The U.S. and Sri Lanka: Assessing Progress
Ambassador Blake’s Remarks to the American Chamber of Commerce Lunch - October 9, 2007 Cinnamon Grand, Colombo:
The U.S. and Sri Lanka: Assessing Progress:
Fellow Chamber Members, Ladies and Gentleman,
It is a pleasure to be here to address you again today, approximately one year since my last luncheon with you. I always appreciate an invitation from the Chamber to speak with you.
To the members of the press, let me assure you that the Embassy will release the full text of my remarks right after this lunch. One thing I have learned during the last year is that even my remarks at private meetings seem to end up in the press so getting my side of what I actually said is very important!
[Ambassador Robert Blake - File Pic]
First let me thank and commend the Board, Executive Director Gordon Glick and the staff of the American Chamber of Commerce for your continued outstanding work to promote greater trade and investment between the U.S. and Sri Lanka. I am very proud that AmCham is one of the most, if not the most, dynamic and effective of the bilateral Chambers in Sri Lanka. A special word of thanks and praise to the Chairman of the AmCham Board John Varley who will be stepping down shortly. John has been a constant source of new ideas, encouragement and friendship to all of us and, John, we will sorely miss you.
I was asked to assess today the progress in relations between the United States and Sri Lanka. The last year has marked a period of challenge and change. I, for one, have a much greater understanding not only of this beautiful country, but also the movers and shakers behind it, many of whom are in the room today.
I am often asked what U.S. interests in Sri Lanka are. In other words – why do we care about Sri Lanka and its people, and what are our hopes for the future of the country? Simply put, the friendly relations between our two countries go back almost 60 years. We want to build on those to help Sri Lanka end its long conflict, strengthen its democracy, and promote economic prosperity and free markets so this beautiful country can realize the bright hopes that we all have for it.
Naturally, our focus at present is to encourage a negotiated settlement to the conflict that has bedeviled Sri Lanka for 25 years. That is because progress to end the conflict will have a positive multiplier effect on so many of our other goals. Unfortunately, the hope and promise of the 2002 Ceasefire Agreement is, like the agreement itself, all but defunct. As ceasefire violations by both sides have increased in frequency and seriousness and as the security situation has deteriorated, governance and human rights have declined, as have economic growth and opportunity. The country has seen several high-profile assassinations, hundreds of thousands of newly displaced persons, a sharp rise in abductions and disappearances, brazen paramilitary activity including child recruitment, and threats and intimidation of civil society and the media.
I’d like to speak in a little more detail about the conflict; human rights; the situation in the East; trade and the economy; and finally, corruption since all of these are central to all of your operations and the future success of your businesses.
The Conflict
The United States has been a strong and unwavering supporter of Sri Lanka’s fight to defend itself against terrorist attacks from the LTTE. That support takes many forms from military, to law enforcement cooperation, to efforts to help Sri Lanka stop financial flows to the LTTE, to our contributions to enhancing the security of the Colombo Port through the Container Security Initiative of the US Department of Homeland Security and the Megaports Initiative of the Department of Energy.
The Sri Lankan military has achieved important victories in the past year, including the defeat of the LTTE in the east, and the sinking of many LTTE tankers used to deliver military and other supplies to the Tamil Tigers. Such victories and U.S. support for Sri Lanka should demonstrate to the LTTE that they cannot hope to win this conflict.
However, the government’s victories also have come at a very high cost in human lives and suffering. Thousands have died in the last year alone, adding to the toll of around 70,000 in the quarter-century history of the conflict. Hundreds of thousands more have become homeless and endured severe privation. To help relieve the suffering the U.S. has donated food worth $14 million so far this year, with another shipment valued at an additional US$9 million set to arrive later in the year.
But both sides must realize there can be no military solution to Sri Lanka’s conflict. The U.S. welcomes Foreign Minister Bogollogama’s public statement during his visit to Washington last week that President Rajapaksa’s government agrees the conflict cannot be solved through military means. Without equal and parallel progress on the political track, there cannot be an end to the violence. The continued absence of a viable proposal for sharing of power with the country’s minorities is as disappointing to us as it is to most Sri Lankans.
The U.S. has followed closely and with admiration the intensive efforts of Professor Tissa Vitharana, his colleagues in the All-Party Representative Committee, and others of goodwill to break the decades-old logjam on devolution. We hope that these efforts soon reach a successful conclusion and form the basis for a southern consensus. But they must also satisfy the aspirations of the Muslim and the Tamil communities. They also are Sri Lankans, who have an equal right to live peacefully in this country, and to participate meaningfully and constructively in exercising responsibility for their own lives and futures within a united Sri Lanka.
