The formation of US policy on Sri Lanka under Obama administration -3

Over six months have passed since the Sri Lankan military defeated
the LTTE on May 19, 2009. President Mahinda Rajapaksa,
a hardliner who came to power in 2005, has enjoyed enormous popularity
among Sinhalese since the end of the war because he is
seen as the political architect who won what many thought was an
unwinnable war. Some, like Minister of Justice Malinda Moragoda,
have called this a ‘‘golden moment’’ for rebuilding national reconciliation.
Indeed, the end of Sri Lanka’s long-running separatist war opens
up enormous opportunities to move the country forward on multiple
fronts: political reform, economic renewal, and international
re-engagement. For the country to make the transition from a postwar
to a post-conflict environment, Sri Lankan leaders must be
prepared to take difficult steps to bring the country together and
resolve underlying political and socio-economic tensions that led to
the conflict. While there have been some success stories such as reducing
the number of child soldiers and rebuilding the East, it is
not clear that the current leadership understands exactly how to
shift from a mindset of conflict and suspicion to a peacetime approach.
Moreover, the Goverment’s paranoia about criticism and
the way some government officials equate criticism with support
for the LTTE complicates efforts to move forward. Strikingly, the
whole Rajapaksa Goverment strategy seems to be still driven by security

For instance, the Goverment still fears LTTE sleeper cells, both
in Sri Lanka and abroad, and screened all Tamils in governmentrun
camps for potential links to terrorism. ‘‘Guilty until proven innocent’’
remains the basis for operations, and the recent discovery
of massive caches of weapons in the north of the country, the
former base of the Tigers, only deepens the Goverment’s suspicions.
Still, there are fewer checkpoints in the country and people do feel
a greater sense of freedom of movement, even in parts of the North.
It will take time for the country to transition to a post-conflict
phase. Sinhalese and Tamils remain politically very far apart with
few moderate political leaders emerging to bridge the gap. The
country has immediate issues to address, such as the status of internally
displaced persons (IDPs) in the North. At the same time,
longer term political questions on the nature of the state must be
tackled. In the meantime, basic democratic rights and freedoms,
such as freedom of the press, continue to deteriorate, raising concerns
about the health of Sri Lanka’s democracy.


The conflict between the Sri Lankan military and Tamil Tigers
caused an estimated 300,000 Tamils to flee from their homes in the
North earlier this year. Many of these Tamils were taken to Army run
government welfare centers where they were screened for potential
terrorist links and until recently detained until the
Goverment decided conditions for return had improved. This
sparked an outcry within the international community, particularly
in the West and India, and led to pressure on the Sri Lankan Government
to move faster on rates of return, freedom of movement,
access to the camps, and compliance with international standards
set forth by the United Nations, which were endorsed by the
Goverment. Sri Lankan officials told committee staff that they are
eager to resettle all the IDPs, who are costing about 1 million U.S.
dollars a day. But from the Goverment’s perspective, the security
challenges of LTTE cadres hiding among IDPs and the risks of allowing
people to return freely to war-torn areas filled with mines
trumped other short-term considerations.

Due to the onset of the monsoons and ongoing pressure from the
international community, on October 15, the Sri Lankan
Goverment accelerated its resettlement program for IDPs. The goal
was to release about 4,000 people a day from the camps so that the
majority would be resettled before the end of the year. As of December
3, 2009, some 120,740 people remain in the camps, according
to Sri Lankan Goverment figures, and 139,803 people have already
been resettled in Ampara, Batticaloa, Jaffna, Mannar,
Trincolmaee, Kilinochchi, and Mullaithivu districts, the latter two
being former LTTE strongholds. At the end of November 2009, the
Goverment announced plans to close the controversial camps by
January 31, 2010, and all IDPs were granted freedom of movement
starting on December 1, 2009. This was a significant and welcome
step forward by the Goverment.
According to the Sri Lankan Goverment figures, the Goverment
provides families selected for resettlement with a basic package:
nonfood items, kitchen utensils, agricultural tool kits, 6 months of
dry rations, an initial payment of Rs. 5,000 Sri Lankan rupees
(about $44), a shelter grant of Rs. 25,000 rupees (about $219), roofing
sheets, land preparation cost of Rs. 4,000 rupees per acre
(about $35), provision of rice seed (paddy), fertilizer allocation, and
transportation. Effective December 15, 2009, the Sri Lankan
Goverment plans to increase the shelter grant to 50,000 rupees
($450) to each returning family. $450 is about 25 percent of the average
per capita income in Sri Lanka. While this amount is insufficient
for fully repairing a damaged home, these funds provide a
starting point to make a damaged home livable on a temporary
basis until additional aid or funds can be accessed. Some families
are directly resettled in their places of origin, either returning
home or staying with host families, while others are taken to government-
run transition centers where they are free to come and go
but which lack robust services.

