US embassy cable - 04COLOMBO567

C O N F I D E N T I A L SECTION 01 OF 04 COLOMBO 000567 
 
SIPDIS 
 
DEPARTMENT FOR SA, SA/INS, INR/NESA 
DEPARTMENT ALSO PLS PASS TO USTR J. ROSENBAUM 
NSC FOR E. MILLARD 
TREASURY FOR R. ADKINS 
COMMERCE FOR A. BENAISSA 
 
E.O. 12958:  DECL:  03/31/14 
TAGS: PREL, PGOV, PINS, PINR, PHUM, ECON, CE, Elections, Political Parties 
SUBJECT:  Sri Lanka:  Implications for U.S. policy of 
possible post-election scenarios 
 
Refs:  Colombo 564, and previous 
 
(U) Classified by Ambassador Jeffrey J. Lunstead. 
Reasons 1.5 (b, d). 
 
1.  (C) SUMMARY:  This message reviews the implications 
for U.S. policy of possible scenarios resulting from Sri 
Lanka's April 2 parliamentary election.  The two most 
likely post-election scenarios are: 
 
-- (A) The President's UPFA grouping wins outright or is 
able to cobble together a majority in Parliament.  As 
outlined in Reftel, this outcome could put the peace 
process and economic reforms at risk.  Also, while 
bilateral ties would remain positive, they would 
probably be a bit cooler; and, 
 
-- (B) The PM's UNP is able to form a government on its 
own or more likely via an alliance of convenience with 
the pro-LTTE TNA grouping.  Under this scenario, the 
peace process and economic reforms would continue, 
although stressful cohabitation ties would remain in 
place. 
 
Outside of these two likely scenarios, there are other 
considerably less probable outcomes, including:  a hung 
parliament, which would create a very fluid situation as 
parties scrambled for power for an indefinite period; 
and the President's SLFP and the UNP (or elements 
thereof) forming a "national unity" government.  This 
latter possibility might be a favorable outcome 
depending on how it is done. 
 
2.  (C) SUMMARY (continued):  If the election is a close 
one (as is widely expected), there almost certainly will 
be significant political maneuvering in the post- 
election period and it may take some time before a new 
government is formed.  Given the tense, confusing 
situation that may prevail, we recommend that the U.S. 
remind the parties, as necessary, to respect democratic 
norms and to work together in the national interest. 
END SUMMARY. 
 
------------------------------ 
Likely Scenario #1:  UPFA wins 
------------------------------ 
 
3.  (C) Campaigning for Sri Lanka's April 2 
parliamentary election wrapped up on March 30 per 
regulations.  At this point, it seems unlikely, given 
Sri Lanka's complex proportional electoral system (see 
Reftels), that any of the parties will win a landslide 
victory, or even obtain an absolute majority of 113 
seats in the 225-member Parliament.  One of the most 
likely scenarios at this time is that the alliance 
between President Kumaratunga's Sri Lanka Freedom Party, 
"SLFP," and the radical Janatha Vimukthi Peramuna, 
"JVP," wins the largest number of seats.  (The SLFP-JVP 
combine's technical name is the United People's Freedom 
Alliance, "UPFA.")  Polls and other anecdotal evidence 
suggest that the UPFA would probably not win outright by 
gaining enough seats on its own to form a majority in 
Parliament.  The UPFA might, however, be able to put 
together a majority after the election by obtaining the 
support of smaller parties eager to be in government. 
Observers believe, for example, that the Jathika Hela 
Urumaya (JHU), which is running an all-Buddhist monk 
candidate slate, may decide to support the UPFA under 
certain conditions.  In addition, the Sri Lanka Muslim 
Congress (SLMC) and the tea estate Tamil Ceylon Worker's 
Congress (CWC) might move from supporting Prime Minister 
Wickremesinghe's United National Party (UNP) to the UPFA 
if the opportunity presented itself.  It is also 
possible that some MPs may defect from the UNP and join 
the UPFA if they were assured that they would receive 
ministerial positions (see more on this type of scenario 
in para 8). 
 
4.  (C) If the UPFA wins the election, one possible 
positive is that it would end Sri Lanka's tense 
cohabitation situation.  This would allow the UPFA 
government to move forward with its plans for the 
country in an unfettered manner.  That said, as outlined 
in Reftel, the problem for the U.S. is that the UPFA's 
plans themselves are problematic.  A UPFA victory could 
put the peace process at risk, for example, as it is 
unclear how effective President Kumaratunga leading a 
government in coalition with the anti-peace process JVP 
would be in dealing with the Liberation Tigers of Tamil 
Eelam (LTTE).  Moreover, a win by the alliance would 
pose serious questions about the direction of GSL 
economic policy and reform.  With respect to bilateral 
ties, a UPFA government would almost certainly be more 
difficult to deal with and less responsive to our 
positions on international matters.  We would expect the 
UPFA to continue the policy of trying to reach a Free 
Trade Agreement (FTA) with the U.S., though how 
committed and capable a UPFA government would be in 
negotiations on the matter is uncertain. 
 
