Identifier
Created
Classification
Origin
02COLOMBO1908
2002-10-11 05:48:00
CONFIDENTIAL
Embassy Colombo
Cable title:  

SCENESETTER FOR DAS CAMP'S VISIT TO SRI LANKA

Tags:  ECON PGOV PREL PTER CE LTTE 
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C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 001908 

SIPDIS

FOR SOUTH ASIA BUREAU DAS CAMP FROM AMBASSADOR WILLS

E.O. 12958: DECL: 10/11/2012
TAGS: ECON PGOV PREL PTER CE LTTE
SUBJECT: SCENESETTER FOR DAS CAMP'S VISIT TO SRI LANKA

Classified By: Ambassador E. Ashley Wills, Reasons: 1.5 (b,d)


-----------------
EXECUTIVE SUMMARY
-----------------

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 001908

SIPDIS

FOR SOUTH ASIA BUREAU DAS CAMP FROM AMBASSADOR WILLS

E.O. 12958: DECL: 10/11/2012
TAGS: ECON PGOV PREL PTER CE LTTE
SUBJECT: SCENESETTER FOR DAS CAMP'S VISIT TO SRI LANKA

Classified By: Ambassador E. Ashley Wills, Reasons: 1.5 (b,d)


--------------
EXECUTIVE SUMMARY
--------------


1. (C) I want to extend a warm welcome to you on your
upcoming visit to Sri Lanka. Your visit comes at an
exciting time, with many of the positive trends we
are now observing having gained increased traction
since your December 2001 visit. A ceasefire has been in
place since December, and the government and the Tamil Tigers
just sat down for constructive face-to-face talks, which are
due to continue later this year. The situation
remains fluid, however, with the intentions of the Tamil
Tigers still unclear. The peace process could also be
undermined by domestic fissures, such as cohabitation
stresses between the PM and the President, and tensions
between the Muslim community and the LTTE. The
government is also dealing with a delicate economic
situation.


2. (C) This period of tremendous opportunity and
volatility in Sri Lanka is also a time of significant
U.S. influence. Prime Minister Wickremesinghe wants to
work closely with the U.S. Your visit will help cement
the gains made in U.S.-Sri Lankan relations by
underscoring our strong support for the peace process,
reinforcing the same message delivered here by A/S Rocca in
March and the Deputy Secretary in August.
END EXECUTIVE SUMMARY.

--------------
Status of the Peace Process
--------------


3. (C) The election of a new government in
December 2001 heralded in an exciting -- and potentially
momentous -- period in Sri Lanka. During your December 2001
visit you saw Sri Lanka in the immediate aftermath of these
tumultuous elections; now you will observe first-hand the
many positive changes those elections sparked. The United
National Front (UNF) government headed by Prime Minister Ranil
Wickremesinghe has taken an activist posture,
particularly regarding the peace process. In short
order, the government and the Liberation Tigers of Tamil

Eelam (LTTE) re-initiated the stalled Norwegian
government facilitation effort and put unilateral
ceasefires into effect in December 2001. The government
also took rapid steps to ease tensions by lifting
roadblocks and checkpoints, and ending bans on medicine
and other items entering LTTE-controlled territories.
The government's performance on human rights issues has
also been a strong one, with many fewer Tamils
complaining of mistreatment at the hands of the security
forces. (Note: There is still an appearance of
impunity in some cases that the GSL needs to do more to
grapple with, however.)


4. (C) Continuing the positive trend, the GSL and the
LTTE went on to conclude a formal ceasefire accord in
February. The accord is being monitored by the
Norwegian-run Sri Lanka Monitoring Mission (SLMM),which
has performed capably, but is thin on the ground. In a
benchmark event, the two sides met face-to-face in
Thailand, September 16-18. Before the talks took place,
the GSL met the long-standing demand of the LTTE and
lifted its ban on the organization, effectively
legalizing the LTTE as a political entity in Sri Lanka.
The talks -- though preliminary -- were constructive,
and set the stage for further talks slated to take place
later this year. In a press conference held at the end
of the talks, the chief LTTE negotiator also made
remarks that seem to have edged away from an outright
demand for a separate state for Tamils. In a very
recent development, the two sides also exchanged
prisoners for the first time since the war began.


5. (C) All of these steps have had a dramatic effect in
decreasing tensions in the country, bringing relief to a
war weary populace. Already, the ongoing ceasefire is
the longest break that Sri Lankans have had from the
ethnic conflict since it began in 1983. This new spirit
was symbolized by PM Wickremesinghe's visit to Jaffna in
March, the first such visit by a GSL leader in years.
A/S Rocca joined Wickeremesinghe for
part of this visit, underscoring U.S. support for the
peace process. A/S Rocca's visit also led to the
arrival of a demining team sponsored by the U.S., which
has been clearing mines in Jaffna since April. The
Deputy Secretary also made a highly successful visit to
war-ravaged Jaffna during his August visit to Sri Lanka.

