Recent air raids by the LTTE’s aerial wing (see related Intelligence Report) indicate an emerging focus on military targets with secondary or collateral economic value dimensions. The apparent rationale of recent attacks suggests the LTTE is seeking targets with a ‘dual-use’ or ‘dual-effect’ nature in terms of their military and economic roles. This targeting preference likely indicates a growing LTTE strategic focus on damaging Sri Lanka’s economy through attacks against economic targets in order to weaken the government.
• The LTTE’s debut air raid in March 2007 targeted a Sri Lankan air base adjacent to the international airport—the focal point of the nation’s tourist and international business traveler traffic.
• The most recent LTTE air attack targeted oil facilities north of Colombo that were thought to be providing fuel to the military. The raid also hit facilities of Royal Dutch Shell, prompting the Anglo-Dutch oil company to temporarily close its main storage facility.
The apparent targeting rationales for these attacks suggest that the LTTE sought primarily to strike military and energy infrastructure targets. A possible secondary goal of the attacks was to collaterally threaten Sri Lanka’s commercial airline traffic and foreign companies with existing or planned facilities or investments in Sri Lanka. Such attack goals may be intended to damage Sri Lanka’s tourist, investment, and energy/infrastructure sectors compelling them to abandon the country. An exodus of tourists and foreign business would severely damage the national economy, and weaken and isolate the government.
In risking such precious aerial military assets the LTTE seemed to carefully select various targets to maximize their potential ‘payoff’ in terms of their strategic impact against the military, government, and economy.
The LTTE is unlikely to target outright foreign economic interests, particularly in attacks likely to cause severe casualties. Such attacks would run counter to the group’s strategic and operational interests in:
• diverting guerrilla resources from the LTTE’s main strategic adversary and targets in the form of the Sri Lankan government and military; and
• likely provoking international condemnation and crackdowns on Tamil diaspora communities globally that provide operational and financial support to the Tigers.
However, foreign firms are likely to be threatened by LTTE attacks as secondary or collateral economic targets, particularly those involved with the Sri Lankan government, military, infrastructure, investment, or tourism sectors.
Air Attacks Damaging Economy, Threaten Foreign Firms
The deteriorating environment of all-out war between the government and the LTTE in Sri Lanka, and the terrorizing effects of LTTE attacks against a range of government, infrastructure, military, and economic targets across the island, is taking its toll on the country’s economy. Sri Lanka’s rupee slipped to a new low, markets have been jittery, and stocks fell last week, just days after the most recent LTTE air raid.
The government-LTTE fighting and recent LTTE air attacks have hit the country’s tourism sector particularly hard, and will pose a significant threat to international business travel and investments in the near to mid-term. According to the Economist, “with over 500,000 arrivals a year, yielding an income of US $410 million, tourism was Sri Lanka’s third-biggest dollar earner last year.” However, intensified fighting between the LTTE and Sri Lankan military has weakened the country’s tourism sector, decreasing tourism arrivals by one third compared to levels this time last year. Western nations have advised their citizens to avoid non-essential travel to Sri Lanka due to the security situation. Travel agents cited by Agence France-Presse have reported heavy cancellations of airline and holiday bookings to the country.
In response to the Air Tiger threat, Sri Lanka’s international airport has shut down its night operations—the time when the LTTE air wing has conducted its previous raids—and a number of major commercial carriers serving the country have significantly altered their operations.
• Sri Lankan Airlines, Emirates, and Singapore Airlines had already halted night flights; and
• Hong Kong’s Cathay Pacific has totally suspended its services to Sri Lanka.
Sri Lankan Airlines alone accounts for 60 to 70 percent of passenger and cargo traffic through the airport.
The LTTE has targeted airlines before. In 2001, an LTTE attack against the airport complex hit half the national airline fleet.
FORECAST: Continued Threat to Economic Targets, Tourist Sector, Foreign Business Interests
The LTTE has threatened to launch further aerial attacks. While foreign business and economic firms and interests are unlikely to be the primary or exclusive target of LTTE attacks, the apparent increased LTTE focus on military or government targets with a ‘secondary’ or ‘collateral’ economic value does increase the overall threat to international economic interests and travel within Sri Lanka in the near-term.
