This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 06 COLOMBO 002145 
 
SIPDIS 
 
DEPT FOR EB A/S ANTHONY WAYNE; SA/INS FOR M.GOWER, C.SIM; 
TREASURY FOR S.CHUN; MCC FOR D.NASSIRY AND E.BURKE 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EAID ECON PGOV CE MV ECONOMICS
SUBJECT: MIXED RECORD CONFRONTS SRI LANKA, MALDIVES AND 
DONORS AS TSUNAMI ONE YEAR ANNIVERSARY APPROACHES 
 
Ref: Colombo 2099 
 
¶1.  (SBU) Summary: As we approach the one year anniversary 
of the December 26, 2004 tsunami, Sri Lanka has avoided the 
mass outbreak of disease and unrest that some feared early 
on, established a network of transitional shelters, begun 
to build permanent housing, elected a new President, 
established and now re-structured the agencies responsible 
for tsunami relief and reconstruction, established but are 
perhaps rethinking a 100 meter coastal "buffer zone,"  and 
begun to restore livelihoods, particularly in the hard-hit 
tourism and fisheries sectors.  As we look back on one 
year, there are examples of much that was right and much 
that was wrong with both Sri Lanka's and the international 
community's approach.  Nonetheless, for having absorbed the 
loss of 35,000 fellow countrymen, and weathered over USD 
1.5 billion in damage, Sri Lanka has emerged relatively 
strong, committed to disaster preparedness and somewhat 
wiser, beginning to adapt from some lessons learned during 
the first months immediately after the crisis.  Maldives 
ends the year scrambling for funding to fill a significant 
financing gap and to finance a major budget deficit. 
Having started the post-tsunami phase strong, Maldives' 
small size and obvious resource constraints have turned its 
impressive "sprint" at the outset of the disaster into a 
tougher slog.  Increasing tourist arrivals, however, should 
help Maldives through.  End Summary 
 
¶2.  (SBU) On December 26, 2004 the Asian tsunami struck Sri 
Lanka and Maldives, killing approximately 35,000 Sri 
Lankans and 100 Maldivians.  While Sri Lanka absorbed 
approximately USD 1.5 billion (or 5 percent of GDP) in 
damage, Maldives faced USD 400 million in damage - a 
whopping 60 percent of GDP.  For perspective, in the case 
of Maldives, it would be as if Hurricane Katrina had killed 
over 100,000 people and caused USD 6 Trillion in damage. 
For Sri Lanka, it was the proportional equivalent of 250 
September 11 attacks happening simultaneously.  Neither 
country was prepared, neither had the capacity to absorb 
such a hit, yet both performed, in hindsight, with a fair 
degree of competence and success. 
 
Sri Lanka 
---------- 
The US Response 
--------------- 
¶3.  (SBU) USG humanitarian assistance for Sri Lanka in the 
aftermath of the December 2004 tsunami disaster was 
spearheaded by USAID/OFDA with the immediate deployment of 
a DART team and rapid funding of a portfolio of emergency 
projects.  Now largely completed, the projects were 
instrumental in setting the framework for a successful 
international and national relief effort.  Against a 
disaster scenario of 35,322 dead, 516,150 displaced, and 
over a million affected in the country?s coastal 
communities, there were no deaths due to starvation, lack 
of medical care, or epidemics.  The government of Sri Lanka 
has reported that the majority of children are back in 
school; at least half of the tsunami-displaced population 
has been accommodated in more than 50,000 transitional 
shelters (while others have been taken in by relatives); 
and a combination of short-term and longer-term cash and 
employment interventions have assured at least some income 
to the families of the 200,000 persons who lost their 
livelihoods. 
 
¶4. (SBU) In coordination with USAID activities, the US 
military response was swift and effective.  In all, 1,700 
Marine, 150 Air Force and US Navy personnel provided 
immediate clean-up, logistics and relief support to 
affected communities on the ground.  US Marines cleared 
tsunami affected areas and rebuilt a school in southern Sri 
 
SIPDIS 
Lanka.  Air Force personnel, via "Operation Winn-Dixie" 
provided fresh produce from central Sri Lanka to affected 
communities in the North and East and conducted medical 
operations in the very northernmost part of the island. 
Merchant Marine ships provided fresh water to both Sri 
Lanka and Maldives.  The US military presence and 
cooperation with the USAID/OFDA DART teams was impressive, 
effective, and proved an amazingly popular goodwill gesture 
during a time of severe need. 
 
