US embassy cable - 04COLOMBO611

C O N F I D E N T I A L SECTION 01 OF 04 COLOMBO 000611 
 
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 
 
KATHMANDU PLS PASS TO CODEL DREIER 
 
E.O. 12958:  DECL:  04/08/14 
TAGS: PREL, PGOV, PINR, ECON, MASS, CE, Elections, LTTE - Peace Process, Political Parties 
SUBJECT:  In meeting with Ambassador, new PM expresses 
support for peace process, notes concerns re radical JVP 
 
Refs:  Colombo 607, and previous 
 
(U) Classified by Ambassador Jeffrey J. Lunstead. 
Reasons 1.5 (b,d). 
 
SUMMARY 
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1.  (C) Ambassador Lunstead made a congratulatory call 
on new Sri Lankan Prime Minister Mahinda Rajapakse on 
April 8.  During their 45-minute long discussion, 
Rajapakse underscored his support for the peace process. 
In a theme he kept returning to, he also expressed deep 
concerns about the high degree of influence the radical 
JVP party would have on the new government.  The 
Ambassador noted that it was important for the new 
government to send a positive signal to investors 
regarding its economic plans, and he briefly reviewed 
USG military-to-military cooperation with the GSL. 
Rajapakse stressed that he wanted to work with the U.S. 
very closely.  Rajapakse was his usual affable, breezy 
self throughout the meeting.  He is someone we think the 
U.S. can work with.  He will be very much overshadowed 
by President Kumaratunga and he seems fine with that. 
We suggest that a formal letter of congratulations be 
sent to him from Washington as soon as possible.  END 
SUMMARY. 
 
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Meeting the new PM 
------------------ 
 
2.  (C) Ambassador Lunstead called on new Sri Lankan 
Prime Minister Mahinda Rajapakse on April 8. 
(Rajapakse, the former Leader of the Opposition and a 
senior MP in President Kumaratunga's Sri Lanka Freedom 
Party, "SLFP," was sworn in on April 6 -- see Reftels 
for bio-data.)  The meeting took place at Rajapakse's 
private residence in Colombo.  (There are unconfirmed 
reports that Rajapakse does not plan to move into the 
official residence located at Temple Trees across from 
the Embassy, though he may use it as an office.)  Before 
the meeting began, there was a photo spray involving a 
scrum of photographers and cameramen. 
 
3.  (C) When the two sat down, the Ambassador 
congratulated Rajapakse on the results of the April 2 
parliamentary election in which the United People's 
Freedom Alliance (UPFA) won the most seats.  (The UPFA 
is a coalition of the SLFP and the radical Janatha 
Vimukthi Peramuna, "JVP," party.)  The Ambassador noted 
that the election and the largely peaceful way it was 
conducted were a "positive symbol of democracy."  When 
asked if he was elated, Rajapakse, smiling broadly, 
replied:  "I don't feel it yet."  The Ambassador noted 
that he had often said that he represented the U.S. to 
Sri Lanka as a whole, and not to one party, or to one 
person.  That was true in the past and was true now. 
The U.S. looks forward to working with the new 
government in support of the peace process, prosperity 
for the Sri Lankan people, and to defeat terrorism. 
Rajapakse, who was dressed in his customary red scarf 
over a long white shirt and white sarong, replied that 
he wanted good relations with the U.S. and did not 
foresee any "barriers" to that happening -- the U.S. and 
Sri Lanka "must work together." 
 
