Published: 10 May 2003

At a Conference sponsored by the Institute for International Economics (IIE) titled "Free Trade Agreements and US Policy" Ambassador Robert Zoellick, United States Trade Representative (USTR) mentioned Sri Lanka as a potential candidate for a FTA with the United States. He stated that the Bush administration will accelerate its bilateral and small country/regional approach to liberalise global trade, especially if the WTO "Doha Development Round" talks stall. He mentioned ASEAN countries as a possibility and also identified the Middle East, the Dominican Republic and Columbia as potential candidates. This statement follows the signing of the first FTA with an Asian country when Prime Minister Goh and President Bush signed the US-Singapore FTA in Washington, D.C. on May 6, 2003. Following Zoellick's comments President Bush offered on Friday May 9, 2003 a US-Middle East Free Trade Area by 2013 as an economic incentive to that region. Ambassador Zoellick elaborated that four key criteria are being used to identify candidates for potential US FTA's- 1. progress on economic reforms 2. support for US positions in global trade negotiations including the Doha Round 3. support for US foreign policy objectives, 4. impact of a FTA on overall regional integration. "The mentioning of Sri Lanka as a potential candidate is significant in that this is the first indication for a FTA in South Asia. With 41% of our exports (primarily apparel and garments) worth US$2 billion destined to the US market, this is very significant for our industry" said Sri Lanka's Ambassador to the United States, Devinda R. Subasinghe. "This is the outcome of significant progress made within the US-Sri Lanka Trade and Investment Framework Agreement (TIFA) signed during Prime Minister Ranil Wickremesinghe's visit to Washington to meet with President Bush in July 2002." Meetings of the US-Sri Lanka Joint Council were held in Colombo in November 2002 and in Washington in March 2003 co-chaired by Deputy United States Trade Representative Amb. Jon Huntsman and Minister of Commerce and Consumer Affairs, Hon. Ravi Karunanayake with the participation of Minister of Enterprise Development, Industrial Policy and Investment Promotion and Constitutional Affairs, Prof. G. L Peiris. Council meetings have advanced significantly trade, commerce and investment relationships between the two countries. Avenues for greater market access, including a possible FTA were discussed at these meetings. The recent award of a 100 mw power plant to a US corporation, Caterpillar Power was an outcome of the TIFA process. Minister of Economic Reform, Science and Technology Hon. Milinda Moragoda met with Ambassador Zoellick during his visit to Washington to co-chair the April 14 US-hosted Pre-Tokyo Seminar. Minister Moragoda used this opportunity to discuss ways to build on the success of the TIFA process and to move forward towards an FTA. "The importance attached to the US-Sri Lanka political and economic relationships indicates that the US takes the economic relationship very seriously and Ambassador Zoellick's statement clears the way for the government and industry to realize the potential of Sri Lanka's candidacy" said Ambassador Devinda R. Subasinghe. Embassy of Sri Lanka Washington DC USA 10 May 2003

