Identifier
Created
Classification
Origin
04COLOMBO545
2004-03-26 06:42:00
CONFIDENTIAL
Embassy Colombo
Cable title:  

In visit to Sri Lanka, SA DAS Patterson

Tags:  PGOV PREL ECON PTER CE LTTE ECONOMICS 
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C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 000545 

SIPDIS

DEPARTMENT FOR SA, SA/INS, S/CT
DEPARTMENT PLEASE ALSO PASS TOPEC
NSC FOR E. MILLARD

E.O. 12958: DECL: 03-26-14
TAGS: PGOV PREL ECON PTER CE LTTE ECONOMICS
SUBJECT: In visit to Sri Lanka, SA DAS Patterson
discusses April 2 elections, plus peace and economy

Refs: Colombo 515, and previous

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

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 000545

SIPDIS

DEPARTMENT FOR SA, SA/INS, S/CT
DEPARTMENT PLEASE ALSO PASS TOPEC
NSC FOR E. MILLARD

E.O. 12958: DECL: 03-26-14
TAGS: PGOV PREL ECON PTER CE LTTE ECONOMICS
SUBJECT: In visit to Sri Lanka, SA DAS Patterson
discusses April 2 elections, plus peace and economy

Refs: Colombo 515, and previous

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


1. (C) SUMMARY: SA DAS Torkel Patterson visited
Colombo, March 21-23. Highlights of the visit included
meetings at the MFA, with a key adviser to President
Kumaratunga, with local diplomats, and with local
business leaders, including the American Chamber of
Commerce. Key issues discussed included the April 2
parliamentary elections, the peace process, and the
economic situation. The visit served to underscore
continued high-level USG engagement with Sri Lanka
during this sensitive timeframe. END SUMMARY.

--------------
MFA Meetings
--------------


2. (C) Deputy Assistant Secretary for South Asian
Affairs Torkel Patterson visited Colombo, March 21-23.
On March 22, DAS Patterson and Ambassador Lunstead held
separate meetings with Foreign Minister Tyronne Fernando
and Foreign Secretary Bernard Goonetilleke. Patterson
and the Ambassador used both meetings to review CHR
priorities, including the Cuba and China draft
resolutions, and the Iraq situation (see Reftels). In a
brief discussion regarding Sri Lanka's April 2
parliamentary elections, Goonetilleke remarked that he
felt that voter turnout might be lower this time around
due to voter dissatisfaction with the two major parties.
Foreign Minister Fernando claimed that the campaign of
his United National Party (UNP) was getting a good
response among younger voters, but admitted that
confidence in the UNP on economic issues among "the
average voter" was low.

--------------
Meeting with Key Presidential Adviser
--------------


3. (C) On March 22, DAS Patterson and Ambassador also
met with Lakshman Kadirgamar, former foreign minister
and a key adviser to President Kumaratunga. Asked for
his views on the election campaign, Kadirgamar seemed

confident that Kumaratunga's "United People's Freedom
Alliance" (UPFA) would do well. There had not been much
violence so far in the campaign, he related. He
thought, however, that there could be some post-election
violence. President Kumaratunga was prepared to deal
with any such incidents, he said. Queried re the split
in the Liberation Tigers of Tamil Eelam (LTTE) (see
Reftels),Kadirgamar thought there was some prospect of
reconciliation between breakaway eastern rebel leader
Karuna and Tiger leader V. Prabhakaran. That said, any
possible reconciliation would likely take place after
the April 2 election, as would any possible armed
conflict between the two sides. DAS Patterson noted the
degree of control the GSL had over Sri Lanka's media.
Kadirgamar, who is currently the Minister of Media and
Communications, agreed that the state-run media outlets
were quite influential. There had been attempts to
reform the situation in the past, but they had all
failed. (Per Reftels, the Ambassador also raised the
issue of the fabrication of results of a poll in
government-controlled newspapers on March 20. The poll
had been partially financed by USAID. Kadirgamar said
he would look into the matter.)

--------------
Dinner with Local Diplomats
--------------


4. (C) DAS Patterson also attended a March 22 dinner at
the Ambassador's residence with local diplomats,
including those from Norway, the UK, the EU,
Netherlands, and Canada. The natural focus of
conversation was the upcoming parliamentary election.
The overall feeling at the dinner was that it was not
precisely clear how the political situation was playing
out. That said, most agreed that the President's UPFA
grouping had gotten off to a fast start and was probably
ahead at this point in the race. Prime Minister
Wickremesinghe's UNP had gotten off to a very slow
start, but its campaign was getting more active.
Norwegian Ambassador Brattskar noted that the anti-peace
process JHU party -- in an unprecedented move -- was
running an all-Buddhist monk candidate slate, and might
pick up between 2-5 seats in Parliament. It was not
clear whether the JHU's support would come from voters
who might have supported the UPFA, or would come from
voters who were dissatisfied with the two major parties
and were looking for other alternatives. Regarding the
LTTE split, there was widespread agreement that the main
LTTE organization would probably wait until after the
April 2 election to try to displace Karuna via an armed
attack or by trying to entice Karuna's supporters away
from him.