¶5.  (U) In addition to OFDA activities (about USD 43 
million), USAID obligated USD 53.6 million into 
livelihoods, small-scale infrastructure, urban planning, 
and good governance activities and another USD 35 million 
in a large-scale infrastructure reconstruction program. 
USAID's livelihood support program includes assistance for 
the GSL's tourism "Bounce Back" campaign, cash for work and 
vocational training, small grants to restore the 
livelihoods of small business owners, and projects to 
support livelihood development in multi-ethnic areas in or 
adjacent to tsunami affected areas.  Peace Corps' Crisis 
Corps program has provided short-term volunteers to support 
capacity building projects and the delivery of livelihood 
assistance to affected groups.  Crisis Corps works with 
international, national and local partner organizations in 
the South and East to strengthen the ability to manage 
information, gain access to resources, replace productive 
assets and rebuild communities. 
 
¶6.  (U) The infrastructure reconstruction projects will 
include rebuilding the bridge over Arugam Bay in the east, 
the reconstruction of three fisheries harbors and the 
reconstruction and redevelopment of up to 14 
vocational/technical schools.  Further, the US Trade and 
Development (USTDA) agency has provided assistance to the 
newly formed National Disaster Management Council (now the 
Ministry for Disaster Management), water and sanitation 
pilot projects and transportation improvement.  The US also 
agreed to provide two years of debt deferral and 
restructured payments to help provide "breathing space" for 
the Ministry of Finance. 
 
Accomplishments and Challenges 
------------------------------ 
¶7.  (SBU) As we enter the second post-tsunami year, we find 
that approximately 53,000 transitional shelters have been 
built with funding from various donors, enough for roughly 
half of the 500,000 who were displaced. The rest are living 
with friends and family, and efforts are underway to 
identify needed resources and services to help restore 
these families to their former lifestyle. NGOs and the GSL 
have coordinated relatively well on the transitional 
housing program, and as we come out of the monsoon season, 
we find that while there were certainly some transitional 
shelter residents who were displaced temporarily a second 
time, concerns about a second wave of humanitarian crises 
have not been borne out. 
 
--Buffer Zone 
 
¶8.  (SBU) Perhaps the biggest mistake on the part of the 
GSL post-tsunami was setting unrealistic permanent housing 
goals, and then hamstringing their ability to deliver 
through the imposition of a 100m/200m coastal conservation 
?buffer zone? in the west and east of the island 
respectively.  Within weeks of the disaster, then President 
Kumaratunga announced that the Government would rebuild all 
damaged housing within 3 months.  While few took this 
particular promise literally, it had the effect of setting 
expectations that reconstruction could be done within a 
year.  In fact, an entire year has been needed to provide 
transitional shelter, coordinate efforts to begin building 
permanent shelter and work through how to operate with the 
100m/200m buffer zone.  Ultimately, the buffer zone has 
proven largely unworkable, given the constraint of land 
availability, particularly in the East.  We were able to 
bring out coastal experts from several agencies (USGS, 
FEMA) to provide much-needed expertise and advice on how to 
deal with coastal conservation issues.  Their input was a 
significant factor in the GSL?s decision to modify the 
buffer zone. 
 
¶9.  (SBU) Following the November 18 election of President 
Rajapakse, an announcement was made that the buffer zone 
would be rescinded and people would be allowed to build 
back on their previous sites.  This decision has not yet 
been finalized, but it should have the effect of moving 
thousands of people from what appears to be a seriously 
constrained donor-driven housing program into the "owner- 
driven" housing program, which has enjoyed far more success 
(see para 9 below). 
 
--Former Killing Zone 
 
¶10.  (SBU) Complicating Government reconstruction efforts 
was the fact that a majority of the tsunami-affected area 
lay in territory controlled or heavily influenced by the 
Liberation Tigers of Tamil Eelam (LTTE), a US-designated 
foreign terrorist organization, which has waged a violent 
insurgency against the Government since 1983.  Although an 
uneasy ceasefire has been in effect since early 2002, low- 
level violence persists.  After several months of 
negotiations following the tsunami, the Government signed 
an aid-sharing agreement with the LTTE in June.  However, 
soon thereafter concerted opposition from nationalist 
political parties in the south, including one of the 
Government's own coalition partners, Muslim groups, and a 
court challenge rendered the agreement inoperable.  The 
Government acknowledges that Tsunami reconstruction has 
lagged behind in LTTE-held areas and is considering ways to 
move forward with assistance to these areas. 
 
