VZCZCXYZ0003
OO RUEHWEB

DE RUEHLM #0581/01 1001227
ZNR UUUUU ZZH
O 101227Z APR 06
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3091
INFO RUEHNE/AMEMBASSY NEW DELHI PRIORITY 9487
RUEHKU/AMEMBASSY KUWAIT PRIORITY 0438
RUEHCG/AMCONSUL CHENNAI PRIORITY 6522

UNCLAS COLOMBO 000581 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PLEASE PASS TO SENATOR ENZI AND CODEL FROM AMBASSADOR 
LUNSTEAD 
 
E.O. 12958: N/A 
TAGS: OREP PREL PGOV PTER EAID ECON CE
SUBJECT: SRI LANKA:  SCENESETTER FOR CODEL ENZI 
 
 
------------------- 
BILATERAL RELATIONS 
-------------------- 
 
¶1.  (SBU) Senator Enzi, your delegation's April 14 visit to 
Sri Lanka offers a valuable opportunity to highlight our warm 
bilateral ties, re-emphasize our commitment to support the 
peace process and review progress on key elements of our 
humanitarian assistance program.  Bilateral relations with 
the Government of Sri Lanka (GSL) are cordial and strong, 
underpinned by our shared democratic values and our mutual 
support in the Global War on Terror.  These ties were further 
bolstered by the swift U.S. response to the December 2004 
tsunami, which killed more than 35,000 people and devastated 
 
SIPDIS 
70 percent of the Sri Lankan coastline.  Overall, U.S. 
relations with Sri Lanka continue to improve, with trade, 
investment and military cooperation on the upswing.  The U.S. 
is one of four Co-chairs, along with Japan, Norway, and the 
EU to the peace process.  The GSL appreciates the firm stand 
the U.S. has taken by proscribing the Liberation Tigers of 
Tamil Eelam (LTTE) as a Foreign Terrorist Organization (FTO) 
in 1997.  We have repeatedly emphasized that the LTTE listing 
could be reviewed if the LTTE renounces terror in word and 
deed--which the Tigers so far have not done. 
 
------------- 
PEACE PROCESS 
-------------- 
 
¶2. (SBU) Your visit comes on the eve of the second round of 
ceasefire talks, scheduled to be held April 19-21 in Geneva, 
between the Government and the LTTE.  Since the last round of 
talks (February 22-23), in which the LTTE said it would halt 
attacks on GSL security forces and the GSL pledged to curb 
the activities of "armed groups" in Government-controlled 
territory, the two parties have repeatedly accused each other 
in public of failing to uphold their respective commitments. 
In addition to the war of words, confrontations between GSL 
security forces, the LTTE and "armed groups," most notably 
the dissident Karuna faction of the LTTE, have led to nearly 
30 deaths in the north and east since the last round of talks 
concluded on February 23.  Although GSL security forces have 
shown great restraint in the face of repeated provocations 
from the LTTE, the Karuna faction, which many people suspect 
enjoys some degree of GSL support, continues to operate with 
apparent impunity.  The recent uptick in violence has raised 
concern that the LTTE, which unilaterally walked out of 
negotiations with the GSL in 2003, may decide not to attend 
the meeting in Geneva.  GSL behavior, on the other hand, has 
also given cause for concern.  Members of President Mahinda 
Rajapaksa's government have openly criticized Norwegian 
government facilitators to the peace process and the 
Nordic-sponsored ceasefire monitoring organization, the Sri 
Lanka Monitoring Mission (SLMM), for purported partiality 
toward the LTTE. 
 
¶3.  (SBU)  In your meeting with GSL interlocutors, you may 
wish to commend GSL efforts to re-engage with the LTTE across 
the table, underscore the importance of strengthening the 
ceasefire and urge the GSL not to give the Tigers any pretext 
to break off talks.  While expressing concern about the 
continued violence, you may also wish to reaffirm U.S. 
support for Norewegian facilitators and SLMM monitors, noting 
the important work the SLMM has done in documenting LTTE 
child recruitment practices.  You might also probe GSL 
strategy on how to move the talks past focusing on the 
ceasefire toward a political resolution of the 23-year 
conflict. 
 
------------------- 
ECONOMIC RELATIONS 
------------------- 
 
¶4.  (SBU) As the Ambassador noted in a speech to the American 
Chamber of Commerce earlier this year, in order to achieve 
better economic progress, "peace is paramount."  The 
continuing uncertainty surrounding the peace process has 
raised concerns among current and potential investors.  While 
Sri Lanka suffered over USD 1 billion in damage as a result 
of the tsunami, most rebuilding costs will be borne by NGOs 
and the donor community.  Sri Lanka's economic growth rate 
did not suffer noticeably, largely because of the relatively 
low contribution of the tourism and fishing sectors (the two 
most heavily affected industries) to GDP, and because of the 
offsetting growth in the construction industry. 
 
