Identifier
Created
Classification
Origin
04COLOMBO897
2004-05-28 05:49:00
CONFIDENTIAL
Embassy Colombo
Cable title:  

Political update: Norwegian Envoy's visit;

Tags:  PGOV PREL PINR ECON CE NO 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 000897 

SIPDIS

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

PLEASE ALSO PASS TOPEC

E.O. 12958: DECL: 05-28-14
TAGS: PGOV PREL PINR ECON CE NO
SUBJECT: Political update: Norwegian Envoy's visit;
Provincial elections seem set for July; New ministers

Refs: Colombo 888, and previous

(U) Classified by James F. Entwistle, Deputy Chief of
Mission. Reasons 1.5 (b,d).

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 000897

SIPDIS

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

PLEASE ALSO PASS TOPEC

E.O. 12958: DECL: 05-28-14
TAGS: PGOV PREL PINR ECON CE NO
SUBJECT: Political update: Norwegian Envoy's visit;
Provincial elections seem set for July; New ministers

Refs: Colombo 888, and previous

(U) Classified by James F. Entwistle, Deputy Chief of
Mission. Reasons 1.5 (b,d).


1. (C) This update on Sri Lanka's political situation
reviews the following recent developments:

-- In latest visit, Norwegian Envoy characterizes
meetings with GSL and Tigers as "fruitful."

-- Several new ministerial appointments announced.

-- Provincial Council elections look set to take place
in July.

-- During visit by Mission team, GSL under pressure to
deliver the economic goods in the deep south.

-- Proposed rate hikes in basic services may spell
trouble for UPFA government.

===============================
Norwegian Special Envoy's visit
===============================


2. (SBU) In the latest bid to move the peace track
forward, Norwegian Special Envoy Erik Solheim arrived in
Sri Lanka on May 24. On May 26, he met with Liberation
Tigers of Tamil Eelam (LTTE) political chief S.P.
Thamilchelvam in the northern Tiger-controlled town of
Kilinochchi. In a press release issued by the Tigers
late May 26, Thamilchelvam was quoted as informing
Solheim that the LTTE's Interim Self Governing Authority
(ISGA) proposal for administering the north/east should
be the key initial focus of possible peace talks and not
ways to get to a possible final settlement. (The LTTE's
ISGA proposal was made late last year. The group
withdrew from peace talks with the GSL in April 2003.)
Solheim also reportedly met late May 27 with President
Chandrika Kumaratunga and key advisers, including
Foreign Minister Kadirgamar and Peace Secretariat Chief
Jayantha Dhanapala.


3. (C) COMMENT: The LTTE statement underscoring the
importance of discussing its ISGA proposal first is the
group's reaction to the GSL's idea that other "core
issues" be discussed in parallel. The LTTE has long
made known that it wants the ISGA proposal to be a key
topic of possible talks. The proposal is very

controversial in the south, however, and the LTTE's
apparent aim that it be made the key basis for talks is
potentially problematic. In the meantime, the GSL's
idea to discuss "core issues" in parallel was a
negotiating tactic that could annoy the Tigers. Despite
all the jockeying, Solheim has publicly characterized
his visit as "fruitful." The Ambassador will be meeting
with Solheim late May 28. END COMMENT.

============================
New Ministerial Appointments
============================


4. (SBU) On May 26, new ministers and deputy ministers
were sworn in by President Kumaratunga. Ratnasiri
Wickremanayake, a senior Sri Lanka Freedom Party (SLFP)
MP who served as prime minister from 2000-2001 in the
then-People's Alliance (PA) government, was sworn in as
Minister of Public Security and Law and Order, Minister
for Buddha Sasana (Affairs),and also as Deputy Minister
for Defense. D.E.W Gunasekera, a senior MP and
organizer of Sri Lanka's small Communist Party, was
appointed as Minister of Constitutional Reforms.
Professor V. Warnapala, a national list SLFP, was named
Deputy Minister of Foreign Affairs.

5. (C) COMMENT: While the appointment of additional
ministers by Kumaratunga was not unexpected, most
observers had expected her to retain the Public Security
and Constitutional Reform portfolios. Wickremanayake's
appointment as deputy defense minister is important, as
he will serve as day-to-day head of this key ministry.
(Kumaratunga retains the defense ministry portfolio.)
Warnapala is a former Sri Lankan foreign service officer
with wide-ranging experience in international affairs.
END COMMENT.
============================================= =
Provincial Council Elections seem set for July
============================================= =


6. (SBU) Sri Lanka's six remaining provincial council
elections look set to take place in July. Deputy
Elections Commissioner Ananda Senanayake told Pol FSN on
May 27 that the elections would take place either July 3
or 10, but that President Kumaratunga had not yet set a
firm date. The six councils in which elections will
take place are those in Central, Uva, Western,
Sabaragamuwa, North Central and Southern Provinces.
These provincial council elections follow the United
People's Freedom Alliance's (UPFA) decisive victory in
the Wayamba ("Northwest") provincial council election
held on April 24, in which it won 31 of the 52 seats on
the ballot (see Reftels). In a related development,
Media Minister Reginald Cooray resigned his Cabinet post
on May 27 to run for the position of Chief Minister of
the Western Province. Deputy Transport Minister M.
Herath also resigned his position and will run for Chief
Minister of the Sabaragamuwa Province. As was done
during the April parliamentary elections, the Elections
Commissioner recently probibited campaign posters and
cut-outs being put up during the election campaign, and
allocated nearly Rs. 9 million (approx. USD 90,000) for
their removal.


