US embassy cable - 05COLOMBO497

UNCLAS SECTION 01 OF 03 COLOMBO 000497 
 
SIPDIS 
 
SENSITIVE 
 
FOR A/S TONY WAYNE FROM AMBASSADOR LUNSTEAD; DEPARTMENT FOR 
SA/INS; PLEASE PASS TO TREASURY C.CARNES 
 
E.O. 12958: N/A 
TAGS: EAID, ECON, EFIN, CE, MV, Tsunami 
SUBJECT: SRI LANKA RELIEF TO RECONSTRUCTION UPDATE (MARCH 
8, 2005) 
 
REF: COLOMBO 464 
 
This telegram is for use in upcoming briefing for Deputy 
Secretary Zoellick and the Tsunami IAWG 
 
SIPDIS 
 
1. (U) Sensitive but unclassified, please handle accordingly. 
 
 
2. (U) Summary:  The GSL has issued new guidance on NGO and 
donor activity in Sri Lanka, particularly with regard to the 
duty free entry of relief and reconstruction supplies into 
the country, but the situation remains confused.  High-level 
interlocutors continue to acknowledge shortcomings, but 
appear unable, or unwilling, to confront the issues head-on. 
While many NGOs appear to have bulging pockets at this point, 
they are under pressure to deliver and are finding the 
process of registering and being allowed to operate 
cumbersome and confusing.  New guidelines on the duty free 
entry of relief and reconstruction items have raised more 
questions than they have answered.  The US Army Corps of 
Engineers continues to assess USAID recommended infastructure 
projects, in the hope that supplemental funds will be 
forthcoming in order to begin implementation.  Maldives, in 
comparison to Sri Lanka, appears better organized in its 
reconstruction effort.  End Summary. 
 
Process 
------- 
 
3.  (SBU) In Sri Lanka, problems continue to plague the GSL's 
efforts to coordinate reconstruction efforts.  The two main 
impediments to progress at this point are a failure to 
adequately coordinate and facilitate NGO operations and the 
lack of clear guidance on procedures such as importing relief 
and reconstruction items into the country.  Further, 
continued debate over the 100/200 meter coastal conservation 
zone (reftel) and confusion over its implementation (how it 
will be enforced; whether exemptions will be granted) has 
caused delays in the rebuilding and repair process.  During a 
March 7 lunch meeting with Finance Secretary PB Jayasundera, 
Ambassador commented on the problems posed by unclear 
guidance and lack of a coordinating mechanism.  Jayasundera 
acknowledged the GSL's shortcomings, offered several examples 
of how operations could be improved, but suggested the 
Ambassador raise the issue with President Kumaratunga. 
Ambassador has requested a meeting with the President to 
discuss relief issues. 
 
NGO Operations 
-------------- 
 
4. (U) NGOs in Sri Lanka continued to be burdened and 
blessed.  Their burdens have stemmed from the GSL's lack of a 
coordinating mechanism and suspension of the NGO registration 
process, as well as continued bureaucratic hassles in getting 
relief and reconstruction supplies cleared into the country. 
Donor governments continue to raise the issue, though they 
are becoming victims of this systemic failure themselves. 
USAID has been unable to get the communications equipment for 
the US Army Corps of Engineers assessment team cleared in 
time for the team to use it during its visits out of Colombo 
(The GSL has imposed special procedures on communication 
equipment due to security concerns). 
 
5. (U)  In an effort to address these issues, the GSL called 
a meeting on March 7 of all NGOs that wish to operate in 
tsunami affected areas.  Far from clarifying and expediting 
 
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the relief and rehabilitation process, the meeting conveyed a 
sense of "business as usual."  No new fast-track mechanisms 
have been announced, though a new procedure has been put in 
place to register NGOs.  While the Government has issued new 
guidelines on duty-free entry of relief and rehabilitation 
materials, there continue to be significant confusion and 
misunderstanding about what is covered and how it can be used 
(see "Duty-Free Entry of Relief Goods" below).  Many 
organizations, including the UN and large international NGOs, 
continue to experience delays in clearing relief commodities 
at both the international airport and at the port.  Part of 
the problem is clearly the huge amount of supplies that are 
coming in, but a far greater impediment is the lack of clear 
policies and poor communication between Government entities. 
Duty-Free Entry of Relief Goods 
------------------------------- 
6.  (U) The GSL announced over the weekend new guidelines on 
duty-free entry of relief and rehabilitation goods that will 
be in place for goods that arrive prior to April 26, 2005. 
According to the Finance Ministry announcement, items that 
can be imported duty free, assuming they are turned over to 
the relevant Government agency, include new apparel, 
textiles, tents, building materials, school supplies, 
medicines and medical supplies, gully emptiers and water 
tanks, and generators.  Water pumps may be imported duty free 
but do not need to be turned over to the Government.  Items 
that need special permission include communications equipment 
and electrical appliances, consumer durables and computer 
equipment.  The announcement made clear that rice would not 
be allowed to enter the country duty free, in order to 
protect domestic producers. 
 
