VZCZCXRO3541
PP RUEHCI
DE RUEHLM #1040/01 3231132
ZNR UUUUU ZZH
P 181132Z NOV 08
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC PRIORITY 8914
INFO RUEKJCS/SECDEF WASHDC
RUEHNE/AMEMBASSY NEW DELHI 2396
RUEHKA/AMEMBASSY DHAKA 1140
RUEHKT/AMEMBASSY KATHMANDU 6349
RUEHCG/AMCONSUL CHENNAI 8783
RUEHCI/AMCONSUL KOLKATA 0378
RHHMUNA/CDR USPACOM HONOLULU HI
RHEFDIA/DIA WASHDC//DHO3//

UNCLAS SECTION 01 OF 04 COLOMBO 001040 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/INS 
DHAKA PLEASE PASS TO DASD CLAD 
 
E.O 12958: N/A 
TAGS: MARR PGOV PHUM PREL CE
SUBJECT:  Sri Lanka:  Scenesetter for the Visit of Deputy Assistant 
Secretary of Defense Clad 
 
¶1. (SBU) Summary:  Your visit comes at a critical time, with Sri 
Lanka's 25-year ethnic conflict entering a possibly decisive phase. 
Government forces have made significant progress against the 
Liberation Tigers of Tamil Eelam (LTTE) in the last several months, 
gaining a large swath of territory in Sri Lanka's northwest. 
However, the government also faces some challenges in its campaign 
against the LTTE, including shortages of some military supplies, 
such as parts for U.S. supplied equipment due to Congressional 
prohibitions, and an increasingly strained budget and a balance of 
payments shortfall.  Bilateral relations between the U.S. and Sri 
Lanka, including counterterrorism cooperation, are generally good. 
However, the USG has been openly critical of the GSL's failure to 
rein in or punish serious human rights abuses.  There is little 
evidence to date that the GSL will respond to the concerns of the 
U.S. Congress, allowing us to lift some of the restrictions on 
military assistance and exports of defense-related materials. 
Further progress on obtaining the release of child soldiers serving 
with government-sponsored paramilitaries could lead to the 
resumption of support for maritime and aerial surveillance under 
Section 1206 and other programs.  End summary. 
 
Military and Security Situation 
------------------------------- 
 
¶2.  (SBU) The Government of Sri Lanka is making steady progress in 
its semi-conventional counterinsurgency operations against the LTTE 
in the Northern Province, or "Vanni", region.  Inadequate security 
and stability operations in the Eastern Province have resulted in 
continued deterioration of the security situation there, as the LTTE 
infiltrates its cadres to destabilize the provincial government and 
friction between Karuna and Pillaiyan factions of the TMVP grows 
more violent.  The commitment of Army Special Forces and Commandos 
and Police Special Task Force units to support operations in the 
Vanni has left Colombo and the rest of the country more vulnerable. 
Terrorist incidents in the Colombo greater metropolitan area are up 
dramatically in 2008, but do not pose a threat to your visit.  The 
LTTE does not target foreigners.  However, the threat to U.S. 
citizens of being in the wrong place at the wrong time, particularly 
to those who associate with GSL officials targeted by the LTTE, 
increases with the rise in attacks. 
 
Prognosis 
--------- 
 
¶3.  (SBU) It appears increasingly likely that within the next 12 
months, possibly sooner, the military may take the remaining 
LTTE-controlled areas of the Northern Province, which will drive 
residual LTTE forces underground and likely precipitate more 
terrorist attacks countrywide.  The LTTE probably will remain 
capable of massing sufficient forces to launch occasional guerrilla 
attacks against Government of Sri Lanka targets, but may also 
increasingly resort to terrorist operations against civilian and 
economic targets, including attacks focused on Tamil leaders aligned 
with the GSL, GSL military and political leadership, and high payoff 
targets such as critical infrastructure.  To counter the changes in 
LTTE strategy, the GSL will shift its own focus from 
semi-conventional to counter-terrorist and stability support 
operations. 
 
