VZCZCXRO6747
OO RUEHBI RUEHLMC
DE RUEHLM #1057/01 2121022
ZNR UUUUU ZZH
O 311022Z JUL 07
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6535
INFO RUEHKA/AMEMBASSY DHAKA 0322
RUEHIL/AMEMBASSY ISLAMABAD 7305
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RUEHBI/AMCONSUL MUMBAI 5546
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHHMUNA/HQ USPACOM HONOLULU HI
RUEATRS/DEPT OF TREASURY WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS SECTION 01 OF 03 COLOMBO 001057 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/INS AND EEB/IFD/ODF 
MCC FOR S. GROFF, D. TETER, D. NASSIRY AND E. BURKE 
TREASURY FOR LESLIE HULL 
 
E.O 12958: N/A 
TAGS: EAID EINV PGOV PHUM CE
 
SUBJECT: SRI LANKA: GOVERNMENT STILL WORKING ON PLANS FOR 
DEVELOPMENT OF THE EAST 
 
REF: A) COLOMBO 971  B) COLOMBO 977  C) COLOMBO 1016 
 
¶1. (SBU) SUMMARY:  The government of Sri Lanka announced soon after 
consolidating military control over the East (ref A) that it would 
ask donors to fund development of the area.  The president has 
designated his brother Basil as the point man for the Eastern 
development push.  Basil told UN officials July 17 that he would 
have a redevelopment plan ready by July 19, however that date has 
slipped to August 7.  Donors will likely be cautious in responding 
to the government's appeal, wanting to see firm indications that the 
government's control over the area is truly solid, that the 
government will not attempt to marginalize Tamil and Muslim 
citizens, and that projects will be economically sustainable.  In 
addition, the GSL's announcement that NGOs' development activities 
in the East will fall under the supervision of security forces has 
raised concerns among the donor community.  The government could 
take their hesitancy as reason to seek more help from 
non-traditional donors.  End summary. 
 
¶2. (SBU) President Rajapaksa, in his July 19 address celebrating the 
government's July 11 defeat of the Liberation Tigers of Tamil Eelam 
in the East, promised to "launch an all out development war, giving 
priority to agriculture" in the East.  He expressed confidence that 
international donors would support the effort, echoing an earlier 
appeal by Public Administration Minister Karu Jayasuriya for donors 
to support "an accelerated program of redevelopment that will be 
completed in six months."  Rajapaksa placed his brother and trusted 
advisor Basil in charge of the government's planning for development 
of the East.  Basil, after initially stating that the government's 
redevelopment plan would be ready by July 19, and then by July 27, 
currently is scheduled to present the plan August 7 to the 
Consultative Committee on Humanitarian Assistance (CCHA), which 
consists of bilateral and multilateral donors, international 
organizations, and NGOs. Charge will attend for the U.S. Mission. 
 
¶3. (SBU) United Nations officials already working on the 
resettlement of internally displaced people in the East have had 
preliminary meetings with Basil to discuss the larger development 
challenge as well.  According to Tom Hockley, of the UN Resident 
Coordinator's Office, Basil described three "pillars" required for 
the East to catch up with the rest of the country:  first, security 
and stability (which Basil said has been achieved with the taking of 
Thoppigala); second, reconstruction and development; and third, 
political restructuring and stability (which would presumably be 
addressed by some form of local elections -- see refs B and C).  To 
address the second pillar, the government is working on two guiding 
plans: a "Resettlement Plan for the East" and a "Sunrise Regional 
Plan for the East." 
 
NEAR-TERM PLAN FOCUSES ON BATTICALOA RESETTLEMENT 
--------------------------------------------- ---- 
 
¶4. (SBU) The Resettlement Plan for the East, coordinated by the 
Ministry of Resettlement and Disaster Relief Services, would cover 
the short-term process of resettling internally displaced persons. 
First priority would be those displaced by recent fighting, followed 
by those displaced by the 2004 tsunami, and finally those displaced 
by fighting over the past twenty years.  It would address food and 
water supplies, housing, health and education, livelihoods, roads 
and transport, public services, and religious affairs for newly 
resettled citizens in Batticaloa district. This plan will call for 
donor funds of about $27 million. 
 
¶5. (SBU) Other steps planned for near-term recovery, according to 
Basil, are demining, reduction of limitations on coastal fishing 
hours, and creation of procedures for police to inspect and seal 
trucks to facilitate transportation of fish and produce from the 
 
COLOMBO 00001057  002 OF 003 
 
 
East and goods from Colombo to the East. 
 