Published: 08 May 2003

During a recent visit to the University of Pittsburgh in Pennsylvania, on an invitation to deliver a speech on "The Current Trends in Sri Lanka", Sri Lanka's Ambassador to the US Devinda R Subasinghe addressed a wide gathering of academics, students and members of the Sri Lankan Community. In the context of Sri Lanka's increasing importance in South Asia and increasing US interest in Sri Lanka, Ambassador Subasinghe proposed that Sri Lankan studies become an integral part of the University curriculum in the Asia Studies program at the University of Pittsburgh in Pennsylvania. Ambassador Subasinghe referred to the commitment of the University's Asian studies program to foster a better understanding of the East, South and Southeast Asia and the Pacific and also expressed the wish to facilitate educational, social and cultural exchanges between the students of Sri Lanka and the University of Pittsburgh. In his speech, Ambassador Subasinghe also summed up the positive trends in Sri Lanka in the political, economic, legal, democratic and tourism realms. Observing that the economy of Sri Lanka had been ravaged by two decades of ethnic conflict, Ambassador Subasinghe referred to the country's commitment to achieve a lasting peace through political dialogue and economic reconstruction and stated that together with the assistance of the governments of Norway, United States, India and Japan the country had achieved "a major breakthrough in securing the peace" by embarking on peace talks with the Liberation Tigers of Tamil Eelam. Referring to the positive relationship between the United States and Sri Lanka, Ambassador Subasinghe commented on the recently concluded Trade and Investment Framework Agreement (TIFA) signed in July 2002 and the important economic, trade and investment ties between the two countries. He observed that the United States is Sri Lanka's biggest trade partner and comprises one of Sri Lanka's main export markets with exports in the year 2002 amounting to US $1,810 million and imports from the United States totaling US $ 171.9 million. He also commented on the economic reform and economic development efforts to move the economy to a path of sustained high growth and the Sri Lanka government's "Regaining Sri Lanka" program of economic recovery and development that includes increasing economic growth and reducing conflict-related rural poverty, strengthening rural infrastructure and improving quality education and health services, in order to make the country "a transport, logistics and financial hub for the Indian Sub-continent". The Ambassador met Dr. James V. Maher, Provost, Senior Vice Chancellor and Dr. Vijai Singh, Vice Chancellor of the University of Pittsburgh as well as Dr Christina Gabriel, Vice Provost of the Carnegie Mellon University where the possibility of conducting programs in Sri Lanka on education and Information Communication Technology as well as technical collaboration on the e-Sri Lanka program with the Carnegie Mellon University were discussed. Ambassador Subasinghe and Mrs Subasinghe also participated in the annual Sinhala Tamil New Year dinner hosted by the Sri Lankan community at the University of Pittsburgh. Embassy of Sri Lanka Washington DC USA 08 May 2003

