By Colombo Telegraph –

“The UNP party is playing a dangerous game supporting General Fonseka, because the Sri Lankan Presidency is very powerful, and it is unclear what economic policies Fonseka would support as President” the US embassy Colombo wrote to Washington.

The Colombo Telegraph found the leaked US diplomatic cable from WikiLeaks database. The cable was classified as “CONFIDENTIAL” details the argument behind Fonseka’s position on corruption.

The cable written on 01, January 2010 by the ambassador Patricia A. Butenis says “The opposition presidential candidate General Fonseka is military man who has publicly admitted that he has little knowledge of economic issues, and other than clamping down on corruption, he has no apparent economic program.”

The ambassador Butenis wrote “ It will be extremely difficult for  him to advance a coherent economic policy because the opposition parties supporting him have diametrically opposed economic views. Instead, Fonseka plans to focus on corruption, where President Rajapaksa is weak, and blaming corruption and government waste for voters, tough economic times. While the economy is a high – priority for many voters, both campaigns have focused on personalities and past performance rather than on a solid economic and political platform for future.”

Maitree reminded Ranil that he and Fonseka should say something about the economy, but he demurred because the political parties backing Fonseka’s candidacy had completely different economic policies

Econoff met with opposition campaign strategist Harsha de Silva, who is a prominent opposition economist, said he was in charge of writing Fonseka’s economic manifesto for his possible administration, but it was an impossible task because the UNP and JVP are diametrically opposed. Instead of a positive economic agenda, De Silva recommended attacking President Rajapaksa for corruption and waste. The ambassador Butenis further wrote “The corruption issue is a good one because while Fonseka is seen as clean, even the President’s private polling shows 80% of the people think that President Rajapksa and his family are corrupt.”

She wrote “ Fonseka himself however, prefers not to discuss future economic plans. Parliament opposition leader and potential future prime minister under a President Fonseka, Ranil Wickramesinghe, and his wife had a private lunch with the DCM and Poloff. At the lunch, his wife reminded Wickramesinghe that he and Fonseka should say something about the economy, but he demurred because the political parties backing Fonseka’s candidacy (primarily the liberal UNP and the leftist JVP) had completely different economic policies.”

“The opposition focus on corruption indicates that it believes that neo – liberal reforms, such as privatization, are too toxic to publicly advocate. Sri Lanka’s economy could indeed benefit from both a good crusade against corruption and liberal reforms” the ambassador further wrote.

Read the full cable below for further details;

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TO RUEHC/SECSTATE WASHDC PRIORITY 1067
INFO RUEHKA/AMEMBASSY DHAKA PRIORITY 2226
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 9248
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 7503
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 3658
RUEHCG/AMCONSUL CHENNAI PRIORITY 9810
RUEHKP/AMCONSUL KARACHI PRIORITY 2632
RUEHCI/AMCONSUL KOLKATA PRIORITY 0492
RUEHLH/AMCONSUL LAHORE PRIORITY 0118
RUEHBI/AMCONSUL MUMBAI PRIORITY 7099
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RULSDMK/DEPT OF TRANSPORTATION WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 000002

SIPDIS

E.O. 12958: DECL: 01/04/2020
TAGS: CE ECON PGOV
SUBJECT: OPPOSITION PRESIDENTIAL CANDIDATE HAS LITTLE
ECONOMIC AGENDA; FOCUSES ON CORRUPTION

REF: COLOMBO 1145

COLOMBO 00000002  001.2 OF 002

Classified By: A/DCM Rebecca Cohn for Reasons 1.4 (B.D)

¶1.     (C)  Summary.  The opposition presidential candidate
General Fonseka is a military man who has publicly admitted
that he has little knowledge of economic issues, and other
than clamping down on corruption, he has no apparent economic
program.  General Fonseka has announced some populist
measures to increase government employee salaries and
increase public pensions.   It will be extremely difficult
for him to advance a coherent economic policy because the
opposition parties supporting him have diametrically opposed
economic views.  Instead, Fonseka plans to focus on
corruption, where President Rajapaksa is weak, and blaming
corruption and government waste for the voters, tough
economic  times.  While the economy is a high-priority for
many voters, both campaigns have focused on personalities and
and past performance rather than on a solid economic and
political platform for the  future.    End Summary.

