At the third round of negotiations held in early December in Norway, the Sri Lankan government and the Liberation Tigers of Tamil Eelam (LTTE) indicated the nature of the political solution being worked out to end the country’s 19-year civil war.

In a joint statement issued on December 5 at the end of four days of talks, the two sides agreed to explore “a federal structure within a united Sri Lanka” as a solution to the issue of self-determination in “areas of historical habitation of the Tamil-speaking peoples”. For the LTTE, the declaration marks the formal abandonment of its longstanding demand for a separate, independent state of Tamil Eelam in the north and east of the island.

Chief government negotiator G.L. Peiris described the decision as a “paradigm shift”. He said “the historic and unprecedented breakthrough... was the explicit identification of a federal structure which will be the basis on which the political structure will be evolved”.

The announcement was immediately hailed in Washington and London. US State Department spokesman Phillip Reeker said it was “extremely positive” that “the two sides have made progress in discussing political issues.” Similarly UK Foreign Secretary Mike O’Brien said he was “encouraged” by the progress at the talks.

Both sides have been under pressure from the major powers to end the war, which is an obstacle to investment in Sri Lanka and has the potential to further destabilise the Indian subcontinent. At an aid conference in Oslo in the week prior to the talks, US Deputy Secretary of State Richard Armitage pointedly insisted that the LTTE completely abandon the armed struggle and accept the sovereignty of Sri Lanka.

The LTTE chief negotiator Anton Balasingham was at pains to offer assurances. He told a press conference after the talks: “This model (the federal structure)... has to be properly conceptualised within an appropriate constitutional form.” But he described as “distorted” a report that appeared in the Colombo-based Island claiming that he advocated the establishment of two states in a recent speech in London. Following the talks, the LTTE dispatched a delegation to Switzerland to study its federal system.

The two sides are now pushing for a rapid end to the war, in part because of the country’s deteriorating economy. Prime Minister Ranil Wickremesinghe toured Japan last week to prepare for another summit of donors to be held in Tokyo next May. The next round of peace talks is scheduled to take place in Thailand in January, where it is expected both sides will discuss humanitarian issues as the basis for a joint appeal in Tokyo for further rehabilitation funds.

In the past, the LTTE sought the support of the major powers for the establishment of an independent capitalist statelet in which the Tamil elite would collaborate in the exploitation of the working class. Having been rebuffed by the US and European powers, the LTTE is now seeking to function as a junior partner of the Colombo government in transforming the war-ravaged north and east into a cheap labour platform for international capital.

Whatever its final form, a “federal structure” will resolve none of the legitimate grievances of the Tamil masses over decades of systematic discrimination by the Sinhala-dominated political establishment in Colombo. Like previous proposals for regional autonomy, the new setup will be a power-sharing arrangement between the country’s Sinhala, Tamil and Muslim elites that will entrench the existing communal organisations and sow the seeds for future ethnic tensions and conflict.

On behalf of the government, Peiris compared the proposed federal solution with a constitutional package that President Chandrika Kumaratunga and her Peoples Alliance (PA) attempted to enact in 2000. The constitutional amendments failed to achieve the required two-thirds majority after Wickremesinghe, then leader of the opposition, joined Sinhala extremist groups in denouncing the changes. Now Wickremesinghe, who won last year’s national election, is attempting to carry out similar measures and faces opposition from Sinhala chauvinist organisations that are accusing him of betrayal.

Extremist Sinhala organisations such as Sihala Urumaya, the Janatha Vimukthi Peramuna (JVP) and the All Ceylon Buddhist Congress have denounced the Oslo agreement as a betrayal of the nation, saying it represents the LTTE’s first step towards establishing a separate state.

Both the UNF and opposition PA are deeply mired in Sinhala chauvinism and are therefore highly susceptible to such pressure. Responding to criticisms, Defence Minister Tilak Marapona recently declared: “The ceasefire doesn’t mean dropping our guard. We should be more vigilant.” Following reports that the LTTE was setting up its own courts, he insisted that the government would be running the legal system, saying: “The LTTE institutions, wherever they are located, are unconstitutional and illegal.”

The Sri Lanka Freedom Party (SLFP), the leading party in the opposition PA, sent a delegation to India in early December to sound out possible allies in opposing any deal reached between the government and the LTTE. While the Indian government has been generally supportive of the talks, there are concerns in ruling circles over the political impact, particularly in southern India, of any peace deal that enhances the LTTE’s standing.

India formally banned the LTTE following the assassination of Prime Minister Rajiv Gandhi in 1991, allegedly at the hands of an LTTE suicide bomber. The SLFP delegation met with the Indian Prime Minister Atal Behari Vajpayee, Foreign Minister Yaswant Sinha and opposition leader Sonia Gandhi, Rajiv’s widow, as well as Tamil Nadu Chief Minister Jayalalitha, who insists that LTTE leader Velupillai Prabhakaran face trial over the murder.

During a visit to Sri Lanka last week, Indian Foreign Secretary Kanwal Sibal reportedly expressed concerns over the Sri Lankan government’s decision to allow the LTTE to import high-powered broadcasting equipment to enable its programs to reach a Tamil audience in Tamil Nadu and other southern Indian states.

Considerable international pressure is being exerted on Colombo to conclude a deal with the LTTE. But as details of the federal structure are worked out, the opposition of chauvinist groups is certain to intensify, compounding the political difficulties confronting the Wickremesinghe government.