US embassy cable - 04COLOMBO72

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 000072 
 
SIPDIS 
 
DEPARTMENT FOR D, SA, SA/INS; NSC FOR E. MILLARD 
 
PLEASE ALSO PASS TOPEC 
 
E.O. 12958:  DECL:  01-14-14 
TAGS: PREL, PGOV, EAID, CE, NO, EU, JA, LTTE - Peace Process 
SUBJECT:  Donors find agreement over Akashi visit 
scenario and discuss impact of political impasse on aid 
 
Refs:  (A) Colombo 54; (B) Oslo 64 
 
(U) Classified by Ambassador Jeffrey J. Lunstead. 
Reasons 1.5 (b,d). 
 
1.  (SBU) SUMMARY:  The Tokyo Co-chairs and the larger 
donor group both agreed that the Akashi visit should 
include an informal meeting with the donors only, 
followed by a meeting with GSL -- and LTTE, if they 
would come.  Meetings will be low-key, with no 
communique or press release.  Akashi will visit LTTE 
headquarters in Kilinochchi.  All donors, except the 
U.S., will participate in the LTTE Planning and 
Development Secretariat meeting on January 19.  Donors 
grappled with the question of how to move forward on 
assistance during the current political impasse and what 
message to send.  END SUMMARY. 
 
Co-chairs Agree on Akashi Scenario 
---------------------------------- 
 
2.  (SBU) Tokyo Co-chairs -- Japan, U.S., Norway, EU, 
and Netherlands for EU Presidency -- met January 12 at 
the Chief of Mission level, principally to discuss the 
Akashi January 19-25 visit and the Japanese desire to 
have a "Second Follow-up Meeting to the Tokyo 
Conference" on January 23.  Japanese Ambassador Suda 
said that such a meeting should be as informal as 
possible, a consultation on the current situation and 
what was happening on the assistance front.  There would 
be no attempt to reach agreement on an action.  The GSL 
would be invited to participate, but would be asked to 
avoid long speeches.  The Liberation Tigers of Tamil 
Eelam (LTTE) would be invited, but no one expected them 
to show up. 
 
3.  (SBU) Akashi noted that some other Co-chairs had 
asked for an informal donor meeting with Akashi before 
the government meeting.  Akashi was "concerned about 
that idea," Suda said, feeling it could present an 
impression of donor collusion.  Others, including the 
U.S., argued strongly for such a meeting, as it would be 
a useful opportunity for the donors and Akashi to 
exchange ideas privately.  Suda eventually gave in and 
said he would suggest the idea to Tokyo. 
 
4.  (SBU) Ambassador Lunstead said that while all 
parties agreed a communique would not be useful, we 
could utilize the Akashi visit for another purpose and 
feed the press at the same time.  There is great 
misconception throughout Sri Lanka about what is 
happening on assistance -- in LTTE areas, people insist 
there is no development going on in the North and East, 
while in the South, people insist all of the assistance 
is going to the North and East.  The Akashi visit would 
offer a useful platform to issue a fact sheet showing 
the amount of assistance Sri Lanka was receiving (twice 
as much in 2003 as the year before) and where it was 
going -- to areas throughout the country.  All agreed 
this was a good idea. 
 
5.  (SBU) Ambassador Suda said that Akashi would visit 
LTTE headquarters at Kilinochchi for discussions with 
Tiger political leader S.P. Thamilchelvam, probably on 
January 24.  Other co-chairs suggested that the visit 
might better come before the donor meetings in Colombo, 
so that Akashi could report on his conversations.  Suda 
accepted the logic, but said scheduling might be a 
problem. 
 
Larger Donor Group Endorses Ideas 
--------------------------------- 
 
6.  (SBU) The larger donor group, which adds to the Co- 
chairs other bilateral donors (Sweden, Australia, 
France, Canada, UK, Switzerland and Germany), and 
multilaterals (ADB, World Bank, IMF, UNDP, and UNHCR) 
met the following day, January 13.  The group expressed 
support for the decisions taken by the co-chairs the 
previous day on an informal meeting and on a press 
release summarizing assistance to date.  Ambassador 
Lunstead briefed the group on the high-level Co-chairs 
meeting to be held in February.  The group discussed 
what messages and actions could be useful during the 
current political impasse, including: 
 
-- INTERIM ADMINISTRATION:  There was general agreement 
that an interim mechanism needed to be developed to 
administer assistance to the North and East.  With the 
peace negotiations stalled, there could be no decisions 
on a formal interim administration.  This could be 
something like the North/East Rehabilitation Fund 
(NERF), which never got off the ground. 
 
-- OVERALL MESSAGE:  Donors also discussed what position 
they should take on assistance with the peace 
negotiations stalled, especially in light of the Tokyo 
Declaration statement that "assistance by the donor 
community must be closely linked to substantial and 
parallel progress in the peace process."  World Bank 
Resrep Harrold stated that "donors must express their 
displeasure and indicate they cannot proceed at Tokyo 
levels," i.e., at the full $4.5 billion level.  Norway 
noted that much assistance to the North and East had 
been held up after the LTTE pulled out of peace talks. 
With LTTE now stating it was ready to talk, but the GSL 
unable to do so, the Tigers would want aid to flow to 
their areas.  How would donors answer that request? 
 
7.  (SBU) The group discussed the invitation from the 
newly formed LTTE "Planning and Development Secretariat" 
to attend a meeting on "Rehabilitation and Development 
Needs of Northeastern Sri Lanka" on January 19 in 
Kilinochchi.  All participants except the U.S. said they 
intended to attend the meeting at the "technical" level. 
The question was raised whether donors could recognize 
this new LTTE institution and work with it on setting 
priorities.  The World Bank thought that the LTTE would 
certainly suggest that the donors direct funds to the 
North and East through this institution -- all agreed 
that would not be acceptable. 
 
8.  (SBU) For several months, we have been trying to get 
the Japanese to agree to set up a mid-level working 
group to monitor progress of the peace process, as set 
out in paras 18 and 20 of the Tokyo Declaration, and 
especially with regard to the milestones laid down in 
para 18.  (While the peace negotiations are stalled, the 
peace process continues every day.)  The former Japanese 
Ambassador had stalled and delayed.  In a carefully 
orchestrated maneuver, Canada, Netherlands, the U.S. and 
the UK brought this idea forward again.  The group's 
unanimity of support overcame Ambassador Suda's 
reluctance, and the group will now be established under 
UK lead.  Donors can have up to two participants, one 
from the development side and one from the political 
side. 
 
COMMENT 
------- 
 
9.  (C) The advent of the new Japanese ambassador has 
led to a much more productive co-chairs atmosphere.  The 
collaborative approach on planning the Akashi visit and 
the agreement on a working group are good steps forward. 
We consider that donor group solidarity is important, 
especially in dealing with the LTTE, which would love to 
split the donors up.  The new atmosphere helps to 
strengthen that solidarity.  At same time, all donors 
appear to be wrestling with the vexing problem of how to 
proceed with assistance while negotiations are stalled 
due to the political impasse in South.  Widespread 
feeling seems to be that opening floodgates of Tokyo 
assistance is not appropriate, but that donors also want 
to (a) provide badly needed assistance to conflict- 
devastated areas in the North and East and (b) not build 
resentment in the South or negatively affect chances for 
a resolution of the political impasse.  This will 
require a delicate balance.  END COMMENT. 
 
10.  (U) Minimize considered. 
 
LUNSTEAD