Identifier
Created
Classification
Origin
05COLOMBO497
2005-03-08 11:35:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Colombo
Cable title:  

SRI LANKA RELIEF TO RECONSTRUCTION UPDATE (MARCH

Tags:  EAID ECON EFIN CE MV 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 COLOMBO 000497 

SIPDIS

SENSITIVE

FOR A/S TONY WAYNE FROM AMBASSADOR LUNSTEAD; DEPARTMENT FOR
SA/INS; PLEASE PASS TO TREASURY C.CARNES

E.O. 12958: N/A
TAGS: EAID ECON EFIN CE MV
SUBJECT: SRI LANKA RELIEF TO RECONSTRUCTION UPDATE (MARCH
8, 2005)

REF: COLOMBO 464

This telegram is for use in upcoming briefing for Deputy
Secretary Zoellick and the Tsunami IAWG

SIPDIS

UNCLAS SECTION 01 OF 03 COLOMBO 000497

SIPDIS

SENSITIVE

FOR A/S TONY WAYNE FROM AMBASSADOR LUNSTEAD; DEPARTMENT FOR
SA/INS; PLEASE PASS TO TREASURY C.CARNES

E.O. 12958: N/A
TAGS: EAID ECON EFIN CE MV
SUBJECT: SRI LANKA RELIEF TO RECONSTRUCTION UPDATE (MARCH
8, 2005)

REF: COLOMBO 464

This telegram is for use in upcoming briefing for Deputy
Secretary Zoellick and the Tsunami IAWG

SIPDIS


1. (U) Sensitive but unclassified, please handle accordingly.



2. (U) Summary: The GSL has issued new guidance on NGO and
donor activity in Sri Lanka, particularly with regard to the
duty free entry of relief and reconstruction supplies into
the country, but the situation remains confused. High-level
interlocutors continue to acknowledge shortcomings, but
appear unable, or unwilling, to confront the issues head-on.
While many NGOs appear to have bulging pockets at this point,
they are under pressure to deliver and are finding the
process of registering and being allowed to operate
cumbersome and confusing. New guidelines on the duty free
entry of relief and reconstruction items have raised more
questions than they have answered. The US Army Corps of
Engineers continues to assess USAID recommended infastructure
projects, in the hope that supplemental funds will be
forthcoming in order to begin implementation. Maldives, in
comparison to Sri Lanka, appears better organized in its
reconstruction effort. End Summary.

Process
--------------


3. (SBU) In Sri Lanka, problems continue to plague the GSL's
efforts to coordinate reconstruction efforts. The two main
impediments to progress at this point are a failure to
adequately coordinate and facilitate NGO operations and the
lack of clear guidance on procedures such as importing relief
and reconstruction items into the country. Further,
continued debate over the 100/200 meter coastal conservation
zone (reftel) and confusion over its implementation (how it
will be enforced; whether exemptions will be granted) has
caused delays in the rebuilding and repair process. During a
March 7 lunch meeting with Finance Secretary PB Jayasundera,
Ambassador commented on the problems posed by unclear
guidance and lack of a coordinating mechanism. Jayasundera
acknowledged the GSL's shortcomings, offered several examples
of how operations could be improved, but suggested the
Ambassador raise the issue with President Kumaratunga.

Ambassador has requested a meeting with the President to
discuss relief issues.

NGO Operations
--------------


4. (U) NGOs in Sri Lanka continued to be burdened and
blessed. Their burdens have stemmed from the GSL's lack of a
coordinating mechanism and suspension of the NGO registration
process, as well as continued bureaucratic hassles in getting
relief and reconstruction supplies cleared into the country.
Donor governments continue to raise the issue, though they
are becoming victims of this systemic failure themselves.
USAID has been unable to get the communications equipment for
the US Army Corps of Engineers assessment team cleared in
time for the team to use it during its visits out of Colombo
(The GSL has imposed special procedures on communication
equipment due to security concerns).