International Cooperation 
------------------------- 
 
¶4.  (SBU) As the LTTE is reliant on external illegal financing and 
smuggling activities to sustain its operations, the U.S., as a 
leading proponent of global counter-terrorism efforts, had provided 
the GSL support in preventing and interdicting terrorist 
fund-raising and arms trafficking.  Indian Navy support to SLN 
patrolling of the Palk Strait is another key contribution.  India is 
also interested in providing maritime surveillance radars to Sri 
Lanka.  Unable to acquire defense materiel from U.S. and European 
governments and defense industries because of human rights problems, 
the GSL enjoys continued sales from China, Pakistan, Russia, and 
other former Soviet republics.  However, the GSL's mounting 
financial difficulties, including unsustainable fiscal and 
balance-of-payments deficits, have reportedly interrupted the flow 
of supplies from these partners, who are generally unwilling to 
extend further credits for arm sales and insist on cash.  The GSL 
has also significantly drawn down its foreign exchange reserves in 
an attempt to defend the informal peg to the U.S. dollar and 
 
COLOMBO 00001040  002 OF 004 
 
 
recently has come to the brink of default on payments to 
international banks, including obligations arising out of 
ill-considered petroleum hedging contracts. 
 
Security Cooperation with the U.S. 
---------------------------------- 
 
¶5.  (SBU) The U.S. generally has good relations with the GSL, 
including cooperation where possible on regional issues and within 
international organizations.  We have an active dialogue on matters 
of mutual interest, including the sensitive area of human rights. 
Military-to-military relations are currently subject to significant 
constraints, however.  Due to legislative restrictions related to 
human rights and child soldiers, procurement of U.S. military 
equipment has ceased.  There is no expectation of significant 
substantive change to current U.S. legislative restrictions.  Were 
the Secretary of State to certify that the GSL has made significant 
progress on the issue of child soldiers, the U.S. could resume 
transfers of equipment for aerial and maritime surveillance and 
communications.  (State and DoD will seek to exempt communications 
from the possible new restrictions in the FY-09 appropriations 
legislation.) 
 
Training and Exchanges 
---------------------- 
 
¶6.  (SBU) The only restriction on training is the interagency policy 
prohibition against engagement with Sri Lankan Army Special Forces, 
Commandos, and Police Special Task Force personnel.  This is 
generally interpreted to mean those currently serving in, as well as 
former members of, those units.  In practice, engagement with the 
Sri Lankan military is strictly non-lethal, consistent with the U.S. 
position that there is no purely military solution to the conflict. 
The U.S. continues to advocate publicly and privately that the GSL 
should follow a political strategy to end the conflict.  For the 
same reason, the Embassy has proposed postponing high-level U.S. 
military leader visits until spring, when the fighting may have 
slowed and more progress may have been made with regard to the 
release of child soldiers serving in the TMVP. 
 
Human Rights Challenges 
----------------------- 
 
¶7.  (SBU) The GSL's record on human rights remains the greatest 
obstacle to a normal military-to-military relationship.  While 
recognizing that the GSL is not ready at this time to meet the 
criteria set out in section 699G of the 2008 Foreign Operations 
Appropriations Act, the Embassy has tried privately to persuade the 
government to take actions consistent with the objectives of the 
U.S. Congress in passing this legislation.  For example, beyond 
obtaining the release of the paramilitaries' approximately 60 
remaining child soldiers, we have suggested that the GSL should 
reinstate the independence of national bodies such as its Human 
Rights Commission and empower them to exercise their oversight and 
reporting functions.  We have urged the government to rein in the 
shadowy groups responsible for abductions and disappearances and 
hold accountable those responsible for abuses, including in two 
high-profile 2006 cases: the murder of 17 aid workers in Muttur; and 
the separate killing of five students in Trincomalee.  Most 
important, we and other friends of Sri Lanka, notably India, have 
asked the government to reach out to its minorities though a 
political strategy that promises significant devolution of power to 
the provinces and additional rights for minorities.  Our efforts to 
engage on these issues have met with very limited success to date 
for two principal reasons.  First the Government does not have the 
two-thirds parliamentary majority it would need to amend the 
constitution.  Second, it is concerned that approving new rights for 
minorities could weaken its support among its majority Sinhalese 
voter base in advance of Provincial Council and possible 
parliamentary elections in 2009. 
 