Published: 06 May 2003

Honourable Speaker, On the 21st of last month (21st April 2003), Dr Anton Balasingham, Political Advisor and Chief Negotiator to the LTTE, addressed me a letter in which he informed me that the LTTE leadership has decided to suspend its participation in the negotiations for the time being, giving reasons for doing so. I replied Dr. Balasingham, on the 29th of April 2003 responding to the concerns he had raised. I am tabling for the information of Parliament both Dr. Balasingham’s letter and my reply. I would like to point out to the House that as indicated in Dr. Balasingham’s letter, the LTTE was suspending their participation in the negotiations for the time being. It was not giving notice of an end to negotiations, nor were they making a statement that they were going back to war. In fact, Dr. Balasingham in other statements he has made on the matter has been categorical that this was not an indication of resumption of war and that their commitment to seek a negotiated political solution remained. I can state too, that in the opinion of our friends the Donor nations, with whom we are in contact they see no prospect of a resumption of war. Members of the House will be aware that interruptions of this nature in peace processes have occurred before in our country and that this is the second interruption we have experienced. In the peace processes of other countries too suspension of negotiations from time to time is not uncommon. You will recall Honourable Speaker that in my statement to Parliament on the coming into force of the Ceasefire Agreement on 22nd February 2002, I said that the road to peace was going to have more pitfalls and setbacks than successes. Let me recall the background in which the Ceasefire Agreement between the Government and the LTTE was initiated. At that time, the two parties had not formally met and the ground work was prepared by the Norwegian Government. We have had several months of talks and some considerable progress has been made. The people’s yearning for peace has been fulfilled and there is now an absence of war. In fact a new environment has evolved. We might even say that we have progressed faster than we envisaged at the time we set out on this journey taking up issues not contemplated in February 2002. For example, the LTTE were agreeable to our suggestion relating to the preparation of a comprehensive document in respect of human rights applicable to all stages of the negotiating process and including suitable provision regarding monitoring and enforcement. There was, moreover, explicit agreement relating to a political resolution of the ethnic conflict by means of sharing of power based on a federal structure within a united Sri Lanka. The very progress that has been made has been a catalyst for the emergence of fresh issues. We are now at a stage when it is evident that substantial progress has been made in respect of the provisions of the Ceasefire Agreement, and we move forward into a further phase of the evolving process. Our aim at this time is to keep the process going and continue to be on the alert. The important thing is that there is no question of going back to war. Mr Speaker, Permit me to identify what the real issues are at this time. Firstly, there is the question of sharing of resources. The whole economy which was run down by two decades of war has to be kick-started. The Regaining Sri Lanka is our strategic framework for the long term economic development of Sri Lanka. One of the objectives for high growth mentioned in this document is to generate resources for the long term development of the North-East. The fear of the LTTE is that all the resources we get will go to the South. At the same time, the people in the South fear that all the moneys will go to the North. Neither of this will happen. We decided to assess our requirements both in terms of the needs of the North-East and what we required in the medium term for the Regaining Sri Lanka strategy. Therefore, we did not hold the usual Donor Conference last year. Instead the Royal Norwegian Government convened the Oslo Conference last September, where the Donor nations decided to pledge aid for emergency assistance. It was at Oslo that it was decided to call the Tokyo Conference to pledge aid for the development of the whole country including the North-East. The LTTE has a role in the rebuilding of the North-East. The Oslo meeting delineated this role and the part the international community will play in it. In Tokyo, we will have, the Needs Assessment Report on the North-East, and the four adjacent Districts done in consultation with all stakeholders, the Regaining Sri Lanka and a bridging document before the Donors. We expect to receive the funding which would make both these objectives realisable. In the meantime, in our interaction with the Donor community, we have taken up our immediate and medium term needs. I am pleased to record, we are well on the way to raising the development assistance we require for this purpose. I am optimistic that the international community both through bilateral and multilateral means will make available an amount of around one Billion Dollars a year for the next three years, which is our estimated requirement to attain the national development goals. I would also inform the House, that with regard to immediate support for the North-East, three Multilateral agencies, the UN system, the World Bank and the Asian Development Bank, have determined the amounts required for the North-East and the adjacent four Districts in consultation with both parties. Of course, it must be realised that as is usual, all of this is not going to come in one tranche and will be available at different points depending on our capacity and performance. The second general issue I would like to refer is, how to make life easier for the people living in the North-East. The major issue of the North-East is that of the Internally Displaced. At the time of the Ceasefire Agreement, the number of families displaced was approximately 200,000. Today, that number has been greatly reduced. As of April this year, 75,000 families have voluntarily re-settled. To help them integrate in the community, we have increased the Unified Assistance Scheme from Rs. 15,000/- to Rs. 25,000/- per family. Already, about 10,000 families have received the increased UAS support. In addition to making land available which would involve clearing of 2 million landmines, there are some major issues in respect of resettlement. One of these is, that of title to land where legal challenges in Courts by claimants can delay the process and the Government will have to pay large amounts as compensation. We are obtaining the advise of the Attorney General on this question. Another of the major problems we are facing is that of building capacity in the administrative machinery in the North-East, which has been run down over the years. It was an administration only able to barely supply the day-to-day requirements of the population, like providing rations for people in welfare camps; it was not geared to