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Cablegate: Sri Lanka: Scenesetter for the Visit of Deputy Assistant

VZCZCXRO3541
PP RUEHCI
DE RUEHLM #1040/01 3231132
ZNR UUUUU ZZH
P 181132Z NOV 08
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC PRIORITY 8914
INFO RUEKJCS/SECDEF WASHDC
RUEHNE/AMEMBASSY NEW DELHI 2396
RUEHKA/AMEMBASSY DHAKA 1140
RUEHKT/AMEMBASSY KATHMANDU 6349
RUEHCG/AMCONSUL CHENNAI 8783
RUEHCI/AMCONSUL KOLKATA 0378
RHHMUNA/CDR USPACOM HONOLULU HI
RHEFDIA/DIA WASHDC//DHO3//

UNCLAS SECTION 01 OF 04 COLOMBO 001040

SENSITIVE

SIPDIS

STATE FOR SCA/INS
DHAKA PLEASE PASS TO DASD CLAD

E.O 12958: N/A
TAGS: MARR PGOV PHUM PREL CE
SUBJECT: Sri Lanka: Scenesetter for the Visit of Deputy Assistant
Secretary of Defense Clad

1. (SBU) Summary: Your visit comes at a critical time, with Sri
Lanka's 25-year ethnic conflict entering a possibly decisive phase.
Government forces have made significant progress against the
Liberation Tigers of Tamil Eelam (LTTE) in the last several months,
gaining a large swath of territory in Sri Lanka's northwest.
However, the government also faces some challenges in its campaign
against the LTTE, including shortages of some military supplies,
such as parts for U.S. supplied equipment due to Congressional
prohibitions, and an increasingly strained budget and a balance of
payments shortfall. Bilateral relations between the U.S. and Sri
Lanka, including counterterrorism cooperation, are generally good.
However, the USG has been openly critical of the GSL's failure to
rein in or punish serious human rights abuses. There is little
evidence to date that the GSL will respond to the concerns of the
U.S. Congress, allowing us to lift some of the restrictions on
military assistance and exports of defense-related materials.
Further progress on obtaining the release of child soldiers serving
with government-sponsored paramilitaries could lead to the
resumption of support for maritime and aerial surveillance under
Section 1206 and other programs. End summary.

Military and Security Situation
-------------------------------

2. (SBU) The Government of Sri Lanka is making steady progress in
its semi-conventional counterinsurgency operations against the LTTE
in the Northern Province, or "Vanni", region. Inadequate security
and stability operations in the Eastern Province have resulted in
continued deterioration of the security situation there, as the LTTE
infiltrates its cadres to destabilize the provincial government and
friction between Karuna and Pillaiyan factions of the TMVP grows
more violent. The commitment of Army Special Forces and Commandos
and Police Special Task Force units to support operations in the
Vanni has left Colombo and the rest of the country more vulnerable.
Terrorist incidents in the Colombo greater metropolitan area are up
dramatically in 2008, but do not pose a threat to your visit. The
LTTE does not target foreigners. However, the threat to U.S.
citizens of being in the wrong place at the wrong time, particularly
to those who associate with GSL officials targeted by the LTTE,
increases with the rise in attacks.

Prognosis
---------

3. (SBU) It appears increasingly likely that within the next 12
months, possibly sooner, the military may take the remaining
LTTE-controlled areas of the Northern Province, which will drive
residual LTTE forces underground and likely precipitate more
terrorist attacks countrywide. The LTTE probably will remain
capable of massing sufficient forces to launch occasional guerrilla
attacks against Government of Sri Lanka targets, but may also
increasingly resort to terrorist operations against civilian and
economic targets, including attacks focused on Tamil leaders aligned
with the GSL, GSL military and political leadership, and high payoff
targets such as critical infrastructure. To counter the changes in
LTTE strategy, the GSL will shift its own focus from
semi-conventional to counter-terrorist and stability support
operations.

