US embassy cable - 04COLOMBO587

C O N F I D E N T I A L SECTION 01 OF 05 COLOMBO 000587 
 
SIPDIS 
 
DEPARTMENT FOR SA, SA/INS, INR/NESA; PLS PASS TO USTR J. 
ROSENBAUM 
 
NSC FOR E. MILLARD; TREASURY FOR R. ADKINS; COMMERCE FOR 
A. BENAISSA 
 
ISLAMABAD PLEASE PASS TO CODEL DREIER 
 
E.O. 12958:     DECL: 04-05-14 
TAGS: PGOV, PREL, PTER, PINR, ECON, CE, Elections, Political Parties 
SUBJECT:  Sri Lanka:  Results of Sri Lanka's April 2 
election and potential implications for U.S. policy 
 
Refs:  Colombo 579, and previous 
 
(U) Classified by Ambassador Jeffrey J. Lunstead. 
Reasons 1.5 (b,d). 
 
1.  (C) SUMMARY:  Final results from Sri Lanka's April 2 
parliamentary election came out late April 4 and 
President Kumaratunga's political grouping, the "UPFA," 
emerged with the largest number of seats in Parliament. 
The UPFA did not attain a majority, however.  The 
President may swear in an "interim" PM and a new cabinet 
imminently, even as the UPFA looks for allies among 
smaller parties to secure a majority in Parliament (the 
UPFA has until April 22, when the new Parliament first 
sits, to prove its majority status).  Big winners in the 
election included the Marxist JVP (a part of the UPFA 
grouping), a new party formed by Buddhist monks, and the 
Tamil National Alliance, a stalking horse for the LTTE. 
The big loser in the race was the UNP.  The UNP, 
however, may still be able to form the next government 
along with smaller parties if the UPFA fails to, though 
that appears highly unlikely. 
 
2.  (C) SUMMARY (Continued):  It is early, but the 
results of the election appear to have a number of 
possible implications for U.S. policy.  If -- as now 
seems highly likely -- the UPFA forms the government, 
for example, it would appear to be problematic for 
progress on the peace process and economic reform.  In 
addition, bilateral ties would probably not be as 
favorable as they were under the previous UNP 
government.  A UPFA government's interest in negotiating 
a Free Trade Agreement (FTA) is also unknown.  USG 
development and military assistance programs will 
probably go on largely unchanged.  Overall, we expect 
the post-election situation in Sri Lanka to be very 
turbulent and fractious in the near-term and possibly 
well beyond that, and progress in areas of U.S. concern 
may be difficult.  We will make sure the new government 
understands that we continue to support Sri Lanka, but 
that our ability to work with it will depend on its 
actions.  END SUMMARY. 
 
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UPFA seems set to form next government 
-------------------------------------- 
 
3.  (C) Final results from Sri Lanka's April 2 
parliamentary election came out late April 4 (see 
para 13).  President Kumaratunga's UPFA political 
grouping won the most seats (105), but did not attain a 
majority in Parliament (113 seats or more).  At this 
time, the UPFA is reaching out to the smaller parties in 
an effort to cobble together a majority.  Possible 
partners for the UPFA include the Sri Lanka Muslim 
Congress (SLMC), which won five seats, and the tea 
estate Tamil Ceylon Worker's Congress (CWC), which won 
6-7 seats.  It is also possible that the UPFA could gain 
the support of the Jathika Hela Urumaya (JHU), a new 
party running an all-Buddhist monk candidate slate, 
which won nine seats (see para six).  In addition, it 
seems possible that the UPFA could also benefit from MPs 
crossing over from the United National Party (UNP), 
which performed very poorly in the election (see para 
seven).  The President may also try to work out a deal 
with the 5-6 MPs from the pro-Liberation Tigers of Tamil 
Eelam (LTTE) Tamil National Alliance (TNA) who are 
believed to be aligned with rebel eastern commander 
Karuna. 
4.  (C) Possible "interim" PM:  Even as the UPFA works 
hard to secure a majority in Parliament, there is word 
that President Kumaratunga plans to swear in an 
"interim" prime minister and perhaps a new cabinet soon, 
perhaps as early as today (April 5).  It is not clear 
who may be named to the PM slot.  Most of the reports, 
however, point to Lakshman Kadirgamar, the former 
foreign minister and a close adviser to the President. 
Other possibilities include Mahinda Rajapakse, a senior 
MP in the President's Sri Lanka Freedom Party (SLFP) and 
the former Opposition leader in Parliament, and D.M. 
Jayaratne, a senior SLFP MP.  (The UPFA has until 
April 22 -- the date the new Parliament first meets -- 
to seal a deal giving it a majority in Parliament.  If 
it does not do so by that timeframe, a UPFA "minority" 
government could be subject to a vote of no confidence.) 
 
