In January 23 Tokyo followup meeting, Donors

C O N F I D E N T I A L SECTION 01 OF 05 COLOMBO 000150

SIPDIS

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

PLEASE ALSO PASS TOPEC

E.O. 12958: DECL: 01-26-14
TAGS: PREL EAID PGOV PTER CE NO JA EU LTTE
SUBJECT: In January 23 Tokyo followup meeting, Donors
agree on need to move forward on assistance efforts

Refs: (A) Colombo - SA/INS 01/26/03 unclass email
- (B) Oslo 154 (Notal)
- (C) Colombo 127, and previous

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


1. (C) SUMMARY: On January 23, Japanese Special Envoy
Yasushi Akashi hosted a second followup meeting to the
June 2003 Tokyo donors conference. The first session of
the meeting was attended by Colombo-based diplomats and
local heads of multilateral organizations (WB, IMF, UN).
Representatives of the GSL joined the second session of
the meeting. The Tamil Tigers did not attend. Donors
expressed their strong support for the implementation of
humanitarian and rehabilitation assistance plans
throughout the island, despite the ongoing suspension of
peace talks between the government and the Tigers.
Although negotiations were on hold, donors highlighted
the need to sustain progress in the peace process. They
cautioned, however, that assistance would be limited
without progress toward a final settlement.


2. (C) The donors also discussed the importance of
keeping communication lines with the Tigers open, as a
means of keeping the group engaged in the peace process.
At the same time, the donors underscored the need to
send a united message to the Tigers about development
and assistance activities. Referring to the ongoing
cohabitation impasse between the President and Prime
Minister, the group agreed to continue to urge the two
sides to resolve the crisis. GSL representatives agreed
with the donors' conclusions, and stated their
commitment to resolve the political situation, to
restart negotiations with the Tigers, and to increase
aid funding to the north/east. Overall, the meeting was
a success in getting the donors on the same wavelength
regarding the peace process. As such, the meeting
served as an excellent lead-in to the Washington meeting
of Tokyo co-chairs scheduled for February 17. (See
Septel containing Japanese Ambassador Suda's readout of
Akashi's visit.) END SUMMARY.

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Second Tokyo Followup Meeting
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3. (C) On January 23, Japanese Special Envoy Yasushi
Akashi hosted the "Second Followup Meeting of the Tokyo
Conference" in Colombo. (The first followup meeting to
the June 2003 Tokyo Conference was held in Colombo in
September 2003.) The meeting was attended by
representatives of the four co-chairs of the Tokyo
process (Japan, Norway, the U.S., and the EU, including
the Netherlands in its rotating EU presidency role --
Ireland does not have representation in Colombo),as
well as local envoys from Australia, Canada, France,
Germany, Italy, Sweden, Switzerland, and the UK.
Representatives of international agencies included the
World Bank, the International Monetary Fund, the Asian
Development Bank, and several United Nations
organizations (UNDP, UNHCR, UNICEF). The January 23
meeting was divided into two sessions: The first
session was an "informal" donors meeting; and the second
session was an "official" meeting in which donors were
joined by GSL Ministers G.L. Peiris, Milinda Moragoda,
and Rauf Hakeem, and Bradman Weerakoon, the Prime
Minister's Secretary. (The Liberation Tigers of Tamil
Eelam, "LTTE," organization was invited to attend, but
declined the invitation.) Ambassador Lunstead, AID
Mission Chief, and Poloff (notetaker) represented the
U.S. at the meeting.


4. (C) In setting the stage for the discussions that
followed, Akashi told the group that there was a need to
evaluate donor activities that were occurring and those
that were not in light of the "political paralysis" in
the south. Akashi stated it was important that none of
the parties in the south or the Tigers should receive
"discordant messages" from the various donors. Donors
needed to be flexible in finding ways to continue
development and rehabilitation assistance, especially to
the north/east, as it was vital to keep the LTTE engaged
in the peace process. At the same time, Akashi said he
recognized the government's strong commitment to ending
the ongoing cohabitation impasse and resuming
negotiations with the Tigers.

