VZCZCXRO2869
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHCG #0057/01 0570210
ZNR UUUUU ZZH
R 260210Z FEB 09
FM AMCONSUL CHENNAI
TO RUEHC/SECSTATE WASHDC 2097
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 CHENNAI 000057 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PTER PHUM ECON IN CE
 
SUBJECT:  SRI LANKA PERMEATES VISIT TO CHENNAI 
 
REF: Chennai 038 
 
¶1. (SBU) Summary: Issues related to the war in Sri Lanka dominated 
SCA/INS Acting Director Diane Kelly's February 3 to 5 visit to 
Chennai.  Local concern for the civilians trapped in the fighting 
was a constant theme as she visited an NGO that supports refugees 
from the war and had lunch with Sri Lanka's Chennai-based Deputy 
High Commissioner and other prominent local figures.  Kelly also 
heard concerns about the economic downturn at a Sri Lankan-owned 
textile manufacturer and at one of India's major information 
technology companies.  End Summary. 
 
Sri Lanka on Everyone's Mind 
---------------------------- 
 
¶2. (SBU) Talk of the war in Sri Lanka dominated a lunch meeting 
hosted by the Consul General.  P.M. Amza, Sri Lanka's Deputy High 
Commissioner in Chennai (and a Tamil) characterized Tamil Nadu Chief 
Minister Karunanidhi's comments criticizing the LTTE as a "welcome 
development."  He also reiterated press reports that the government 
of Sri Lanka was allowing free passage of Tamils out of the conflict 
zone and estimated that the number of Tamil civilians still in the 
zone at approximately 100,000 (despite media reports of up to 
250,000).  Kelly pressed Amza firmly on the Sri Lankan government's 
human rights record, emphasizing that one reason more civilians were 
not leaving the conflict zone was fear of being targeted as LTTE 
sympathizers.  Other guests, including a local journalist for one of 
India's major dailies, engaged Amza in an extended -- and often 
heated -- discussion of the Sri Lankan government's policies and 
intentions. 
 
Refugees a Major Concern 
------------------------ 
 
¶3. (SBU) Kelly also paid a visit on the local offices of the 
Organisation for Eelam Refugees Rehabilitaion (OfERR), an NGO 
working with Sri Lankan Tamil refugees.  OfERR's director, 
Chandrahasan, explained that there are over 78,000 Tamil refugees 
from Sri Lanka living in 119 different camps in Tamil Nadu.  He 
decried both the lack of credible Tamil leadership in Sri Lanka and 
the Sri Lankan government's "Sinhalese chauvinism." 
 
¶4. (SBU) Chandrahasan, a refugee himself, suggested that the USG 
continue working to convince the Sri Lankan government to provide 
neutral territory for internally displaced Tamils monitored by 
international NGOs.  He also suggested that U.S. military advisors 
assist the Sri Lankan government in the transition from military to 
civilian rule in the northern areas of the island recently won back 
from the Liberation Tigers of Tamil Eelam (LTTE).  He believes that 
a federal ruling structure with a Tamil linguistic state in the 
north as envisioned by the Indo-Sri Lankan Agreement of 1987 is the 
key to a political solution. 
 
The Economic Downturn Takes Hold 
-------------------------------- 
 
¶5. (SBU) Kelly also visited a textile manufacturer that produces 
mainly for the U.S. market.  The facility, a division of Sri 
Lankan-owned MAS Holdings, runs a series of modern production lines 
that manufacture undergarments for retailers like Victoria's Secret 
and other internationally known brands.  One executive explained 
that a key reason why MAS decided to open a major facility in Tamil 
Nadu was concern that political instability in Sri Lanka would 
disrupt production.  He also explained that the economic downturn, 
particularly in the company's key markets in the United States and 
Europe, was forcing it to think of creative ways to avoid layoffs. 
In addition to implementing more effective just-in-time 
manufacturing techniques, he said that the company was also looking 
to expand its marketing efforts beyond its traditional U.S. and 
European markets, as well as on more price-sensitive (i.e., less 
prestigious) retailers. 
 
IT Sector also Feeling the Pinch 
-------------------------------- 
 
¶6. (SBU) To get a taste of South India's vaunted information 
technology (IT) sector, Kelly visited Cognizant, a U.S.-based 
company with a major presence in India.  A Cognizant executive told 
Kelly that the company is definitely feeling the pinch of the 
worldwide economic slowdown -- particularly in the United States -- 
but it is still forecasting positive revenue growth for 2009, albeit 
far, far less than the 30 percent-plus growth that the company has 
enjoyed for the past several years.  He also explained that 
Cognizant, like other IT companies, is seeing a significant slowdown 
in new orders as corporate clients reduce and/or delay capital 
expenditure on technology development.  He was optimistic about the 
longer term future, however, noting that companies like Cognizant 
ultimately save their clients money, making them attractive business 
partners in these difficult economic times. 
 
 
CHENNAI 00000057  002 OF 002 
 
 
Comment 
------- 
 
¶7. (SBU) Kelly's visit to Chennai turned out to be more Sri 
Lanka-focused than we had planned, due to the increasing salience of 
the issue as a topic of everyday conversation among our local 
contacts.  The plight of Sri Lanka's Tamil minority continues to be 
a major cause celebre in Tamil Nadu (ref A), and figures to become 
even more prominent in the coming weeks as Tamil Nadu's politicians 
all vie to define positions that Indian voters will support in the 
run up to national elections. 
 
KAPLAN