VZCZCXRO3739
OO RUEHBI RUEHLMC
DE RUEHLM #2127/01 3601206
ZNR UUUUU ZZH
O 261206Z DEC 06
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5023
INFO RUEHRL/AMEMBASSY BERLIN IMMEDIATE 0096
RUEHNE/AMEMBASSY NEW DELHI 0415
RUEHKA/AMEMBASSY DHAKA 9733
RUEHIL/AMEMBASSY ISLAMABAD 6671
RUEHKT/AMEMBASSY KATHMANDU 4737
RUEHKP/AMCONSUL KARACHI 2092
RUEHCG/AMCONSUL CHENNAI 7235
RUEHBI/AMCONSUL MUMBAI 5004
RUEHLMC/MILLENNIUM CHALLENGE CORP

UNCLAS SECTION 01 OF 02 COLOMBO 002127 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DRL/IL FOR LAUREN HOLT 
 
STATE FOR SCA/INS 
 
MCC FOR S GROFF, D NASSIRY AND E BURKE 
 
 
E.O 12958: N/A 
TAGS: ECON PHUM SOCI EAID CE
SUBJECT:  SRI LANKA LOSES HALF OF GERMAN TSUNAMI AID 
 
REF:  Colombo 2119 
 
¶1.  (U) SUMMARY:  News of Germany's reallocation of approximately 19 
million euros in tsunami reconstruction funding from Sri Lanka to 
Aceh, Indonesia hit the newswires on December 23 and 24 following 
remarks by the German Minister for Overseas Development during a 
visit to Aceh.  This funding, earmarked for the north and east of 
Sri Lanka, comprises half of Germany's tsunami assistance 
programming for Sri Lanka.  It has not been possible to spend these 
funds due to access problems in conflict-affected areas.  End 
Summary. 
 
19 Million Euros Reallocated to Aceh; No New Programming 
-------------------------------------------- 
 
¶2.  (U) During her visit to Aceh, Indonesia, German Minister for 
Overseas Development Heidemaire Wieczorek-Zeul told a reporter for 
the German daily Tagesspiegel that 19 million euros originally 
destined for Sri Lanka would be reallocated to Aceh.   According to 
Tagesspiegel's December 24 publication of the interview, 
Wieczorek-Zeul also noted that Germany would not enter into any new 
programs with Sri Lanka until the peace process between the 
Liberation Tigers of Tamil Eelam (LTTE) and the Government of Sri 
Lanka (GSL) resumes.  She explained that due to the increased 
intensity of the conflict in the northern part of Sri Lanka, it was 
"too dangerous" to continue projects.  She added that German 
officials had "no access" to the Jaffna peninsula. 
 
¶3.  (SBU) The timing of the announcement, made on the eve of the 
second anniversary of the tsunami, caught the German Embassy by 
surprise.  Andreas Hartmann, Counselor for Economic Cooperation and 
Development at the German Embassy, explained to PolChief that the 19 
million euro reallocation cuts Germany's two-year 38 million euro 
tsunami assistance program in half.  These funds generally go 
 
SIPDIS 
directly to the GSL for reconstruction efforts.  He said that the 
German tsunami reconstruction programs in the south of Sri Lanka 
were going well, and would continue.  But the 19 million euros being 
reallocated to Aceh simply cannot be spent in the north and east at 
this time, due to the conflict in those areas.  German Ambassador 
Juergen Weerth told DCM that, at this time, no new money would be 
allocated for programs beyond what has already been committed until 
there is progress in resuming negotiations between the GSL and 
LTTE. 
 
 
Encouraging Other Nations to Freeze Tsunami Funding 
--------------------------------------------- ------ 
 
¶4.  (U) Wieczorek-Zeul also commented that it would be "nice" if 
other nations would discontinue further funding of tsunami 
reconstruction projects until the peace process resumes.  Sri 
Lanka's Disaster Management Minister Mahinda Samarasinghe dismissed 
this call, saying that the GSL has already taken measures to address 
Wieczorek-Zeul's concerns.  Samarasinghe added that Sri Lanka still 
has not yet been officially notified of the reallocation of funds. 
 
¶5.  (SBU) COMMENT:  As the conflict increases the difficulty for 
donors to implement programs in the north and east, this situation 
contributes to the growing disparity between the Sinhalese south and 
the north and east, where more of Sri Lanka's Tamil population 
lives.  Germany is foremost among the donors in showing its 
displeasure with resumption of the conflict in Sri Lanka by 
withholding its future aid flows, and is further reinforcing that 
message with the movement of these tsunami funds from Sri Lanka to 
Indonesia.  Germany has taken the rational step of re-directing 
funds to a tsunami-affected area where they actually can be used 
(Aceh).  As Germany assumes the EU presidency on January 1, the 
question of whether Germany will use its position to persuade other 
European countries to follow suit will bear watching. 
 
¶6. (SBU) COMMENT CONTINUED: USAID currently implements programs in 
the east, including Office of Transition Initiatives (OTI) 
activities and the tsunami reconstruction program, but has limited 
activity in the north, where its efforts are impacted by the 
deteriorating security situation but do continue, albeit at a slower 
 
COLOMBO 00002127  002 OF 002 
 
 
pace of implementation.  USAID assistance is programmed with 
non-governmental organizations, both public and private, and is more 
immune to corruption in the GSL (see ref) since the USG funding 
takes place through these organizations and does not go directly to 
the GSL.  Meanwhile, the Embassy continues to press for greater 
humanitarian access to the north and east and supports the goal of 
utilizing future USAID programs to address underlying inequities in 
those areas. 
 
BLAKE