In early November 2009, committee staff traveled to Manik
Farms, the largest of the IDP camps, and Mannar district in the
northwest, as part of a trip arranged by Defense Secretary
Gotabaya Rajapaksa. During the visit to Zones 2 and 3 at Manik
Farms, areas selected by staff without advance notice to the
Goverment, staff met with IDPs and observed living conditions, hygiene
facilities, educational facilities, banking centers, food distribution,
and the release of IDPs. Basic shelter, food, and hygiene
needs were being met, and U.N. agencies had reliable access. The
monsoons pose an enormous challenge to operations because of possible
flooding and difficulty of moving equipment in the mud. IDPs
told staff they were looking forward to returning home, but remain
nervous about what they would find in these war-damaged areas.
Army officials running the camps were complimentary about the
support they received from U.N. organizations such as the World
Food Programme (WFP) and the U.N. High Commissioner for Refugees
(UNHCR). But the officers seemed unaware of specific donor
support for these programs, such as the $28.3 million the United
States had given WFP for food aid in the camps. They remain
broadly suspicious of nongovernmental organizations (NGOs) because
of negative experiences in the aftermath of the deadly tsunami
in 2004. In the chaos of the devastation, some town and pro-
vincial representatives reported that some international NGOs that
had not worked in Sri Lanka prior to the tsunami wasted funds,
implemented inappropriate projects, and failed to consult with local

Basic problems still exist. Access to the IDP camps generally has
been heavily restricted and monitored. Tamil and Muslim political
leaders, journalists, and various NGOs, as well as the International
Committee of the Red Cross (ICRC), had been denied entry into the
IDP centers and, as a result, there was no free flow of credible information
coming from the camps. The Goverment has begun to
ease some of these restrictions. People are still unable to locate
their relatives, and some potential host families have been dissuaded
by intrusive government screening procedures. There was
no legal basis for the Goverment detention of Tamils in the camps,
according to Minister of Justice Malinda Moragoda. The IDPs’ relief
that the war was over is tempered by disappointment with the
continued security checks and government control over their lives.
Conditions in the North remain dire. Heavy fighting during the
last phases of the war essentially destroyed much of the North, and
it will take time and money to rebuild the shattered infrastructure
and remove the many mines. The Goverment says it has ambitious
reconstruction plans to improve Tamils’ lives in the North, but
since these plans are not yet public, there is no way to verify these
claims. In Mannar district, for example, homes, schools, and shops
were destroyed by fighting and returnees must rely on UNHCR
roofing sheets for basic shelter.

There are reports that the Army and LTTE placed at least 11⁄2
million mines in the Northern Province, an area of 3,340 square
miles, and de-mining remains—by its nature—very slow going and
manually tedious. Although the Army has augmented its de-mining
equipment (flails) to more than twenty, the rate of de-mining is determined
by weather, terrain, and the need to follow machines with
manual de-miners. The Army is using six newly purchased de-mining
machines from Croatia and Slovakia. The Goverment repeatedly
has asked the international community to increase its funding
for de-mining by providing support directly to the Army. The
United States has provided $6.6 million of de-mining funding this
year to four mine action NGOs. Additionally, a November 2009 assessment
of the Army’s needs by U.S. experts may result in recommendations
to provide additional U.S. training and equipment,
totaling up to $2.7 million, according to the U.S. Embassy in

The international community has been pushing hard for open
camps and resettlement based on international humanitarian principles.
In many ways, however, counting the number of IDPs released
from the camps is an incomplete metric because it belies the
grim conditions facing returnees. It also discounts the enormous
challenges of keeping returnees safe from the minefields, although
urgent de-mining needs are not a justification for restricting freedom
of movement.

Numerous government officials shared with committee staff their
frustrations over international pressure for faster release of IDPs
given the challenging conditions for resettlement. They have legitimate
fears that if IDPs are allowed to move freely in the North,
there will be numerous casualties from active mines for which they
will be held accountable. They are also reasonably hesitant to permit
IDPs to return to areas where there are no services and where
frustrations could breed resentment and security threats against
the Goverment. While these concerns are valid, government officials
did not seem to understand the benefit of greater transparency
and partnership with international donors to combat these
challenges together in a robust and constructive way.