The Candidate Has Little Economic Experience

¶2.    (C)  General Fonseka is a military man who has little
experience with economics  or even any readily apparent views
on economic issues.  Fonseka has admitted publicly that he
does not have any economic experience, and he has made few
public statements about the economy.  He has promised to
increase the monthly salary of public servants by 10,000
rupees or approximately $ 90 USD per month (there are 1.2
million government employees).  Fonseka also supports
providing 2,000 rupee monthly pensions to senior citizens
(about $18 USD).  Econoff met with opposition campaign
strategist and economist Harsha de Silva, who said that
Fonseka plans to promise benefits to each economic segment of
the population in order to gain votes.   Fonseka himself,
however, prefers not to discuss future economic plans.
Parliament opposition leader and potential future prime
minister under a President Fonseka, Ranil Wickramesinghe, and
his wife had a private lunch with the DCM and Poloff.  At the
lunch, his wife reminded Wickramesinghe that he and Fonseka
should say something about the economy, but he demurred
because the political parties backing Fonseka's  candidacy
(primarily the liberal UNP and the leftist JVP) had
completely different economic policies.

Irreconcilable Differences Between the Opposition Parties

¶3.    (C)  General Fonseka is a common candidate supported by
the free market UNP and the far left JVP.  The UNP has
supported privatization of state industries, an open economy
and an increased role for the private sector.  The JVP is at
the opposite end of the economic spectrum, has opposed
privatization and UNP reforms in the past,  supports a large
role of the state, opposes foreign investment, and advocates
for government welfare to protect society.  De Silva, who is
a prominent opposition economist, said that he was in charge
of writing Fonseka,s economic manifesto for his possible
administration, but it was an impossible task because the UNP
and JVP are diametrically opposed.  Instead of a positive
economic agenda, De Silva recommended attacking President
Rajapaksa for corruption and government waste.

Campaign Strategy Focuses on Corruption and Government Waste

¶4.    (C)  De Silva conducted a poll on behalf of the
opposition which found that the Sri Lankan people were very
upset about the cost of living, their declining ability to
support their families, and corruption and government waste.
The poll also found that there was a split between support
for the GSL,s nationalist state-led policies and the UNP,s
international trade private sector-led economic policies.
The government UPFA coalition and the UNP are seen as equally
capable of improving their personal economic situation.

¶5.    (C)  De Silva recommended that Fonseka criticize
President Rajapaksa on government waste and corruption issues
and blame corruption for the high cost of living and the
difficult economic situation faced by many Sri Lankans.  The
corruption issue is a good one because while Fonseka is seen

COLOMBO 00000002  002.5 OF 002

as clean, even the President,s private polling shows 80% of
the people think that President Rajapaksa and his family are
corrupt (see reftel).  De Silva plans to use a study,
produced by a prominent economist, that corruption costs Sri
Lanka 2% in annual GDP growth.   The opposition will try to
tie President Rajapaksa,s alleged corruption to the rising
cost of living and falling income for many Sri Lankans.

¶6.    (C)  De Silva candidly admitted to econoff that the
attack on corruption is primarily a campaign strategy.  De
Silva said that 'as an economist' he understood that the
government of Sri Lanka needed to institute many economic
reforms, but for campaign purposes the opposition needed to
back away from the 'neo liberal' reforms attached to the UNP.
 After the election, De Silva hoped that the UNP would take
command of economic policy and apply a toned-down version of
its traditional policies.

¶7.    (C)  Comment.  The UNP party is playing a dangerous
game supporting General Fonseka, because the Sri Lankan
Presidency is very powerful, and it is unclear what economic
policies Fonseka would support as President.  The opposition
focus on corruption indicates that it believes that
neo-liberal reforms, such as privatization, are too toxic to
publicly advocate.  Sri Lanka,s economy  could indeed
benefit from both a good crusade against corruption and
liberal reforms.  End Comment.
BUTENIS