development. There had been no recruitment of officers for years. In fact the Mullaitivu District Secretary has no office or residence. What we inherited was an administration without the capacity for development work. This was the basic reason for the inability to move forward rapidly in implementation. The institution of SIHRN, (the Sub committee for Immediate Humanitarian and Rehabilitation Needs) was therefore a crucial one for commencing immediate development work. We are currently working out new mechanisms to co-ordinate the work of the Central Government Agencies and the North-East Provincial Council. This would call for the strengthening of SIHRN. Normalisation of civilian life is another issue which has received priority. This necessarily involves the High Security Zones and the manner in which the military and security concerns have to be balanced with humanitarian civilian needs. As the security situation improves, the military presence will be less needed. When normalcy returns the large presence of troops in Jaffna will not be necessary and the stationing of troops will be as it is in the rest of the country. National security concerns will of course be taken into consideration at every stage. In moving forward in this area, the question of timing is critical when humanitarian and security issues are balanced. Just as the views of the civil society are being made available, so will we need the advice we get from the armed forces. There have been some issues which continue to remain unresolved. For example, in Jaffna city, moving out of the Five One Divisional Headquarters and the Five One Two Brigade Command Headquarters from Subash and Gnanam Hotels and some houses in the vicinity to the Jaffna Fort. That matter as the House knows, is still awaiting resolution. Since there seems to be some misconception in the public mind about this matter I would like to take this opportunity to clarify the position and to state categorically to the House that the proposed relocation does not amount to any change whatsoever with regard to the High Security Zone, in Palali, but is limited to arrangements within the city of Jaffna. As regards the High Security Zones and de-escalation we have obtained relevant expertise from India. General Nambiar, one time Commander of the UN Forces in Bosnia, and present Director of the United Services Institute of India, is the Advisor to the Government in regard to the process of de-escalation. He will come to Sri Lanka today bringing his report. He will meet the President, the Minister of Defence, the Commander of the Army and me. A recent issue which has arisen in regard to disengagement of forces is in the seas The SLMM is addressing the issues, and the two parties have been asked to respond. In this context we have obtained the services of Vice Admiral P J Jacob, former Vice Chief of Naval Staff of the Indian Navy to advise the Government on issues relating to the sea. I think the House will be happy to know that he will also be arriving in the country today. These issues will take some time to discuss and move forward to agreement . And finally, we have to obtain compliance with the Ceasefire Agreement. We need to consider the whole issue of human rights, and the fulfilment of Human Rights norms in its various manifestations. In this connection one major issue that has arisen is the recent assassinations of intelligence operatives and political activists. I would also like to inform this House that the Police and the Armed Forces have been instructed to take all necessary steps to bring to justice the perpetrators of these crimes. The Government accepts the need to address the concerns of the Muslim community in the North-East. Firstly, we have to arrange for the Muslim delegation to meet soon with the LTTE to work out the modalities for a Muslim Delegation to take part in the plenary discussion. It is an imperative requirement at this stage of the deliberations that a delegation articulating the aspirations of the Muslim community should have the opportunity of participating at discussions relevant to the Muslims at the plenary sessions. There are also the future political arrangements for the North-East to be dealt with - in fact the core issues. As we move on from the Ceasefire Agreement, the Government is open to having wide ranging discussions on the many issues that are represented here – especially regarding the extent of devolution of power and the units of devolution. We will in consultation with all parties proceed to develop a Road Map towards this objective. This will set out with clarity the sequence in which the substantive issues will be addressed in the unfolding process, so that the objective sought to be accomplished and the means by which this goal will be reached, becomes apparent. Mr Speaker, I would like to conclude by keeping the House informed of the current steps we are taking to bring about a situation where negotiations could be resumed. As I have said before, the safety-net of the international community which we have brought about is being of great help to us at this time. We have had a firm expression of views by our friendly countries, including the United States, UK, Japan, France and India. Our facilitator and friends have been very active during this period speaking with interested parties. As we recognise the issues that have emerged between the parties, we have been strengthened in our resolve to approach this issue in a practical manner. The international community whose goodwill is abundantly at our disposal is engaged in a professional exercise of shuttle diplomacy which has already begun to show promising results. For example, Mr Erik Solheim of the Norwegian Delegation has been meeting Dr Balasingham. There has been contact between Mr Vidar Helgessen and the LTTE leadership. In regard to India which is always a relevant factor, Minister Milinda Moragoda has paid a visit to Delhi and been in contact with the Foreign Minister, Yashwant Sinha and Brijesh Mishra, Advisor to the Indian Prime Minister. So have the Members of the Norwegian Delegation and Japanese Delegation. Last Sunday, I had meetings with the Norwegian and the Japanese Delegations. I could tell you that Mr Helgessen met Dr Anton Balasingham yesterday and Erik Solheim will be meeting Dr Balasingham on Thursday. I will be meeting the Norwegians again on their return from the Vanni. The Foreign Minister of Norway, Jan Peterson will be visiting us soon and Christina Rocca from the United States will be here next week. Overall, the Norwegians are dealing with the peace process, while the Japanese are focussing on the Tokyo Conference. All of this opportunity will be made use of for further discussions. We have also made known the current situation to all of the interested partners such as to all members of the international community and they too would be using their good offices to see that the process is re-commenced as early as possible. On behalf of the Government, I can assure you Mr Speaker, I will be keeping the Party leaders informed of the developments as they occur.