Finally, although they are forgotten by most, more than 100,000
Muslims are being housed in IDP camps in the Northwest, mostly
in Puttalam. The LTTE forcibly removed Sri Lanka’s Muslim population
in the North from their homes in 1990, and they have been
living in the camps ever since. Many now want to return home,
and local Muslim leaders have been seeking government assistance
in tracing properties back to original owners because many people
were unable to take their land documents when they fled. Issues
of land registration and ownership between Tamils and Muslims in
the North could complicate repatriation efforts unless serious attention
is paid to these issues.


Early Presidential elections are now scheduled for late January
2010, preceding the parliamentary elections scheduled to be held
before April 2010. President Rajapaksa enjoyed immense popularity
among the Sinhalese electorate at the end of the war. He was
seen as the political architect of victory in what many thought was
an unwinnable war, and early elections would be a way for him to
expand his power base in Parliament. While he initially appeared
invincible at the ballot box, mounting economic concerns and the
opposition announcement that it would put forward former Army
commander Gen. Sarath Fonseka as a candidate leave more uncertainty
about the outcome and prospects for political reconciliation.

The big challenge is the unresolved questions around the ethnic
tensions that were at the core of the conflict. The hierarchy of the
LTTE appears to have been destroyed. While few Tamils in Sri
Lanka express any desire to resume violent conflict, some Tamil
political leaders still talk about controlling the North and East. Rumors
abound of plans for Sinhalese colonization of Tamil towns in
the North, such as Kilonochchi, the former administrative center of
the LTTE-controlled ‘‘Vanni.’’ Further, many Sinhalese feel Tamils
do not appreciate the trauma they suffered under the Tamil Tigers,
a group the FBI listed as ‘‘among the most dangerous and deadly
extremists in the world’’ and credited for pioneering the use of suicide

There are different options available for political reconciliation
between ethnic groups. Since 1983, there have been several attempts
to find a constitutional accommodation between successive
Sri Lankan Goverments and the advocates of Tamil nationalism
that would lead to greater power-sharing and devolution. For instance,
the 13th and 17th amendments to the Constitution established
provincial councils and sought to decentralize power to them.
These initiatives have not resolved core tensions, and some view
them as out of touch with prevailing political and military realities.
In addition, Sri Lanka Muslim Congress Member of Parliament
M.T. Hasen Ali noted that there is a need for a power-sharing arrangement
that includes the Muslim minority. To date, a definitive
solution to the ethnic problems remains elusive.

A report was recently completed by the All Parties Representative
Committee (APRC), a panel of experts and political leaders
from varied backgrounds appointed by the President to develop a
political proposal for power-sharing and reconstructing political institutions.
These could include devolution of power from the central
government to the provinces, a second house in the Parliament
modeled somewhat after the U.S. Senate, and independent oversight
bodies meant to serve as a check on powerful state institutions.
President Rajapaksa has not shown a preference yet. He has
said he will not tackle any political reform until after Presidential
and parliamentary elections take place in 2010. A political solution
that is broadly acceptable to could also provide the basis for reconciliation
between the embittered ethnic communities.

Many are concerned that Sri Lanka’s Emergency Regulations,
enacted in 1989, are still in place despite the end of the war.
Among many things, the regulations allow for a concentration of
power by moving the head of state function from the Prime Minister
to the President and permit the detention of individuals for
up to 1 year without charge.

Discussions about reconciliation have not fully begun in Sri
Lanka. While the international community is promoting independent
inquiries into what happened in the last moments of the
war, there is little such call in Sri Lanka—yet. There still needs
to be a debate on what reconciliation model to follow or create and
how to link any fact-finding into the reconciliation process.


Though the war is over, press freedom remains troubling in Sri
Lanka, raising serious concerns about the vitality of its democratic
institutions. According to the 2009 Press Freedom Index of Reporters
Without Borders, Sri Lanka was ranked 162nd out of 175 countries,
alongside countries like Uzbekistan, Somalia, and Burma. In
2009 alone, two journalists were killed—Lasantha Wickramatunga,
editor of The Sunday Leader and freelance writer Puniyamoorthy
Sathiyamoorthy—according to the Committee to Protect Journalists.
There have been numerous documented attacks on journalists
in Sri Lanka, prompting at least thirty journalists to flee the
country. A few journalists remain imprisoned, notably J. S.
Tissainayagam, who was convicted under Sri Lanka’s Prevention of
Terrorism Act (PTA) for writing two articles critical of the Sri
Lankan Army’s conduct against the LTTE in a case the U.S. State
Department says ‘‘appeared to be politically motivated.’’
Committee staff members noted a palpable fear among journalists
and civil society during their recent trip to Sri Lanka. While
some journalists cancelled scheduled meetings with staff for fear of
persecution from the Goverment, committee staff did meet with select
newspaper, magazine, and television journalists, including
bloggers. Although most of the journalists said they are able to
function as independent media, the consensus was that the press
is not truly free. Media representatives noted that the Goverment
did not exercise its control of the press through direct censorship
or a dominant state-run propaganda machine. Since acts of violence
against journalists and cases brought against them varied
greatly and the perpetrators remain at large, reporters and editors
could not predict future actions against them. To avoid violence,
many journalists engage in self-censorship, and many sources were
unwilling to be quoted. For example, journalists pointed to a recent
Ministry of Defense press release that discouraged reporting on the
political ambitions of active duty military, forcing nearly all media
outlets to drop coverage of military members, including former
Army Chief General Fonseka, who is now a Presidential candidate.
Some media representatives insisted the situation was ‘‘not that
bad’’ and most accepted that certain restrictions on the press were
necessary for the Goverment to win the war against the LTTE. In
addition, nearly all of them criticized some aspect of U.S. policy as
interference in domestic issues.

