Financial Times

Return to peace negotiations or face tough war
Severe US warning to the LTTE at business lunch
The United States government, through its ambassador here, gave perhaps one of its stronger warning to the LTTE last week – get back to the negotiating table or (in case of war) “face a stronger, more capable and more determined Sri Lankan military.”

Ambassador Jeffrey Lunstead, in a bitter criticism of the LTTE – ironically coming as he completes his tour of duty in Sri Lanka in mid-2006 --, blasted the rebel movement and asked, “the LTTE’s current actions call into question its ‘leadership’ of the Tamil people but what kinds of leaders block their people from realizing their most fundamental democratic aspirations?”

Speaking to a group of businessmen on “Peace and Prosperity: US Policy Goals in Sri Lanka 2006” at a luncheon meeting of the American Chamber of Commerce in Sri Lanka, Lunstead explained that US military assistance to the Sri Lankan military is given not with the hope of a return to hostilities because, the US wants peace and stands with the Sri Lankan people who want peace.
But he made it abundantly clear that if the LTTE chose to abandon peace, “they will face a stronger, more capable and more determined Sri Lankan military, adding that the US wanted the “cost of a return to war to be high.”
He called on the business community to take an active role in promoting the peace process.

Excerpts of his presentation:
“In many of my discussions with you, either at large events such as this, or at our more informal ‘Sector Teas,’ I’ve focused on themes such as what business’s role should be in laying a foundation for sound economic policy or the need for the private sector to take an activist role in supporting sound economic and public policies. These points remain important and valid.
Today, however, there is an overriding theme that trumps all the others: Peace.

The peace process is paramount. As we look at peace and prosperity, we are at a point in the cycle when the furtherance of peace is perhaps the single most important thing that can push Sri Lanka along the path to further prosperity.

A failure to capitalize on peace now will have significant negative repercussions in the months and years ahead. It will be especially bad for the economy and the underlying businesses that drive it. Therefore, I think it critical that the business community take an abiding interest in the current status of the process.

You need to take an active role in both promoting the process and educating the country about the benefits of the processes’ success or the consequences of its failure.

I just recently returned from Brussels where I participated in the co-chairs meeting. What I was pleased to find in Brussels, was a continued optimism on the part of my fellow co-chair participants that, despite recent damage to the ceasefire and the peace process, a strong hope for progress remains.
I must congratulate the government on its continued restraint, despite the recent provocative actions by the LTTE.

Similarly, the US calls on the LTTE to stop its violent activities and to return to the negotiating table with the Government of Sri Lanka in order to work towards a stable, permanent peace.

There can be a role for the LTTE in future development of Sri Lanka, but only if it returns to the peace table, renounces terrorism in word and deed and become a responsible participant in Sri Lanka’s future. And this will lead to a better life for the Tamils and all Sri Lankans in the north and east.
The LTTE’s current actions call into question its “leadership” of the Tamil people. What kinds of leaders block their people from realizing their most fundamental democratic aspirations?

What kinds of leaders allow their people to continue to suffer from a lack of investment and industry? What kinds of leaders continue to pursue violence when the clear benefits of peace are obvious? These are not acts of leadership.

They directly undermine LTTE claims to legitimacy and they keep the aspirations of the Tamil people bottled up. The United States remains committed to the peace process in Sri Lanka, and in helping the legitimate governing bodies of Sri Lanka to prepare for their roles in developing and protecting their citizens.

Through our military training and assistance programs, including efforts to help with counterterrorism initiatives and block illegal financial transactions, we are helping to shape the ability of the Sri Lankan Government to protect its people and defend its interests. Let me be clear, our military assistance is not given because we anticipate or hope for a return to hostilities. We want peace. We support peace. And we will stand with the people of Sri Lanka who desire peace.

If the LTTE chooses to abandon peace, however, we want it to be clear, they will face a stronger, more capable and more determined Sri Lankan military. We want the cost of a return to war to be high.

Now you may be asking, why is the American Ambassador using such blunt language at a gathering of the business elite? What has this got to do with our businesses or our interests? As I said in the beginning, it is imperative that the business community become seized with the peace process. For the peace and prosperity message to take hold, people need to understand better the prosperity element.

The government has a clear choice and needs to establish an economic framework to help it foster peace and quickly realize the maximum gains from even the smallest peace initiatives.

Such a framework will require: a strong entrepreneurial class; a strong trade regime that doesn’t discriminate and that attracts the best products in the world; agricultural and industrial establishments that export quality goods for needed hard currency; and an increasingly vibrant services sector that helps Sri Lanka bridge the development divide.

These kinds of policies will help Sri Lanka realize the kind of growth that allows an infant born today, in a country with a GDP per capita of US$ 1,000, to finish his A-levels in a country with a GDP per capita of close to US$ 5,000. And then finish University and raise his own family in a country that has a GDP per capita of US$ 8-9,000.

We hope to successfully conclude compact negotiations that will allow the Millennium Challenge Account program to begin operating in Sri Lanka. The government’s MCA proposal includes infrastructure in irrigation, rural electrification, rural roads and small and medium enterprise development.
Mahinda Chintana raises the issue of promoting rural-growth, something that is needed if the country as a whole is going to prosper in the years ahead. You can’t allow growth to leave huge segments of the population behind. Nonetheless, a focus on “home grown” solutions, that ignores the lessons learned of the global community and that fails to take advantage of what we in the US call OPM – “other people’s money” – will only lead to further stagnation and continued growth far below its potential.

What are some things that would get things moving faster for Sri Lanka? I strongly believe that one of the main opportunities for Sri Lanka lies in the successful conclusion of the WTO’s Doha Round in 2006. Sri Lanka is a trading nation that has an opportunity to play a leading role in promoting the resolution of outstanding issues and help the developing countries of the world understand the benefits to opening up what has been termed “south-south” trade.

Instead of looking at market access for Sri Lankan products as a type of development assistance Sri Lanka should look at the major benefits that accrue by opening its markets, opening markets in other countries and spurring a broader, more diverse set of trading partnerships. Sri Lanka is at a tricky point in its history. It’s not clear if it is at a crossroads, or a cliff’s edge.
The US will continue to support a strong, unified Sri Lanka that seeks peace and prosperity and that offers an atmosphere of respect and justice for all citizens regardless of religion and race. We will urge others in the International Community to do the same.

I see the role of the business community and other civil society players as critical in these endeavors. But the business community has a key role, because your initiatives and your penchant for risk-taking, decision-making and negotiating are all areas that the government will need to advance if the cause of peace and prosperity is to be served.

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