US embassy cable - 04COLOMBO915

C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 000915 
 
SIPDIS 
 
DEPARTMENT FOR D, SA, SA/INS, EAP/J, EUR/NB, EUR/NRA 
NSC FOR E. MILLARD 
 
E.O. 12958:  DECL:  06-04-14 
TAGS: PREL, PREL, EAID, PTER, CE, NO, JA, EU, LTTE - Peace Process 
SUBJECT:  Co-Chairs' June 1 statement stirs up more 
reaction in Sri Lanka while Tigers remain intransigent 
 
Refs:  (A) Colombo 911, and previous 
 
(U) Classified by Ambassador Jeffrey J. Lunstead. 
Reasons 1.5 (b, d). 
 
1.  (C) SUMMARY:  Foreign Minister Kadirgamar told 
Ambassador that the Co-Chairs' Brussels statement could 
be seen as a "threat" to the GSL.  In the Wanni, the 
LTTE rejected a World Bank proposal for a mechanism to 
deliver development funds for the north/east.  The Co- 
Chairs' statement clearly puts pressure on the 
government.  The Tigers may be less concerned.  END 
SUMMARY. 
 
Foreign Minister on Brussels Statement 
-------------------------------------- 
 
2.  (C) At a social event for the visiting Millennium 
Challenge Corporation team on June 3, the Ambassador 
asked Foreign Minister Kadirgamar, returned from New 
Delhi only at midnight the day before, if he had read 
the Co-Chairs' statement from Brussels.  Kadirgamar 
responded that indeed he had.  He said that an emphasis 
on restarting the peace talks was good, but that "some 
people" would see the comments on donor funding as a 
threat.  Ambassador responded that the language was not 
a threat; rather, it was a simple statement of fact. 
The reality was that in the world today, where there 
were many crises and demands for funds, money would 
inevitably go elsewhere if it could not be used in Sri 
Lanka. 
 
3.  (C) Kadirgamar's use of "other people" may refer to 
the JVP.  Newspapers reported on June 4 that the Janatha 
Vimukthi Peramuna (JVP) -- the major partner in the 
President's United People's Freedom Alliance (UPFA) -- 
had issued a statement in response to the June 1 co- 
chairs statement.  In its response the JVP states that 
the Co-Chairs should pressure the LTTE into returning to 
peace talks.  The JVP statement goes on to blame the 
LTTE for the delay in resuming negotiations, calling the 
group's insistence on having its Interim Self-Governing 
Authority (ISGA) proposal be the only subject for talks 
a "precondition."  In the end, the statement says that 
any conditions by the international community on the 
disbursement of the pledged $4.5 billion in aid could be 
"construed...as cooperating with the LTTE in reaching 
their objectives." 
 
4.  (C) The Ambassador is also seeking appointments with 
President Chandrika Kumaratunga and Opposition Leader 
Ranil Wickremesinghe to emphasize points in the June 1 
Co-Chairs' statement and to solicit their feedback. 
 
LTTE Rejects Assistance Fund Proposal 
------------------------------------- 
 
5.  (C) World Bank Resident Representative Peter Harrold 
told Ambassador June 2 that he had traveled to 
Kilinochchi on June 1 to attempt to obtain LTTE 
agreement to a plan for a development assistance scheme 
for the North and East, a "NERF-Lite" which would have 
allowed donors to commit funds to a World Bank fund. 
Projects would have had approval by both the LTTE and 
the GSL.  LTTE would have had substantial influence over 
use of funds in their areas.  The plan had essentially 
been approved by the LTTE in January, and had been 
approved by President Kumaratunga recently.  The LTTE 
this time rejected it out of hand, telling Harrold that 
the GSL's backing away from its commitment to discuss 
only the ISGA at renewed talks made them distrust 
anything the Government promised.  The answer to 
development needs, they said, is to establish the ISGA. 
Dutch Ambassador told Ambassador June 4 that the Dutch 
are furious at this latest LTTE antic, and will tell the 
Tigers they will not proceed with projected assistance 
projects in Tiger areas.  The Dutch will also tell the 
Tigers about the Donor Working Group which is developing 
bench marks on performance on Tokyo Declaration 
milestones so that Tigers understand that donors will 
need to see progress on a number of areas. 
 
Asymmetrical Pressure? 
--------------------- 
 
6.  (C) COMMENT:  As noted in Reftel, many Sri Lankans 
have welcomed the Co-Chairs' statement's sense of 
urgency on resuming the talks.  There is, however, a 
certain asymmetry in the pressure brought by the 
statement.  The LTTE rejection of "NERF-Lite" 
underscores what the bilateral and multilateral donors 
who work in LTTE areas have said for some time:  in the 
end, assistance is not a strong lever for moving the 
Tigers.  With their brutal hold on the population and 
ability to largely disregard public opinion, the Tigers 
are able to focus almost entirely on their political 
goals.  The GSL, on the other hand, will feel 
considerable pressure.  The challenge will be to figure 
out how to apply pressure to the Tigers also, so that 
they do not just sit back and wait for the government to 
come to them.  END COMMENT. 
 
7.  (U) Minimize considered. 
 
LUNSTEAD