Co-Chairs' June 1 statement stirs up more

C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 000915

SIPDIS

DEPARTMENT FOR D, SA, SA/INS, EAP/J, EUR/NB, EUR/NRA
NSC FOR E. MILLARD

E.O. 12958: DECL: 06-04-14
TAGS: PREL PREL EAID PTER CE NO JA EU LTTE
SUBJECT: Co-Chairs' June 1 statement stirs up more
reaction in Sri Lanka while Tigers remain intransigent

Refs: (A) Colombo 911, and previous

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


1. (C) SUMMARY: Foreign Minister Kadirgamar told
Ambassador that the Co-Chairs' Brussels statement could
be seen as a "threat" to the GSL. In the Wanni, the
LTTE rejected a World Bank proposal for a mechanism to
deliver development funds for the north/east. The Co-
Chairs' statement clearly puts pressure on the
government. The Tigers may be less concerned. END
SUMMARY.

Foreign Minister on Brussels Statement
--------------


2. (C) At a social event for the visiting Millennium
Challenge Corporation team on June 3, the Ambassador
asked Foreign Minister Kadirgamar, returned from New
Delhi only at midnight the day before, if he had read
the Co-Chairs' statement from Brussels. Kadirgamar
responded that indeed he had. He said that an emphasis
on restarting the peace talks was good, but that "some
people" would see the comments on donor funding as a
threat. Ambassador responded that the language was not
a threat; rather, it was a simple statement of fact.
The reality was that in the world today, where there
were many crises and demands for funds, money would
inevitably go elsewhere if it could not be used in Sri
Lanka.


3. (C) Kadirgamar's use of "other people" may refer to
the JVP. Newspapers reported on June 4 that the Janatha
Vimukthi Peramuna (JVP) -- the major partner in the
President's United People's Freedom Alliance (UPFA) --
had issued a statement in response to the June 1 co-
chairs statement. In its response the JVP states that
the Co-Chairs should pressure the LTTE into returning to
peace talks. The JVP statement goes on to blame the
LTTE for the delay in resuming negotiations, calling the
group's insistence on having its Interim Self-Governing
Authority (ISGA) proposal be the only subject for talks
a "precondition." In the end, the statement says that
any conditions by the international community on the
disbursement of the pledged $4.5 billion in aid could be
"construed...as cooperating with the LTTE in reaching
their objectives."


4. (C) The Ambassador is also seeking appointments with
President Chandrika Kumaratunga and Opposition Leader
Ranil Wickremesinghe to emphasize points in the June 1
Co-Chairs' statement and to solicit their feedback.

LTTE Rejects Assistance Fund Proposal
--------------


5. (C) World Bank Resident Representative Peter Harrold
told Ambassador June 2 that he had traveled to
Kilinochchi on June 1 to attempt to obtain LTTE
agreement to a plan for a development assistance scheme
for the North and East, a "NERF-Lite" which would have
allowed donors to commit funds to a World Bank fund.
Projects would have had approval by both the LTTE and
the GSL. LTTE would have had substantial influence over
use of funds in their areas. The plan had essentially
been approved by the LTTE in January, and had been
approved by President Kumaratunga recently. The LTTE
this time rejected it out of hand, telling Harrold that
the GSL's backing away from its commitment to discuss
only the ISGA at renewed talks made them distrust
anything the Government promised. The answer to
development needs, they said, is to establish the ISGA.
Dutch Ambassador told Ambassador June 4 that the Dutch
are furious at this latest LTTE antic, and will tell the
Tigers they will not proceed with projected assistance
projects in Tiger areas. The Dutch will also tell the
Tigers about the Donor Working Group which is developing
bench marks on performance on Tokyo Declaration
milestones so that Tigers understand that donors will
need to see progress on a number of areas.

Asymmetrical Pressure?
--------------


6. (C) COMMENT: As noted in Reftel, many Sri Lankans
have welcomed the Co-Chairs' statement's sense of
urgency on resuming the talks. There is, however, a
certain asymmetry in the pressure brought by the
statement. The LTTE rejection of "NERF-Lite"
underscores what the bilateral and multilateral donors
who work in LTTE areas have said for some time: in the
end, assistance is not a strong lever for moving the
Tigers. With their brutal hold on the population and
ability to largely disregard public opinion, the Tigers
are able to focus almost entirely on their political
goals. The GSL, on the other hand, will feel
considerable pressure. The challenge will be to figure
out how to apply pressure to the Tigers also, so that
they do not just sit back and wait for the government to
come to them. END COMMENT.


7. (U) Minimize considered.

LUNSTEAD