US embassy cable - 02COLOMBO1839

C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 001839 
 
SIPDIS 
 
OFFICIAL INFORMAL 
 
DEPT FOR SA/INS FROM AMBASSADOR WILLS 
 
E.O. 12958:  DECL:  10-03-12 
TAGS: AMGT, CE, LTTE - Peace Process 
SUBJECT:  OFFICIAL INFORMAL NUMBER 137 -0302) 
 
CLASSIFIED BY DCM LEWIS AMSELEM.  REASONS 1.5, B,D. 
 
CONTENTS: TREASURY/AID ASSESSMENT READOUT 
OTHER ASSESSMENTS 
          DEMINING IN LTTE AREAS 
          CAMBODIA'S COLOMBO PLAN DUES 
 
TREASURY/AID ASSESSMENT READOUT 
------------------------------- 
1.  (U)  The joint Treasury/AID team had a tremendously 
successful one-week visit here last month.  It was packed 
with meetings from early morning into each evening.  Even 
though it was an office director (and below) level team, 
we had no problems getting meetings with numerous 
Ministers (Finance, Economic Reform, Labor and the 
Central Bank Governor), who were eager to discuss U.S. 
aid and technical assistance.  We in the mission, for our 
part, are very happy with how the mission went and its 
outcomes thus far. 
 
2.  (U) The main outcome of the Treasury portion of the 
mission will be the placement of several (at least two, 
maybe more) Treasury Advisors in GSL beginning probably 
early 2003.  One would work on improving debt management 
and one on improving budgeting; one may also assist with 
the reorganization of state-run People's Bank (in big 
trouble because of bad loans).  GSL was extremely 
enthusiastic about having long-term Treasury Advisors 
working with it to improve its performance on some of the 
areas key to economic reform.  A follow-up mission from 
Treasury to scope-out the particular projects is due here 
week of October 14. 
 
3.  (U) While Treasury was here to identify specific 
technical assistance projects, the AID portion of the 
mission had a more general objective of determining what 
areas the AID program should focus on in the future. 
Based on the debrief the AID visitors gave the DCM at the 
end of its visit, AID is looking to focus on two themes 
here: facilitating economic growth island-wide and 
economic-integration of the North/East with the rest of 
the country.  Some specific areas mentioned were: making 
industry and labor more productive; further developing 
the financial sector; improving agricultural 
productivity; helping GSL rationalize government (e.g. 
customs reform); helping GSL communicate its reforms 
better to the people; and promoting further 
decentralization of government functions.  The visitors 
also mentioned that AID would be willing to look at 
helping Sri Lanka prepare for FTA negotiations with the 
U.S., should that become a near-term possibility. 
 
OTHER ASSESSMENTS 
----------------- 
 
4.  As you know, the Peace Corps hasn't properly assessed 
us yet.  That will happen soon.  The PACOM team is in 
country now.  And the NDU team's report just reached us 
by email yesterday (10/2) and has been forwarded to INS 
and the SA FO, also via email.  (FO) 
 
DEMINING IN LTTE AREAS 
---------------------- 
5.  (C) In reply to your o/i query, we do not think the 
U.S. should be involved directly (repeat directly) in any 
demining projects that take place in LTTE-controlled 
areas.  As you know, the LTTE is on the FTO and we do not 
think USG officials should be involved in interactions 
with the group.  For the same reason, we do not think the 
U.S. should be involved in directly funding any local 
NGOs controlled by the LTTE that are doing demining. 
That said, we could see funding international NGOs that 
may want to do demining in LTTE-controlled areas, such as 
HALO Trust.  We already have a precedent to rely on:  we 
provide funds to CARE which does work in LTTE areas.  In 
general, however, we think there is more than enough 
demining to be done in GSL-controlled areas, including 
projects that directly benefit Tamils and Muslims.  The 
QRDF's project in Jaffna, for example, mainly benefits 
Tamils living in what is a GSL-controlled area. 
 
6.  (U) By the way, we are faxing you an exchange of 
letters between the Ambassador and Donald McCoy.  McCoy, 
writing on behalf of the Marshall Legacy Institute (MLI), 
requests U.S. support for a demining project using dogs 
that it would like to implement in Sri Lanka.  It sounded 
like an excellent idea to us and we know that MLI has 
done good work elsewhere.  Perry Baltimore, MLI's 
president, is set to visit Sri Lanka in November and we 
will meet with him.  He may call SA/INS and Pat Patierno 
in PM/HDP for a briefing before he departs the U.S. (POL) 
 
CAMBODIA'S COLOMBO PLAN DUES 
---------------------------- 
7.  (U) During the most recent Colombo Plan meeting, 
Cambodia's request to be exempt from the USD 14,500 
annual dues was raised again.  A motion was passed to 
postpone making a decision on the matter until the April 
14-16, 2003, Consultative Committee Meeting in Tehran. 
As the issue comes up, we'll continue to insist that the 
Khmers pay up, per the previous guidance we received from 
the Department.  By the way, has anyone had a chance to 
review our action request re participation in the Tehran 
meeting, which was sent way back in July (Colombo 1412)? 
 
WILLS