------------------------------------- 
Likely Scenario #2:  A UNP/TNA linkup 
------------------------------------- 
 
5.  (C) Another likely post-election scenario involves 
the UNP being able to form a government on its own, or 
more likely via an alliance of convenience with the pro- 
LTTE Tamil National Alliance (TNA) grouping.  Most 
observers believe that the UNP probably will be unable 
to win 113 seats or more (with allies, it now controls 
about 114 seats), but will have to settle for a reduced 
total of seats in the election.  If that happens, the 
UNP will have to turn to the TNA, which appears set to 
win roughly 20 or so seats.  It is unlikely that the 
UNP, in doing this, would conclude a formal governing 
pact with the TNA, but rather that the TNA would receive 
an informal understanding from the UNP on how it (the 
UNP) would handle peace process matters.  So far, 
neither the UNP nor the TNA have publicly discussed the 
mechanics of forming any sort of informal alliance.  (On 
the UNP's part, doing so would risk a backlash from 
voters in the south who resent the pro-LTTE TNA.) 
Nonetheless, it is widely understood that the UNP would 
almost certainly reach out to the TNA if doing so would 
allow the UNP to form the majority in Parliament.  One 
potential fly in the ointment is that it is unclear what 
impact if any rebel commander Karuna's recent split from 
the LTTE might have on this scenario.  It is not known, 
for example, whether all MPs under the TNA grouping 
would work together, or whether the party might break 
apart into pro-LTTE and pro-Karuna factions. 
Yesterday's assassination of a "pro-Karuna" TNA 
candidate further muddies the waters. 
 
6.  (C) A victory by the UNP on its own (without the 
TNA) would be the single best result for the U.S.  Since 
coming to power in December 2001, the UNP has been 
strongly pro-peace process, as well as pro-economic 
reform and international investment.  The UNP has also 
been careful to tend to the bilateral relationship and 
to support the U.S. in multilateral fora such as the WTO 
and the UN (on Iraq), for example.  A UNP/TNA combine, 
meanwhile, would probably also be good for the peace 
process and economic reform, as well as bilateral ties. 
As a coalition, it would not be as stable as the UNP 
ruling on its own, however.  Due to the TNA element, for 
example, such a linkup would probably come under fierce 
partisan attack from the UPFA, which would claim that 
the UNP was too close to the LTTE.  One negative factor 
that would remain in place regardless of whether the UNP 
wins on its own or with the support of the TNA involves 
cohabitation with President Kumaratunga.  Cohabitation 
ties, no doubt, would remain stressful and susceptible 
to regular crises, as they are now.  It is possible, 
however, that the UNP's political momentum following a 
victory might politically intimidate Kumaratunga for 
some time after the April 2 election, as happened after 
the December 2001 election. 
 
------------------------------------- 
Other Possible (if unlikely) Outcomes 
------------------------------------- 
 
7.  (C) Outside of these two likely scenarios, there are 
other considerably less probable outcomes, including a 
hung parliament in which no grouping can form the 
majority for an indefinite period.  This would be a very 
negative outcome because the political situation would 
be unsettled for some time as parties battled each other 
for majority control.  Some parties might take to the 
streets in efforts to affect the situation.  If a hung 
parliament proved particularly protracted in nature, it 
is doubtful that the GSL would be able to get much done 
with respect to either the peace process or economic 
reforms for months on end.  Indeed,  President 
Kumaratunga might call another round of elections, 
setting the whole destabilizing process currently taking 
place in motion again. 
 
8.  (C) Another scenario involves the President's SLFP 
and the UNP forming a "national unity" government.  If a 
SLFP-UNP combine was formed it would probably be as a 
result of a hung parliament in which there seemed to be 
no other way to form the next government.  With Sri 
Lanka's two major parties working together, in theory 
such a government could prove to be good news for the 
peace process and for economic reforms.  Given the 
intense personal animosity between the President and the 
PM, however, it is difficult to see how such a 
government could work together for very long.  There 
have also been some vague reports that President 
Kumaratunga might try to form a "national unity" 
government of a different stripe.  This would involve 
the President cherry picking some well-known UNP MPs and 
enticing them to join her by promising them high-level 
ministries.  If a "national unity" government is formed 
under such circumstances, it would seem to be a recipe 
for problems as the rump portion of the UNP would almost 
certainly fight back hard.  (Another twist that has been 
discussed, along these lines, is that the President 
would ask a UNP leader other than the PM to form a 
national unity government.  Foreign Minister Tyronne 
Fernando and Power and Energy Minister Karu Jayasuriya 
have been mentioned as high-level UNP officials possibly 
willing to work with Kumaratunga, for example.) 
 
----------------------------------------- 
COMMENT:  U.S. Posture in the Coming Days 
----------------------------------------- 
 
9.  (C) With the approach of the election, Sri Lanka 
appears to be hurtling toward a period marked by even 
greater uncertainty than usual.  It is an open question 
whether the election will add clarity, or whether it 
will make the situation even murkier.  If the election 
is a close one, for example, there almost certainly will 
be significant political maneuvering in the post- 
election period and it may take some time before a new 
government is formed.  The President is not obliged, 
under the Constitution, to ask the leader with the 
largest number of seats to form a government.  Rather, 
she "shall appoint as Prime Minister the Member of 
Parliament who, in her opinion, is most likely to 
command the confidence of Parliament."  This, of course, 
gives ample room for mischief-making.  (FYI:  Political 
give-and-take among the parties would almost certainly 
be prolonged by the onset of Sri Lanka's major holiday 
season involving Sinhalese and Tamil New Year's, which 
will begin in earnest late next week.) 
 
10.  (C) In the meantime, the post-election timeframe 
could also be marked by a severe uptick in violence as 
the main LTTE organization tries to knock out rebel 
commander Karuna in the east.  (There are reports that 
the LTTE has been waiting until after the election to 
hit out at Karuna in a major way.)  Given the tense, 
confusing situation that may prevail as parties seek to 
form the next government in Colombo, we recommend that 
the U.S. remind them, as necessary, to respect 
democratic norms and to work together in the national 
interest.  If the situation gets bad, we should be 
prepared to issue public statements and to warn the 
parties privately that the unprecedented level of U.S. 
support of the past few years could be jeopardized.  END 
COMMENT. 
 
11.  (U) Minimize considered. 
 
LUNSTEAD