International Cooperation
-------------------------

4. (SBU) As the LTTE is reliant on external illegal financing and
smuggling activities to sustain its operations, the U.S., as a
leading proponent of global counter-terrorism efforts, had provided
the GSL support in preventing and interdicting terrorist
fund-raising and arms trafficking. Indian Navy support to SLN
patrolling of the Palk Strait is another key contribution. India is
also interested in providing maritime surveillance radars to Sri
Lanka. Unable to acquire defense materiel from U.S. and European
governments and defense industries because of human rights problems,
the GSL enjoys continued sales from China, Pakistan, Russia, and
other former Soviet republics. However, the GSL's mounting
financial difficulties, including unsustainable fiscal and
balance-of-payments deficits, have reportedly interrupted the flow
of supplies from these partners, who are generally unwilling to
extend further credits for arm sales and insist on cash. The GSL
has also significantly drawn down its foreign exchange reserves in
an attempt to defend the informal peg to the U.S. dollar and

COLOMBO 00001040 002 OF 004


recently has come to the brink of default on payments to
international banks, including obligations arising out of
ill-considered petroleum hedging contracts.

Security Cooperation with the U.S.
----------------------------------

5. (SBU) The U.S. generally has good relations with the GSL,
including cooperation where possible on regional issues and within
international organizations. We have an active dialogue on matters
of mutual interest, including the sensitive area of human rights.
Military-to-military relations are currently subject to significant
constraints, however. Due to legislative restrictions related to
human rights and child soldiers, procurement of U.S. military
equipment has ceased. There is no expectation of significant
substantive change to current U.S. legislative restrictions. Were
the Secretary of State to certify that the GSL has made significant
progress on the issue of child soldiers, the U.S. could resume
transfers of equipment for aerial and maritime surveillance and
communications. (State and DoD will seek to exempt communications
from the possible new restrictions in the FY-09 appropriations
legislation.)

Training and Exchanges
----------------------

6. (SBU) The only restriction on training is the interagency policy
prohibition against engagement with Sri Lankan Army Special Forces,
Commandos, and Police Special Task Force personnel. This is
generally interpreted to mean those currently serving in, as well as
former members of, those units. In practice, engagement with the
Sri Lankan military is strictly non-lethal, consistent with the U.S.
position that there is no purely military solution to the conflict.
The U.S. continues to advocate publicly and privately that the GSL
should follow a political strategy to end the conflict. For the
same reason, the Embassy has proposed postponing high-level U.S.
military leader visits until spring, when the fighting may have
slowed and more progress may have been made with regard to the
release of child soldiers serving in the TMVP.

Human Rights Challenges
-----------------------

7. (SBU) The GSL's record on human rights remains the greatest
obstacle to a normal military-to-military relationship. While
recognizing that the GSL is not ready at this time to meet the
criteria set out in section 699G of the 2008 Foreign Operations
Appropriations Act, the Embassy has tried privately to persuade the
government to take actions consistent with the objectives of the
U.S. Congress in passing this legislation. For example, beyond
obtaining the release of the paramilitaries' approximately 60
remaining child soldiers, we have suggested that the GSL should
reinstate the independence of national bodies such as its Human
Rights Commission and empower them to exercise their oversight and
reporting functions. We have urged the government to rein in the
shadowy groups responsible for abductions and disappearances and
hold accountable those responsible for abuses, including in two
high-profile 2006 cases: the murder of 17 aid workers in Muttur; and
the separate killing of five students in Trincomalee. Most
important, we and other friends of Sri Lanka, notably India, have
asked the government to reach out to its minorities though a
political strategy that promises significant devolution of power to
the provinces and additional rights for minorities. Our efforts to
engage on these issues have met with very limited success to date
for two principal reasons. First the Government does not have the
two-thirds parliamentary majority it would need to amend the
constitution. Second, it is concerned that approving new rights for
minorities could weaken its support among its majority Sinhalese
voter base in advance of Provincial Council and possible
parliamentary elections in 2009.

