The Ambassador reviews the peace process, aid

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 001602

SIPDIS

DEPARTMENT FOR SA, SA/INS
NSC FOR E. MILLARD

E.O. 12958: DECL: 09-15-13
TAGS: PREL PTER EAID CE US UN LTTE
SUBJECT: The Ambassador reviews the peace process, aid
and redesignation in initial call on Prime Minister


(U) Classified by Ambassador Jeffrey J. Lunstead.
Reasons 1.5 (b, d).


1. (C) SUMMARY. In a September 14 introductory
meeting, the Ambassador and Prime Minister
Wickremesinghe agreed that last week's donor roundtable
on the occasion of Japanese envoy Akashi's visit had
usefully demonstrated that the donors were holding firm
to the Tokyo linkage between progress at the peace table
and the release of reconstruction aid for the North and
East. The PM said he has no qualms at all about the
imminent U.S. redesignation of the LTTE as a terrorist
organization. The Ambassador reviewed the FTA process
and also told the PM that no decision has been taken on
a November White House meeting. The PM plans to have
some "like-minded countries" activities in New York but
would appreciate more information on U.S. "UN reform"
perspectives. The PM encouraged the Ambassador to have
a close working relationship with President Kumaratunga.
END SUMMARY.


2. (C) The Ambassador, accompanied by DCM, paid an
introductory courtesy call on Sri Lankan Prime Minister
Ranil Wickremesinghe September 14. Minister for
Economic Development Milinda Moragoda and Secretary to
the PM Bradman Werakoon sat in with the PM.

Akashi, Aid and Redesignation
--------------


3. (C) After an initial exchange on latest developments
at the WTO meeting in Cancun (Moragoda had just gotten
off the phone with Sri Lankan Ambassador to the U.S.
Devinda Subasinghe who is in Cancun) in which the PM
pledged that Sri Lanka would be as helpful as possible
there, the conversation turned to the September 12
donor's meeting in Colombo chaired by Japanese special
envoy Yasushi Akashi. Wickremesinghe told the
Ambassador that the U.S. statement at the September 12
donor roundtable had been "quite useful," especially in
its reiteration of the U.S. view of the Liberation
Tigers of Tamil Eelam (LTTE). The PM commented that, as
his government takes a "soft approach" to the LTTE as
part of its peace negotiating strategy, it is helpful
that that be balanced by "tough statements from the
outside."


4. (C) The Ambassador briefed the PM on the timeline
for U.S. redesignation of the LTTE as a Foreign
Terrorist Organization (FTO) and reviewed some of the
ways in which the U.S. might make public the rationale
for the redesignation and what the LTTE could do to
perhaps one day get off the list. Wickremesinghe said
he "agreed completely" with the U.S. redesignation and
thought that the idea of a concurrent interview
explaining the U.S. action was a good one. The PM said
the combination of Friday's (September 12) Akashi press
statement which made clear that reconstruction aid to
the North and East is tied to progress in the peace
process (he agreed with the Ambassador that "progress"
would mean more than just a return to the negotiating
table) and the U.S. redesignation exercise fit together
well. "The LTTE is no longer monolithic," he said. It
is necessary, Wickremesinghe said, to encourage those in
the LTTE who are "inside looking out." Moragoda
commented that the international community must stand
firm on the LTTE since the group is "good at wearing you
down." The Ambassador agreed that making concessions in
the face of LTTE obstructionism on the peace process
would send absolutely the wrong message. The most
useful aspect of Akashi's visit had been the reiteration
that donors are not backing off and that the Tokyo
position is holding strong.


5. (C) On the reconstruction front, Moragoda noted that
the Janantha Vimukthi Peramuna (JVP) in particular was
making mileage politically with the erroneous but
powerful message that there would be no reconstruction
assistance in the South until the Tigers allowed
sufficient progress in the peace process to release
reconstruction aid for the North and East. The
Ambassador noted that the Akashi statement had very
clearly spelled out three keys points: 1) there will be
no reconstruction assistance in the North and East until
there is "progress" in the peace process; 2)
humanitarian assistance in the North and East will
continue unabated; 3) reconstruction assistance in the
South will continue to flow unaffected by the peace
process, and would, in fact, be "intensified." The
Ambassador, the PM and Moragoda agreed that the third
point perhaps needed to be underlined in the domestic
political arena to rebut the notion that the LTTE is
holding aid to the South hostage.

