Key GSL minister reviews status of peace

C O N F I D E N T I A L SECTION 01 OF 04 COLOMBO 000090

SIPDIS

DEPARTMENT FOR SA, SA/INS, INR/NESA; NSC FOR E. MILLARD

LONDON FOR POL/RIEDEL

E.O. 12958: DECL: 01/14/13
TAGS: PGOV PTER PINR PHUM CE IN LTTE
SUBJECT: Key GSL minister reviews status of peace
process, including security zone issue and Indian role

Refs: Colombo 75, and previous

(U) Classified by Lewis Amselem, Deputy Chief of
Mission. Reasons 1.5 (b,d).


1. (C) SUMMARY: In a January 13 meeting with the
Ambassador, Milinda Moragoda, a key GSL minister,
reviewed the status of the peace process. At the recent
talks, he said, the LTTE had pressed hard on the Jaffna
security zone issue. An agreement was not reached, but
the two sides agreed to keep working on the matter. For
the first time, the two sides discussed timelines, with
the GSL indicating it wanted a final settlement much
sooner than the LTTE. Moragoda, who had just returned
from New Delhi, also expressed concern over what he
considered GoI divisions over how to handle Sri Lankan
policy. Based on Moragoda's comments, much of the low
hanging fruit has been picked and he expects the peace
process to become increasingly difficult. END SUMMARY.

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A Pensive Moragoda
--------------


2. (U) The Ambassador and DCM met January 13 with
Milinda Moragoda, the Sri Lankan Minister of Economic
Reform and a key player on peace process issues.
Moragoda had just returned to Colombo from India (see
Para 10) and before that Thailand where he had
participated in the fourth round of GSL talks with the
Liberation Tigers of Tamil Eelam (LTTE) (see Reftels).
Before Bangkok, Moragoda had also been in Japan for
several days.


3. (C) Moragoda was pensive. He also seemed very tired
and -- in a rarity for someone who usually has his act
together -- a bit disorganized. Our guess is that the
heavy travel schedule had worn Moragoda down, but the
weight of all the issues he was dealing with also
appeared a factor. (Note: Moragoda has his hand in
virtually everything the government does, political,
military or economic.) Discussing how busy he was,
Moragoda commented that Prime Minister Wickremesinghe
was planning a cabinet reshuffle soon and his
(Moragoda's) portfolios might be slimmed down. If that
happened, Moragoda noted, he would be very happy.
(Note: We have no further information about any cabinet
reshuffle. In past conversations, Moragoda has
discussed possibly giving up his economic-related
responsibilities, so that he can concentrate on the
peace process.)

--------------
The Fourth Round
--------------


4. (C) Providing a brief readout of the recently
concluded talks, Moragoda indicated that they had gone
relatively well. The big issue had been how to handle
the Sri Lankan military's "high security zones" in
Jaffna. The LTTE had pressed very hard for a reduction
in the size of the security zones. For its part, the
GSL had stressed that it could not agree to do this
without a symmetrical and verifiable Tiger commitment to
disarmament of cadre that might enter military-vacated
areas. (Note: The Tigers have refused to discuss
disarmament at this time.) Given the disagreement over
the security zone issue, the two sides had ultimately
decided to focus on resettling displaced persons (IDPs)
who had points of origin from outside the area of the
camps. (Note: The government estimates that about
300,000 IDPs are from Jaffna areas located outside of
the camps and 40,000 are from inside areas that are now
taken up by the camps. The LTTE disputes these
figures.)


5. (C) In the meantime, Moragoda noted, the two sides
had also agreed to continue discussing the security
zones. At this time, both sides were waiting for a
report being prepared by Satish Nambiar, a retired
Indian general, on the issue. (Note: Moragoda said
Nambiar had been asked to prepare the report by the GSL.
Nambiar, he added, was being paid by the Indian
government, with some expenses reimbursed by the Sri
Lankan government.) The government was getting
indications that Nambiar's report would "split the
difference," i.e., providing for some relocations and
reductions in the security zone network, but not
outright withdrawal.


6. (C) Looking at how the security zone issue was
handled, Moragoda concluded that the government had
probably made a mistake in releasing the military's
proposal on the security zone issue publicly before it
was provided to the LTTE. (Note: The military's
report, which was prepared by Jaffna Army commander
Major General Fonseka, was publicized in late December
-- see Reftels) The report had clearly angered the
Tigers, who found it inflexible. They also objected to
its use of terms like "terrorist" when referring to the
LTTE. The use of such terms had led the Tigers to
accuse the GSL of not exercising control over the
military. Moragoda commented that the report was the
"proximate cause" of the Tiger decision to withdraw from
the "Sub-Committee on De-Escalation and Normalization."
(Note: The LTTE announced earlier this month that it
would no longer participate in this sub-committee,
preferring to discuss security issues in the political-
level talks. The decision was a setback for the peace
process.)

