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UNCLAS SECTION 01 OF 02 COLOMBO 001109 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON PGOV CE
SUBJECT:  USAID Support for Reconstruction of Eastern Sri Lanka 
 
¶1. Summary.     On November 8-11, Foreign Assistance Coordinator for 
the Bureau of South and Central Asian Affairs/Office of Regional 
Affairs (SCA/RA) Aisha Sabar visited USAID funded projects in the 
Eastern Province.   USAID has focused on fostering economic growth, 
good governance, and reconciliation in the Eastern areas of Sri 
Lanka freed from the LTTE in 2007.  After nearly two years of 
investment in the Economic Growth, sector, USAID programming in the 
East is having a substantial impact on the creation of sustainable 
jobs through investment in public-private partnerships.   These 
programs have assisted the establishment of an apparel factory, 
increased dairy production, developed papaya cultivation, and 
brought a new ice cream plant.  USAID is also providing vocational 
support to ex-combatants and implementing linguistics training for 
local government officials.  End Summary. 
USAID Economic Growth Programs in the East 
 
¶2. USAID is helping to create sustainable jobs and jumpstart 
much-needed economic growth by working with Sri Lanka's private 
sector.  Using public-private partnerships to leverage private 
sector funds at a greater than 2 to 1 ratio, USAID is  creating new 
business opportunities and jobs in aquaculture, horticulture, 
ready-made garments, and other major sectors.  Public-private 
partnerships have focused on:  1) Increasing export markets in areas 
of untapped potential; 2) Decreasing dependence on imports of 
product that Sri Lanka is capable of producing on its own.  All job 
creation activities emphasize equitable participation from all three 
ethnic groups - Tamil, Muslim, and Sinhalese. 
¶3. Ambassador Butenis officially launched a new ice cream plant in 
Batticaloa District, (primarily Tamil) as part of a dairy 
revitalization project that is expected to increase the incomes of 
4,000 dairy farmers and reduce dependence on imported milk products. 
 For this project, USAID partnered with Land O'Lakes, a U.S. dairy 
producer, and CIC Agribusiness, a major Sri Lankan agricultural 
company.   This project alone is expected to increase national milk 
collection by 9%. 
¶4. SCA/RA Assistance Coordinator and USAID staff traveled to Ampara 
District in Eastern Province to participate in the first papaya 
harvest of a group of farmers supported by USAID's Papaya 
Cultivation Project in Monaragala District in adjacent Uva Province. 
 As part of USAID's umbrella project entitled 'Connecting Regional 
Economies,' this project will enable 3,000 farmers to grow hybrid 
red lady papaya, with an anticipated additional monthly income of Rs 
10,800.  The project leverages funding and technical expertise from 
Daya Group, a major Sri Lankan company operating in various sectors, 
including agriculture, apparel, aviation, construction, and 
microfinance.  As a manager from the Daya Group explained, the 
company had not previously invested in papaya for export.  Through 
the USAID project, the company is training and connecting farmers to 
European and U.S. markets for fresh and dried papaya.  Tamil and 
Sinhalese farmers explained to the visiting State-USAID team that 
they are now able to generate sustainable incomes and plan to 
continue papaya cultivation as a source of income for their 
families.  Both projects-dairy revitalization and papaya 
cultivation-are tapping into new areas of investment. 
¶5. Another area for economic growth is in the garment sector. 
Several garment factories have been established in the East, and a 
Brandix official told Econoff that more garment factories could move 
to the East due to competitive wage rates.  SCA/RA Assistance 
Coordinator visited Brandix Lanka Limited, the largest apparel 
exporter in Sri Lanka.  Brandix explained that the Government of Sri 
Lanka through their Board of Investment is providing tax and other 
incentives to companies to invest in the East.   USAID is partnering 
with Brandix to train unskilled workers as certified sewing machine 
operators.  Currently, 600 young Tamil, Muslim and Sinhalese are 
being trained and then hired at the new Brandix apparel factor in 
Punani, the first Brandix factory in the East.  USAID is funding the 
cost of training at a 1 to 5 ratio. 
 
USAID Projects for Good Governance and Political Reconciliation 
 
¶6. Through Section 1207 Department of Defense funds, USAID is also 
helping to reintegrate 1,000 Tamil ex-combatants through a variety 
of reintegration support activities, including vocational training, 
education, and microloans for self-employment opportunities. 
Vocational training centers run by different NGO's are being tapped 
to provide training to former child soldiers and ex-combatants. 
However, post training employment remains a challenge.  During the 
trip, the State/USAID team visited an impressive vocational training 
center run by Sarvodya, a national NGO, where former child soldiers 
are learning employable skills, such as motorbike mechanics and 
mobile phone repair.    This training is expected to support them to 
reintegrate into the community.  The vocational center, which 
includes a dormitory, was funded by U.S. private sector funds. 
 
COLOMBO 00001109  002 OF 002 
 
 
Unicef supports the training. 
 
¶7. SCA/RA Assistance Coordinator observed Tamil/Sinhala language 
training for mid-level local government officials at the Ampara 
Urban Council.  Training participants explained, while the GoSL had 
created incentives (e.g. promotion-related incentives) for 
government officials to learn Tamil, few have had the opportunity to 
receive proper language training.  The training participants, all 
women, said that after only two (out of six total) months of USAID 
supported training, they are already better able to communicate with 
Tamil-speaking citizens in their respective offices (e.g. 
accounting, tax).  USAID is also empowering and strengthening 
Women's Rural Development Societies (WRDS) at the village level to 
access local government and donor support for development projects. 
 
¶8. Comment.  USAID is undoubtedly providing important assistance to 
foster economic growth in the former conflict areas of the East. 
Post is planning a trip to the East to assess economic progress in 
the East and whether GSL programs have been effective, which will be 
reported septel.  Meanwhile, USAID and post will work to maximize 
the effectiveness of our economic and political assistance to the 
East to provide opportunity and thereby address some of the root 
causes of the conflict.  End Comment. 
 
Fowler