Rebuilding: Owner versus Donor Driven Housing Programs 
--------------------------------------------- --------- 
¶11.  (SBU) Sri Lanka established two options for people 
whose homes were damaged or destroyed by the tsunami.  For 
those whose homes were not in the buffer zone, an "owner- 
driven" program was created, which provided direct grants 
to homeowners, who then have the responsibility for 
repairing or building their own homes.  As of November 
2005, all participants in the owner-driven program had 
received the first payment (out of four payment tranches), 
and the GSL, through participating banks, was in the 
process of making second payments.  This program currently 
involves approximately 53,000 homeowners.  While the first 
payments had been made, a dearth of qualified Government 
technical officers in the affected areas slowed the 
verification process, which was required to release the 
second payments.  Following the release of additional 
technical officers from other regions, progress has picked 
up and some participants have even received their third and 
fourth (final) payments. 
 
¶12.  (SBU) The "donor-driven" permanent housing program 
for those whose homes were within the buffer zone has not 
proceeded quite as quickly.  Rebuilding for these families 
required identifying new land, a process that proved 
enormously slow and fraught with problems, particularly 
with regard to livelihood (for example, fisherman in Sri 
Lanka prefer to live near the sea and their equipment; 
Government ideas about building multi-story communities 
three kilometers inland, away from the coast and equipment, 
proved impractical).  Hundreds of NGOs stepped in to offer 
to build housing and, as of November, of the roughly 50,000 
houses in the donor built program, MOUs had been signed 
between the GSL and rebuilding entities (mostly NGOs) for 
just over 29,000.  Construction had begun on approximately 
25,000 units (Note: these figures could be slightly 
misleading, as the Government reportedly counts the 
beginning of work on a multi-tract housing project as the 
commencement for all houses.  Therefore, in a 200-house 
project, if the ground has been broken on the first unit, 
the GSL counts it as 200 units under construction. End 
Note). 
 
¶13.  (SBU) The recent decision to eliminate the 100m/200m 
buffer zone could have a dramatic effect on the donor- 
driven and owner-driven programs, since allowing people who 
were previously barred from returning to their damaged 
homes or lots to return could significantly increase the 
participation in the owner-driven program.  Moreover, the 
US and other donors have urged the Government to allow NGOs 
to be involved in that process, to assist homeowners in 
assuring that their homes are sound, and constructed in a 
manner consistent with the needs of living near the coast. 
This transition is still very much a work in progress and 
will be monitored closely by all participating groups and 
agencies to ensure that a maximum number of people benefit 
from any relaxation of the rules. 
 
From TAFREN/TAFOR/TAP to RADA 
----------------------------- 
¶14.  (SBU) In the immediate aftermath of the tsunami it 
became clear that a Colombo-centric approach to the 
response would emerge, and that it would revolve around the 
Presidency.  Out of this model came several organizations 
that led the primary relief and reconstruction efforts, 
with authority from the President's office and with her as 
the ultimate decision-maker.  The Task Force for Relief 
(TAFOR), the Task Force for Rebuilding the Nation (TAFREN) 
and The Transitional Accommodation Project (TAP) were just 
a sample of the organizations that came about, headed by 
confidants of the President and responsible for a top-down 
approach to implementing relief and reconstruction 
programs. 
 
¶15. (SBU) While these organizations were staffed with 
capable and determined individuals, the Colombo-centered 
focus led to delays, indecision and, ultimately, poorer 
decisions than otherwise might have been taken in the 
field.  Following his election as President in late- 
November, President Rajapakse decided to amalgamate all 
reconstruction entities, both for tsunami and war-affected 
areas, into one overarching body, the Relief and 
Development Agency (RADA).  Reftel provides additional 
information on RADA and its direction based on discussions 
with its leadership.  RADA Chief Operating Officer, Saliya 
Wickramasuriya, currently in the process of evaluating 
personnel and resources, told Econchief that he will not 
likely make many changes to structures until he get a full 
handle on the complete set of responsibilities and 
requirements of the new agency.  He is also working on 
drafting legislation that will give the agency "authority" 
status, which in Sri Lanka conveys a significant amount of 
power, allowing organizations to bypass existing 
structures, statutes and processes.  One of the key focuses 
of the agency, according to Wickramasuriya, will be to push 
decision-making down to the local levels, and provide 
capacity building for the village and district level 
leaders who are necessarily the "first responders" to all 
of the relief and reconstruction requirements. 
 
Donor Coordination 
------------------ 
¶16. (SBU) While donor coordination appears to have led to a 
closer working relationship among members of the donor 
community, particularly the International Financial 
Institutions (IFIs), and the Government, there was also 
evidence of competition among donors, and efforts to 
"elbow" others out for projects (Note: Post faced this 
phenomenon directly when Germany's GTZ sought to take some 
of the vocational schools projects for which the US had 
already signed an agreement with the GSL. End Note).  There 
were also cases early on of oversupply of NGOs and relief 
in certain areas, and gaps in harder to reach, or less 
prominent areas of the country. 
 
