Remarks at the American Center

Good Evening.  I'm delighted to be here in Sri Lanka, and to have this opportunity to talk to you.

I would like to start by expressing again the strong sympathy and support of the United States for Sri Lanka and its people as they rebuild after the horrible tsunami tragedy last December 26.  Our support for you in this effort remains a top priority for us.

The first thing I did upon my arrival in Sri Lanka this morning was to visit Kalmunai in the East, to get a sense of the disaster and recovery efforts.  Several months later it is still clear that the devastation was tremendous and that much remains to be done to help people recover.

The United States has been in the forefront of the effort to assist Sri Lankan recovery.  We will remain engaged as the country addresses its enormous reconstruction needs.  We've pledged $350 million in tsunami relief worldwide, and as you know, President Bush requested an additional $950 million from Congress for Tsunami reconstruction.  So far, approximately $132 million has actually been committed.  I should add that American private sector contributions have also been enormous, topping $1 billion by some estimates.

The emergency relief phase went well.  People's needs were clear and, by and large, they were met.  As Sri Lanka moves into the long-term process of reconstruction and a full return to normal life for the hundreds of thousands of affected people problems will continue.  A critical need being confronted now is to ensure transitional shelter for the homeless before the rains begin in earnest.  There are still some coordination problems at the national and local levels.

We hope the government and the LTTE will agree soon on a joint mechanism for tsunami relief, to assure that assistance finds its way to people who need it - wherever they are in Sri Lanka.

Still, I know that tremendous efforts are being made every day to recover from this disaster.  In my visit to Kalmunai earlier today, I was impressed with some of the programs the US Agency for International Development's partners are undertaking there - transitional shelters, cash-for-work programs, and clean-up efforts.  The NGO's we've contributed to have so far constructed more than 1,200 durable transitional shelters in Sri Lanka.

And now I would like to turn to overall bilateral relations.  Relations between the United States and Sri Lanka are excellent: we work closely on counter-terrorism, IPR protection, regional stability, democracy issues and trade relations.  Military relations are excellent, as demonstrated recently by the donation of a U.S. Coast Guard Cutter to the Sri Lankan navy, and Admiral Fallon's visit last week.

U.S. goals for Sri Lanka remain simple, straightforward and interlocking:

-- A lasting peace settlement for this country, which will increase prosperity and reduce the threat of terrorism;

-- Greater economic growth and investment, which will build support for peace;

-- Strengthened democracy and observance of human rights.

Helping Sri Lanka achieve peace is key to the kind of success here that will match the exciting successes elsewhere in the region.  We support fully the Norwegian efforts to facilitate a settlement, but the real key to achieving one rests with Sri Lankans themselves.  A political solution is the only way to a resolution.  We urge the parties to return to peace talks, and to continue the broader process necessary to end the conflict.  The government should speak with one voice on the peace process.

Our position on the LTTE has not changed.  The U.S. continues to regard the LTTE as a Foreign Terrorist Organization.  Our listing of it as a Foreign Terrorist Organization will remain in effect until the group renounces terrorism in word and deed.  This includes ending the murder of political opponents and the recruitment of children.  The LTTE should understand that we would be willing to consider engaging with them once they undertake such a renunciation.  We are concerned about the apparent upsurge in violence in the East and urge the LTTE and other armed factions to do everything possible to contain it.

Sri Lanka's economy seems to have weathered the recent tsunami better than many might have expected early on.  Nonetheless, the extensive human tragedy will inevitably encompass negative economic effects.  Further, with such devastation will come significant challenges during the rebuilding effort.  The US intends to be a partner with Sri Lanka throughout that process.

The United States is a major customer for Sri Lanka's export industries.  Sri Lanka's exports of apparel face increasing competition.  Nonetheless, I also hear the Sri Lankan industry continues its plans to expand.  The new realities of a post-quota world do not need to be a negative for Sri Lanka.  While globally there will be consolidation, I understand some of that consolidation has already benefited Sri Lanka, with factories shutting down in other countries and moving production here.  It is vital that Sri Lanka continue to embrace economic reforms that through expanding trade will offer new opportunities to young Sri Lankans in globally competitive industries.  The USAID-sponsored "Competitiveness Program (TCP)," which is working to strengthen industries with good export or foreign currency potential, is designed to support such reform.

Another opportunity that should not be lost is Sri Lanka's eligibility to become a Millennium Challenge Account country.  The newly constituted Millennium Challenge Corporation, a US government entity, is looking at a new way for the United States to engage with countries that are making the choice to promote good governance and human rights, economic growth and economic freedom, and invest in their people.  Sri Lanka was deemed eligible for both fiscal years 2004 and 2005 and is currently working on developing a compact proposal that will enhance growth and reduce poverty.  This is a tremendously exciting opportunity for Sri Lanka, one we hope that the government seizes.

In conclusion, I would like to underline again our optimism about recent developments in South Asia, our hope and belief they will continue and our intention to do what we can to maintain their momentum.  This hope applies as much to Sri Lanka as to any other South Asian country, and the United States will continue to support progress here.