----------------------------------------- 
Big Winners:  JVP and Buddhist Monk Party 
----------------------------------------- 
 
5.  (C) The big winners in the April 2 election included 
the Sinhalese chauvinist Janatha Vimukthi Peramuna (JVP) 
and the Jathika Hela Urumaya (JHU).  Running as part of 
the UPFA ticket, the JVP won approximately 40 seats (up 
from 16) and many of its leaders received huge vote 
totals which at times surpassed those won by major party 
candidates.  Already, there are reports that the JVP is 
arguing that, based on its performance, it should 
receive additional ministerial positions in any cabinet 
formed by the UPFA.  (The JVP is arguing from a position 
of strength:  the President's SLFP appears to have lost 
seats; in the last Parliament it had 79 seats, for 
example, and this time around it may have closer 
to 65-70.  This means that the UPFA's gains were made 
entirely by the JVP.) 
 
6.  (C) As for the JHU, it performed impressively.  A 
new party running an all-Buddhist monk slate of 
candidates (an unprecedented occurrence), the JHU took 
nine seats and almost six percent of the vote.  Its 
performance makes the JHU a big player in the next 
Parliament and would seem to make the party a societal 
force.  The monks have not yet clearly articulated their 
positioning on major issues and it is uncertain exactly 
what they stand for.  (When asked during an April 4 BBC 
TV interview for the party's view regarding the peace 
process, for example, a leading monk denied that Sri 
Lanka had an ethnic conflict.  When pressed, he thought 
for awhile and blamed the problem on "various leaders," 
whom he did not name.)  That said, they are skeptical of 
the peace process with the LTTE and are against moves to 
liberalize the economy further.  As further evidence of 
the heightened polarization of Sri Lankan politics, the 
Tamil National Alliance, which is completely controlled 
by the LTTE, also did well, winning 22 seats, all from 
the north and east. 
 
------------------- 
Big Loser:  The UNP 
------------------- 
 
7.  (C) The big loser in the election was undeniably the 
UNP, which did miserably in almost every area of the 
country.  Twelve former UNP ministers and deputy 
ministers were defeated, for example.  (Well-known 
former UNP minister Milinda Moragoda will return to 
Parliament and former minister G.L. Peiris is highly 
likely to, however.)  Even in its long-standing 
stronghold of Colombo District, the UNP lost a great 
deal of ground.  The UNP appears to have been most hurt 
by the perception that the cost of living had risen 
markedly since the party had taken power in 2001 and it 
was not doing enough to improve the situation.  The UPFA 
and the JHU also made effective hay out of the claim 
that many members of the UNP were corrupt.  Although UNP 
leader Ranil Wickremesinghe personally did well in the 
election, there are rumors that he may face a leadership 
challenge from those in the party who blame him for the 
defeat.  Despite all of these bad tidings, it still 
appears theoretically possible, though very unlikely, 
that the UNP could form the next government along with 
smaller parties (like the TNA) if the UPFA fails to. 
 
------------------------------------ 
POSSIBLE IMPLICATIONS FOR USG POLICY 
------------------------------------ 
 
8.  (C) It is early, but the results of the election 
appear to have a number of possible implications for 
U.S. policy.  If -- as seems highly likely -- the UPFA 
forms the next government, for example, it would appear 
to be problematic for the future of the peace process 
and economic reform (also see Reftels).  For their part, 
President Kumaratunga and the UPFA have indicated that 
they support the peace process and would like to restart 
talks with the LTTE.  There is, however, much confusion 
as to what the UPFA's exact stance is toward the peace 
process, including whether it fully accepts the 
conclusions agreed to in the June 2003 Tokyo 
Declaration.  It is also highly possible that the LTTE, 
which is known to dislike Kumaratunga (and Kadirgamar) 
in bitter fashion, may prove difficult to re-engage in 
the talks.   On the economic side, as reviewed in 
Reftels, the UPFA made many promises to the electorate 
regarding jobs and  about restoring subsidies.  If the 
UPFA takes steps to meet its promises, it would spark 
very real concerns from the International Financial 
Institutions (IFIs) and donors about Sri Lanka's budget 
and commitment to implementing strong growth-oriented 
macro-economic policy. 
 