Published: 02 May 2003

US Assistant Secretary of State Christina Rocca is scheduled to visit Sri Lanka on 12th and 13th May 2003 at the invitation of the Prime Minister. She is part of the delegation of Deputy Secretary of State Richard Armitage visiting Afghanistan, India and Pakistan and will visit Sri Lanka at the conclusion of those visits. Deputy Secretary of State Armitage will lead the US delegation to the Tokyo Conference on Reconstruction and Development of Sri Lanka to be held next month which is being co-chaired by the US. The present visit is a follow up to the successful Pre-Tokyo Seminar held in Washington in April 2003 hosted by the State Department. Ms. Rocca’s visit signifies the continuing support of the US Government to the peace process. This visit follows her earlier visit to Sri Lanka in March 2003. She will also discuss during the visit bilateral relations in the context of the deepening ties between Washington and Colombo. Ms. Rocca is scheduled to meet the Prime Minister, Foreign Minister and members of the negotiating team including Ministers G.L. Peiris, Milinda Moragoda and Rauf Hakeem among others. Embassy of Sri Lanka Washington DC USA 02 May 2003

Published: 29 April 2003

29th April 2003 Dr Anton Balasingham Political Advisor Chief Negotiator to the LTTE LTTE Headquarters Killinochchi. Dear Dr Balasingham, I write further to my letter of 22nd April 2003 in response to yours of 21st April, in which you had expressed your organisation’s concern in relation to some critical issues on the ongoing peace process. I must at the outset express my complete agreement with you that during the 14 months in which the Ceasefire Agreement has been consolidated as a result of the sincerity and determination shown by both sides, there has been substantial progress towards peace and development throughout the country. For instance:

• The Ceasefire has held for a period of 14 months; the daily toll of dead and maimed combatants and civilians has been brought to a halt.
• SLMM procedures have been strengthened and its activities and coverage expanded; critical situations which would earlier have led to conflict have been defused and resolved.
• Places of worship and schools occupied by the Military have been handed over.
• The Government and LTTE have established SIHRN an institution for decision making in which both have equal participation.
• Through a joint approach by the Government and the LTTE to the Donors, a funding mechanism NERF has been established.
• Some of the issues pertaining to the Muslims have been addressed.
• Detailed study of Federal and Government structures has been undertaken by both sides.
• The Joint Gender Committee has been set up.
• Positive working relationships have been established between the parties at operational level.
• The international Donors, both multilateral and bilateral, have already disbursed substantial funding (in excess of US$ 30 million) for humanitarian and rehabilitation work in the North-East.

