KILINOCHCHI, Sri Lanka (Reuters) - The war's over, but men with guns remain in Sri Lanka's former battle zone in the north, where recovery is wobbling along despite few basic services and too little lending.
Small, green shoots of Sri Lanka's recovery from a 25-year war are beginning to show in the form of microfinance loans for people displaced by the climax of the battle between the government and the Liberation Tigers of Tamil Eelam (LTTE).
The LTTE ruled the northern and eastern portions of the Indian Ocean island, nearly a fifth of its land mass, until government troops routed them in a final battle in May 2009. Nearly 300,000 people were displaced in the fighting.
President Mahinda Rajapaksa's government has largely ignored external calls for a "political solution" to heal the ethnic divide that fuelled the war in favor of an economic revival in the war zone he has dubbed the "Northern Spring".
That, he says, will help unite the country's Tamil minority and Sinhalese majority.
"I'm satisfied with the present situation, but we are going through hardships with a lack of basic facilities like sanitary facilities, water and shelter," rice farmer Michael George, 36, told Reuters after receiving a 100,000 rupee ($888.70) loan to cultivate his paddies.
A key to the "Northern Spring" has been an aggressive central bank push to get new bank branches opened in the main cities of the north, Jaffna and Kilinochchi.
The LTTE had declared the latter the capital of the separate nation it wanted to create for minority Tamils.
The primary thrust, bank officials have said, is to boost lending and mobilise deposits in a region where gold jewelry has long been a favoured currency of savings.
"We need to expand the credit flow to the people as we see very poor credit flow despite a high deposit level," central bank Deputy Governor K.G.D.D. Dheerasinghe told Reuters during a visit to open several new branches in Jaffna and Kilinochchi.
One thing hasn't changed: uniformed men with guns rule the streets. Now, army men in standard camouflage have replaced Tiger fighters with their distinctive tiger-striped uniforms.
"I don't want my sons to stay in Kilinochchi," farmer N. Awaratne, 53, told Reuters. "Earlier, we had LTTE problems. Now we have army problems. We don't have anything, our house and all our property are destroyed."
One of his sons remains in army custody, after escaping from the LTTE's forcible recruitment, Awaratne said. Most of the thousands of people in army custody are undergoing job training and rehabilitation to return home.
But home for many has nothing left.
"There are no facilities available to us," Rajeswary, a 43-year-old mother of three told Reuters. Her right leg was blown off in shelling in the final battle of the war during which every member of her family was hurt, she said.
"All our valuables burnt and when we returned, our house was damaged and now we live in a hut," she said. "We don't want food or money, but we'd like it if somebody could help us to make our living by providing cattle or goats or hens."
(Writing by Bryson Hull; Editing by Miral Fahmy)
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