--------------
LTTE Intentions not clear
--------------


6. (C) Despite so much progress in so short a time, GSL
interlocutors will be the first to tell you that the
situation is fluid. One key reason for this is lack of
confidence in the LTTE (which has been listed on our
Foreign Terrorist Organization list since 1997). While
it is clear that the LTTE is worried about further
international isolation in the aftermath of September 11
(there are indications that intensified international
pressure has decreased its funding, for example),it is
not clear whether the organization is simply looking for
a hiatus to wait out the storm. Some of the LTTE's
activities raise questions about its commitment to
peace, including forced recruitment for its military
(some of it of children),the widespread extortion of
money from Tamils and Muslims, and a pattern of low-
level harassment of the Sri Lankan military. The LTTE
also remains authoritarian in structure and has not
renounced terrorism (although there have been no
reported LTTE-sponsored terrorist attacks this year).
With full knowledge of these risks, the GSL has made the
decision that it wants to test the LTTE to determine
whether it is for real and, so far, this policy is
generating favorable results.

--------------
Cohabitation Stresses and Muslim issues
--------------


7. (C) Another factor that could unravel the peace
process is domestic opposition in the south. The
radical, Sinhalese chauvinist Janantha Vimukthi Peramuna
(JVP) party has engaged in rallies and demonstrations
against the ceasefire accord. A potentially more
ominous threat is President Kumaratunga and her party,
who have sent mixed signals, at times constructive, at
times critical. Kumaratunga's attitude seems largely
bound up in the cohabitation tensions that flare between
her and Prime Minister Wickremesinghe's government. We
recently heard that the PM and the president plan to
meet regularly to discuss peace process and national
security issues, which is a positive development.


8. (C) The Muslim community and the LTTE also share a
tense relationship. The two sides have long been at
loggerheads, particularly in the ethnically mixed
Eastern Province. Based on first-hand observation by
Mission personnel and other reports, some Muslims are so
angered at efforts by the LTTE to marginalize their
community that the possible growth of Islamic extremism
needs to be closely monitored. Taken together, all of
these tensions are not positive for the peace process,
especially during this sensitive period when the
negotiation track with the LTTE is just starting up.

--------------
Economic Issues
--------------


9. (SBU) Turning briefly to economic issues, Sri Lanka's
situation is delicate. While it has the most open
economy in South Asia and a relatively high per capita
income (USD 837),economic growth has been uneven and is
mostly confined to the greater Colombo region. A litany
of problems in 2001 conspired to produce the country's
first year of GDP contraction since independence (minus
1.4 percent). The new UNF government appears committed
to putting the right policies in place to re-ignite
economic growth. The main test of this commitment came
in its 2002 budget, presented in March. This budget
contained many substantive reform measures and was key
to restarting the suspended payments of the IMF's
Standby Arrangement. The government is now implementing
many of these reforms, while trying to minimize the
burden of increased prices on the population. We expect
2002 to be a rebuilding year, with growth of 2-3
percent.


10. (SBU) Our trade relationship with Sri Lanka entered
a new phase with the signing of a bilateral Trade and
Investment Framework Agreement (TIFA) in July. The TIFA
sets up a council, jointly chaired by USTR and the Sri
Lankan Ministry of Commerce, to discuss trade and
investment issues. The first council meeting is to take
place in November with the visit to Sri Lanka of Deputy
USTR Ambassador Huntsman. The U.S. intends to use the
TIFA process to improve the investment climate in Sri
Lanka and win greater business here for American firms.

--------------
Conclusion
--------------


11. (C) This exciting period in Sri Lanka provides many
opportunities for the U.S. Prime Minister
Wickremesinghe wants to work closely with the U.S. Per
the recent policy review, various USG agencies are in
the process of visiting Sri Lanka to review economic and
commercial issues, and study the possible return of the
Peace Corps, in addition to visits focused on enhanced
defense cooperation. Your visit will demonstrate the
continued high-level U.S. interest in assisting Sri Lanka in
its quest for lasting peace and increased prosperity.


12. (SBU) We suggest that you make the following key
points in your meetings with Sri Lankan officials:

-- Express strong U.S. support for the peace process and
Norwegian facilitation.

-- GSL needs to keep up momentum; Sri Lanka is a vital
symbol of movement toward peace and stability in a
troubled South Asian region.

-- All parties should work in national interest on peace
process and on economic reform. It is important that
peace process not falter because of political
infighting.

-- Making the tough choices now on economic reform will set
the stage for growth throughout the decade; failing to do so
will ensure anemic growth and threaten the peace dividend Sri
Lankans are hoping for.
WILLS