Although it has not been possible to reach agreement on all matters our joint resolve to cooperate has provided the space and confidence for the international community to participate in rehabilitation and development. The 14 month period of peace has therefore been one of steady progress and hope to our people. Let me take up one by one, the various reasons which appear to have led your organisation to take what you have termed as a “painful decision.” 1. Exclusion of the LTTE from the Preparatory Seminar in Washington: As you would know, the Japanese Government suggested preparatory seminars in Washington, Brussels and Oslo prior to the Tokyo Conference. The Government of Norway later felt that it would forego this opportunity since the Oslo meeting last November had virtually served this purpose. Subsequently for various logistical reasons mainly connected with the Iraq crisis, the decision to hold a meeting in Europe was changed and it was proposed to have a preparatory meeting in Colombo in May. These arrangements were discussed at the meeting at Hakone. There were two other significant reasons for going ahead with the Washington seminar in April. The first, was the fact that such a seminar would enable the gathering of major Donors who would be present in Washington as participants in the important Spring Meetings of the World Bank and IMF. The other reason was that it was important to obtain commitment of the Donors to this process before their attention was absorbed by the needs of Iraq as a consequence of the situation following that conflict. The Washington preparatory seminar was not a pledging conference. The multilateral organisations present at the seminar announced their indicative figures under their Country programme at the meeting. The LTTE’s inability to attend the seminar was due to the fact that the organisation still remains a banned organisation under United States Law. I regret the LTTE could not participate and you will appreciate that the Government cannot be blamed for this situation. From the inception the Government was committed to working with the LTTE in rebuilding the North-East. In fact the Tokyo Conference offered by the Japanese Government as a pledging conference for the Reconstruction and Development of Sri Lanka took this fact into consideration. The Conference is to be opened by the Prime Minister of Japan. 2. The non-implementation of the terms and conditions enunciated in the truce document: Both sides have obligations to fulfil the terms of the Ceasefire Agreement. While there has been increasing compliance, I agree with you that there is yet much to be done to implement fully, the provisions of the Ceasefire Agreement. Our view is that both parties should commit themselves to doing so. The presence of the Sri Lanka Monitoring Mission has undoubtedly helped in ensuring, to the extent possible, the observance of the Ceasefire in all its aspects. The final objective of course is normalisation of the ground situation. However in view of the fact that the conflict has been long drawn out, normalisation is bound to be a difficult process. Both sides I know, have been impatient at the pace at which normalisation has taken place and it would be necessary to renew our joint commitment to make progress. 3. The suffering and hardship experienced by hundreds of thousands of internally displaced Tamils: The highest priority has been given by the Government, your organisation and the international community to alleviate the conditions of the internally displaced, as quickly as possible. We ourselves have pledged at the last election to (a) take steps to make life easier for the people of the North and East, and (b) solve the problems of people who have been displaced and rendered helpless by war. In fact there has been progress. The Government has taken substantial loans from the World Bank and ADB for re-settlement of internally displaced persons and the numbers have been reduced significantly. There is also the further question of de-mining of the lands in which internally displaced persons would be settling and an effective programme is underway with several international Donors committed to humanitarian mine action. Indeed the work of your own TRO and its humanitarian de-mining unit working in the Vanni in this endeavour, is highly appreciated. Of course there is much more to be done to make life better for the people. There have been delays in implementation due to the breakdown in Government administration as a result of the twenty year conflict. In the last few weeks we have been discussing the measures to strengthen the effectiveness of implementation and to establish an effective coordination mechanism for administration in the Northern districts – the districts worst affected by the war. The Government will keep the LTTE briefed on these proposals prior to implementation. We will also convey to you our views on making SIRHN more effective and look forward to reaching agreement on the modifications that are needed. As Mr Bernard Goonetilleke’s letter of 28th April 2003 would have informed Mr Tamilchelvan, we have formulated procedures to commence the 15 approved projects while the formal arrangements for NERF are being finalised. The Norwegian Facilitator will be apprising you of the manner in which we are overcoming this problem. 4. The aggressive Military occupation of Northern cities and civilian settlement: Ever since the Ceasefire, the policy of the Government has been to restore normalcy in order that the civilian population would be enable to carry on their customary livelihood. The visible signs of this are, the increased production in fisheries and the bumper paddy harvest that has been experienced in the recent Maha season in the Vanni. Though there are yet steps to be taken to reduce the constraints now necessitated by security considerations, the difference in people’s lives over the past year is I believe quite evident. The Government is committed, as I mentioned earlier, to resolve the issues of the persons displaced by war. Mr Austin Fernando, Secretary Defence by his letter dated 27th April 2003 informed Mr Tamilchelvan of the intention of the Army to release the two hotels in Jaffna town and the surrounding houses. Pre-fabricated buildings to house the troops have already been ordered. The Report prepared by General Nambiar on the Review of the High Security Zones, as mentioned in the Talks of 6th – 9th January will also be available when the Talks resume. 5. The marginalisation of the people of North-East in the macro economic policies and strategies of the Government: A careful reading of the “Regaining Sri Lanka” document which contains the vision and strategy for acceleration of development will indicate the degree to which conflict related development has been emphasised. Regaining Sri Lanka is the National Economic Policy Framework of the Government. Its objective is to achieve and sustain a high rate of growth for a decade or so which will enable (a) the creation of employment opportunities and (b) generation of sufficient economic resources for long term development of the North-East. The specific strategies and plans for promoting economic development in the North East will be worked out in consultation with the LTTE. There is no intention to exclude the LTTE from the process. One of the achievements for the Government and the LTTE was the ability to cooperate in commissioning the Multi Agency Needs Assessment to identify the reconstruction and rehabilitation requirements of the North-East. Once the two parties agree on this Report, it will become the official planning framework for the rebuilding of the North-East. Reference to the planning framework will be included in the Regaining Sri Lanka document. This planning framework will also be submitted to the Tokyo Donor Meeting in addition to the Regaining Sri Lanka document. In the face of these very positive developments, albeit not at the pace which we might have desired, it is extremely unfortunate that the LTTE leadership has decided to suspend its participation in the negotiations for the time being. I am however, encouraged by the reiteration of your commitment to seek a negotiated political solution to the question, and in furtherance of this, hope that you would, at this decisive time, review your present stance, and continue a partnership which has as you have conceded, already achieved considerable success. I believe finally this would be in complete accord with the firm desire of all our people that the peace process continues without interruption. With regards, Yours sincerely, Ranil Wickremesinghe Prime Minister of Sri Lanka