Human Rights
Turning to the sensitive area of human rights, the United States recognizes that there has been a welcome decline in forced disappearances in Colombo and the Western Province. But violations in other parts of Sri Lanka remain as serious as ever. We are particularly concerned about the situation in Jaffna, where the most fundamental rights of people to be secure in their persons and homes are being violated almost daily. The number of extrajudicial killings in Jaffna has risen even higher in recent months. This is disappointing given the firm control the Sri Lankan military has over the Jaffna peninsula.
In his speech of October 4 at the Johns Hopkins School of Advanced International Studies, Foreign Minister Bogollogama outlined a series of indictments and arrests of members of the Sri Lankan Police and Armed Services on charges of abduction, murder, illegal detention, torture and other crimes. The U.S. has an active dialogue with the Government of Sri Lanka about our concern over the lack of accountability for human rights abuses. Trials, convictions and jail terms for those found guilty would help demonstrate the Government’s intention to address the climate of impunity that is of concern to human rights defenders.
Another right we track closely is freedom of expression. We believe that the role of the media in all free societies is to act as one of the most important checks on government power. They need to be able to write and broadcast without fear of harassment or reprisal. The killing of journalists, especially Tamil journalists, and other threats to freedom of expression are a blemish on a country with Sri Lanka’s proud democratic traditions, and must be stopped.
Situation in the East
With the defeat of the LTTE in the East, the government now has a major opportunity to lay the groundwork for a democratic, participatory, multi-ethnic governance structure in the East. The U.S. and other members of the international community are looking for ways to support financially such an outcome.
In our dialogue with the government on the east, we have emphasized several principles that will help lay the groundwork for our support of a successful stabilization and reconstruction program.
First and foremost, the Government must establish security and bring paramilitaries under control. The government is committed to this goal but more progress is needed.
Second, all stakeholders but particularly the Government must be vigilant to ensure that the stabilization and reconstruction programs do not alter the ethnic and demographic balance that underpins stability now.
Third, the government needs to develop civilian institutions to allow all communities to have a say in decisions on major issues, such as the distribution of local resources for development, the allocation of land, and the structure and composition of local civilian police authorities. Mr. Basil Rajapaksa has made a promising start in consulting stakeholders that we hope will be sustained and broadened.
A successful and participatory stabilization and reconstruction effort in the east could serve as a template and confidence builder for a future solution in the north. Devolved power will not mean the end of the Sri Lankan State nor will it lead to separation of the Tamil-speaking areas from Sri Lanka. Rather, the success of the principle of autonomous action in carefully circumscribed and appropriate fields of endeavor by empowered local and regional governments will reinforce the sense of belonging among Sri Lanka’s minority communities. It is essential to demonstrate to these communities that the majority wishes to live with them in peace and mutual respect.
Giving the minorities a stake in their own affairs is critical to win their support, and bring about a new perspective that their lives are better under Government rather than terrorist control. It will show them that they have a much brighter future within a united Sri Lanka than they ever could under an LTTE dictatorship. Giving Tamils and Muslims this hope will undermine Prabhakaran and the LTTE in a way nothing else could. Withholding this hope would condemn the country to more decades of ethnic strife and suffering.
Trade and the Economy
Turning to trade and investment, the United States would like to see increased trade and investment between the United States and Sri Lanka. While bilateral trade in most sectors has remained stable, there are still too few U.S. exports of our unequaled machinery and technology. Sri Lanka is growing at 6% a year, but were it not for the conflict that growth rate could easily be 8% or more. If that were the case, I am confident that we would be able to improve the persistent ten-to-one trade surplus that Sri Lanka runs with the United States. Similarly, there has not been a significant amount of new U.S. investment in Sri Lanka during the past year. We believe that there are significant opportunities here for U.S. companies. The possible growth in the energy sector, new infrastructure projects that will speed development country-wide, as well as the ever-growing IT-sector, are just a few examples.
We want to do all that is possible to encourage new investment while working with our partners in government to ensure that current investors and stakeholders in Sri Lanka are treated fairly and receiving a good return on your investments. I made an enormous effort last year to encourage U.S. businesses to come, personally writing to more than 200 companies. I also traveled to Houston with Petroleum Minister Fowzie to urge American and other investors to look at oil and gas exploration opportunities in the Mannar Basin. I’ll continue to reach out to U.S. companies, and to encourage especially those who are already operating in South Asia to consider Sri Lanka as an investment destination.
