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Cablegate: Sri Lanka: Government Still Working On Plans For

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OO RUEHBI RUEHLMC
DE RUEHLM #1057/01 2121022
ZNR UUUUU ZZH
O 311022Z JUL 07
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6535
INFO RUEHKA/AMEMBASSY DHAKA 0322
RUEHIL/AMEMBASSY ISLAMABAD 7305
RUEHKT/AMEMBASSY KATHMANDU 5419
RUEHLO/AMEMBASSY LONDON 3942
RUEHNE/AMEMBASSY NEW DELHI 1238
RUEHNY/AMEMBASSY OSLO 4010
RUEHKO/AMEMBASSY TOKYO 3096
RUEHKP/AMCONSUL KARACHI 2223
RUEHCG/AMCONSUL CHENNAI 7897
RUEHBI/AMCONSUL MUMBAI 5546
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHHMUNA/HQ USPACOM HONOLULU HI
RUEATRS/DEPT OF TREASURY WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS SECTION 01 OF 03 COLOMBO 001057

SIPDIS

SENSITIVE

SIPDIS

STATE FOR SCA/INS AND EEB/IFD/ODF
MCC FOR S. GROFF, D. TETER, D. NASSIRY AND E. BURKE
TREASURY FOR LESLIE HULL

E.O 12958: N/A
TAGS: EAID EINV PGOV PHUM CE

SUBJECT: SRI LANKA: GOVERNMENT STILL WORKING ON PLANS FOR
DEVELOPMENT OF THE EAST

REF: A) COLOMBO 971 B) COLOMBO 977 C) COLOMBO 1016

1. (SBU) SUMMARY: The government of Sri Lanka announced soon after
consolidating military control over the East (ref A) that it would
ask donors to fund development of the area. The president has
designated his brother Basil as the point man for the Eastern
development push. Basil told UN officials July 17 that he would
have a redevelopment plan ready by July 19, however that date has
slipped to August 7. Donors will likely be cautious in responding
to the government's appeal, wanting to see firm indications that the
government's control over the area is truly solid, that the
government will not attempt to marginalize Tamil and Muslim
citizens, and that projects will be economically sustainable. In
addition, the GSL's announcement that NGOs' development activities
in the East will fall under the supervision of security forces has
raised concerns among the donor community. The government could
take their hesitancy as reason to seek more help from
non-traditional donors. End summary.

2. (SBU) President Rajapaksa, in his July 19 address celebrating the
government's July 11 defeat of the Liberation Tigers of Tamil Eelam
in the East, promised to "launch an all out development war, giving
priority to agriculture" in the East. He expressed confidence that
international donors would support the effort, echoing an earlier
appeal by Public Administration Minister Karu Jayasuriya for donors
to support "an accelerated program of redevelopment that will be
completed in six months." Rajapaksa placed his brother and trusted
advisor Basil in charge of the government's planning for development
of the East. Basil, after initially stating that the government's
redevelopment plan would be ready by July 19, and then by July 27,
currently is scheduled to present the plan August 7 to the
Consultative Committee on Humanitarian Assistance (CCHA), which
consists of bilateral and multilateral donors, international
organizations, and NGOs. Charge will attend for the U.S. Mission.

3. (SBU) United Nations officials already working on the
resettlement of internally displaced people in the East have had
preliminary meetings with Basil to discuss the larger development
challenge as well. According to Tom Hockley, of the UN Resident
Coordinator's Office, Basil described three "pillars" required for
the East to catch up with the rest of the country: first, security
and stability (which Basil said has been achieved with the taking of
Thoppigala); second, reconstruction and development; and third,
political restructuring and stability (which would presumably be
addressed by some form of local elections -- see refs B and C). To
address the second pillar, the government is working on two guiding
plans: a "Resettlement Plan for the East" and a "Sunrise Regional
Plan for the East."

NEAR-TERM PLAN FOCUSES ON BATTICALOA RESETTLEMENT
--------------------------------------------- ----

4. (SBU) The Resettlement Plan for the East, coordinated by the
Ministry of Resettlement and Disaster Relief Services, would cover
the short-term process of resettling internally displaced persons.
First priority would be those displaced by recent fighting, followed
by those displaced by the 2004 tsunami, and finally those displaced
by fighting over the past twenty years. It would address food and
water supplies, housing, health and education, livelihoods, roads
and transport, public services, and religious affairs for newly
resettled citizens in Batticaloa district. This plan will call for
donor funds of about $27 million.