7. (C) COMMENT: Although provincial councils do not
have much authority nor access to finances, the results
of the elections could spell which way the political
winds are blowing. It is early, but -- at this point --
the President's United People's Freedom Alliance (UPFA)
is widely expected to win most of the provincial council
seats up for grabs. (The UPFA is the technical term for
the grouping between the "SLFP" and the Marxist Janatha
Vimukthi Peramuna, "JVP.") The opposition United
National Party (UNP) is expected to pick up a fair
amount of seats. If the UNP does very poorly, however,
it could further undermine UNP leader Ranil
Wickremesinghe's leadership of the party. He has
already faced unprecedented internal party criticism due
to the UNP's defeat in the April parliamentary election
(see Reftels). END COMMENT.

===========================================
GSL under pressure to deliver in Deep South
===========================================


8. (C) Polchief and Pol FSN visited the southern city
of Galle, May 24-25. During the visit, the team met
with a wide variety of political, civil society, and
Buddhist clergy interlocutors. Among all interlocutors,
there was widespread satisfaction that the government
was moving forward with the peace process. Jayantha
Jayaweera, a former UNP MP, however, was critical of the
GSL, stating that it had "lied" during the electoral
campaign by claiming that the then-UNP government was
"giving in" too much to the LTTE only to follow the same
policies when in power. A number of interlocutors were
worried that the GSL would have a hard time meeting the
commitments it had made on economic matters during the
campaign. Ven. Baddegama Samitha, a UPFA MP and a
Buddhist monk, for example, admitted that the UPFA "had
probably made too many promises regarding jobs and that
there would be a drop in prices." Samitha thought the
UPFA would eventually exceed expectations, but he
thought it would take time.

9. (C) COMMENT: Southern Sri Lanka, including Galle,
has long been a leftist bastion and the UPFA still
appears quite strong there. That said, there is some
concern developing that the new government is not
delivering on its promises quickly enough. This could
hurt the GSL's political standing down the line. If the
government gets into some trouble, it is not clear
whether the UNP will necessarily benefit. In fact, the
JVP may be the main beneficiary. Though the party is
technically part of the UPFA, the JVP has maintained its
own organization and is seemingly disassociating itself
ever so slightly from the SLFP. In doing this, the JVP
seems to be playing a smart game and it appears poised
to pick up more support in the future. END COMMENT.

============================================= =========
Rate hikes in basic services may mean trouble for UPFA
============================================= =========


10. (C) Several recent proposed rate hikes in basic
services may spell trouble down the road for the UPFA
government. Due to low hydroelectric production, the
Ceylon Electrical Board has indicated that it may raise
rates soon. Additionally, Prima Ceylon Limited, the
sole producer of flour in Sri Lanka, announced on May 26
that it could hike its prices for flour by twenty
percent per kilogram if the GSL fails to pay subsidy
dues that Prima believes are in arrears. On May 27, the
GSL issued a gazette notification that declared flour an
essential commodity and established a set price for
flour. The GSL also announced that it would allow
competition for flour in the market. Given Prima's
monopoly of flour production, this essentially invites
flour imports in the short-term; however, given the
GSL's duty structures and the regional price of flour,
it is not clear if there would be any takers. Rate
increases have also been mooted in other basic services
lately, namely bus fares and petroleum prices. (We
understand the GSL is exploring ways to keep petroleum
prices down, including via a recent request to the GoI
for a line of credit to subsidize the Indian Oil
Company's subsidiary in Sri Lanka.)


11. (C) COMMENT: It is widely believed on the ground
that one of the main reasons leading to the UNP's defeat
in the April elections was that the impact of promised
economic reforms had not yet been felt by the average
Sri Lankan. During the campaign, the UPFA took full
advantage of this perception that the UNP had failed to
deliver the goods (although macroeconomic indices
indicated that the country was doing relatively well).
When coupled with conflicting GSL statements on
privatization (see Reftels) and uncertainty regarding
government proposals to hire thousands of unemployed
graduates, however, the UPFA risks looking like it
cannot deliver on its economic promises early in its
tenure. As noted above, contacts in Galle are already
reporting that the GSL is under pressure to deliver the
economic goods quickly. END COMMENT.


14. (U) Minimize considered.

LUNSTEAD