CONFIDENT PRESIDENT VOWS TO MOVE FORWARD ON PEACE

C O N F I D E N T I A L SECTION 01 OF 05 COLOMBO 002003 SIPDIS E.O. 12958: DECL: 11/28/2015 TAGS: PREL PGOV ECON KIRF EAID CE LTTE SUBJECT: CONFIDENT PRESIDENT VOWS TO MOVE FORWARD ON PEACE AND PROSPERITY REF: COLOMBO 1605 Classified By: Ambassador Jeffrey J. Lunstead for reason 1.4 (D). ¶1. (C) Summary. President Rajapakse told the Ambassador he is committed to maintaining historically close ties with the United States and welcomes co-chair involvement in the peace process. There is a role for an "independent and balanced" Norway although they should not head the SLMM in Rajapakse's view. The CFA needs to be "strengthened" as Rajapakse moves forward on peace with the LTTE. The President said there is money for everything he proposed in his November 26 speech to Parliament but admitted that energy costs and the expectation of continued subsidies will make his duties as Finance Minister challenging. Rajapakse urged rapid movement on an MCC compact and said he is absolutely committed to religious freedom. The new President clearly is not a details man but he is accessible and committed to the bilateral relationship. End Summary Hard to Make Everybody Happy -------------- ¶2. (C) The Ambassador and DCM (notetaker) called on a relaxed and confident President Mahinda Rajapakse the evening of November 26. Rajapakse was unaccompanied in the hour-long conversation. After thanking the Ambassador for his congratulations, the President launched into a chuckling complaint about the amount of time it had taken him to "make everyone happy" in the cabinet appointment process. He pointed out his Cabinet will be much smaller than previous ones with only twenty-five members (he did not mention that twenty-five other ministries will be outside the Cabinet). He referred back to his last conversation with the Ambassador in September (reftel) and assured him again that he will manage his Janatha Vimukthi Peramuna (JVP) coalition partner (and was meeting them later the same evening). Rajapakse said that if the JVP and the Jathika Hela Urumaya (JHU) vote with him, he has a thin majority of 119 seats in the 225-seat Parliament but, he said, he may dissolve Parliament and call an early general election to strengthen that majority. Rajapakse claimed that a number of senior United National Party (UNP) members had wanted to come across after the election but said he had turned them down since they had all wanted Cabinet positions as the price of their defection. "That would not have been fair to the people who supported me." Rajapakse said it was a "surprise" that Tamils in the North were prevented from voting by the LTTE but expressed confidence that he would have won anyway. Close U.S. Ties to Continue -------------- ¶3. (C) The Ambassador told Rajapakse that the U.S. had worked well historically with many different Sri Lankan governments and hoped to do the same now. Both countries have long democratic traditions. U.S. goals in Sri Lanka are peace and prosperity and we remain committed to them, the Ambassador said. Rajapakse thanked the Ambassador and said he agreed completely with the Ambassador's characterization of the bilateral relationship. "I'll be delighted to work with you." Rajapakse emphasized that, despite some of the rhetoric in the campaign, he and his government were not "anti-outsider or anti- Western." To the contrary, Sri Lanka's future depends on collaborating with the rest of the world. The Tigers, Norway and the Peace Process -------------- ¶4. (C) Turning to the peace process, Rajapakse said he did not know "what the Tigers are up to" and therefore would be watching LTTE leader Prabhakaran's November 27 Heroes' Day Speech with great interest. The Ambassador noted that while the LTTE is one of the most brutal terrorist organizations in the world they are also a "fact on the ground" that must be dealt with if real peace is to be obtained. Rajapakse agreed: "They are terrorists but they are also human beings." He continued that he must find the "right language" to use with the LTTE and that he did not think the Tigers want to go back to war. The Ambassador emphasized that the U.S., both bilaterally and as one of the co-chair countries, stood ready to help on the peace process. He briefly reviewed U.S. military assistance, noting to Rajapakse that it is designed to help make clear to the LTTE that a return to the battlefield is not an option because they would lose. ¶5. (C) Asked about the future of Norway in the peace process, Rajapakse said "there is no reason to move them