SRI LANKA: DEPUTY SECRETARY MEETS PRIME MINISTER:

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 001553 SIPDIS DEPARTMENT FOR S, D, P, SA; NSC FOR MILLARD; CINCPAC FOR POLAD E.O. 12958: DECL: 08/22/2007 TAGS: EAID PGOV PINS PREL PTER CE ECONOMICS LTTE SUBJECT: SRI LANKA: DEPUTY SECRETARY MEETS PRIME MINISTER: WAR, PEACE, TERRORISM, DEVELOPMENT Classified By: Ambassador E. Ashley Wills; reasons 1.5 (b,d) ¶1. (C) SUMMARY: In a very cordial half-hour August 22 meeting (followed by a press conference and a working dinner) with Sri Lankan Prime Minister Wickremesinghe, Deputy Secretary Armitage stressed US support for the GSL's ongoing SIPDIS efforts to reach a negotiated solution to Sri Lanka's 20-year civil war. The Deputy Secretary noted that his visit to Sri Lanka, coming less than a month after the PM's meeting with President Bush in Washington, should serve as a visible manifestation of the strength of US support for the still-fledgling peace process. The Deputy Secretary, who had visited the war-torn Jaffna peninsula earlier in the day, told the PM that while the US could not provide the answer for Sri Lanka's problems, and could not serve as an "honest broker" between the GSL and the terrorist LTTE, the US could help Sri Lanka realize its tremendous potential. He urged the PM to continue to make efforts to get along with President Kumaratunga to ensure that the peace process did not break down because of discord within the GSL. In response to the PM's urging, the Deputy Secretary promised to raise with the Japanese the possibility of a more energetic "friends of Sri Lanka" aid donor group that would help Sri Lanka raise the estimated $500 million it will need over the next five years to address the rehabilitation, reconstruction, and restoration of the war-impacted northern and eastern regions of the island. The PM provided a relatively upbeat assessment of Sri Lanka's economy in the coming year; the Deputy Secretary noted that economic growth would enable Sri Lanka SIPDIS to raise internally some of the money it needs to rebuild the nation. The PM expressed great satisfaction with his visit to Washington last month, saying the meeting with President Bush had helped shore up support for the peace process among the majority Sinhalese, many of whom remain skeptical about the possibility of peace with the Tamil LTTE. He expressed appreciation for the positive role played by the United States in Sri Lanka, and hoped for ever closer relations between the two countries. END SUMMARY ¶2. (U) Deputy Secretary of State Armitage made an August 22 
call on Prime Minister Ranil Wickremesinghe in the PM's official residence. In the cordial thirty-minute meeting, the Prime Minister had with him Minister for Economic Reform Milinda Moragoda (Amcit),MFA Foreign Secretary Nihal Rodrigo, and the PM's Secretary Bradman Weerakoon. Accompanying the Deputy Secretary were the Ambassador, NSC Senior Director for Asian Affairs James Moriarity, SA PDAS Michele Sison, Special Assistant Kara Bue, and Colombo DCM (notetaker). ¶3. (C) The Deputy Secretary opened the conversation by discussing his trip earlier in the day to war-torn Jaffna city and peninsula (septel). He described the devastation he had seen and related some of the conversations he had with local residents. He noted the irony that some of the interlocutors criticized the GSL on human rights grounds, but apparently had no fear of doing so in the presence of heavily armed Sri Lanka troops and senior GSL officials, including Minister Moragoda. He said, however, all of the persons with whom he spoke in Jaffna gave the PM high marks for his efforts to end the war, even if they had doubts that he could succeed in convincing the Sinhalese majority to come to terms with the Tamil minority. The PM recalled his own visit to Jaffna in which SA A/S Rocca accompanied him, saying that he had received a very warm welcome from the Tamils there, who clearly want the 20-year war to end. He said that the human rights situation has improved markedly but that the GSL still had not provided the people of Jaffna with a tangible "peace dividend" (as noted below, the Sri Lankans would return to this topic.) He noted, for example, that landmines -- an estimated two million mines -- remain a major threat to the population in the north and inhibit the ability of people to resume normal lives. ¶4. (C) The Deputy Secretary expressed great satisfaction with the PM's visit to Washington last month and, especially, his meeting with President Bush. He noted that the US bureaucracy has moved very quickly in response to GSL requests for assistance in the areas of intelligence, security, trade, investment, and aid. He noted that his own visit, coming less than a month after the PM's meeting with President Bush, should serve as a strong manifestation of US support for the PM's efforts to bring peace to Sri Lanka. Over the coming months Sri Lanka will receive the visits of US assessment teams to look at how the US can assist Sri Lanka in the areas mentioned by the GSL as needing help. He noted that the intelligence team (septel) and a team from the Peace Corps are in the country. He also commented that the US has a demining team in Sri Lanka which has removed a considerable number of mines and UXO in the Jaffna peninsula and continued to do so -- the Deputy Secretary had visited a site near Jaffna where the team works. He stressed that the US could not provide the answer for Sri