--------------
Timeline of a Possible Settlement
--------------


7. (C) On the margins of the talks, Moragoda related
that he had had an interesting colloquy with LTTE senior
negotiator Anton Balasingham on timelines for a possible
final settlement of the conflict. This was the first
time the two sides had discussed this issue, he
confided. Moragoda said he told Balasingham that the
government wanted to wrap things up as quickly as
possible, preferably within the next 6-8 months.
Balasingham replied that the LTTE had a much longer
timeline in mind, stretching two-and-a-half years. The
LTTE negotiator indicated that this timeline was
predicated on a point where President Kumaratunga was
out of office or on her way out. (Note: Kumaratunga's
term ends in early 2006, with the next presidential
election slated to take place in December 2005.) The
LTTE, Balasingham indicated, did not trust her and did
not want a final settlement agreed to when Kumaratunga
still was in any position to undermine it.


8. (C) In explaining the different timelines, Moragoda
went on to add that the Tigers appeared quite satisfied
with the on-the-ground pace of the peace process. The
government, however, felt the need to show political
gains in ending the war, in addition to moving forward
with improvements in the on-the-ground situation.


9. (C) Queried about Balasingham's health, Moragoda
replied that he did not look good. Moragoda said he
(Moragoda) was really worried about the future of the
peace process if something happened to Balasingham. It
was not clear whether the LTTE had anyone available who
could take his place. (Note: Balasingham has had a
long-standing kidney condition, which requires constant
medical attention. Concerns about his health have
reportedly led to the postponement of Balasingham's
planned trip to LTTE-controlled northern Sri Lanka,
which was slated to begin after the conclusion of the
recent talks.)

--------------
Visit to New Delhi
--------------


10. (C) Shifting gears, Moragoda provided a brief
readout on his recent visit to India. In New Delhi, he
said he had briefed GoI officials, including External
Affairs Minister Sinha and National Security Advisor
Mishra, on the outcome of the talks. Moragoda felt that
his meetings had gone well and that India was on board
with the peace process. That said, Moragoda expressed
concerns over what he saw as a disconnect in the GoI
over how to handle policy toward Sri Lanka. According
to Moragoda, the MEA seemed to favor a "go slow"
approach, not wanting the GoI to take too prominent a
role as regards Sri Lanka. Mishra, however, seemed to
want India to assume a more energetic posture. Moragoda
said he was not sure how the apparent difference in
emphasis would shake out, but it potentially could prove
problematic for Sri Lanka down the road. Per Reftels,
Moragoda added that GoI officials continued to express
concerns about Japan's heightened interest in Sri Lanka.
The recent visit of Foreign Minister Kawaguchi to New
Delhi had not allayed Indian concerns about the GoJ's
higher profile, he said.

--------------
Other Issues
--------------


11. (C) The meeting also touched on the following
issues:

-- Cohabitation: Regarding the always-testy
relationship between the government and the president,
Moragoda said he was scheduled to brief Kumaratunga on
peace process issues fortnightly. He felt that
Kumaratunga's attitude toward the peace process was
highly ambiguous: she did not want to be seen as
opposing the process, but she also wanted to keep the
government off-balance, so as to gain political
advantage.

-- Muslim Meltdown: Moragoda could not conceal his low
opinion of Rauf Hakeem, the Sri Lanka Muslim Congress
(SLMC) leader. Hakeem was a poor politician who had
alienated virtually everyone, including the Prime
Minister. In fact, Moragoda said he could now count at
least four separate SLMC factions. Hakeem had made a
hash out of his participation in the fourth round of
talks, earning a stern lecture from Balasingham, who
warned him to stop interjecting so-called "Muslim
issues" into the talks. (Note: Hakeem was re-elected
leader of the SLMC shortly after his return from the
Thailand talks. Only pro-Hakeem SLMC delegates were
allowed to attend the party meeting where the election
was held.)

-- Donor Conference: The international donor conference
hosted by Japan would take place June 15-16.

-- UN Voting: He reacted in a positive manner to a
request that the U.S. and the GSL work together to
improve Sri Lanka's UN voting record. He said he would
call Permrep Mahendran in New York on the issue and
report back.

--------------
COMMENT
--------------


12. (C) Based on Moragoda's comments, much of the low
hanging fruit has been picked and he clearly expects the
peace process to become increasingly difficult. In our
estimation, he could well be right. The way forward
will probably be particularly rough for the GSL, which
is at pains to show some sort of "peace dividend" to its
constituents. The LTTE, of course, does not have
similar worries given its authoritarian ways. In
addition, per Moragoda's straightforward statement to
Balasingham that the government wants to come to terms
as soon as possible, the LTTE probably has a legitimate
reason to feel that it has the upper hand at this point.
Indeed, Moragoda seemed to indicate to us that the GSL
was not going to go to the mat over the security zone
issue. At the same time, handling the negotiations is a
difficult calculus for the LTTE. If it really wants the
process to work, the LTTE cannot afford to embarrass the
government too much. That would only redound to the
advantage of those who are skeptical about the peace
process in the south. In light of these confusing ins
and outs, it is no wonder that Moragoda seemed tired and
out-of-sorts. That said, the GSL leadership is going to
have to rise to the occasion in the coming months if it
is going to see the process through. END COMMENT.


13. (U) Minimize considered.

WILLS