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Cablegate: New Ministers Discuss Continuity, but No Details

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 COLOMBO 000937

SIPDIS

SENSITIVE

FOR SA/INS, COMMERCE FOR ITA:ABENAISSA

E.O. 12958: N/A
TAGS: ECON EINV SENV CE ENRG ETRD ECONOMICS
SUBJECT: NEW MINISTERS DISCUSS CONTINUITY, BUT NO DETAILS
IN EARLY MEETINGS WITH AMBASSADOR

REF: COLOMBO 0647

SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY.

1. (SBU) Summary: In introductory meetings with Ambassador
in April and May, the Ministers of Commerce and Consumer
Affairs, Power and Energy, Investment and Tourism,
Environment and Natural Resources and Ports and Aviation
stated that many existing programs would continue, reforms
would be modest, and no major new initiatives were planned.
A common theme in the discussions was the plan in each
ministry to be responsive to popular demands raised during
the election. End summary.

2. (SBU) Continuing his series of introductory meetings,
Ambassador met with Jeyeraj Fernandopulle Minister of
Commerce and Consumer Affairs; Susil Premajayantha, Minster
of Power and Energy; Anura Bandaranaike, Minister of
Industry, Tourism and Investment Promotion; AHM Fowzie,
Minister of Environment and Natural Resources and Mangala
Samaraweera, Minister of Ports and Aviation (see reftel for
biodata). Ambassador informed each Minister of ongoing or
upcoming USG programs and solicited agreement to continue.
Each Minister said that many of the existing programs would
continue, expressed appreciation for support they have
received in the past, and assured Ambassador of continuing
cooperation.

3. (SBU) The Ministers were not prepared to engage on
specific issues in depth and requested additional information
on USG programs. Each Minister referred to the necessity for
his Ministry to take early, concrete steps to appear
responsive to the needs of the population. (Note: The new
government believes the opposition's defeat in recent
elections was due primarily to its inattention to the rural
population's perception that their concerns were not
addressed. End note.) Specific issues discussed in each
meeting are outlined below.

Commerce Minister Wants FTA
---------------------------
4. (SBU) New Commerce and Consumer Affairs Minister Jeyeraj
Fernandopulle listened quietly as the Ambassador recounted
key US concerns regarding some trade disputes, IPR
enforcement and the status of the Doha Round. When the
Ambassador raised TIFA, however, Fernadopulle lit up and said
"When can we sign an FTA?" The Ambassador carefully walked
Fernandopulle through the process of trade negotiations.
Fernandopulle, (who Econchief later learned had been briefed
by representatives of the apparel manufacturing industry
immediately prior to the Ambassador's visit), then asked how
to get the process restarted. The Ambassador suggested a
letter to USTR indicating continued interest, actions to
resolve outstanding trade disputes and support for trade
liberalizing processes in the WTO and upcoming UNCTAD
meetings. The Ambassador was careful to note the realities
of several ongoing US trade negotiations and the upcoming US
presidential elections. He urged Fernandopulle to take FTA
into consideration as a long-term trade-enhancing goal,
noting that progress this year was unlikely. Fernandopulle
suggested he would try to meet with USTR Zoellick in
Washington, following his participation in the UNCTAD
meetings in Brazil on June 15 and 16.

Ports and Aviation Minister Wants Development Assistance
--------------------------------------------- -----------
5. (SBU) Minister of Ports and Aviation Samaraweera admitted
he had no background in these fields, but said he planned to
move forward on big projects, including major development of
the southern port of Hambantota, a smaller yacht port at
Galle and airports at Koggala for tourism and Wellawatte as
an alternate international airport. He agreed to continue
with Customs efforts to make Colombo a Container Security
Initiative port. When queried by Ambassador about the halted
airport privatization, Samaraweera said the GSL was open to a
public/private partnership instead. The Minister requested
visits by the regional TSA representative to discuss security
implications of opening airspace to more tourist flights
around the island. He was also interested in the proposed
visit by USTDA representatives to discuss other aviation
projects.

Power and Energy Minister Wants Progress on Projects
--------------------------------------------- -------
6. (SBU) Power and Energy Minister Premajayantha assured
Ambassador that the planned unbundling, of power
generation, transmission and distribution would go forward.
He agreed that cheap base load power was needed, and said the
new government would move forward on some stalled projects,
including the controversial Kotmale Dam, which had been
delayed by public protests. Ambassador briefed on the TDA
grant to conduct a feasibility study for a 300 MW coal plant.
The Minster responded positively, and said the Ceylon
Electricity Board would be responsible for working with the
USG on the study. He expressed appreciation for the wind and
solar maps donated by USAID, and confirmed the interest of
many firms in the GSL plans to lease offshore blocks for oil
and gas exploration.

Investment Minister Wants To Remove Obstacles
---------------------------------------------
7. (SBU) Minister Bandaranaike was joined by the new Ministry
Secretary Dr. U Vidanapathirane, and Board of Investment

SIPDIS
(BoI) Chairman, Lalith de Mel. Commenting on his broad
portfolio, the Minister agreed with Ambassador that export
diversification was important, and that Sri Lanka needs to do
a better job in promoting itself to potential investors. The
chairman briefed on new BoI efforts, including: monthly
meetings to address investors, problems, the creation of a
land bank, so investors are saved the hassle of finding
and gaining approval for land, an effort to recruit local (as
well as foreign) investment, and a campaign to entice
international Fund managers to invest in Sri Lanka. The plan
for tourism includes upgrading existing infrastructure,
facilities and services, not to increase capacity, but to be
able to charge more. Ambassador noted that infrastructure
upgrades would be essential before prices could be increased.

Environment Minister Wants Quick Results
----------------------------------------
8. (SBU) Environment Minister HML Fowzie said his priorities
are infrastructure improvement, quick results and protection
of the people through protection of the environment. He said
he would do his best to help investors, and was ready to be
supportive on issues raised by Ambassador including on
individual investment cases, and with the Tropical Forest
Conservation Act.

9. (SBU) Comment: Each Minister was gracious and welcoming,
but not well briefed. The bilateral initiatives described by
the Ambassador were not familiar, and each requested more
information on specific programs. The agreement that many
programs started under the previous regime would continue was
welcome. It appears that the Ministers were still waiting
for direction from party leadership. End comment.
LUNSTEAD

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