OFFICIAL INFORMAL NUMBER 137 -0302)

C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 001839 SIPDIS OFFICIAL INFORMAL DEPT FOR SA/INS FROM AMBASSADOR WILLS E.O. 12958: DECL: 10-03-12 TAGS: AMGT CE LTTE SUBJECT: OFFICIAL INFORMAL NUMBER 137 -0302) CLASSIFIED BY DCM LEWIS AMSELEM. REASONS 1.5, B,D. CONTENTS: TREASURY/AID ASSESSMENT READOUT OTHER ASSESSMENTS DEMINING IN LTTE AREAS CAMBODIA'S COLOMBO PLAN DUES TREASURY/AID ASSESSMENT READOUT -------------- ¶1. (U) The joint Treasury/AID team had a tremendously successful one-week visit here last month. It was packed with meetings from early morning into each evening. Even though it was an office director (and below) level team, we had no problems getting meetings with numerous Ministers (Finance, Economic Reform, Labor and the Central Bank Governor),who were eager to discuss U.S. aid and technical assistance. We in the mission, for our part, are very happy with how the mission went and its outcomes thus far. ¶2. (U) The main outcome of the Treasury portion of the mission will be the placement of several (at least two, maybe more) Treasury Advisors in GSL beginning probably early 2003. One would work on improving debt management and one on improving budgeting; one may also assist with the reorganization of state-run People's Bank (in big trouble because of bad loans). GSL was extremely enthusiastic about having long-term Treasury Advisors working with it to improve its performance on some of the areas key to economic reform. A follow-up mission from Treasury to scope-out the particular projects is due here week of October 14. ¶3. (U) While Treasury was here to identify specific technical assistance projects, the AID portion of the mission had a more general objective of determining what areas the AID program should focus on in the future. Based on the debrief the AID visitors gave the DCM at the end of its visit, AID is looking to focus on two themes here: facilitating economic growth island-wide and economic-integration of the North/East with the rest of the country. Some specific areas mentioned were: making industry and labor more productive; further developing the financial sector; improving agricultural productivity; helping GSL rationalize government (e.g. customs reform); helping GSL communicate its reforms better to the people; and promoting further decentralization of government functions. The visitors also mentioned that AID would be willing to look at helping Sri Lanka prepare for FTA negotiations with the U.S., should that become a near-term possibility. OTHER ASSESSMENTS -------------- ¶4. As you know, the Peace Corps hasn't properly assessed us yet. That will happen soon. The PACOM team is in country now. And the NDU team's report just reached us by email yesterday (10/2) and has been forwarded to INS and the SA FO, also via email. (FO) DEMINING IN LTTE AREAS -------------- ¶5. (C) In reply to your o/i query, we do not think the U.S. should be involved directly (repeat directly) in any demining projects that take place in LTTE-controlled areas. As you know, the LTTE is on the FTO and we do not think USG officials should be involved in interactions with the group. For the same reason, we do not think the U.S. should be involved in directly funding any local NGOs controlled by the LTTE that are doing demining. That said, we could see funding international NGOs that may want to do demining in LTTE-controlled areas, such as HALO Trust. We already have a precedent to rely on: we provide funds to CARE which does work in LTTE areas. In general, however, we think there is more than enough demining to be done in GSL-controlled areas, including projects that directly benefit Tamils and Muslims. The QRDF's project in Jaffna, for example, mainly benefits Tamils living in what is a GSL-controlled area. ¶6. (U) By the way, we are faxing you an exchange of letters between the Ambassador and Donald McCoy. McCoy, writing on behalf of the Marshall Legacy Institute (MLI), requests U.S. support for a demining project using dogs that it would like to implement in Sri Lanka. It sounded like an excellent idea to us and we know that MLI has done good work elsewhere. Perry Baltimore, MLI's president, is set to visit Sri Lanka in November and we will meet with him. He may call SA/INS and Pat Patierno in PM/HDP for a briefing before he departs the U.S. (POL) CAMBODIA'S COLOMBO PLAN DUES -------------- ¶7. (U) During the most recent Colombo Plan meeting, Cambodia's request to be exempt from the USD 14,500 annual dues was raised again. A motion was passed to postpone making a decision on the matter until the April 14-16, 2003, Consultative Committee Meeting in Tehran. As the issue comes up, we'll continue to insist that the Khmers pay up, per the previous guidance we received from the Department. By the way, has anyone had a chance to review our action request re participation in the Tehran meeting, which was sent way back in July (Colombo 1412)? WILLS