--------------
Commerce Ministry Meeting
--------------


5. (C) Secretary of Commerce and Consumer Affairs
Harsha Wickramasinghe and Director General of Trade K.J.
Weerasinghe updated DAS Patterson March 22 on current
political activities, GSL positions in the WTO, and
progress in BIMST-EC (Bangladesh, India, Myanmar, Sri
Lanka and Thailand Economic Cooperation) and SAFTA
(South Asia Free Trade Agreement) talks. Wickramasinghe
discussed UNP election tactics designed to discredit the
JVP's stance that it is a credible political party, by
highlighting its brutal past actions. He also noted
that the pro-LTTE Tamil National Alliance (TNA) had said
they would not ally with the United People's Freedom
Alliance (UPFA),but would hold out for as much as they
could get from the UNP.


6. (C) On WTO issues, Weerasinghe promised that the GSL
Representative in Geneva would support USG positions on
UNCTAD and on food aid issues. The GSL is now busy
finalizing its proposals for accession to the
Information Technology Agreement, fulfilling a
commitment made during the last round of TIFA talks.
Wickramasinghe mentioned that he saw BIMST-EC as an
important bridge between SAARC and ASEAN, and as a tool
to open up Myanmar's trade regime. Weerasinghe bemoaned
the multiplicity of bi- and multi-lateral trade regimes,
and noted the need for convergence.

--------------
AMCHAM Roundtable
--------------


7. (U) During a March 22 meeting with members of the
American Chamber of Commerce, DAS Patterson outlined USG
views on regional developments of the past two years and
asked for insights into the current domestic political
situation and business climate. IBM Managing Director
and former Amcham President, Kavan Ratnayaka described
IBM efforts to support open source software development,
noting that Sri Lanka has become an internationally
recognized "brand" in the open source community.


8. (SBU) Amcham Director Graetian Gunawardene, whose
company manufactures Samsonite luggage, noted that the
export sector has been driving growth and employment.
He asked specifically for DAS Patterson's support in
pushing for a U.S.-Sri Lanka Free Trade Agreement (FTA)
and in returning U.S. visa validity to 5 years. (Note:
We are discussing possible changes in our visa
reciprocity schedule with the GSL.) Noting that Sri
Lanka has a long democratic tradition, even through some
very difficult times, Gunawardene suggested there should
be closer U.S.-Sri Lanka commercial ties to match their
shared democratic ideals. Patterson promised to review
FTA issues when he got back to Washington, and urged
the Amcham to consult with the GSL's Ministry of Foreign
Affairs to promote a review of the reciprocity issues
that have led to the limited validity of U.S. visas for
Sri Lankans.


9. (C) On the current political situation, optimism
about the future mixed with concerns about short-term
political realities. Ratnayaka (a longtime UNP
supporter whose family is close to the Prime Minister)
raised concerns about the opposition's ability to move
forward on the peace process due to the LTTE's lack of
trust in the President. Others in the group, including
Citibank CEO Kapila Jayawardena, thought the LTTE would
look closely at who wins the April 2 election and would
be willing to deal with whichever party wins, assuming
that party has the intention of negotiating a workable
solution. Outgoing Energizer Managing Director Sunil de
Alwis commented that Sri Lanka remains an attractive
place to do business. He mentioned Energizer's new USD
2 million investment, which upgraded its manufacturing
facility and improved Energizer's ability to meet
increased domestic demand and a potential export market
into India as well. Citibank and Energizer reps said
their Sri Lankan operations are leading performers in
their respective companies. Jayawardene noted that
American companies tend to do well in Sri Lanka.
Citibank's own return-on-equity in Sri Lanka is over 50
percent, the best in Asia.

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


10. (C) As the many threads laid out above indicate,
this is a very sensitive timeframe for Sri Lankans, who
have deep worries about the future of the peace process
and the economy. These overall concerns are fed by
specific worries over the unstable pre- and post-
election period, over what the radical JVP might due in
power if the UPFA wins, over what the LTTE split means
for the peace process, etc. Given this complex, fluid,
situation, DAS Patterson's visit was reassuring to Sri
Lankans, who deeply appreciate continued high-level USG
engagement in support of the peace process. END
COMMENT.


11. (U) DAS Patterson was not able to clear on this
message before departing Post.


12. (U) Minimize considered.

LUNSTEAD