LONGER-TERM DEVELOPMENT PLAN COMING SOON 
---------------------------------------- 
 
¶6. (SBU) The government intends to release its Sunrise Regional Plan 
for the East, composed of elements formulated by individual line 
ministries, on August 7.  The long-term plan (through 2030) would be 
broken into ten-year increments, correlated to the development 
promises formulated in the President's "Mahinda Chintana" campaign 
manifesto.  It appears this plan will be an update of a 2004 Eastern 
Province Development Plan that was shelved when the tsunami hit and 
fighting subsequently resumed in the East.  This plan would include 
infrastructure development, to be accomplished using both government 
and donor funds.  While no overall dollar figure has been cited for 
this plan, Basil noted to UN officials that development of the East 
was included in the 2007 budget, so each line ministry has funds for 
the job.  For example, he said, the Ministry of Nation Building has 
about $11 million; another government source told the media this 
week that the government was ready to spend a total of about $55 
million. 
 
MILITARY TO OVERSEE NGOs' DEVELOPMENT WORK 
------------------------------------------ 
 
¶7. (SBU) The government has decided that the army and police will 
play a supervisory role in the East development process.  Military 
spokesman Brigadier Prasad Samarasinghe told the BBC that local 
military commanders would work with civil authorities to approve and 
monitor NGO activities in the East.  The Colombo Sunday Times quoted 
a directive issued by Eastern Security Forces Commander Parakrama 
Pannipitiya stating, "rural development of areas liberated by the 
forces after the humanitarian operations, where there is a civil 
population must be done under the supervision of the police 
stationed in the areas as well as the armed forces."  This memo 
stated that village level committees, composed of villagers and a 
member from the armed forces and the police, would be responsible to 
identify projects that NGOs could conduct.  The Pannipitiya memo 
went on to say that "NGOs should not be permitted to do as they 
please in these areas as before." 
 
COMMENT: COORDINATION AND PLANNING WON'T BE EASY 
--------------------------------------------- --- 
 
¶8. (SBU) Of the 65 cabinet and non-cabinet ministries that have 
allocations in the 2007 budget, dozens have line responsibilities 
relevant to development in the East.  Another handful (Finance and 
Planning, Plans and Implementation, Public Administration, Nation 
Building, etc.) have coordinating responsibilities, so this effort 
is bound to experience coordination problems.  Further, the 
government's rush to get a plan out within weeks of retaking the 
East is symptomatic of its tendency to do hasty planning for 
complicated and sensitive challenges like this.  Finally, the 
government's preference for top-down, non-market approaches to 
planning will raise questions about the viability and sustainability 
of its plans. 
 
¶9. (SBU) International donors and assistance agencies thus are 
likely to have divergent ideas from the government on what needs to 
be done to get the East back on its feet.  Smaller donors will want 
to focus on sustainable grass roots level capacity building.  (Note: 
USAID's new program for Sri Lanka focuses heavily on economic growth 
and democracy and governance in the East.  Programs will involve a 
range of activities including grass roots livelihood development and 
support for small businesses, including connecting farmers with 
markets in the prosperous Western Province and abroad.)  The 
government is supportive of these types of programs, but its recent 
 
COLOMBO 00001057  003 OF 003 
 
 
appeal appears focused on commitments to build infrastructure.  It 
may ask large donors, like Japan, the Asian Development Bank, and 
the World Bank, to shift some of their planned investments to new 
projects in the East.  These donors may not be eager to fund 
infrastructure in an area that the government controls only 
tenuously. 
 
¶10. (SBU) The government's decision to charge military and police 
with supervising NGO activities will also add to the divergence 
between how the government and the donors see the development 
process going.  This directive indicates that the government 
continues to believe that the LTTE is likely to try to infiltrate 
NGO staff and that many NGOs are biased toward the LTTE.  From these 
beliefs, the government concludes that NGO resources, if not 
monitored, may be diverted to the LTTE.  While there is some basis 
for this concern with respect to NGOs operating in the 
LTTE-controlled North, it appears contradictory for the government 
to retain this concern in the East, given the government's assertion 
that it controls the area. 
 
COMMENT, CONT'D: WHICH DONORS WILL 
THE GOVERNMENT COURT? 
---------------------------------- 
 
¶11. (SBU) With the government's interest in infrastructure and its 
tasking of security forces with supervising NGO activities, it will 
be interesting to watch the degree to which Sri Lanka seeks the 
assistance of non-traditional donors, especially China.  With 
President Rajapaksa having recently said Sri Lanka could do without 
donors who attach conditions to their assistance, the development of 
the East could demonstrate whether the government is prepared to be 
flexible in order to retain the support of its oldest, most 
competent, and most generous donors, or whether it will want to do 
things its own way with less transparent help from a small handful 
of non-Western donors such as China. 
MOORE