SRI LANKA: INFORMATION FOR MCC NOVEMBER 8 MEETING

UNCLAS SECTION 01 OF 02 COLOMBO 001821

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR EB/IDF/ODF AND SCA/INS
STATE PLEASE PASS MCC FOR D NASSIRY AND E BURKE

E.O. 12958: N/A
TAGS: EAID MCC KMCA CE
SUBJECT: SRI LANKA: INFORMATION FOR MCC NOVEMBER 8 MEETING



1. (SBU) Summary: Post recommends that Sri Lanka continue to
be considered MCC-eligible. MCC projects would increase
overall prosperity and support our main objective of helping
Sri Lanka attain a lasting peace. Violence between
Government of Sri Lanka forces and the Liberation Tigers of
Tamil Eelam (LTTE) heightened in the first two weeks of
October. October 28-29 peace talks between the two sides in
Geneva ended in deadlock without a date for a future round.
On the other hand, the two major southern political parties
have signed a Memorandum of Understanding to work together on
the peace process, giving rise to guarded optimism that a
"southern consensus" can move the process forward. The
government has taken steps to address the international
community's concerns about human rights and NGO access within
Sri Lanka. End summary.

TALKS FOUNDER AMID RISING VIOLENCE
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2. (SBU) In the first two weeks of October, Sri Lanka saw
continued serious violence. Since June, both the number and
scale of violent confrontations between the Government of Sri
Lanka (GSL) and the Liberation Tigers of Tamil Eelam (LTTE)
increased drastically. In July, the LTTE provoked an
overreaction by security forces at the Mavilaru irrigation
gates between Batticaloa and Trincomalee. A military
engagement ensued in the predominantly Muslim area of Muttur.
On September 1, after the LTTE withdrew security guarantees,
monitors from EU member states left the Sri Lanka Monitoring
Mission (SLMM). This reduced the number of monitors from 65
to 32, even as complaints of Cease Fire Agreement (CFA)
violations multiplied.


3. (SBU) On October 28-29, Norwegian-facilitated peace talks
in Geneva between the government and the LTTE ended without
any significant breakthrough, failing to produce even an
agreement on dates for a next round. The government focused
on broad issues such as democratic governance, administration
of justice, and devolution of power sharing. The LTTE called
for action on more immediate concerns, including full
implementation of the Ceasefire Agreement (CFA) and
strengthening of the Sri Lanka Monitoring Mission (SLMM).
Talks deadlocked on the second day over the LTTE demand that
the A-9 highway to Jaffna be reopened.

THE TWO MAJOR PARTIES CONVERGE
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4. (SBU) One bright spot in the internal political situation
is the recent agreement between the two major parties, the
opposition United National party (UNP) and the governing Sri
Lankan Freedom Party (SLFP),to work together on a common
program. The SLFP and UNP signed a Memorandum of
Understanding (MoU) on October 23 setting out a Common
Minimum Program to resolve the conflict in the north and east
and to address other national issues. Most significantly,
the MoU reaffirmed the 2002 Ceasefire Agreement with Norway
as facilitator, provoking predictable outrage from Sinhalese
chauvinist parties who supported President Rajapaksa in the
November 2005 election. The Co-chairs and other Western
diplomats view the agreement as a positive contribution
toward reaching a "southern consensus" on a viable peace
proposal the Tigers would have to consider seriously.
Important details of the agreement have not become public,
however. Implementing it will not be easy for either the
ruling party or the opposition UNP - but there is no other
clear way forward.

HUMAN RIGHTS
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5. (SBU) Credible allegations of serious human rights
violations by both sides have mounted. The August 5
execution-style killing of 17 local staff members of the
French NGO Alliance Contre la Faim, 16 Tamils and one Muslim,
has attracted the most attention. The Sri Lanka Monitoring
Mission accused Sri Lankan security forces of involvement in
the murders, a charge the government vehemently denied. An
investigation by a team of Australian forensic experts has
yet to produce conclusive evidence regarding the authorship
of the crime. The government now appears to be paying
attention to the international outcry against the
deteriorating human rights situation. In September,
President Rajapaksa agreed to work with the Co-chairs, other
countries, and the United Nations to set up a panel of
international observers to assist a national Commission of
Inquiry on Human Rights.

NGO ACCESS

COLOMBO 00001821 002 OF 002


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6. (SBU) International humanitarian organizations such as
Medecins sans Frontieres and others have come under fire from
Sinhalese hardliners for alleged Tiger sympathies - or even
giving assistance to the LTTE. While such charges appear to
have minimal basis in fact, the government has cracked down
on work permits for the international NGOs and ordered some
to leave the country. Coordinated pressure from the
international community, including the Embassy, got the GSL
to backtrack on the expulsions. The GSL has also initiated a
high-level working group to address NGO access problems. The
third such meeting took place on November 3.

RECOMMENDATION FOR SRI LANKA'S MCC STATUS
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7. (SBU) Post urges that Sri Lanka continue as an
MCC-eligible country. Development assistance that MCC
provides is needed to help Sri Lanka in its ongoing efforts
to promote greater prosperity, especially in the rural areas
where poverty is greater. As we have consistently reported,
the uneven distribution of wealth in Sri Lanka is one of the
root causes of the conflict. Increased prosperity can only
bolster Sri Lanka's ability to achieve a lasting peace. The
US, as a Co-Chair, is deeply engaged in the search for a
negotiated political settlement to the conflict. An MCC
Compact will bring a "peace dividend" that can help prevent
Sri Lanka's long-running ethnic strife from flaring up anew.
BLAKE