Opportunities to Engage 
----------------------- 
 
¶8.  (U) We have an important role to play in helping the GSL 
stabilize and secure its Eastern Province through the DoD-funded 
1207 program, which USAID is taking the lead in implementing.  A key 
component of this effort will be to assist with demobilizing and 
retraining former members of the TMVP paramilitary.  The program 
 
COLOMBO 00001040  003 OF 004 
 
 
will also seek to reinvigorate the economy of the East through 
livelihoods creation and public-private partnerships to spur 
investment-led growth, and link the East to lucrative markets in the 
Western Province and abroad.  In addition, PACOM activities will 
provide humanitarian assistance and small-scale infrastructure 
development in the East.  The GSL will also face significant 
challenges in clearing and securing conflict-affected areas in the 
Northern Province.  While there likely will be widespread support 
for development programs in the North, security will be the initial 
requirement. In order to resettle IDPs from the North as quickly as 
possible, de-mining will be a major need; however, the military 
faces considerable equipment constraints and international groups 
conducting existing de-mining projects operate at a slow pace.  An 
innovative State Department program to create a humanitarian 
demining capacity within the Sri Lankan Army was initially 
successful, but some of the progress was lost when the units created 
were not kept together.  Other international partners have little 
enthusiasm for working directly with the military on this, 
preferring to channel demining assistance through international NGOs 
and contractors with long experience in demining. 
 
Major Sri Lankan Defense Concerns 
--------------------------------- 
 
¶9.  (SBU) The military has repeatedly requested and/or attempted to 
independently procure spare and repair parts and maintenance 
services and training for its AN/TPQ-36 radars, its Bell 212 and 412 
helicopters, its C-130 aircraft, and most recently its 30mm 
Bushmaster guns.  The GSL has also expressed interest in acquisition 
of other military hardware, including Beechcraft airplanes.  We have 
informed them that current 699G restrictions prohibit such 
transfers, and there is no indication that those restrictions will 
be reduced until the GSL meets the conditions that will enable the 
U.S. to lift them.  The Sri Lankan Navy has repeatedly requested 
early warning of illicit merchant shipping supporting LTTE arms 
trafficking.  The SLN cannot sustain the deployment level required 
to prevent all smuggling activity around its shores.  The Army is 
suffering heavy casualties from LTTE artillery and mortar fires, and 
the Chinese counter-battery radars are ineffective.  The result is 
area counter-fires that risk collateral damage to infrastructure and 
civilian casualties, especially since the LTTE deliberately position 
their forces in civilian areas.  The Air Force continues to employ 
"dumb" gravity bombs with imprecise results.  The SLAF has been 
unable to acquire a more precise system.  The SLAF also continues to 
struggle unsuccessfully to counter the LTTE air threat.  The 
combination of Indian and Chinese radars, jets, and missiles has 
proved to be incapable of matching the LTTE's Zlin Z-143 
propeller-driven planes with low heat signatures. 
 
COMMENT 
------- 
 
¶10. (SBU) The President and his advisors have successfully divided 
opposition forces against each other, but the heterogeneous and 
unwieldy coalition still does not provide a stable and reliable 
majority for the government in parliament.  Moreover, the bloated 
administration -- with over 100 ministers and deputy ministers -- 
has a poor track record in many important areas of governance.  As a 
result, the survival of the President's administration in its 
current form depends critically on maintaining the perception among 
the southern, Sinhalese Buddhist majority that the government is on 
the verge on winning the war against the Tigers.  Perhaps for this 
reason, the defense and security authorities have been given free 
rein to conduct operations as they see fit.  The current government 
and its predecessors have largely been unwilling to take action 
against alleged human rights violators.  However, a recent MoD 
decision to hold officers and soldiers accountable for crimes 
committed while deployed on a UN peacekeeping mission to Haiti 
offers an opportunity to demonstrate that the military can punish 
abusers without undermining morale.  We recommend you urge your 
senior civilian and military Defense Ministry interlocutors to take 
action against the perpetrators of some of the more egregious recent 
cases of human rights violations.  You should also address with them 
some serious impediments that have arisen to a successful 
stabilization program in the East.  Of greatest concern is the 
deteriorating security situation caused by the re-infiltration of 
LTTE intelligence cadres into the area; the GSL's failure to 
demobilize paramilitaries in the east; and the growing internecine 
friction between TMVP leaders Karuna and Pillaiyan.  Without proper 
 
COLOMBO 00001040  004 OF 004 
 
 
security conditions, our efforts to encourage new investment to help 
stabilize the east will falter, giving new opportunities to the 
LTTE.