Lanka's problems, and could not serve as an "honest broker" between the GSL and the terrorist LTTE (as some people wanted),but the US could help Sri Lanka realize its tremendous potential. ¶5. (C) The Deputy Secretary asked the PM how the visit to Washington had played in Sri Lanka. The PM laughed and said "it helped me politically." He went on to explain that certain sectors in the Sinhalese majority south have great reservations about negotiating with the LTTE. They view with great satisfaction the fact that the USG has the LTTE on its list of FTOs. Hence, the PM noted, to have the US, known for being anti-terrorist, support his peace efforts gives him political coverage with the Sinhalese doubters. ¶6. (C) Moragoda interjected that for the peace process to continue to receive support, or at least not encounter serious opposition, the GSL needs to show a "peace dividend." The PM hopes to launch an international effort to raise $500 million over the next five years for the rebuilding of the war-affected areas. Moragoda noted that Japan continues to be the biggest donor to Sri Lanka and said that the GSL needs US help to convince the Japanese to lead an international effort ("Friends of Sri Lanka") to raise the funds. Moragoda commented that the donor group has not had a formal meeting in some time, and thought one could prove helpful. He remarked that the Indians have provided Sri Lanka some credits and seemed willing to do more. He hoped the US could galvanize donors to greater generosity. He also stressed that an FTA with the US could serve as a key component in the GSL's economic recovery strategy. The PM said that Sri Lanka needed a great deal of technical expertise to modernize its economy and governmental structure. Despite that and a drought earlier this year which affected food production and power generation, the GSL hoped to have economic growth of about 3 percent this year as compared to a negative 1.3 percent last year. The PM said he hoped to get Sri Lanka back to a growth rate of about 9 percent/year. ¶7. (C) The Deputy Secretary replied that the Bush Administration had reversed the prior decision to close the AID mission in Colombo, and sought to increase funding for AID in Sri Lanka. He and the Ambassador also noted that the Administration's "Millennium Challenge Account" could potentially prove very beneficial to Sri Lanka, although no decisions have yet been made. He promised to talk to the Japanese during his forthcoming visit to Tokyo and said he would relay their response to the GSL via the Ambassador. He commented that if the Sri Lanka can get a growth rate of 3 percent, not to mention 9 percent, it could begin to provide funds for rebuilding from its own sources. Deputy Secretary Armitage and the Ambassador said that while an FTA might be a ways off, the US and Sri Lanka can use the recently-signed TIFA to provide the framework for negotiating a mutually satisfactory trade arrangement. ¶8. (C) Turning to the subject of India, the Deputy Secretary said that the Indians have expressed great interest in what "the US is doing in Sri Lanka" and seemed to pay considerable attention to his visit. PDAS Sison noted that the Indian Embassy in Washington had been very interested in the PM's meeting with President Bush. Moragoda said the Indians remain a bit "worried" by the greater US profile in Sri Lanka but that this seems to be dissipating. In response to the Deputy Secretary's question, the Foreign Secretary provided an SIPDIS upbeat account of the recent SAARC meeting he attended. He said Indian and Pakistani representatives had a brief but cordial encounter. ¶9. (C) Deputy Secretary Armitage asked about the PM's relations with President Kumaratunga. He stated that "cohabitation" is the only real option if the peace process is going to work, and the peace process "is the only game in town." The PM agreed, but related his difficulties with the President who seems lukewarm about the peace process. He described a letter he had just received from her highly critical of the GSL and essentially accusing it of kowtowing to the LTTE. The PM had decided not to reply to the President's letter. The PM said he hoped to have a private meeting with the President upon her return from the UK next week. COMMENT ¶10. (C) The Deputy Secretary's visit was clearly a big hit with the GSL -- he is the most senior USG representative to visit the country in nearly 20 years. The PM is obviously still basking in the glory of his recent visit to the US and in the notably increased official American attention to Sri Lanka's efforts to end 20 years of war and fifty years of socialist economics. The GSL has repeatedly told us that it wants even greater US involvement in Sri Lanka, and this attitude came through clearly throughout the Deputy Secretary's visit. SIPDIS ¶11. (C) The PM clearly worries about the unpredictable President Kumaratunga, who although suffering some significant political reverses in the past few months remains a formidable political force in the Sinhalese south. He also worries about the state of Sri Lanka's economy and the need to show a "peace dividend." The Deputy Secretary's visit has provided the GSL a needed expression of international support as it plans to enter into formal dialogue with the LTTE next month in Thailand and should help firm up the GSL's resolve to take on the long and difficult task of bringing decades of communal warfare and terrorism to an end. Wills