issues to watch: — Concrete steps Rajapaksa takes to address Tamil political demands, something he said he would do after elections were over. — The tack taken by Tamil parties, who now lack a cohesive plan and have softened their approach since the war’s end. (Editing by Andrew Marshall)

COLOMBO (Reuters) — Re-elected President Mahinda Rajapaksa will dissolve parliament shortly and call a legislative election, his office said on Thursday, in a move that could enable him to reshape the unwieldly coalition now backing him.

Rajapaksa won a thumping victory on Tuesday over his former army commander, General Sarath Fonseka, in the Indian Ocean island’s first nationwide election since the defeat of the separatist Tamil Tigers.

Rajapaksa had sought a new mandate to endorse his plans to develop Sri Lanka by exploiting its geographically strategic position astride air and sea lanes, rebuilding infrastructure and encouraging foreign investment and local productivity.

“(The) President is to dissolve parliament and go for a general election soon,” presidential spokesman Lucien Rajakarunanayake said.

COLOMBO, Jan 28 (Reuters) — Re-elected President Mahinda Rajapaksa will dissolve parliament shortly and call a legislative election, his office said on Thursday, in a move that could enable him to reshape the unwieldly coalition now backing him. Rajapaksa won a thumping victory on Tuesday over his former army commander, General Sarath Fonseka, in the Indian Ocean island’s first nationwide election since the defeat of the separatist Tamil Tigers. [ID:nSGE60Q006] [ID:nSGE60Q0KN] Rajapaksa had sought a new mandate to endorse his plans to develop Sri Lanka by exploiting its geographically strategic position astride air and sea lanes, rebuilding infrastructure and encouraging foreign investment and local productivity. [ID:nSGE5BL0G7] "(The) President is to dissolve parliament and go for a general election soon," presidential spokesman Lucien Rajakarunanayake said. He declined to say precisely when the president would dissolve parliament, which is due to end its term in April. As president, Rajapaksa holds the reins of a $40 billion economy that has enjoyed a partial peace dividend, and is on the path to recovery with big Chinese and Indian investments into infrastructure and plans to put $4 billion into development. Development of local industry, business and agriculture are what Rajapaksa says will be the key to healing Sri Lanka’s divisions, by building a national identity and reconnecting the formerly Tiger-held areas to the rest of the country. Disproving forecasts that Rajapaksa and former general Fonseka would race to a photo finish, the veteran politician won 57.8 percent of 10.4 million votes cast against 40.2 for Fonseka. The Colombo Stock Exchange <.CSE>, which dipped 2 percent in early Thursday trading, closed up 1.28 percent at a fresh record high. [ID:SGE60R0H6] It rose 125 percent in 2009, as post-war optimism made it one of the year’s best performers. DEFEATED RIVAL CRIES FOUL Fonseka has cried foul over alleged vote rigging and what he said was an attempt to arrest him after army soldiers surrounded the luxury hotel where he was staying in the capital Colombo. The military said he may have been planning a coup. "Only stupid people like them want to plan a coup in a hotel close to the president’s house. We are not fools like them,", Fonseka told reporters. He complained his security detail had been removed. The military said his security had been withdrawn because he was no longer a presidential candidate, meaning he was no longer entitled to it. Fonseka walked out of the hotel unhindered on Wednesday evening and vowed to challenge the results in court, but few expect that to get far given the president’s huge victory margin. Mangala Smaraweera, an opposition legislator who engineered Fonseka’s candidacy, said ballots that used to be rigged by force were now rigged by "showing money to counting agents". The United States in a statement praised the conduct of the election, which many feared would be violent after a bloody campaign in which five people died. Observers noted few irregularities, and no major violence. The U.S. statement cited a few violations and urged they be investigated but congratulated Sri Lanka for turnout that exceeded 70 percent and the president for his win. Banking that his post-war popularity would secure him a new six-year term, Rajapaksa gambled and called the election two years before his term was set to expire. Aides say the president wants to reconfigure his coalition, which has produced a cabinet with more than 100 ministers and has in the past kept him from achieving some of his political goals. One area where Rajapaksa has been criticised for lack of progress is political reconciliation with the Tamil ethnic minority since the war’s end. The president said on Wednesday night he would begin that process after the parliamentary poll. (Additional reporting by Shihar Aneez; Writing by Bryson Hull; Editing by Jerry Norton and Ron Popeski)

COLOMBO (Reuters) – Sri Lankan President Mahinda Rajapaksa on Wednesday won his second war in a year, crushing an electoral challenge by the former army chief who broke ranks with him just months after they claimed victory over Tamil rebels.

The veteran politician, 64, defied forecasts he would race to a photo finish with General Sarath Fonseka, turning in a 57.8 percent tally against the popular soldier’s 40.2 percent.

In doing so, Rajapaksa may have shown his neophyte challenger that four decades of battlefield experience were no match for his 40 years of practice in political combat. It was not the first time an enemy may have underestimated him.

Tamil Tiger separatist leader Vellupillai Prabhakaran may have brought about his own end by helping bring Rajapaksa to power. He ordered Tamils to boycott the 2005 election, which deprived Rajapaksa’s competitor Ranil Wickremesinghe of victory.

