US embassy cable - 03COLOMBO749

C O N F I D E N T I A L SECTION 01 OF 03 COLOMBO 000749 
 
SIPDIS 
 
DEPARTMENT FOR SOUTH ASIA ASSISTANT SECRETARY 
CHRISTINA ROCCA FROM AMBASSADOR WILLS 
 
E.O. 12958:  DECL:  05/05/13 
TAGS: PREL, PGOV, PTER, ECON, MARR, CE, NO, JA 
SUBJECT:  Scenesetter for SA Assistant Secretary Rocca's 
upcoming visit to Sri Lanka 
 
(U) Classified by Ambassador E. Ashley Wills: 
Reasons:  1.5 (b,d). 
 
1. (C) SUMMARY:  We warmly welcome your upcoming visit. 
It comes at an important time, with the peace process 
facing serious turbulence.  After months of progress, 
including six rounds of talks, the Tigers recently 
suspended negotiations.  There have been tentative signs 
that the Tigers' may be edging away from their hard-line 
stance, but the situation remains fluid.  The peace 
process is also being buffeted by domestic problems, 
such as cohabitation stresses and a delicate economic 
situation.  Despite all the turbulence, this period 
remains one of tremendous promise and your visit will 
help cement the gains made in U.S.-Sri Lankan relations, 
including in the defense area.  END SUMMARY. 
 
=============================== 
Background on the Peace Process 
=============================== 
 
2.  (C) We look forward to your May 11-14 visit to Sri 
Lanka.  It comes at an important time.  As you know, the 
United National Front (UNF) government led by Prime 
Minister Ranil Wickremasinghe has taken an activist 
posture regarding the peace process since it assumed 
power in December 2001.  In short order, the government 
and the Liberation Tigers of Tamil Eelam (LTTE) re- 
initiated the stalled Norwegian government facilitation 
effort and put unilateral ceasefires into effect.  A 
formal Norwegian-monitored ceasefire accord was signed 
in February 2002.  Continuing the positive trend, the 
two sides met in Thailand in September 2002 for their 
first round of peace talks since 1995.  Before the talks 
took place, the GSL met the long-standing demand of the 
LTTE and lifted its ban on the organization.  The LTTE, 
subsequently, edged away from its long-standing demand 
for a separate state.  Since September, the government 
and the LTTE have held five more rounds of talks.  In 
addition, donor countries met at a conference in Oslo in 
November 2002, with the Deputy Secretary in attendance. 
 
======================== 
Tiger Pullout from Talks 
======================== 
 
3.  (C) Despite so much progress in so short a time, the 
situation remains highly fluid, with the LTTE's 
commitment to the peace process in real question after 
its April 21 decision to "suspend" its participation in 
the peace talks.  At the same time, the group stated 
that it would not attend the Tokyo donors conference in 
June.  In making these announcements, the LTTE said it 
wanted to see more progress on such matters as 
humanitarian relief and a sharp reduction in the size of 
the Jaffna security zones before coming back to the 
talks.  There are recent signs that the Tigers may be 
edging away from their hard-line stance, however.  The 
tone of the group's reaction to our press statement on 
their pullout from the talks was relatively moderate, 
for example.  That said, despite feverish Norwegian and 
Japanese efforts, it is still not clear whether the 
peace process will be back on track soon. 
 
4.  (C) Re the LTTE's intentions and motivations, we 
think the group's pullout from the talks was tactical in 
nature, with the LTTE's trying to reset the peace 
process more to its advantage.  In the longer term, we 
think it is likely that the group is using the peace 
process more as a test to see if it can get power in the 
north and east without the inconvenience of war rather 
than as an honest-to-goodness parley that leads to real 
ethnic reconciliation.  Some of the LTTE's policy 
pronouncements raise red flags, for example, including 
its apparent lack of interest in disarmament and 
demobilization.  The group is also clearly unwilling to 
end its arms resupply efforts.  The forced recruitment 
of children is also a major human rights issue, as is 
the group's assassination of Tamil opponents, 
intimidation of Muslims in the east, and widespread use 
of extortion.  In spite of these negative signs, the GSL 
continues to hope that the peace process will help 
domesticate the LTTE through time, strengthening 
potential moderate elements in the group. 
 
===================== 
Tensions in the South 
===================== 
 
5.  (C) Another factor that could help unravel the peace 
process is domestic opposition in the south.  While 
playing to a small audience thus far, Sinhalese 
chauvinists led by the radical Janantha Vimukthi 
Peramuna (JVP) have engaged in rallies against the peace 
process.  President Kumaratunga, meanwhile, has sent 
mixed signals, at times constructive, at times critical. 
Kumaratunga's attitude seems largely bound up in the 
cohabitation tensions that routinely flare between her 
and the government.  Most recently, Kumaratunga and her 
party, the People's Alliance (PA), have been busily 
trying to negotiate a pact with the JVP as a means to 
counter the UNF government.  It is not clear whether a 
PA-JVP alliance will come to fruition, but if it does 
the reaction from the LTTE is bound to be sharply 
critical. 
 
