US embassy cable - 05COLOMBO327

UNCLAS SECTION 01 OF 03 COLOMBO 000327 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR SA/INS 
NSC FOR DORMANDY 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: OVIP, PREL, PGOV, EAID, PTER, CE, LTTE - Peace Process, Political Parties, Tsunami 
SUBJECT: SRI LANKA:  SCENESETTER FOR THE FEBRUARY 20-21 
VISIT OF FORMER PRESIDENTS BUSH AND CLINTON 
 
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SUMMARY 
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1.  (SBU)  The December 26 tsunami, in spite of its cruel 
humanitarian toll and staggering financial costs, has 
provided the Government of Sri Lanka (GSL) and the Liberation 
Tigers of Tamil Eelam (LTTE) a chance to re-engage after a 
near two-year hiatus in negotiations.  The tragedy has 
mitigated, at least temporarily, the vitriol typical of 
domestic politics here, and the GSL should move quickly to 
capitalize on this respite.  Any perception--whether valid or 
not--that disaster aid is not being distributed equitably to 
affected communities could exacerbate ethnic tensions and 
further embitter existing political rivalries.  The visit of 
former Presidents Bush and Clinton offers an opportunity to 
reiterate our appreciation for GSL assistance to American 
citizen victims of the disaster; to underscore our commitment 
to helping Sri Lanka rebuild; and to encourage GSL/LTTE 
cooperation in reconstruction as a way to resume progress 
toward a negotiated settlement of the conflict.  End summary. 
 
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POST-DISASTER: 
PICKING UP THE PIECES 
---------------------- 
 
2.  (U) Sri Lanka is beginning to pick up the pieces after 
emerging from the greatest natural disaster in its recorded 
history.  The December 26 tidal wave that devastated 
two-thirds of this island's coastline killed approximately 
31,000 people (another 5,000-plus remain missing), displaced 
nearly 400,000, and caused an estimated $930 million in 
damage.  Unprepared for a disaster of such magnitude, the 
Government of Sri Lanka (GSL) response to the catastrophe was 
initially somewhat halting and chaotic, but has since 
improved.  Responsibility for implementing the GSL's 
ambitious reconstruction plan has been assigned to three task 
forces, headed by senior civil servants and prominent members 
of the private sector, to ensure coordination with foreign 
and local NGOs, bilateral and multilateral donors, and 
private and corporate donors.  By late January the GSL 
Central Bank had reported receiving nearly $35 million in 
direct contributions from foreign and local sources.  Actual 
damage to infrastructure proved less than initially feared. 
The greatest costs imposed by the tsunami appear related to 
housing (nearly 80,000 houses were completely destroyed in 
the disaster; about half that number were partially 
destroyed) and in livelihoods (nearly 400,000 jobs were lost, 
according to World Bank estimates). 
 
3.  (SBU)  The tsunami had its most dramatic impact on the 
fishing and tourism industries.  Tourism (which brought in 
more than $400 million in revenues in 2004) is a key foreign 
exchange earner.  The damage to livelihoods will have lasting 
social and economic impact in the affected areas.  As 
reconstruction picks up, some donors have expressed concern 
at the lack of appropriate mechanisms to coordinate 
rebuilding efforts and ongoing relief activities.  The World 
Bank, Asian Development Bank and Japan Bank for International 
Cooperation are undertaking a joint needs assessment, the 
first draft of which has been released.  The second phase of 
the assessment is just getting under way. 
 
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U.S. ASSISTANCE 
---------------- 
 
 
4.  (SBU)  The Sri Lankan government and its people have 
warmly welcomed U.S. government and private assistance.  To 
date, USAID has provided $57.6 million in emergency food 
assistance, relief supplies, shelter, water and sanitation, 
health, livelihoods recovery, psychological and social 
support, protection and anti-trafficking, logistics and 
coordination, and cleanup and rehabilitation activities for 
affected communities in Sri Lanka.  Cash-for-work and 
micro-finance programs are fully operational.  USAID is now 
focusing on program monitoring and evaluation, ongoing 
situational assessments and planning for longer-term 
reconstruction.  USAID is exploring options for anticipated 
supplemental funding for tsunami reconstruction, including 
rehabilitation and/or reconstruction of harbor facilities, 
bridges, water and sanitation systems, and damaged and/or 
destroyed vocational technical schools.  Along with 
infrastructure contributions, USAID plans to expand 
assistance for internally displaced persons, especially women 
and children; work with local micro-finance institutions and 
industry associations to restore livelihoods; assist 
provincial and local governments in building capacity to 
improve service delivery in tsunami-affected districts; 
expand anti-trafficking in persons efforts; assist the GSL in 
the creation of an emergency response organization and plan; 
and expand rehabilitation and/or reconstruction of 
small-scale community infrastructure, targeting 
labor-intensive projects.  More than 1,000 U.S. military 
personnel from the Combined Support Group Sri Lanka helped 
clear heavy debris, rebuild schools, provide medical care and 
distribute emergency rations before their departure in early 
February.  Media coverage of the U.S. effort has consistently 
been highly favorable. 
 