9.  (C) Other possible implications include:  under a 
UPFA government, U.S.-GSL bilateral ties would probably 
not be as favorable as they were under the previous UNP 
government.  It is highly unlikely that a UPFA 
government, for example, would provide the U.S. much 
support in the WTO, or be helpful in the UN, as the UNP 
was on occasion.  The UPFA has also avoided making any 
comments on its attitude towards an FTA with the U.S. 
We expect that specific USG assistance programs 
involving USAID and DoD will largely continue unchanged. 
 
10.  (C) JVP's Role:  If the UPFA succeeds in forming 
the government, an overarching factor that will probably 
adversely affect most aspects of the U.S.-GSL 
relationship reviewed above is the nature of the JVP's 
influence in government circles.  As reviewed in 
Reftels, this iteration of the JVP is the product of two 
failed insurrections (one in the 1970s; the other in the 
late 1980s).  Although it appears to have sworn off the 
use of violence, the JVP remains an anti-peace process, 
Marxist-oriented party, that is strongly anti- 
"globalization" and, at times, anti-U.S.  Given how well 
the party did in the election, the JVP appears set to 
play an important role in a possible UPFA government, 
which almost certainly is not good news for U.S. 
concerns. 
11.  (C) Overall, it is certainly positive that the 
election campaign and election day itself were 
dramatically less violent than those in the immediate 
past (see Reftels).  The election does appear to have 
been free and fair by and large, though there were some 
irregularities, most of them perpetrated by the LTTE. 
All that said, however, we expect the post-election 
situation in Sri Lanka to be very difficult and 
fractious in the near-term and possibly well beyond 
that.  Parliament has been polarized, with the JVP and 
JHU doing well on the Sinhalese chauvinist side and the 
pro-LTTE TNA solidifying its position as the leading 
party for Tamils on the other side.  In the meantime, 
the major parties that are much more moderate and to 
some extent multi-ethnic --  the UNP and the President's 
SLFP -- have lost seats.  At the same time, there is the 
very real possibility of a move in the near-term by the 
main LTTE organization against Karuna in the east that 
could be bloody in the extreme.  Given this confluence 
of factors, Sri Lanka appears set for a turbulent period 
in which progress in areas of U.S. concern will be 
difficult. 
 
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Reaching out 
------------ 
 
12.  (C) All that being said, we have developed good 
relationships with President Kumaratunga, her maybe-PM 
Lakshman Kadirgamar, and others in the SLFP hierarchy. 
We will be meeting them in the coming days to reiterate 
that the U.S. remains a friend of Sri Lanka, that we 
want to work with the new government, and that our 
ability to do so will depend on the policies that the 
government follows and the decisions it makes.  We 
believe that engagement from Washington -- letters, 
phone calls -- could be effective in passing this 
message, and we will make recommendations as the new 
government shakes out. 
 
--------------------------------- 
Final Results of April 2 Election 
--------------------------------- 
 
13.  (U) Final results from Sri Lanka's April 2 
parliamentary election follow (for purposes of 
comparison, results from the last parliamentary 
election, in December 2001, are also included): 
 
-- United People's Freedom Alliance (UPFA):  Sri Lanka 
Freedom Party (SLFP) plus Janatha Vimukthi Peramuna 
(JVP):  45.60 percent and 105 seats.  (Of the 105 seats, 
about 40 of them appear to have been won by the JVP. 
2001 election results -- SLFP and JVP running 
separately:  the People's Alliance, including SLFP, 
38.00 percent, 79 seats; JVP: 9.10 percent; 16 seats.) 
 
-- Eelam People's Democratic Party (EPDP):  0.27 percent 
and one seat.  (2001 election:  1.17 percent and two 
seats.) 
 
-- Jathika Hela Urumaya (JHU):  5.97 percent and 9 
seats.  (The JHU is basically a new party, but it is 
linked with the "Sihala Urumaya" party that won 0.56 
percent of the vote and no seats in 2001.) 
 
-- United National Party (UNP) plus Ceylon Worker's 
Congress (CWC):  37.83 percent, 82 seats.  Of the UNP's 
82 seats, 6-7 are believed to have been won by the CWC. 
(2001 election:  45.63 percent; 106 seats.) 
 
-- Tamil National Alliance (TNA) running as "Ilanki 
Tamil Arasu Katchchi" (ITAK) party:  6.84 percent; 22 
seats. (2001 election:  3.89 percent; 15 seats.) 
 
-- Sri Lanka Muslim Congress (SLMC):  2.02 percent, 5 
seats.  (2001 election:  1.17 percent; 8 seats.) 
 
-- Upcountry People's Front:  0.54 percent, one seat. 
 
(Note:  Parliament has 225 seats, with 113 needed for a 
majority.) 
 
14.  (U) Minimize considered. 
 
LUNSTEAD