out." The Norwegians need to understand, however, that there is a strong perception in the south of the country that they are biased in favor of the LTTE. He agreed with the Ambassador that this perception is erroneous but insisted it is there nonetheless and must be dealt with. "Norway must be more independent and balanced." Rajapakse resurrected the argument that the CFA had been adopted too quickly in 2003, before Colombo could examine it in detail, due to Norwegian pressure. The President also said it was a mistake for Norway, in addition to being the facilitator and a co-chair, to head the Sri Lanka Monitoring Mission (SLMM). The Ambassador reminded Rajapakse that Norway had been reluctant to head the SLMM but had agreed to at government insistence. Rajapakse replied, "Well, we have to fix that." Rajapakse said he was comfortable with the role of the co-chairs and looked forward to working with them. ¶6. (C) Turning to his plans for the peace process, Rajapakse said his first priority will be to renegotiate and "strengthen" the cease-fire agreement (CFA) so that it is not so unfavorable to the government (he implied that one aspect of "strengthening" will be to somehow give the SLMM more than just a monitoring mandate while removing the Norwegians from it). At the same time, he will bring the JVP along on the peace process and make them understand the Norwegian role. Rajapakse said he will need to have a "discussion with the South" to explain his plans and that moving forward on a lasting peace process "is not a sell-out." He will then begin talks with the LTTE which will include, he hopes, a face-to-face session with Prabhakaran "whenever he is ready, even tomorrow." Rajapakse said that it was up to the LTTE to take the initiative in peace talks since they, not the government, had walked out of them in 2003. Tsunami Recovery Needs Improvement SIPDIS -------------- ¶7. (C) Turning to tsunami recovery, Rajapakse said that the process under President Kumaratunga had been too centralized. Power and authority should have been pushed down to the district level with local officials empowered to make decisions and move things forward. As a result, permanent housing construction is taking too long. Rajapakse implied that it would be better at least in some areas to compensate people financially for lost housing and let them build what they want rather than expecting them to be happy with donor- built housing. (Note: In fact, such a program is in place for many of the tsunami-affected. End Note) Rajapakse said Kumaratunga's Task Force for Rebuilding the Nation (TAFREN),the coordinating body for tsunami recovery, had spent too much money on itself in salaries and equipment and that the government response had been too bureaucratic ("too many clearances and studies"). "We must decentralize," the President concluded. (Note: we have heard that TAFREN will be folded into a larger "relief and reconstruction" authority which would also oversee conflict-related reconstruction. End Note). Finding the Money, Enthusiasm for MCC -------------- ¶8. (C) Referring to Rajapakse's speech in Parliament earlier that day (septel),the Ambassador asked if it will be possible to find money for everything promised in the presentation. After joking that he would look to the U.S. to pay for it, the President said he had "checked with the Treasury" beforehand and they had explained that it would be possible to fund Rajapakse's initiatives without increasing deficits. He noted he was pleased that Finance Ministry Secretary P.B. Jayasundera would stay on. Rajapakse said he had decided to keep the Finance portfolio himself because of its importance and because previous Finance Minister Sarath Amunugama had been "silent" during the campaign amidst speculation that he was supporting the UNP. Rajapakse said he faces a challenge in that "everybody wants subsidies" and high electricity prices affect every aspect of the economy. Finding a way to bring more electricity generation on line will be a priority. ¶9. (C) The Ambassador briefed Rajapakse on the status of the Millennium Challenge Corporation (MCC). He stressed that our ability to move forward will depend heavily on the economic performance of the Sri Lankan government and noted that an MCC team would like to visit in December after the revised budget is presented to continue discussions on the MCC compact. Rajapakse was enthusiastic about the MCC and supported the team's visit. He took on board the Ambassador's suggestion that he appoint a senior official to be the point of contact with the