5.  (SBU)  The U.S. is working with other donors and INGOs to 
ensure the equitable distribution of our assistance, 
including in the north and east.  In keeping with 
long-standing policy, however, USG personnel are not deployed 
in LTTE-controlled areas. 
 
 
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U.S. CASUALTIES 
---------------- 
 
6.  (U) Seven American citizens were confirmed killed in the 
tsunami; an eighth remains missing and is presumed dead.  The 
 
SIPDIS 
GSL responded quickly to assist U.S. and other foreign 
tsunami victims.  Despite resource and manpower constraints, 
 
SIPDIS 
the GSL worked rapidly to move foreigners, including 
Americans, to safety, often according them first priority in 
limited aircraft seats.  Immigration authorities worked 
closely with the Embassy to determine the number of Americans 
in country at the time of the catastrophe. 
 
 
----------------------- 
POLITICAL IMPLICATIONS 
----------------------- 
 
7.  (SBU)  Before the tsunami struck, prospects for resumed 
negotiations between the GSL and the Liberation Tigers of 
Tamil Eelam (LTTE) were lackluster.  Both sides had adopted 
rigid positions (the LTTE insisting on its controversial 
proposal for an interim administration as the sole basis for 
talks; the GSL, citing the objections of its chief coalition 
partner, insisting on a broader agenda) that appeared to 
offer little ground for compromise.  The protracted impasse 
gave chauvinist Sinhalese elements, including GSL coalition 
partner Janatha Vimukthi Peramuna (JVP), ample space to 
mobilize opposition to the peace process, while the LTTE 
continued to violate the terms of the ceasefire agreement by 
murdering political opponents and recruiting child soldiers. 
Efforts by the Norwegian facilitators of the peace process to 
revive talks, on hold since the LTTE's April 2003 walk-out, 
were further complicated by President Chandrika Kumaratunga's 
preoccupation with extending her political career (in late 
2005 she runs up against a two-term limit as president) by 
engineering a referendum to amend the Constitution. 
8.  (SBU) Cooperation on post-tsunami reconstruction efforts 
has provided the GSL and the LTTE fresh opportunities for 
re-engagement.  (Note:  The tsunami wrought substantial 
damage in six of the eight districts claimed by the LTTE as a 
Tamil "homeland," in addition to another four districts in 
the predominantly Sinhalese south.)  In the first few days 
after the disaster, President Kumaratunga issued a public 
statement noting the need for all communities to work 
together; LTTE leader Prabhakaran followed up with an 
unprecedented expression of condolences for the "Sinhala 
brethren" killed in the tragedy.  Since then, according to 
INGO and other foreign diplomatic sources, cooperation 
between the two parties on the ground, especially at the 
local level, remains good, despite the occasional broadside 
in the media accusing one or the other of obstructionism. 
The "co-chairs" of the peace process (the U.S., EU, Japan and 
Norway) are encouraging both sides to develop appropriate 
mechanisms to coordinate relief/reconstruction at all levels. 
 Unfortunately, an apparent moratorium on tit-for-tat 
assassinations by the LTTE and a rival faction ended on 
February 7 with the killings of an LTTE political leader and 
a pro-LTTE ex-parliamentarian in GSL-controlled territory in 
the east.  LTTE suspicions that the rival faction is 
supported by GSL security forces--along with the proximity of 
the ambush to several Sri Lankan Army installations--have 
raised concerns that the incident could undermine these 
promising first steps toward building confidence between the 
two parties. 
 
9.  (SBU)  The tsunami has also given President Kumaratunga 
some respite from the bitter partisan in-fighting that 
characterizes mainstream Sri Lankan politics.  At least for 
now, the opposition United National Party (UNP) has suspended 
its sniping at her and, in a commendable show of subsuming 
partisan benefit to the national good, has committed to 
working with her government in rebuilding the nation. 
Despite occasional threats to withdraw from the government, 
the JVP, the President's contrarian coalition partner, has 
muted its typically vociferous opposition to the peace 
process. 
 
10.  (SBU)  While the disaster may provide Kumaratunga some 
welcome breathing space from LTTE ultimatums and partisan 
intrigue, we suspect the window is narrow and will not remain 
open long.  The operation of the Sri Lankan bureaucracy, 
which was never a model of speed and agility under the best 
of circumstances, has not been improved by the tremendous 
logistical challenges imposed by this unprecedented disaster. 
 Any inefficiency/inequity/non-transparency in the 
distribution of assistance will likely be quickly capitalized 
upon by Kumaratunga's political rivals.  Most important, any 
perceived discrimination in the allotment of aid 
resources--whether valid or not--could aggravate underlying 
ethnic tensions, worsening prospects for a negotiated 
settlement to the conflict.  The GSL must move quickly to 
ensure that assistance reaches all affected populations in an 
equitable and timely fashion or risk exacerbating partisan 
animosities and re-igniting ethnic grievances. 
 
 
 
 
LUNSTEAD