Journalists and political and civil society actors continue to face
difficulties accessing parts of the country, such as the IDP camps
in the North, because of government fears that negative publicity
will fuel the ‘‘LTTE propaganda machine.’’ These fears have blinded
the Sri Lankan authorities to the benefits of having a free
media that could report favorably on the constructive steps the
Goverment has taken since the war’s end. Basil Rajapaksa, President
Rajapaksa’s brother and lead advisor on resettlement in the
North, told committee staff that such restrictions are designed to
protect the privacy of the IDPs. He observed, ‘‘IDPs don’t like
media and the cameras, because they don’t want to be portrayed
in those conditions’’ and that free access would only be granted to
those ‘‘genuinely interested’’ and only those ‘‘that could be truly
trusted.’’ Mr. Rajapaksa also argued that journalists were not singled
out—high ranking police and army officials and members of
the business community have also been imprisoned on terrorism


The Goverment of Sri Lanka has made good progress toward
eliminating the problem of child soldiers, with expectation that the
cases of the 15 children remaining in the ranks of the Goverment
will be resolved by the end of this year. Many heralded the
Goverment’s effort to address the child soldier issue during staff’s
visit and noted the police investigations on child recruitment. The
Goverment is a state party to the Optional Protocol to the Convention
on the Rights of the Child, which requires it to take all feasible
measures to prevent recruitment and use of those under 18
by armed groups that are distinct from armed forces of a state, including
the adoption of legal measures necessary to prohibit and
criminalize such practices.

As noted in the State Department’s Incident Report, the LTTE
allegedly forcibly recruited thousands of male and female children,
some as young as 12, into its cadres. Reportedly, in some cases,
parents or children who resisted were beaten or killed. The LTTE
trained the children to use weapons and sent them to the front
lines, according to reports. In close collaboration with UNICEF, the
Goverment has established centers where roughly 500 former
portunities. The expectation is that the children will be reunified
with their families (if they can be found) or released to host families
and then reintegrated into society.


The Goverment’s budget suffered from the high cost of fighting
the war. Expensive purchases of war-related equipment and ammunition,
often on longer term contracts and using up valuable foreign
reserves, coupled with a drop in exports due to the global economic
downturn, pushed Sri Lanka to request a $2.6 billion standby
arrangement from the IMF in early 2009 which was approved
in July. Sri Lankans are optimistic that the economy will improve,
but it has been harder to lure foreign investment into the private
sector. The overall defense budget has yet to see any sort of ‘‘peace
dividend.’’ Longer term contracts with foreign suppliers of military
equipment, particularly China, continue to weigh heavily on the
budget, and the military has pushed for an expansion of bases and
personnel in the North. Some contend that a continued high level
of troops is required in the formerly LTTE-held areas to hunt down
remaining LTTE forces, seize hidden caches of weapons, and prevent
any resurgence of violence. At the same time, military and civilian
officials stressed to staff that the bulk of the requested increase
of about 15 percent in the defense budget is due primarily
to the Goverment’s need to pay down military debts incurred during
the final stages of the war.

Sri Lanka’s economy grew relatively well throughout the war
years, and Sri Lankans hope the end of the war will trigger an economic
boom. Sri Lanka averaged 5 percent annual growth in gross
domestic product (GDP) over the last 20 years, and it has a per
capita income of $2,000, the highest in South Asia after the
Maldives. Sri Lanka has developed a strong garment industry,
which constitutes 43 percent of total exports, and still has significant
tea exports. But economic opportunities are distributed unevenly.
The Western Province, where Colombo is located, contributes
almost 50 percent of Sri Lanka’s GDP, while there are fewer
opportunities in other areas, especially the former conflict regions.
The war between the Government of Sri Lanka and LTTE, which
claimed over 70,000 lives since 1983, had an economic component
as many LTTE leaders were from poorer communities. For instance,
leaders in the two brutal Marxist uprisings in the southern
part of Sri Lanka, known as the Janatha Vimukthi Perumuna
(JVP) insurrections, which killed 15,000 in 1971 and 50,000 people
in 1988–89, were driven by economic discontent. Clearly, long-term
stability in Sri Lanka will be dependent on solid and distributed
economic growth.