COLOMBO, Jan 27 (Reuters) – Sri Lankan President Mahinda Rajapaksa on Wednesday won his second war in a year, crushing an electoral challenge by the former army chief who broke ranks with him just months after they claimed victory over Tamil rebels. The veteran politician, 64, defied forecasts he would race to a photo finish with General Sarath Fonseka, turning in a 57.8 percent tally against the popular soldier’s 40.2 percent. In doing so, Rajapaksa may have shown his neophyte challenger that four decades of battlefield experience were no match for his 40 years of practice in political combat. It was not the first time an enemy may have underestimated him. Tamil Tiger separatist leader Vellupillai Prabhakaran may have brought about his own end by helping bring Rajapaksa to power. He ordered Tamils to boycott the 2005 election, which deprived Rajapaksa’s competitor Ranil Wickremesinghe of victory. Rajapaksa became Sri Lanka’s youngest-ever legislator in 1970 at the age of 24, and has served as both labour minister and prime minister. Although Rajapaksa is comfortable moving among the people, quick with a joke or a pat on the back, he has displayed steely resolve at times and the ability to beat back opponents. He worked quickly to sideline Fonseka after the war, creating a new job for him in which he had no troops at his command after suspecting the general may attempt a coup or otherwise try to subvert his vast powers. Those factors led Fonseka to quit and enter the poll race, bringing his warrior’s swagger onto the campaign trail, accusing the president of corruption and nepotism. Rajapaksa fought back and in the end humiliated the general who in May triumphantly announced that Sri Lanka’s entire land mass was under government control for the first time in 25 years, cornering him on Wednesday with soldiers inside a Colombo hotel. A lawyer by trade who habitually wears the traditional dress of white knee-length shirt, sarong and a red sash, Rajapaksa hails from the southern coastal district of Hambantota, where Chinese companies are now building a massive port. While Fonseka and the rest of the armed forces fought to crush the rebels, Rajapaksa stood firm against international pressure and demonstrated deftness at using Sri Lanka’s non-aligned status to play allies off each other. Defiance against Western calls for war crimes probes cost Sri Lanka a European Union trade concession that would have boosted the country’s garment business, but Rajapaksa readily turned towards India and China and other nations for support. Since the end of the war, Rajapaksa has focused on a development drive, reducing a budget deficit and increasing investment to revive the $40 billion economy. Despite his efforts to implement a political solution for a sustainable peace in Sri Lanka, extreme elements in his coalition resisted the move before Rajapaksa decided to go for a fresh mandate, promising to give a solution after the poll. (Editing by Bryson Hull and Paul Tait)

COLOMBO, Jan 26 (Reuters) – Two former allies who led Sri Lanka to victory in a 25-year civil war duelled at the ballot box on Tuesday after a bitter, personal campaign for the country’s first peacetime presidential vote in nearly three decades. More than 14 million people registered to vote, and polling began amid heavy security and fears that election day would be as bloody as a campaign in which five people were killed and more than 800 violent incidents were recorded. President Mahinda Rajapaksa and General Sarath Fonseka are the rivals in a close contest in which the defeat of the Liberation Tigers of Tamil Eelam (LTTE) in May has figured heavily in campaigning, with both claiming credit. Rajapaksa as commander-in-chief and Fonseka as the army commander stood side-by-side after the historic victory in May, but within months split over what the general said was his sidelining by the president and false coup plot accusations. Despite the sound of blasts before polling in the northern city of Jaffna, the cultural centre of Sri Lanka’s Tamil ethnic minority, and a petrol bomb attack, polling was smooth, election observers said. No one was wounded in those attacks. Human Rights Minister Mahinda Samarasinghe blamed the opposition for setting off the blasts. "We were alerted yesterday to the plan of the opposition to create this kind of situation, so they could tell the international community the government was doing this to intimidate the people in Jaffna," he told Reuters. A motley coalition of opposition parties with divergent ideologies have united to support Fonseka with the sole aim of beating the incumbent, who called the vote two years early hoping to capitalize on his seemingly insuperable post-war popularity. Whoever wins will take the reins of a $40 billion economy still awaiting the full peace dividend, despite large Indian and Chinese investments into infrastructure and about $1.5 billion in foreign investment into government securities. Major investors have shied away, saying Sri Lanka first have must rein in government spending, which would in turn boost confidence in the rupee currency <LKR=>. The Colombo Stock Exchange <.CSE>, open for a half-day trading session, rose nearly 1 percent by 0600 GMT. It was one of the world’s best performing markets last year, gaining 125 percent after the war and is at record levels this year.The rupee has been mainly stable in the last year, but fell as much as 6 percent in April and May as cash reserves plunged. ———————————————————- For a graphic see here ———————————————————– HIGH COST OF LIVING More than 68,000 police and a quarter-million election officials have spread out across the Indian Ocean island, which for the first time in nearly three decades votes without the fear of suicide blasts or attacks by the Tamil Tiger separatists. "Today’s victory will be remarkable. It’s been evident with voters across the nation participating towards our victory," Rajapaksa said after voting in Medamulana, his rural district on the southern coast. "We expect a peaceful election and are getting ready to enjoy a better tomorrow." Both Rajapaksa and Fonseka have pledged to dole out costly subsidies and public sector pay rises, which economists say will make it hard for Sri Lanka to meet its cost-cutting obligations under a $2.6 billion International Monetary Fund loan. "What I expect in the future is that in the same way peace was established, the cost of living will be brought down and the unemployment problem will be solved, 51-year-old security guard Jayantha Perera told Reuters TV before casting his vote. Since the main contenders are expected to split the Sinhalese ethnic majority’s vote bloc, about 75 percent of the nation’s 21 million people, the remaining minority vote could become decisive if the Sinhalese division is even. Tamils make up about 12 percent and for the first time in decades will be able to vote without the LTTE dictating their choice. Muslims and so-called Estate Tamils, brought from India to work on tea plantations under British colonial rule, will also figure in the minority vote bloc. (Additional reporting by Ranga Sirilal in Colombo, Shihar Aneez in Medumalana, and N. Parameswaran in Jaffna; Editing by Sanjeev Miglani)