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Island-wide Assistance Plans Need to Move Forward
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5. (C) Donors expressed strong agreement with
Ambassador Lunstead's remarks underscoring the critical
need to differentiate between the peace process and the
peace negotiations. Although the negotiations between
the GSL and the LTTE were on hold, the Ambassador
stressed that it was vital to support the broader peace
process which was ongoing. Donors also agreed that it
was important to ensure that Sri Lankans throughout the
island benefited from Tokyo-pledged financial
assistance. In that regard, they agreed that it was
essential to manage perceptions about the geographic
distribution of aid by communicating accurate messages
about the amount and location of development activities.

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Donors Agree: Lack of Progress will Limit Aid
-------------- -


6. (C) While affirming the need to continue development
assistance on an island-wide basis, donors recognized
that -- in the absence of substantive progress in the
peace talks -- there will come a limit to funding.
Ambassador Lunstead said it was necessary to make clear
that the entire aid package pledged during the June 2003
Tokyo conference could not be released without progress
toward a final settlement. Japanese Ambassador Akio
Suda warned the GSL that without substantive progress in
the peace process and recommencement of negotiations
with the Tigers, it would become difficult for Colombo-
based missions to keep their governments engaged in Sri
Lanka, given the significant need for assistance in
other parts of the world. Participants also addressed
the lack of an effective mechanism for distributing aid
in the north/east. Various donors suggested the
possibility of developing an "interim interim"
administrative structure, along the lines of the
suspended North East Rehabilitation Fund (NERF). (Note:
In early 2003, the LTTE pulled out of the original
governmental structure, the Sub-Committee on the
Immediate Humanitarian Rehabilitation in the North/East,
"SIHRN," complaining that it was ineffective.)

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Dealing with the LTTE
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7. (C) Donors agreed on the importance of ensuring that
the LTTE received accurate information. Norwegian
Ambassador Hans Brattskar said he and his GON colleagues
remained in regular contact with the group's
representatives in Sri Lanka, as well as the LTTE's
chief spokesman, Anton Balasingham, who is based in
London. Brattskar added that an LTTE delegation, led by
Tiger Political Chief S.P. Thamilchelvam, was scheduled
to visit Oslo, as well as several other European cities,
for meetings at the end of January. Akashi agreed that
it was important that the donors send consistent
messages to the LTTE. G.L. Peiris underscored the GSL's
desire that the Tigers have access to timely, accurate
information about developments in the south. Further,
Ambassador Brattskar called for donors to continue
contacts with the LTTE in order to build capacity within
the group on development issues. In response to a call
for increased technical-level GSL-LTTE contact, Bradman
Weerakoon said there was no formal structure for "track
two" peace negotiations between the GSL and LTTE, but
acknowledged several existing avenues of communication,
as well as opportunities for face-to-face meetings.

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EU paper on Tokyo Monitoring Framework
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8. (C) Dutch Ambassador Susanna Blankhart, representing
the EU presidency, discussed the need to develop a
mechanism to fulfill the spirit of the Tokyo declaration
regarding monitoring progress in the peace process. To
that end, Ambassador Blankhart presented an EU-developed
"framework" document which would set up a mechanism for
donors to monitor progress in the peace process (as laid
out in paras 18 and 20 of the Tokyo Declaration),and to
develop incentives for the GSL and LTTE (see Ref A).
While many other donors agreed in theory with the need
for common monitoring mechanisms, the group did not
discuss the EU paper in depth. Australian High
Commissioner David Binns cautioned that any performance
indicators needed to be realistic and not overly
ambitious. There was general agreement to begin work on
monitoring progress in the peace process, but no
agreement to begin joint work on incentives.

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Discussion of Cohabitation Impasse
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9. (C) The donors also discussed the ongoing
cohabitation impasse between Prime Minister
Wickremesinghe and President Kumaratunga. Donors
stressed the need to continue pressure on both sides to
resolve the impasse and to urge them to focus on a
bipartisan approach to negotiations with LTTE. From
Norway's perspective as peace process facilitator,
Ambassador Brattskar stated that both parties in the
south need to be involved in decision-making on peace
process and development-related issues in order for
there to be positive progress. Brattskar, and others,
cautioned about the damaging effect the southern
political situation, including corollary issues such as
recent religious tensions (attacks on churches, etc.),
was having on the peace process.