5. (SBU) Other steps planned for near-term recovery, according to
Basil, are demining, reduction of limitations on coastal fishing
hours, and creation of procedures for police to inspect and seal
trucks to facilitate transportation of fish and produce from the

COLOMBO 00001057 002 OF 003


East and goods from Colombo to the East.

LONGER-TERM DEVELOPMENT PLAN COMING SOON
----------------------------------------

6. (SBU) The government intends to release its Sunrise Regional Plan
for the East, composed of elements formulated by individual line
ministries, on August 7. The long-term plan (through 2030) would be
broken into ten-year increments, correlated to the development
promises formulated in the President's "Mahinda Chintana" campaign
manifesto. It appears this plan will be an update of a 2004 Eastern
Province Development Plan that was shelved when the tsunami hit and
fighting subsequently resumed in the East. This plan would include
infrastructure development, to be accomplished using both government
and donor funds. While no overall dollar figure has been cited for
this plan, Basil noted to UN officials that development of the East
was included in the 2007 budget, so each line ministry has funds for
the job. For example, he said, the Ministry of Nation Building has
about $11 million; another government source told the media this
week that the government was ready to spend a total of about $55
million.

MILITARY TO OVERSEE NGOs' DEVELOPMENT WORK
------------------------------------------

7. (SBU) The government has decided that the army and police will
play a supervisory role in the East development process. Military
spokesman Brigadier Prasad Samarasinghe told the BBC that local
military commanders would work with civil authorities to approve and
monitor NGO activities in the East. The Colombo Sunday Times quoted
a directive issued by Eastern Security Forces Commander Parakrama
Pannipitiya stating, "rural development of areas liberated by the
forces after the humanitarian operations, where there is a civil
population must be done under the supervision of the police
stationed in the areas as well as the armed forces." This memo
stated that village level committees, composed of villagers and a
member from the armed forces and the police, would be responsible to
identify projects that NGOs could conduct. The Pannipitiya memo
went on to say that "NGOs should not be permitted to do as they
please in these areas as before."

COMMENT: COORDINATION AND PLANNING WON'T BE EASY
--------------------------------------------- ---

8. (SBU) Of the 65 cabinet and non-cabinet ministries that have
allocations in the 2007 budget, dozens have line responsibilities
relevant to development in the East. Another handful (Finance and
Planning, Plans and Implementation, Public Administration, Nation
Building, etc.) have coordinating responsibilities, so this effort
is bound to experience coordination problems. Further, the
government's rush to get a plan out within weeks of retaking the
East is symptomatic of its tendency to do hasty planning for
complicated and sensitive challenges like this. Finally, the
government's preference for top-down, non-market approaches to
planning will raise questions about the viability and sustainability
of its plans.

9. (SBU) International donors and assistance agencies thus are
likely to have divergent ideas from the government on what needs to
be done to get the East back on its feet. Smaller donors will want
to focus on sustainable grass roots level capacity building. (Note:
USAID's new program for Sri Lanka focuses heavily on economic growth
and democracy and governance in the East. Programs will involve a
range of activities including grass roots livelihood development and
support for small businesses, including connecting farmers with
markets in the prosperous Western Province and abroad.) The
government is supportive of these types of programs, but its recent

COLOMBO 00001057 003 OF 003


appeal appears focused on commitments to build infrastructure. It
may ask large donors, like Japan, the Asian Development Bank, and
the World Bank, to shift some of their planned investments to new
projects in the East. These donors may not be eager to fund
infrastructure in an area that the government controls only
tenuously.

10. (SBU) The government's decision to charge military and police
with supervising NGO activities will also add to the divergence
between how the government and the donors see the development
process going. This directive indicates that the government
continues to believe that the LTTE is likely to try to infiltrate
NGO staff and that many NGOs are biased toward the LTTE. From these
beliefs, the government concludes that NGO resources, if not
monitored, may be diverted to the LTTE. While there is some basis
for this concern with respect to NGOs operating in the
LTTE-controlled North, it appears contradictory for the government
to retain this concern in the East, given the government's assertion
that it controls the area.

COMMENT, CONT'D: WHICH DONORS WILL
THE GOVERNMENT COURT?
----------------------------------

11. (SBU) With the government's interest in infrastructure and its
tasking of security forces with supervising NGO activities, it will
be interesting to watch the degree to which Sri Lanka seeks the
assistance of non-traditional donors, especially China. With
President Rajapaksa having recently said Sri Lanka could do without
donors who attach conditions to their assistance, the development of
the East could demonstrate whether the government is prepared to be
flexible in order to retain the support of its oldest, most
competent, and most generous donors, or whether it will want to do
things its own way with less transparent help from a small handful
of non-Western donors such as China.
MOORE

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