U.S. on MCC. "We should move forward quickly," the President concluded. New Foreign Minister "Balanced" -------------- ¶10. (C) The Ambassador told Rajapakse that when former Foreign Minister Lakshman Kadirgamar had met Secretary Rice in Washington, the two had agreed that, given the democratic tradition that Sri Lanka and the U.S. share, there should be room for significant cooperation on international issues. One recent example, the Ambassador noted, was a helpful Sri Lankan position at the IAEA on Iran. Rajapakse agreed. "There will be no changes, no worries" although local politics will sometimes affect Sri Lankan positions. He told the Ambassador that he will find new Foreign Minister Mangala Samaraweera "balanced." Support for Religious Freedom -------------- ¶11. (C) The Ambassador noted that anti-conversion legislation had not been much of an issue in the presidential campaign and asked Rajapakse if that meant the issue was dying down in Sri Lanka. Rajapakse said that the anti-conversion bill is dead and will not be brought up again. "Did you see my cabinet?" the President continued, a reference to the fact that separate ministries for each religion, including one for the promotion of Buddhism, have been eliminated. Rajapakse said he had reassured the Buddhist clergy that the elimination of their ministry did not mean the government was undercutting their primacy in the country. But, Rajapakse said, he had made clear that all religions will be treated with respect and that religious freedom is something he takes seriously (and had said so in his speech to Parliament). Rajapakse pointed out that he had done unexpectedly well in Catholic regions of the country which he took as a sign that all religions are comfortable with him in office. The Ambassador said Presidential leadership was important on the anti-conversion issue and hoped he would continue to set the right example. "The (extreme) Buddhists won't start trouble," Rajapakse concluded. Garment Quotas -------------- ¶12. (C) Asked if he had anything else to raise with the Ambassador, Rajapakse asked about the "quota," an apparent reference to the pending "Sri Lanka Tsunami Temporary Relief Act of 2005" which would grant duty-free garment entry for Sri Lankan goods (including, most importantly for Sri Lanka, garments) into the U.S. The Ambassador noted that such legislation is unlikely to pass but pointed out that Sri Lankan garment exports to the U.S. have increased since the end of the quota system, thus making such legislation unnecessary. Rajapakse took the Ambassador's point but said he was under pressure because the UNP had said on the hustings that the "quota" would be approved immediately if Ranil Wickremesinghe became President because "he knows Bush." Rajapakse commented that maybe he would send some garment manufacturers to the U.S. "to discuss the issue." (Note: we would appreciate an update on the status of the legislation. End Note) Transition Hurdles -------------- ¶13. (C) Asked when he would move into the Presidential residence, Rajapakse laughed and said he was waiting for President Kumaratunga to move out. He noted with bemusement that she is still signing documents and calling officials as President which has led to some confusion ("we have parallel Presidencies!"). Rajapakse commented that Kumaratunga had lobbied him hard to keep her brother Anura Bandaranaike as Foreign Minister and Anura had lobbied as well. Rajapakse said he had responded that since Anura had come into the Foreign Ministry only once during his tenure he clearly did not take his duties seriously. He had told Anura ("we have a close personal relationship") that if he worked hard as Tourism Minister in the months ahead, "anything is possible." Comment -------------- ¶14. (C) It is hard to know if President Rajapakse's affable personal style masks a deeper understanding of the issues facing Sri Lanka or whether what you see is what you get. Clearly not a details man, he would seem to be oversimplifying the difficulty of getting the Tigers back to the peace table (although his just-announced decision to keep former UN Under Secretary General (and Sri Lanka's UNSYG candidate) Jayantha Dhanapala as an "advisor" on the process is encouraging) and restoring Sri Lanka to economic health. Much will depend on who emerges in his inner circle since Rajapakse is lacking personal expertise in key areas. That said, the new President clearly values a close relationship with the United States and understands that engagement with the outside world is a good thing. End Comment. LUNSTEAD