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Peace Process 
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4.  (C) The Ambassador remarked that he had met with the 
other local co-chairs of the Tokyo process (Norway, 
Japan, and the EU) on April 7 and everyone had agreed on 
how important it was to support the peace process. 
Rajapakse agreed that maintaining the peace process was 
a key priority.  He noted, however, that "President 
Kumaratunga will be dealing with that."  The Ambassador 
asked whether some sort of public statement by the co- 
chairs expressing support for the peace process would be 
helpful at this time.  Rajapakse said it would be 
because many people in the south needed reassurance that 
the country was not going to be divided into two.  The 
Ambassador also asked about Rajapakse's reported comment 
on April 6 that India should assume a bigger role in the 
peace process.  (Lakshman Kadirgamar, a former foreign 
minister who is set to reclaim his old job, had made a 
similar point in April 7 comments to the press.) 
Rajapakse replied that he had not had anything specific 
in mind.  India, however, was an important country and 
people in the south would be reassured about the peace 
process if India was actively involved.  The Ambassador 
agreed that additional Indian involvement would only 
help.  He added that the U.S. and India enjoyed a very 
warm relationship on international matters, including on 
Sri Lanka.  This may have not been the case years ago, 
but it was today. 
 
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Concerns about JVP 
------------------ 
 
5.  (C) Shifting focus, Rajapakse immediately turned the 
conversation to a point he kept returning to during the 
meeting:  his concerns about JVP influence in the new 
government.  He related that the JVP was gaining 
strength in the country.  It had won 39 seats in the 
April 2 election, up from 16 seats in the last election. 
(Note:  Based on the election result, the JVP could have 
had 41 seats, but, in a spirit of compromise, it decided 
to forego two seats it could have had on the UPFA's 
"national list" of candidates.)  The JVP had a "definite 
plan" and it was going to have a great deal of influence 
on the new government and its policies.  He added that 
he thought that "President (Kumaratunga) was 
underestimating the JVP, thinking she could control 
them."  The JVP, however, was in a good position "to 
interfere" in many aspects of the new government.  The 
group, for example, was going to get four key 
ministries:  agriculture, rural development, fisheries, 
and culture.  These ministries were very important ones 
in Sri Lanka, he averred.  The ministries the JVP would 
control would demand funds from the government, but the 
party did not have any responsibility for the budget, 
and thus would be in position to criticize the GSL's 
actions.  In addition, key JVP leaders had decided not 
to assume ministerial slots, preferring to leave them to 
subordinates, which was a clear sign that the JVP 
planned to separate itself and strike out at the new 
government when it wanted.  One of the reasons he wanted 
India to be more actively involved in the peace process 
was to reassure people in the south and, by doing so, 
help convince them not to turn to the JVP or the JHU. 
(The Jathika Hela Urumaya, the "JHU," is an all-Buddhist 
monk party, which  -- in a very impressive result for a 
new party -- won nine seats in the election.)  When 
Rajapakse finished his soliloquy regarding the JVP, the 
Ambassador responded that the U.S. also had concerns 
about the JVP involving its stance regarding the peace 
process, economic reform, and on other issues.  When 
queried, Rajapakse said he was not certain when a new 
cabinet would be named, but it could be as early as 
tomorrow (April 9). 
 
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Economic Issues 
--------------- 
 
6.  (C) The Ambassador noted that the peace process 
reinforced efforts to bring prosperity to the Sri Lankan 
people and vice versa.  In light of this, it was 
important that the new government send a clear signal to 
investors, international and local, that it supported 
potential investment.  Investors need to know that the 
peace process would continue and that the government in 
power would provide sound, stable economic management in 
regard to the budget, privatizations and other reforms. 
Rajapakse replied that he could not support the 
privatization of basic services, such as health services 
or transport industries, such as the railways.  The 
Ambassador commented that the railways were facing huge 
losses.  Rajapakse replied that they needed a new 
management system.  He added that if the new government 
attempted to privatize the railway system:  "we would 
lose power as quickly as the last government."  In any 
case, the JVP would not allow the railway system to be 
privatized.  The Ambassador noted that free markets were 
almost always the best way to create efficiencies and 
asked whether the new government planned to move ahead 
with the planned third wave privatization of the 
petroleum sector.  Rajapakse did not give a clear 
response to the question.  The Ambassador then remarked 
that neighboring India was experiencing a huge economic 
surge, with very high growth rates.  He had read that 
Prime Minister Vajpayee, in the midst of the 
parliamentary campaign, was promising to go forward with 
more privatizations.  Rajapakse replied that "India can 
afford to do that; Sri Lanka has a lot of poverty."  The 
Ambassador related that Sri Lanka had many advantages, 
but it had to work to sell itself; India and China, 
immense markets, were doing so and getting ahead.  In 
closing, the Ambassador advised that it might be a good 
idea if the new government made a pro-investment 
statement to soothe any concerns in the near-term. 
 