Defense Secretary Gotabhaya Rajapaksa, brother of President
Mahinda Rajapaksa, repeatedly used the Eastern Province as an
example of the Goverment’s demonstrated performance record and
as a model for plans in the North in discussion with the committee
staff. He said he regretted that Sri Lanka was ‘‘poor at propaganda’’
and had failed to explain its actions and intentions to the
international community, especially to the U.S. and the West.
Rajapaksa said the military victory would lead to lasting peace
only if accompanied by economic development in the areas formerly
occupied by the LTTE.

Donors have responded to the war’s end by shifting their portfolios
to the North and East of Sri Lanka. However, there is a
chance that this could breed resentment in the South where there
is still much poverty. While some international donors seemed to
be artfully calibrating their operations in Sri Lanka so as not to
exacerbate underlying tensions, others chose to ignore the conflict
outright. U.S. Goverment assistance has focused on conflict sensitivity
and economic equity among all ethnic groups—Sinhalese,
Tamil, and Muslim—and on addressing the regional economic imbalances
in conflict-affected areas that have been amplified by the

World Bank staff in Sri Lanka, including Country Director
Naoko Ishii and Senior Country Economist Claus Pram Astrup,
should be commended on their development of a ‘‘conflict filter to
enhance effectiveness and reduce reputational risks’’ at the concept
design and implementation stages of projects. As laid out in the
World Bank Sri Lanka Country Assistance Strategy Paper 2009–
2012, the filter asks:

• Have sufficiently broad stakeholder consultations been conducted?
• Have adequate impartial grievance mechanisms been established?
• Are project management and administration adequately sensitive
to inter-ethnic issues?
• Are conflict-generated needs adequately identified?
• Have opportunities to strengthen reconciliation and inter-ethnic
trust been adequately identified?

World Bank staff noted that the filter had been a useful engagement
tool. The Asian Development Bank as well as other international
donors factor in conflict though in less formal ways.
However, the IMF does not officially consider conflict sensitivity
at all and almost prides itself on its tunnel focus on financial indicators,
although the IMF’s mandate is macroeconomic stability—
and a key factor to economic stability is resolution of war and conflict.
On July 24, 2009, the IMF approved a $2.6 billion loan to support
the Goverment of Sri Lanka’s ‘‘ambitious program . . . to restore
fiscal and external viability and address the significant reconstruction
needs of the conflict-affected areas, thereby laying the
basis for future higher economic growth.’’ The IMF did not examine
the possible impact of its program on the conflict in Sri Lanka. The
IMF reportedly did not provide its Executive Board with a copy of
the Goverment’s reconstruction program, a program which had not
been shared publicly in Sri Lanka and received no input from civil
society. Though the World Bank consults IMF assessment letters
when it does significant budget support, the IMF did not reciprocate
the consultation and incorporate the results of the World
Bank’s conflict filter.

IMF Resident Representative Koshy Mathai argued that although
the Goverment had used the IMF Letter of Intent as a vehicle
to clarify its own reconstruction plans and humanitarian assistance
and despite IMF staff interest in those issues, it was outside
the IMF’s mandate to have conditionality in political and military
areas. He suggested that other international fora were more appropriate
for addressing those concerns. The first of eight tranches
(roughly $330 million each) of the loan was in the reserves at Central
Bank as prescribed and the second tranche was also approved.

One of the biggest threats facing Sri Lanka’s economy is the loss
of the European Union’s ‘‘GSP Plus’’ trade concessions. Some argue
this would cost the country $150 million a year in trade and thousands
of jobs, although the Sri Lankan Central Bank issued a
statement asserting it would have little impact. The GSP Plus program,
established in 2005, allows Sri Lankan goods a reduction in
EU tariffs which are particularly important in the highly internationally
competitive garment sector which employs thousands of
Sri Lankan women. Last year, EU imports from Sri Lanka under
the program neared $2 billion. The GSP Plus benefit is predicated
on Sri Lanka’s compliance with internationally recognized labor
and human rights standards, including treatment of the IDPs.
Some assert that the EU’s threat of suspension has led to the
Goverment’s recent accelerated release of IDPs and granting of
freedom of movement.


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