Opportunities to Engage
-----------------------

8. (U) We have an important role to play in helping the GSL
stabilize and secure its Eastern Province through the DoD-funded
1207 program, which USAID is taking the lead in implementing. A key
component of this effort will be to assist with demobilizing and
retraining former members of the TMVP paramilitary. The program

COLOMBO 00001040 003 OF 004


will also seek to reinvigorate the economy of the East through
livelihoods creation and public-private partnerships to spur
investment-led growth, and link the East to lucrative markets in the
Western Province and abroad. In addition, PACOM activities will
provide humanitarian assistance and small-scale infrastructure
development in the East. The GSL will also face significant
challenges in clearing and securing conflict-affected areas in the
Northern Province. While there likely will be widespread support
for development programs in the North, security will be the initial
requirement. In order to resettle IDPs from the North as quickly as
possible, de-mining will be a major need; however, the military
faces considerable equipment constraints and international groups
conducting existing de-mining projects operate at a slow pace. An
innovative State Department program to create a humanitarian
demining capacity within the Sri Lankan Army was initially
successful, but some of the progress was lost when the units created
were not kept together. Other international partners have little
enthusiasm for working directly with the military on this,
preferring to channel demining assistance through international NGOs
and contractors with long experience in demining.

Major Sri Lankan Defense Concerns
---------------------------------

9. (SBU) The military has repeatedly requested and/or attempted to
independently procure spare and repair parts and maintenance
services and training for its AN/TPQ-36 radars, its Bell 212 and 412
helicopters, its C-130 aircraft, and most recently its 30mm
Bushmaster guns. The GSL has also expressed interest in acquisition
of other military hardware, including Beechcraft airplanes. We have
informed them that current 699G restrictions prohibit such
transfers, and there is no indication that those restrictions will
be reduced until the GSL meets the conditions that will enable the
U.S. to lift them. The Sri Lankan Navy has repeatedly requested
early warning of illicit merchant shipping supporting LTTE arms
trafficking. The SLN cannot sustain the deployment level required
to prevent all smuggling activity around its shores. The Army is
suffering heavy casualties from LTTE artillery and mortar fires, and
the Chinese counter-battery radars are ineffective. The result is
area counter-fires that risk collateral damage to infrastructure and
civilian casualties, especially since the LTTE deliberately position
their forces in civilian areas. The Air Force continues to employ
"dumb" gravity bombs with imprecise results. The SLAF has been
unable to acquire a more precise system. The SLAF also continues to
struggle unsuccessfully to counter the LTTE air threat. The
combination of Indian and Chinese radars, jets, and missiles has
proved to be incapable of matching the LTTE's Zlin Z-143
propeller-driven planes with low heat signatures.

COMMENT
-------

10. (SBU) The President and his advisors have successfully divided
opposition forces against each other, but the heterogeneous and
unwieldy coalition still does not provide a stable and reliable
majority for the government in parliament. Moreover, the bloated
administration -- with over 100 ministers and deputy ministers --
has a poor track record in many important areas of governance. As a
result, the survival of the President's administration in its
current form depends critically on maintaining the perception among
the southern, Sinhalese Buddhist majority that the government is on
the verge on winning the war against the Tigers. Perhaps for this
reason, the defense and security authorities have been given free
rein to conduct operations as they see fit. The current government
and its predecessors have largely been unwilling to take action
against alleged human rights violators. However, a recent MoD
decision to hold officers and soldiers accountable for crimes
committed while deployed on a UN peacekeeping mission to Haiti
offers an opportunity to demonstrate that the military can punish
abusers without undermining morale. We recommend you urge your
senior civilian and military Defense Ministry interlocutors to take
action against the perpetrators of some of the more egregious recent
cases of human rights violations. You should also address with them
some serious impediments that have arisen to a successful
stabilization program in the East. Of greatest concern is the
deteriorating security situation caused by the re-infiltration of
LTTE intelligence cadres into the area; the GSL's failure to
demobilize paramilitaries in the east; and the growing internecine
friction between TMVP leaders Karuna and Pillaiyan. Without proper

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security conditions, our efforts to encourage new investment to help
stabilize the east will falter, giving new opportunities to the
LTTE.

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