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Mil-to-Mil Cooperation 
---------------------- 
 
7.  (C) The Ambassador added that the U.S. had a wide 
variety of programs in Sri Lanka.  These programs 
covered many areas, including development assistance and 
military-to-military cooperation.  The Ambassador 
briefly reviewed the Millennium Challenge Account, 
noting that Sri Lanka was a potential candidate. 
Regarding military cooperation, the Ambassador said two 
signals were being sent to the Tigers:  first, if they 
pursued peace, there would be benefits in economic 
reconstruction; and second, if they returned to the war, 
the U.S. and others would stand by the GSL.  In regard 
to specific programs, the U.S. was planning to provide 
the GSL with a former U.S. Coast Guard cutter.  This 
would send a strong signal.  The ship was being provided 
gratis, though the GSL would have to fund the 
refurbishment costs.  Rajapakse said he had heard of the 
cutter program from a friend from his home area in the 
south, who was an engineer and had inspected the cutter 
for the GSL in the U.S.  The Ambassador commented that 
some quick decisions were needed by the GSL regarding 
the cutter and he had just sent a letter to Defense 
Secretary Herath.  Rajapakse said it was important that 
 
SIPDIS 
the ship be provided to the navy and not to the 
fisheries ministry, which was going to be under JVP 
control. 
 
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Other Issues 
------------ 
 
8.  (C) Toward the end of the discussion, Rajapakse 
suddenly commented that he had a friend in Las Vegas who 
had called him and told him that some Americans were 
talking about Sri Lanka now having "a Marxist 
government."  The Ambassador replied that that was not 
how the USG felt.  We planned to continue to work very 
closely with the GSL.  As democracies, we had much in 
common.  Rajapakse noted that he was the head of a group 
called "The Palestinian Solidarity Movement," but his 
only responsibilities involved a meeting and a statement 
once a year.  The Ambassador remarked that with respect 
to international affairs, including the Middle East, the 
U.S. planned to work closely with Sri Lanka.  There was 
always room for disagreement, but the two governments 
needed to continue to consult.  Both the U.S. and Sri 
Lanka were on the UN Commission on Human Rights, for 
example.  The U.S. had reviewed proposed CHR resolutions 
regarding Cuba and China with high-levels in the Sri 
Lankan government and wanted to keep in close touch as 
discussions proceeded in Geneva. 
 
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COMMENT 
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9.  (C) Rajapakse was his usual affable, breezy self 
throughout the meeting.  He is very much a tactical 
thinker, seemingly focused almost single-mindedly on 
domestic politics.  Rajapakse speaks from experience 
regarding the JVP:  he comes from Sri Lanka's deep south 
and his political survival has depended on beating back 
repeated JVP challenges to his voter base.  His concerns 
regarding the group have long been known, but the depth 
of those concerns came through loud and clear during the 
meeting.  Based on his remarks and those we have heard 
elsewhere, there is little doubt that the JVP is going 
to have a huge degree of influence on the government, 
though the net impact of that on the peace process and 
the economic arena remains uncertain.  In discussing the 
JVP, Rajapakse was also transparently signaling that 
there could be problems with infighting within the UPFA 
coalition.  Overall, Rajapakse is someone we think the 
U.S. can work with.  It is clear that he will be very 
much overshadowed by President Kumaratunga, however.  He 
seems to realize that and to be fine with it.  We 
suggest that a formal letter of congratulations be sent 
to him from Washington as soon as possible.  END 
COMMENT. 
 
10.  (U) Minimize considered. 
 
LUNSTEAD