Trips and Visits
--------------


6. (C) Asked about his travel plans, Wickremesinghe
told the Ambassador that his New York UNGA trip is set
and that he will depart Colombo next weekend. Moreover,
he said he understands that President Kumaratunga has
written to UNSYG Annan to advise that she will attend
neither the UNGA nor the AIDS Summit (Note: We've heard
the same thing elsewhere). The PM asked where things
stand on his proposed White House meeting in November.
The Ambassador briefed the PM on the White House
scheduling process but noted that the State Department
would continue to work the issue. Wickremesinghe noted
that the problem for him is that the Sri Lankan budget
is presented in November and the process involves
certain key dates on which he must be present in
Parliament. These dates had not yet been set, pending
firm dates for Washington, but the first week in
November would be best for him. (His current plan is to
present the budget to Parliament on Nov. 12.) After the
Ambassador explained that a decision from Washington
probably was not imminent, Wickremesinghe said he would
proceed with the budget debate arrangements and then try
to adjust as needed if dates are received from
Washington.

FTA/MCA
--------------


7. (C) Moragoda told the PM and the Ambassador that,
according to Ambassador Subasinghe, informal discussions
with U.S. officials on the margins at Cancun about a
U.S.-Sri Lanka Free Trade Agreement (FTA) were
encouraging. The Ambassador reviewed for the PM the FTA
negotiating process and noted that there is no guarantee
that talks will start soon. Nonetheless, the
preliminary work the GSL has undertaken, such as
reviewing the Singapore and Chile FTAs, can only help.
Wickremesinghe said he wanted to spend time on the Hill
and with the U.S. business community in November talking
up the benefits of an FTA. Moragoda asked about the
Millennium Challenge Account (MCA). The Ambassador
explained that the operating framework and the criteria
were still being developed but noted that, on the face
of it, Sri Lanka would seem to be a good potential
candidate. He told the PM that much of the review work
the GSL was undertaking as part of the FTA process would
also be valuable when it came time to show that Sri
Lanka was serious about MCA qualification, since MCA
membership would be "performance-driven."
Wickremesinghe and Moragoda nodded.

Like-Minded Countries
--------------


8. (C) The Ambassador asked the PM what Sri Lanka plans
to do during UNGA regarding the Like-Minded Countries
initiative. Will a meeting or some other forum be
convened? Moragoda said that Ambassador Subasinghe had
been doing "a fair amount of trawling" with a number of
countries. So far, no country has given a "flat no."
The PM might have a few bilaterals or "small meetings"
on the subject in New York. Moragoda noted that the PM
liked the idea of UN reform as an agenda item for the
group but that it is not clear what the term means.
Could the U.S. clarify exactly what reforms it would
like to see in the United Nations? The Ambassador said
we would be glad to and suggested that perhaps the PM
could meet with IO A/S Holmes in New York on the subject
and/or IO/DAS Miller could brief Moragoda. Moragoda
commented that UN reform and Doha WTO follow-up should
probably be the first two "like-minded" topics, with WMD
coming later. Wickremesinghe told the Ambassador that
Japanese envoy Akashi had used their meeting last week
to lobby for Sri Lankan support on a Japanese Security
Council seat

Both Sides of the Cohabitation Fence
--------------


9. (C) The Ambassador told the PM that he hoped to
present credentials to President Kumaratunga soon. He
advised the PM that, as the U.S. envoy to the entire Sri
Lankan government, he hoped to have a cordial and
substantive relationship with the President. "That's
good," Wickremesinghe replied. "The more meetings you
have with her, the better." The Ambassador said, at the
same time, he did not intend to be an envoy between the
PM and the President. Wickremesinghe laughed and said
he understood completely.


10. (C) COMMENT. The PM was relaxed for this Sunday
morning meeting which he had requested. Both the PM and
Moragoda were grateful for U.S. efforts on Friday's
"Tokyo Follow-Up Meeting" and were visibly relieved that
it had gone well. The PM has a full and detailed agenda
for his trip to the U.S., and we strongly recommend a
meeting to discuss UN issues in the context of the
proposed Like-Minded Countries initiative. The
interpersonal dynamics of the meeting were interesting,
as the PM and Moragoda played tag team, with one
suggesting a topic and the other then filling in. END
COMMENT.


11. (U) Minimize considered.

LUNSTEAD