¶17.  (SBU) In the immediate aftermath of the tsunami, the 
World Bank, Asian Development Bank and Japanese Bank for 
International Reconstruction (JBIC) embarked on a multi- 
pronged damage assessment, drawing on expertise from 
existing donors (including USAID) and the GSL.  These 
working groups then created the work plans for moving 
forward with the reconstruction process.  While the GSL 
struggled with its Colombo-centered approach, the donor 
coordination group served as a strong voice for the 
affected communities, insisting on consultation and 
coordination.  As the reconstruction process went forward, 
the IFIs continued to coordinate with other donors and the 
GSL, by establishing a donor working group with rotating 
membership and regular meetings with senior-GSL officials. 
Livelihoods 
----------- 
¶18. (SBU)  With the damage and loss of life, a secondary, 
but no less important, concern has been the restoration of 
livelihoods, both to mitigate the economic damage of the 
tsunami and to provide necessary psychological support to 
 
SIPDIS 
those who have seen their lives uprooted and members of 
their family killed.  The tourism and fishing industries 
were the two economic sectors most heavily affected by the 
tsunami.  While tourism numbers fell precipitously, the 
 
SIPDIS 
overall numbers for temporary visitors in 2005 has been 
remarkably high.  The figures remain low in tourist 
hotspots, however, and resorts are still not at pre-tsunami 
occupancy levels. 
 
¶19.  (SBU) The fishing sector is not a major component of 
GDP in Sri Lanka, but it represents the largest employer 
and economic activity in the coastal areas. Fishing 
communities have slowly returned to the sea as boats and 
fishing kits have become available.  An initial concern 
about an oversupply of single day fishing boats has led to 
an increased focus on multi-day boats, in order to promote 
sustainable fishing practices.  Muslims are also heavily 
represented in the fishing population, adding ethnic 
sensitivities to the mix.  Agricultural land that was 
inundated will take years to return to a useful state. 
Small businesses affected by the tsunami have been targeted 
by a Central Bank-sponsored lending program, designed to 
provide an additional USD 500 million into the affected 
communities' economies. 
 
Maldives 
--------- 
¶20. (SBU)  The past twelve months in Maldives have been a 
whirlwind of post-tsunami operations, political upheaval 
and lurching toward reform.  In the immediate aftermath of 
the tsunami, the GORM elected to hold parliamentary 
elections that were hotly contested and deemed likely to 
move the country toward much anticipated political reform. 
The GORM made a lot of headway early on, presenting a 
highly competent and well developed financing plan to 
donors in various international fora.  As the months wore 
on, however, the lack of depth in GORM Ministries began to 
show and performance dropped considerably.  In recent 
months we have had representations from various GORM 
officials concerned about both a significant financing gap 
for tsunami reconstruction (approximately USD 90 million) 
as well as a looming budget deficit (most recently reported 
at USD 25 million). 
 
¶21.  (SBU) The World Bank and ADB have established local 
offices in Maldives to work through these issues and advise 
the GORM on these financing needs.  UNDP has increased 
operations significantly and taken a lead role in tsunami 
relief and reconstruction activities. 
 
¶22. (U) The US has just concluded a bilateral agreement to 
support reconstruction in the Maldives. The agreement 
commits USD 8.6 million for the reconstruction of harbors, 
power plants, water and sanitation systems and for 
equipment and capacity building for the Ministry of Finance 
to assist with Maldives? absorption capacity. 
 
Comment 
------- 
¶23.  (SBU) Aware that the international spotlight has 
returned to Sri Lanka around the one-year anniversary of 
the disaster, Post has counseled the GSL to take an open 
and honest approach with the international media and high- 
level visitors.  In Sri Lanka, some things have gone well, 
some things have gone poorly, but on the whole, Sri Lanka 
has a largely positive story to tell.  It also has a long 
way to go, and should use the one year mark as a means of 
making people aware of exactly what additional help will be 
required.  From the US Mission perspective, we are pleased 
with the performance to date of US programs and look 
forward to continuing our reconstruction projects, 
implementing our capacity building projects and working 
with the GSL and Maldives as they move forward in the years 
ahead.  For two countries that could not have foreseen 
disasters of this magnitude, both Sri Lanka and Maldives 
have responded with professionalism and compassion to the 
needs of their citizens.  Both adapted and 
institutionalized some of the lessons learned and the 
response of the two Governments to future challenges 
(hopefully none of this magnitude) should be improved.  End 
Comment. 
 
LUNSTEAD