In conducting this outreach, I and my highly capable economic team at the Embassy got valuable feedback on the concerns many US investors have about investing here. Let me share those with you. First and foremost, American companies embody the “capital is a coward” dictum: they tend to shun countries with conflict unless there are extraordinary profits to encourage them.
But the conflict is not the only impediment to new investment. Another important one is contract enforcement. The World Bank recently ranked Sri Lanka 133rd out of 178 countries in the enforcement of contracts. I personally have spent a great deal of time and effort attempting to help U.S. companies here resolve contract enforcement problems. The same World Bank report delivered the good news that Sri Lanka has eased business start-up regulations with the new Companies Act. I know that Minister Amunagama and the Board of Investment are eager to work with companies who are interested in investing in Sri Lanka, and I urge them to make the same kind of progress in contract enforcement as they have in business start-up rules. The Minister has pledged to do so.
Another area that could help boost foreign investment is to enhance English-language and IT training. The US Agency for International Development is doing a lot in both of these fields. But much more is needed. I have strongly encouraged the government and many of you in this room to explore private-public partnerships to increase English and IT education. These will yield benefits in terms of jobs, growth and income not only for the business community but for the country as a whole for generations.
Corruption
Let me mention one other major hindrance to trade and investment: corruption. Corruption damages economic development and reform, impedes the ability of developing countries to attract foreign investment, hinders the growth of democratic institutions, and concentrates power in the hands of a few. A recent Sri Lankan study indicated that Sri Lanka’s GDP would have grown by at least two percentage points in 2006 had government corruption been prevented. The best way to combat corruption is for a government, any government, to be open and transparent.
For the past 18 months, the U.S. and Sri Lanka have been working together to develop strategies to fight corruption. The Sri Lanka Anti-Corruption program was created by the U.S. Agency for International Development after the tsunami, and was designed to help minimize corruption in the distribution of post-tsunami assistance. The program held more than 50 workshops throughout the country to discuss the problem and issues of corruption. The program launched TV and radio spots, published a book for children and conducted the first-ever comprehensive island-wide survey of 3000 persons on perceptions and experiences of corruption at the grassroots level.
It also introduced new methods and techniques of investigative auditing at the Auditor General’s Departments, and assisted the development of a new organization called “Clean Hands,” an association of public sector employees. The Anti-Corruption Program provided technical support to Sri Lankan partners, including Transparency International and the Organization of Professional Associations to produce a National Anti-Corruption Action Plan which aims to mobilize civil society to combat corrupt practices and to promote principles of integrity.
The impact of this program has been impressive. Not only has the capacity of key government institutions including the Auditor General’s Department and the Bribery Commission been strengthened, public awareness of the issue is much greater; citizen participation in monitoring and reporting corruption has increased; and the public has become more engaged in the campaign to combat corruption and promote integrity.
Sri Lanka has taken several other important steps in the fight against corruption. It has enacted a bribery and corruption law and established a Commission to Investigate Allegations of Bribery or Corruption. It has enacted an Assets and Liabilities Declaration Law, put in place a law to control money laundering, and signed the U.N. Convention Against Corruption. These are good initiatives. The National Anti-Corruption Action Plan contains many others, one of which is to enact and implement the Freedom of Information Act, which has been approved by the Law Commission but not yet enacted by Parliament.
This Freedom of Information Act will increase public accountability and enable Sri Lankan citizens to know what decisions government makes and why, and thereby to hold the government accountable for working in the public interest. This together with the other elements in the National Anti-Corruption Action Plan, can have a strong impact on how both the government and private sector do business. A country that fights corruption sends a clear signal to public servants that corruption will not be tolerated, and that it is concerned with protecting the welfare and interest of its people, while also promoting itself positively in the international arena.
Conclusion
In conclusion, I’d like to say that as I assess the progress that the U.S. and Sri Lanka have made in our bilateral relationship, I can note numerous positive steps. However, serious concerns remain. Although Sri Lanka has adapted extremely well to the challenging circumstances you face, you have the capacity to achieve more, much more.
As I travel around this country and meet Sri Lankan and foreign entrepreneurs who are performing world class work in many fields, I remain optimistic about the huge potential for this beautiful country. Few other countries can boast your educational achievements, your high health standards outside the conflict areas, your natural bounty, your entrepreneurial skills, and the advantage you enjoy of free trade agreements with large and fast growing neighbors.
With leadership, and a focus on the national interest above all else, Sri Lanka, like the ancient Egyptian phoenix, has the capacity to rise from the ashes of conflict and create a new era of opportunity and unprecedented prosperity for all Sri Lankans. The United States will continue to be your steadfast friend and partner in this endeavor.
Thank you.
[Source: Embassy News, Colombo, Sri Lanka]
