Cablegate: Action Request for Fy 2010 Funds for Northern Sri Lanka

VZCZCXYZ0000
OO RUEHWEB

DE RUEHLM #1179/01 3571051
ZNR UUUUU ZZH
O 231051Z DEC 09
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1055
RHEFDIA/DIA WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS COLOMBO 001179

SIPDIS

SENSITIVE

DEPARTMENT FOR SCA/INSB
DEPARTMENT FOR SCA/INS AND PRM
STATE ALSO PASS TO USAID
AID/W FOR ANE/SCA
AID/W FOR DCHA to JBRAUSE
AID/W FOR DCHA/FFP, OFDA, DG, OTI, CMM
AID/W FOR EGAT/EG, ED, WID, PR
AID/W FOR ODP/PSA

E.O. 12958: N/A
TAGS: EAID PREL PHUM PREF ECON CE
Ref: A) Colombo 1148; B) Colombo 1109
SUBJECT: Action Request for FY 2010 Funds for Northern Sri Lanka

1. (SBU) This is an action cable. Please see paragraphs 7-13.

2. (SBU) SUMMARY: The coming months offer a unique window of
opportunity for the United States and other donors to assist the
Government of Sri Lanka (GSL) in supporting peace and reconciliation
through development and assistance programs for the North. In May
2009, the Government of Sri Lanka (GSL) declared victory over the
terrorist organization the Liberation Tigers of Tamil Eelam (LTTE),
a U.S.-designated Foreign Terrorist Organization. Few anticipated
that the LTTE would be defeated militarily in 2009, or that the
North would be open for post-conflict development and reconstruction
assistance so quickly; therefore Post's original request for FY 2010
resources did not include funding for the North. Under current
programming, no Development Assistance or Economic Support Funds
(ESF) are available for the North until FY 2011. The opportunity is
now: with this cable, Post requests an additional $34 million in FY
2010 funds for Sri Lanka to enable timely assistance to meet
immediate needs in the North. End Summary.

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Background
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3. (SBU) Sri Lanka is in a period of post-war transition in the
aftermath of its 26-year separatist conflict. Although the GSL won
the war, it is not clear that they will address the underlying root
causes of the conflict in order to win the peace. A successful
resettlement, economic recovery, and development program would
demonstrate to Sri Lanka's minorities, especially the Tamil
community, that they have a far brighter future within a united Sri
Lanka.

4. (SBU) The accelerated release of the nearly 300,000 internally
displaced persons (IDPs) who were confined to closed camps (ref A)
in the North creates new conditions for international assistance,
with the focus shifting from short-term humanitarian needs to
longer-term economic development. Based on USAID's experience in
post-conflict assistance in the Eastern Province, Post assesses that
the immediate priorities for the North include job creation and work
force development; reconciliation, stabilization and governance
programs; justice sector assistance; basic education support; and
micro-enterprise programs.

5. (SBU) These programs would enable residents and returnees in the
former LTTE-controlled areas of the country to benefit from and
participate in the country's development. A timely response to
these needs is critical to address reconciliation and meet Mission
objectives.

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Putting USAID Experience to Work
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6. (U) Since 2003, USAID has invested more than $45 million in
programs in the Eastern Province which have helped to jump-start the
economy in that post-conflict region (ref B). All of USAID's
current programs focus on the Eastern Province and adjoining areas.
USAID's track record of successful programs in areas such as private
sector engagement, business partnerships, job creation, work force
development, protection of human rights, conflict mitigation,
governance, reintegration of ex-combatants, and infrastructure
reconstruction programs could be applied to address the unique
opportunity available now in the North.