5. (U) In an effort to address these issues, the GSL called
a meeting on March 7 of all NGOs that wish to operate in
tsunami affected areas. Far from clarifying and expediting

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the relief and rehabilitation process, the meeting conveyed a
sense of "business as usual." No new fast-track mechanisms
have been announced, though a new procedure has been put in
place to register NGOs. While the Government has issued new
guidelines on duty-free entry of relief and rehabilitation
materials, there continue to be significant confusion and
misunderstanding about what is covered and how it can be used
(see "Duty-Free Entry of Relief Goods" below). Many
organizations, including the UN and large international NGOs,
continue to experience delays in clearing relief commodities
at both the international airport and at the port. Part of
the problem is clearly the huge amount of supplies that are
coming in, but a far greater impediment is the lack of clear
policies and poor communication between Government entities.
Duty-Free Entry of Relief Goods
--------------

6. (U) The GSL announced over the weekend new guidelines on
duty-free entry of relief and rehabilitation goods that will
be in place for goods that arrive prior to April 26, 2005.
According to the Finance Ministry announcement, items that
can be imported duty free, assuming they are turned over to
the relevant Government agency, include new apparel,
textiles, tents, building materials, school supplies,
medicines and medical supplies, gully emptiers and water
tanks, and generators. Water pumps may be imported duty free
but do not need to be turned over to the Government. Items
that need special permission include communications equipment
and electrical appliances, consumer durables and computer
equipment. The announcement made clear that rice would not
be allowed to enter the country duty free, in order to
protect domestic producers.


7. (SBU) The announcement continued to promote confusion
because, according to the published guidelines, certain items
have to be turned over to Government entities for
distribution. However, when the Ambassador queried Finance
Secretary Jayasundera, he indicated that goods do not have to

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be turned over, but that they should be distributed "with the
knowledge" of the relevant Government ministry. Seeking
further clarification, ECONFSN was told that NGOs should turn
the items over to the relevant ministry, but if the NGO
wanted to distribute the goods itself, it could request that
the goods be returned and that the Ministry approve the
distribution.


Coastal Conservation Zone
--------------


7. (U) As described more fully reftel, the 100/200 meter
coastal conservation zone (no-build areas) continues to be
controversial. While the Government has issued guidance in
the form of full-page newspaper advertisements, advising
individuals and businesses of the new rules, and outlining
compensation measures, it is still unclear what will happen,
in particulark, to partially damaged structures, or those
without permits prior to December 26. Some land has been
granted for communities that need to be resettled, but this
remains a tedious process without a well coordinated,
transparent structure for oversight.

Signature Infrastructure Projects
--------------


8. (U) The Army Corps of Engineers teams have been traveling
around tsunami-affected areas, with USAID staff and
representatives of GSL authorities responsible for the type
of infrastructure being assessed, to prepare the cost
estimates for USAID proposed projects, including the repair
of a bridge at Arugam Bay in the east, the reconstruction of
14 vocational training centers in coastal areas, and the
repair and reconstruction of several fishery harbors. They
will complete their assessments by March 16 and present their
cost estimates to USAID. Without further information on
potential funding, it will be difficult to provide more
information on these projects.

Maldives
--------------


9. (U) USAID Director and Econchief attended a briefing by
the ADB and Riluwan Shareef, Executive Director of the GORM's
Finance Ministry, on March 4. The briefing was
well-organized and highlighted the effective work done by the
GORM in coordinating its relief and rebuilding efforts. In
contrast to its larger tsunami-hit cohorts, Maldives has
quietly, and with far less international fanfare, put
together a systematic process to identify and prioritize
needs and apply resources. Also in contrast to its larger
cohorts, Maldives sees a much larger funding gap, relative to
the size of its damage. While damage assessments for the
Maldives suggest USD 406 million is required to finance
reconstruction, donor funding so far totals less than USD 100
million. While it is true that the Maldives has much greater
scope for private sector investment in reconstruction than
other tsunami-affected countries, the scope of the damage,
relative to the size of Maldives economy (approximately USD
850 million per year),is tremendous.

Comment
--------------


10. (SBU) While the tremendous logistical challenge posed by
hundreds of new NGOs and individuals trying to clear goods
into the country for relief work is clear, the GSL still
appears unable to setup an efficient process. This does not
seem to be from ill-will, or a desire to obstruct assistance,
but more the persistence of entrenched bureaucratic habits.
Perhaps most telling is an anecdote passed on by a
senior-level Embassy contact outside the GSL, who told us
that he had been present at a meeting where it had been
suggested that new guidelines on duty be written in a way
that would "please the Americans" (Ambassador had written a
letter to the Finance and Foreign Ministers expressing our
concern on duties being assessed on relief goods). While it
is nice to think we carry so much weight, it is troubling to
think that our protestations and desire for clarification
would be the justification for new policies, rather than a
desire to expedite and better organize the relief effort.
This week's announcement by the GSL and its subsequent
misunderstandings and confusion have also served as a
contrast for Maldives' relief and coordination effort, which
appears very well organized and effective. We expect
Maldives to make a good showing at the Manila conference next
week. End comment
LUNSTEAD