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GSL's Comments
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10. (C) During the second session, Minister for
Constitutional Affairs and lead GSL peace process
negotiator G.L. Peiris reviewed the GSL's perspective on
the current status of the peace process, highlighting
what he characterized as the "positive" results reaped
since December 2001 (when the process began). In this
vein, he noted the February 2002 ceasefire agreement,
the December 2002 Oslo agreement on devolution of power
as a means to resolve the conflict, the willingness of
both sides to discuss the setting up of a possible
interim administration in the north/east, and the
central role of Norway as peace process facilitator.
Echoing earlier comments from the donors, Peiris said
the GSL was interested in exploring ways of getting
sizable redevelopment funds "flowing" to the north/east.
He stressed the need to remain optimistic about the
peace process despite the cohabitation impasse in the
south. In response, Jeremy Carter, local head of the
IMF, expressed concern that government funds were not
being spent according to the budget. This could result
in misunderstandings among ethnic groups. Commenting
further on the peace process, Minister Moragoda admitted
that the current situation was having a negative effect
in many areas, especially the economy, compounded by the
ongoing drought, and higher prices for petroleum,
fertilizer, and power. He said his focus at the moment
was to limit the damage and protect the peace process
and economic gains of the past two years. Moragoda
concluded by stating that the GSL needed a way forward
that balanced the concerns of all groups: the LTTE,
Muslims, and Sinhalese.

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Tigers Complain about Aid Delivery
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11. (C) Akashi also briefed the group on his January 22
meeting with the Tigers in the group's northern
stronghold of Kilinochchi (also see Septel containing
Ambassador Suda's readout of Akashi's visit). Akashi
said Thamilchelvam had expressed concern about what the
LTTE characterized as the slow progress of assistance to
the north/east and the need for aid to be more
effectively channeled to those regions. He also
reported that Thamilchelvam had acknowledged receiving
messages from both representatives of the PM and the
President on various issues. Thamilchelvam felt that
these messages were poorly coordinated and were often
redundant.


12. (C) These remarks largely parallel comments made by
Thamilchelvam during an earlier meeting with
international donors. On January 19, the LTTE hosted
this meeting in Kilinochchi. Representatives from
Norway, Japan, Sweden, Denmark, Netherlands, Canada,
Switzerland, UK, Germany, France, the EU, as well as
several international aid organizations, were in
attendance. (The U.S. was invited but did not attend.)
Massimo Darchini, the Italian Charge' d'Affaires,
attended the January 19 meeting, and told us that
Thamilchelvam gave a lengthy speech to the donors about
pressing rehabilitation and development needs in the
north/east. In addition, Thamilchelvam outlined a
proposed LTTE planning and development secretariat to be
used as a mechanism for receiving and disbursing funding
for projects in the north/east. In response, according
to Darchini, the bilateral donors were united on the
need to develop a mechanism -- the NERF or something
like it -- for delivering aid to the north/east,
provided that there was an appropriate oversight body.
There was little substantive dialogue between
Thamilchelvam and the donors, however.

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COMMENT
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13. (C) Overall, the January 23 meeting was a success
in getting the donors on the same wavelength regarding
the peace process. Many important events have taken
place since the last "followup" meeting in September
2003, including the President's takeover of the three
ministries in November, the Norwegians putting on hold
their facilitation effort, etc., and it was important
for donors to touch base with one another on where they
stood in terms of their Tokyo commitments. It was key,
for example, that the donors agreed that the peace
process was still a going concern, although the talks
remained on hold. The agreement on the need to move
forward with assistance on an island-wide basis was also
noteworthy, as was the recognition that the full amount
of assistance pledged at Tokyo would not materialize
unless solid progress was made toward attainment of a
negotiated settlement. Given the depth and breadth of
the understandings reached among donors, the meeting
served as an excellent lead-in to the Washington meeting
of Tokyo co-chairs scheduled for February 17. Septel
will contain our thoughts and recommendations for that
meeting. END COMMENT.


14. (U) Minimize considered.

LUNSTEAD