7. (U) Action Request: Post requests that the Department and USAID
provide $34 million in FY 2010 Development Assistance or Economic
Support Funds (ESF) and support the re-establishment of an OTI field
office to meet the urgent requirements outlined in the paragraphs
below. USAID's experience, network of community-based partners,
relationships with local authorities, and track record of delivering
rapid assistance in the conflict-affected and politically volatile
areas of Sri Lanka puts USAID in a unique position among donors to
respond to the post-conflict programmatic needs listed in priority
order in the following paragraphs. To determine the funding request
levels indicated below, USAID conducted a Mission review of the
immediate and most strategic requirements in the North to assess the
kinds of programs which would be most useful in addressing those
needs, and then completed a broad analysis on the costs for each
area inclusive of program and management costs.
8. (U) Job Creation and Work Force Development ($12 million). The
lack of economic means contributes to insecurity and
destabilization. The long conflict in northern Sri Lanka severely
degraded the workforce skills of the local population; for example,
English language and IT skills are critically lacking in the North.
Increased investment through the private sector is a prerequisite to
creating job opportunities and enhancing economic security. USAID
would use its experience in implementing public-private business
partnerships to create sustainable jobs through a $12 million
program with indigenous companies in the North. Based on other
private sector partnerships in Sri Lanka, Post expects that this new
initiative would leverage an additional $25 million from the private
sector partners for the North; create 12,000 new jobs; and train
1200 young men and women to enter the current market place.

9. (U) Reconciliation and Stabilization ($7 million). Many
government functions are being re-established in the North. To
mobilize and address post-conflict programming needs quickly, now is
the time to re-establish a field presence for the Office of
Transition Initiatives (OTI). A small-grants program managed by OTI
could mobilize communities to address priority needs related to the
return of displaced populations in collaboration with existing local
government structures. Such a program would also lay the groundwork
for longer-term initiatives. Possible activities include
rehabilitation of small-scale infrastructure; livelihoods support;
civil society development; and information dissemination and
confidence-building measures to create and/or restore trust between
conflict-affected individuals and communities. Funding at the
requested level of $7 million would leverage the establishment of
the Office of Transition Initiatives or direct implementation of
similar activities by the Mission.

10. (U) Justice Sector ($3 million). An integral element in the
stabilization of post-conflict regions is the establishment and
presence of rule of law. In Sri Lanka's conflict, the behavior of
paramilitary groups and the failure of law enforcement and legal
processes resulted in generations of victims who sought
"alternative" mechanisms to dispense justice. Legal processes must
be perceived to be fair and just by all communities: a $3 million
program would support training on case management; judicial
training; creation of a trilingual court system and strengthened
youth courts; modernized and transparent administrative procedures;
and improved technical skills of officials in areas such as human
rights, conflict sensitivity, and combating gender-based violence.

11. (U) Governance ($3 million). There is an immediate need to
address key governance issues in northern Sri Lanka, including the
capacity of provincial and municipal officials to deliver services
and the resolution of land tenure issues for returning populations.
A $3 million program would enable us to build the capacity of local
government officials and to assist with land rights and access
issues which were central to the separatist conflict. A governance
program in the North would enable Post to advocate for and support a
national land policy for returnees, assist with modernized legal
frameworks for resolving land disputes and documentation issues, and
support a short-term alternative dispute mechanism to resolve land
disputes in a timely manner.

12. (U) Basic Education ($5 million). Many of the schools in the
North were destroyed during the last phases of the war. The
destruction of these schools and no integration of effort at the
national level resulted in poorly trained teachers and a curriculum
insufficient to meet the needs of students in the North. A $5
million basic education program to address these needs would be
positively received by the community and would support the
reconciliation process. Elements of the program would include the
rehabilitation of 12 primary schools; the implementation of teacher
training; enhancement of computer skills for both teachers and
students; and support for the development of a civic education
curriculum.

13. (U) Microenterprise ($4 million). Many people lost their
livelihood means during the war but do not currently have the means
to restart their businesses and access their lost resources. USAID
would initiate a timely $4 million community grants micro-enterprise
program to support small businesses, and expects this program would
enhance economic security and stability for the conflict-affected
communities in northern Sri Lanka.
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Comment
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14. (SBU) Post recognizes that there will be challenges to working
in the North. It is in our interests to engage pro-actively and
positively with Sri Lanka, given the political and economic dynamics
of the region and the imperative to avoid a destabilizing return to
armed conflict on the island. The end of the LTTE era provides the
first opportunity in a quarter century for the GSL, USG, and other
donors to address equity issues, both real and perceived, throughout
the country among all the ethnic groups. The GSL will need
substantial donor assistance to ensure that the development needs of
the war-affected North are met. Providing early development
assistance would serve as a force-multiplier in support of Mission
reconciliation goals. We will continue to join other donors in
stressing the importance of free and fair elections, political
reconciliation, and improved human rights and accountability. We
appreciate Washington's consideration. End Comment.

BUTENIS

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