¶5.  (SBU) Sri Lanka is a Millennium Challenge Account 
eligible country, and has submitted a compact proposal 
focusing on rural development, including rural irrigation 
projects, rural roads, rural electrification and small and 
medium enterprise development.  Millennium Challenge 
Corporation is currently conducting its due diligence of the 
proposal and negotiating the contract terms.  The government 
acknowledges the need for an open economy, but retains some 
statist leanings.  The President's Marxist/nationalist allies 
are opposed to the privatization of state-owned enterprises, 
despite their poor track record and significant, and the most 
recent budget was full of give-aways, particularly to rural 
communities. 
 
------------------------------- 
MILITARY-TO-MILITARY RELATIONS 
------------------------------- 
 
¶6.  (SBU) A review of the 2002 US Pacific Command (PACOM) 
assessment of the Armed Forces of Sri Lanka shows that some 
progress has been made but much remains to be done to meet 
our goal of a stronger Sri Lankan military capable of 
deterring an LTTE return to war.  Some of the positive steps 
included:  great strides in humanitarian demining; Sri Lankan 
participation in joint exercises with US and other friendly 
forces; strengthening of maritime surveillance/interdiction 
capabilities through delivery of an ex-U.S. Coast Guard 
cutter; several high-level visits, including by former Deputy 
Secretary of Defense Wolfowitz early last year; and Sri 
 
SIPDIS 
Lankan hosting of a Peacekeeping Operations training center 
and participation in the UN Peacekeeping Operation in Haiti. 
FY 06 funding for Foreign Military Financing is projected at 
USD 1 million, while FY 06 spending on International Military 
Education and Training (IMET) programs is projected at USD 
500,000. 
 
--------------- 
USAID PROGRAMS 
-------------- 
 
¶7.  (SBU)  USAID/Sri Lanka's Country Strategic Plan supports 
three major programs and one special activity in the 
following areas:  Democracy and Governance (DG); Humanitarian 
Assistance (HA); Economic Growth (EG); and a special small 
grants program, via the Office of Transition Initiatives 
(OTI), to support the peace process.  The December 2004 
tsunami caused major implementation delays in the bilateral 
 
SIPDIS 
program while partners switched gears very quickly to address 
the emergency.  Total USAID spending on tsunami-related 
programs is USD 134.6 million, which, over the next two 
years, will include major infrastructure projects, such as 
the rebuilding of a large coastal bridge, the restoration of 
three fishing harbors, and the rebuilding of tsunami-affected 
vocational/technical schools.  During your visit, you will 
have the opportunity to visit a playground constructed by 
USAID in a tsunami-affected community in southwestern Sri 
Lanka. 
 
¶8.  (SBU)  The DG program support the peace process and the 
promotion of transparent and accountable local government. 
There are three streams of intervention--with the national 
government and political parties; civil society; and with 
community groups.  The HA program improves social services to 
targeted vulnerable populations, particularly people with 
mobility disabilities and to children affected by armed 
conflict and violence, as well as torture survivors and their 
families.  New activities beginning this year include an 
HIV/AIDS program and interventions to assist the GSL to 
improve detection of the Avian Influenza virus.  The EG 
program strengthens the role of the private sector in the 
economy by providing expert assistance to increase 
productivity and exports of key commodities and improves the 
ability of the Sri Lankan workforce  to compete in domestic 
and world markets.  The OTI program increases public support 
for a negotiated settlement to the conflict through 
short-term, high-impact small-grant activities that increase 
awareness of key transition issues and promote collaboration 
among diverse groups to set and address local priorities. 
The OTI/Sri Lanka program takes a bottom-up approach to 
peacebuilding by working predominantly at the village level 
and often with informal groups. 
 
--------------------- 
HUMANITARIAN DEMINING 
--------------------- 
 
¶9.  (SBU) The U.S. began training the Sri Lanka Army 
engineering battalion in humanitarian demining operations in 
August 2003.  Since late 2003 the Sri Lanka Army has received 
equipment and training in all disciplines of humanitarian 
mine action.  To date, U.S.-trained Sri Lanka Army demining 
units have cleared more than two million square meters. 
Approximately 570 deminers have been trained, equipped and 
fielded, with over half of them working in Jaffna and the 
rest divided between Vavuniya and Trincomalee. The Mine 
Detecting Dog program began in February 2004 with six dogs 
delivered from Marshall Legacy Institute through private 
donations and the Department of State providing equipment, 
supplies, facilities, training, health care and associated 
support costs for the dogs.  During your visit you will have 
the opportunity to visit the Sri Lanka Army engineering 
battalion in Embilipitiya to hear a briefing on demining 
activities and to observe Army deminers--as well as four mine 
detecting dogs--in action. 
LUNSTEAD