=============== 
Economic Issues 
=============== 
 
6. (C) Sri Lanka's economic situation is quite delicate 
and could have an impact on the peace process.  Although 
it has the most open economy in South Asia and a 
relatively high per capita income (USD 837), economic 
growth has been uneven and is mostly confined to the 
greater Colombo region.  The UNF government appears 
committed to putting the right policies in place to re- 
ignite economic growth, but it has moved haltingly.  If 
economic progress is not made, opponents of the 
government could gain added political traction, a 
situation that could easily cascade to the detriment of 
the peace process. 
 
7.  (SBU) Meanwhile, our trade relationship with Sri 
Lanka is gaining strength.  The Trade and Investment 
Framework Agreement (TIFA) signed last July in 
Washington has produced two rounds of highly successful 
bilateral talks.  At the second TIFA meeting in 
Washington in March, Deputy USTR Jon Huntsman signaled 
that the U.S. and Sri Lanka would soon begin moving 
toward a bilateral Free Trade Agreement.  The FTA, which 
we expect to be announced later this year, will provide 
a much-needed boost to U.S. trade and investment here, 
as well as to the GSL's economic reform efforts.  It 
will also be a strong statement of our confidence in the 
peace process and the economic potential of a united Sri 
Lanka. 
 
============== 
Defense Issues 
============== 
 
8.  (C) We have long maintained that a strong Sri Lankan 
military is essential in keeping the Tigers at the 
negotiating table.  The three U.S. Department of Defense 
assessments conducted last fall identified several 
critical weaknesses in the GSL's defense organization 
that we are working to help alleviate.  Most notably, 
Sri Lanka's lack of a viable maritime surveillance and 
interdiction capability has allowed the LTTE to smuggle 
new weapons and munitions into the country.  Sri Lanka 
recently purchased a US aerial surveillance system, is 
looking at acquiring new radars, will be granted a 
refurbished U.S. Coast Guard Cutter under the excess 
defense articles program, and hopes to buy 30mm 
automatic cannons for their navy vessels.  Our 
continuing support for these and other such initiatives 
are key in ensuring that Sri Lanka's military is capable 
of providing a position of strength from which the 
government can negotiate. 
 
9.  (C) The GSL has consistently supported U.S. military 
operations with blanket overflight and landing 
clearances as well as access to ports.  As the peace 
process continues, the military has begun to look 
towards increasing participation in United Nations 
peacekeeping operations and accepting a larger role in 
assisting the U.S. in the global war on terror.  Most 
recently, Sri Lanka even has begun to explore ways of 
assisting in Iraqi reconstruction efforts, an area where 
the military's resources and expertise could be 
utilized. 
========== 
Key Points 
========== 
10. (C) This exciting and turbulent period in Sri Lanka 
provides many opportunities for the U.S.  Prime Minister 
Wickremesinghe has worked hard to move closer to the 
U.S. (e.g., he played a key role in the GSL's signing of 
an ICC Article 98 non-surrender agreement in November). 
Per the recent policy review, the U.S. has taken steps 
to enhance its engagement with the GSL, and, as noted 
above, various high-level USG agencies have visited to 
review commercial, economic, and defense issues.  Your 
upcoming visit -- as with the Deputy Secretary's visit 
in August 2002 and your previous visit in March 2002 -- 
will help underline strong U.S. support for the peace 
process and our hope for even closer bilateral ties. 
 
11.  (SBU) We suggest that you make the following key 
points in your meetings with Sri Lankan officials: 
 
-- Express strong U.S. support for the peace process and 
Norwegian facilitation. 
 
-- GSL needs to keep up momentum;  Sri Lanka is a vital 
symbol of movement toward peace and stability in a 
troubled South Asian region. 
 
-- All parties should work in national interest in 
regard to the peace process and economic reform.  It is 
important that peace process not falter because of 
political infighting. 
 
-- Express appreciation to GSL for signing an ICC 
Article 98 non-surrender agreement with U.S., and our 
hope for even closer bilateral ties, including in 
multilateral settings such as the UN. 
 
-- Express appreciation for Sri Lanka's continuous 
support of our military operations through granting of 
overflight and landing rights. 
 
-- Express continued support for defense related 
initiatives and our growing military-to-military 
relationship. 
 
12.  (U) Minimize considered. 
 
WILLS