7.  (SBU) The announcement continued to promote confusion 
because, according to the published guidelines, certain items 
have to be turned over to Government entities for 
distribution.  However, when the Ambassador queried Finance 
Secretary Jayasundera, he indicated that goods do not have to 
 
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be turned over, but that they should be distributed "with the 
knowledge" of the relevant Government ministry.  Seeking 
further clarification, ECONFSN was told that NGOs should turn 
the items over to the relevant ministry, but if the NGO 
wanted to distribute the goods itself, it could request that 
the goods be returned and that the Ministry approve the 
distribution. 
 
 
Coastal Conservation Zone 
------------------------- 
 
7.  (U) As described more fully reftel, the 100/200 meter 
coastal conservation zone (no-build areas) continues to be 
controversial.  While the Government has issued guidance in 
the form of full-page newspaper advertisements, advising 
individuals and businesses of the new rules, and outlining 
compensation measures, it is still unclear what will happen, 
in particulark, to partially damaged structures, or those 
without permits prior to December 26.  Some land has been 
granted for communities that need to be resettled, but this 
remains a tedious process without a well coordinated, 
transparent structure for oversight. 
 
Signature Infrastructure Projects 
--------------------------------- 
 
8.  (U) The Army Corps of Engineers teams have been traveling 
around tsunami-affected areas, with USAID staff and 
representatives of GSL authorities responsible for the type 
of infrastructure being assessed, to prepare the cost 
estimates for USAID proposed projects, including the repair 
of a bridge at Arugam Bay in the east, the reconstruction of 
14 vocational training centers in coastal areas, and the 
repair and reconstruction of several fishery harbors.  They 
will complete their assessments by March 16 and present their 
cost estimates to USAID.  Without further information on 
potential funding, it will be difficult to provide more 
information on these projects. 
 
Maldives 
-------- 
 
9.  (U) USAID Director and Econchief attended a briefing by 
the ADB and Riluwan Shareef, Executive Director of the GORM's 
Finance Ministry, on March 4.  The briefing was 
well-organized and highlighted the effective work done by the 
GORM in coordinating its relief and rebuilding efforts.  In 
contrast to its larger tsunami-hit cohorts, Maldives has 
quietly, and with far less international fanfare, put 
together a systematic process to identify and prioritize 
needs and apply resources.  Also in contrast to its larger 
cohorts, Maldives sees a much larger funding gap, relative to 
the size of its damage.  While damage assessments for the 
Maldives suggest USD 406 million is required to finance 
reconstruction, donor funding so far totals less than USD 100 
million.  While it is true that the Maldives has much greater 
scope for private sector investment in reconstruction than 
other tsunami-affected countries, the scope of the damage, 
relative to the size of Maldives economy (approximately USD 
850 million per year), is tremendous. 
 
Comment 
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10.  (SBU) While the tremendous logistical challenge posed by 
hundreds of new NGOs and individuals trying to clear goods 
into the country for relief work is clear, the GSL still 
appears unable to setup an efficient process.  This does not 
seem to be from ill-will, or a desire to obstruct assistance, 
but more the persistence of entrenched bureaucratic habits. 
Perhaps most telling is an anecdote passed on by a 
senior-level Embassy contact outside the GSL, who told us 
that he had been present at a meeting where it had been 
suggested that new guidelines on duty be written in a way 
that would "please the Americans" (Ambassador had written a 
letter to the Finance and Foreign Ministers expressing our 
concern on duties being assessed on relief goods).   While it 
is nice to think we carry so much weight, it is troubling to 
think that our protestations and desire for clarification 
would be the justification for new policies, rather than a 
desire to expedite and better organize the relief effort. 
This week's announcement by the GSL and its subsequent 
misunderstandings and confusion have also served as a 
contrast for Maldives' relief and coordination effort, which 
appears very well organized and effective.  We expect 
Maldives to make a good showing at the Manila conference next 
week. End comment 
LUNSTEAD