Published: 28 April 2003

Dear Mr. Tamilchelvan, Your letter dated 23rd April reached us while the Government delegation was preparing itself to attend the meeting of the Sub-Committee on Immediate Humanitarian and Rehabilitation Needs (SIHRN) scheduled for 25 and 26 April. In fact, the key issues highlighted in your letter had been included in the proposed agenda for the scheduled meeting. The Government delegation, which met for a pre-SubCommittee meeting, had already decided to propose alternative approaches to overcome the temporary constraints facing SIHRN. We were expecting to discuss these approaches with your delegation during the scheduled meeting. I am confident that you are fully aware of the reasons for the delay in finalizing the agreement with the World Bank relating to the North-East Reconstruction Fund (NERF), and that the Government is in no way responsible for that delay. Over the last few weeks the Secretariat for Coordinating the Peace Process (SCOPP) had been in contact with the World Bank office in Colombo on a regular basis with a view to expediting the resolution of outstanding issues. The World Bank has assured us that all agreements pertaining to the establishment and operation of the North-East Reconstruction Fund (NERF) would be completed within several weeks. The Government shares the sentiments expressed by the LTTE in this regard and is sensitive to the fact that donor contributions already committed to the NERF cannot be disbursed for projects approved by the Sub-Committee. In regard to this, the Government delegation, after extensive deliberation, had formulated an interim measure to enable the commencement of approved projects. These measures were to be discussed with you at the Sub-Committee meeting, which has been postponed. In light of this situation, we have requested the facilitator, the Royal Norwegian Government, to brief you on this proposal. You would appreciate the fact that a considerable number of projects would have been approved by SIHRN, had the meeting took place as scheduled. As the meeting has now been postponed, may I suggest that we jointly request Director SIHRN to go ahead with the preparation of estimates etc., in respect of those projects, so that all preliminary arrangements would be in place for them to take off the ground no sooner receiving the approval of the Sub-Committee. In relation to your comments regarding urgent action on resettlement of internally displaced persons and refugees, may I point out that the formulation of the Accelerated Resettlement Programme for the Jaffna District and the Resettlement Programme for the Mannar District, by the SIHRN Secretariat in collaboration with UNHCR, have been completed and was awaiting a decision at the next Sub-Committee meeting. On the pledges made by donor community at the Oslo Donor Conference in November 2002, the Director General, Department of External Resources has contacted the relevant donor countries to ascertain specific information on the quantum of funds they wish to provide to NERF. However, the postponement of the Sub-Committee meeting has caused the donor community to raise questions about the resolve of SIHRN to pursue rehabilitation activity, which is likely to cause further delays in securing funds. The Government, while regretting this development, will do everything in its power to persuade the donor community to make available resources already committed by them to SIHRN to continue its humanitarian and rehabilitation work. Yours sincerely, Bernard A.B. Goonetilleke Head of the Government Delegation to SIHRN