Program Description
USAID's Office of Transition Initiatives (USAID/OTI) Sri Lanka program assists in generating greater support for a negotiated peace settlement that will end long-standing conflict in Sri Lanka. To accomplish this aim, OTI has three objectives:

• demonstrate tangible benefits of peace;
  
  
• iincrease the amount and exchange of information and diverse points of view on peace issues among various levels of society and within different communities and,
  
  
• reduce or prevent incidents of violence in conflict-prone communities.

Based on these objectives, OTI provides grants that will:

• support positive, community-based interaction among diverse groups of people;
  
  
• promote citizen involvement in community decision making, particularly for rehabilitating community-based infrastructure;
  
  
• improve livelihoods and provide skills training; and,
  
  
• increase dissemination of balanced information and differing points of view.

Working with local NGOs, informal community groups, media entities, and local government officials, OTI identifies and supports critical initiatives that will move the country further along the continuum from war to peace. Development Alternatives, Inc. (DAI) implements the $3.5 million small grants program and manages USAID/OTI offices in Colombo, Trincomalee, and Ampara. Since program start-up in March 2003, OTI has approved 87 small grants worth approximately $2.173 million.

Country Situation

SRI LANKA'S COHABITATION CRISIS - A cohabitation crisis between President Kumaratunga and Prime Minister Wickremasinghe, whose political and personal animosities have undermined the peace process for months, is eclipsing discussion of the LTTE's proposal for an interim administration in the North and East and the resumption of formal negotiations. Tensions between the rivals peaked on November 3 when, against the backdrop of the Prime Minister's visit to the White House, the President sacked three key ministers, suspended Parliament and instituted a State of Emergency. Under pressure from the international community, by November's end the Prime Minister and President had met twice to discuss differences, and Parliament was in session again during the month to debate the 2004 budget. The State of Emergency was also lifted. Both leaders agreed to create a joint, four-member committee to discuss issues related to government stewardship of the peace process.

NORWAY SUSPENDS MEDIATION ROLE - Given the government's political instability, Norway has stepped back temporarily from its role as facilitator of the peace process while continuing to monitor the ceasefire agreement through the Sri Lanka Monitoring Mission. This move has ratcheted up the stakes for both the President and Prime Minister, since neither of them will want to be held responsible for the demise of the current peace process. On the positive side, the Norwegians very publicly left the door open to returning to the table once the current political impasse is resolved.

LTTE HERO'S WEEK CELEBRATION - As the cohabitation drama played out, the LTTE held its Hero's Week celebrations during which martyrs were honored in villages in the North and East. In a testimony to the paradoxical nature of the Sri Lankan conflict, Sri Lankan army and police forces provided security for LTTE commemorations held in areas under government control. LTTE leader Prabhakaran's "Hero's Day" speech on November 20 was notable for its relative restraint, particularly given the opportunity to revert to the vitriolic tone of years past. He emphasized that the LTTE would respect the February 2002 ceasefire agreement and not engage in hostilities unless provoked, yet also made it clear that the South's continual political wrangling could leave the LTTE no other choice but to return to its separate-state demand in lieu of autonomy within a unitary Sri Lanka.

COMMUNAL TENSION IN TRINCOMALEE - Violence between Tamils and Muslims continued in Trincomalee communities, with a number of Muslims killed in the conflict-prone Kinniya area. Villages on the outskirts of the multi-ethnic port city have been flashpoints throughout the ceasefire period and November was a particularly difficult month. At the end of the month, some calm was restored as a curfew was introduced and security forces stepped up their presence. Also, it appears that the LTTE instructed local-level cadres to take a firmer hand in putting an end to the violence.

OTI Highlights

A. Narrative Summary

November kept up the quick pace of issuing grants, with the two field offices programming eleven new grants as the Colombo offices focused on grant implementation. The Trincomalee office programmed four new grants and each of these grants contained a conflict mitigation component that reflects the office's emphasis on targeting conflict-related issues in the district. With the situation currently more stable in the Ampara/Batiicaloa area, the Ampara office continued to focus on livelihood initiatives and training opportunities as part of the OTI strategy to support tangible benefits of peace. With the highest number of open grants, the Colombo office issued no new grants, but rather focused on transporting supplies to Jaffna as OTI negotiated needed clearances through the LTTE-controlled Vanni area. A 14 truck convoy traveled to Jaffna in the middle of November without incident, paving the way for the development of new grants in the coming months.

B. November 2003 Grants Activity Summary

Program Category	Approved Grants	Total USD
Community Impact Projects	30	$904,889
Livelihoods	33	$960,682
Media and Information	14	$228,671
Conflict Mitigation	10	$78,575
Total	87	$2,172,817

C. Indicators of Success

In November OTI Ampara staff spent a day meeting Batticaloa government officials to share information about the program. Although the program still has only a small presence in Batticaloa, some government officials were already aware of OTI projects in the area. These initiatives include a three-day peace awareness workshop for local community leaders organized by the Kallar YMCA. Participants and resource persons included community leaders and university lecturers from all ethnic groups. It was the first of five awareness-raising programs that will target different community groups in Batticaloa/Ampara. OTI supports this work through provision of materials, transportation and accommodation costs and allowances for resource persons. Local LTTE representatives also commented on OTI support for this project during a November working level meeting.

During a trip to Puttalam to open four OTI projects, the USAID/Sri Lanka Mission Director and the OTI Country Representative visited the OTI-funded Pallivaasalthurai Polyclinic. The polyclinic is being constructed as a benefit of peace for thousands of displaced Muslim and the multi-ethnic host communities on Kalpitiya Peninsula. When completed, the facility will serve 728 Muslim, 93 Sinhalese and 80 Tamil families from five villages as well as 802 Muslim families which had been displaced from 11 villages. In addition to the local grantee, other partners are contributing to the project. Along with paying for equipment and operating expenses, the government is providing trained personnel to deliver previously unavailable services. The local mosque donated the land for the project. Local mothers raised money needed for electricity grid connections. A Sinhalese volunteer from an OTI project in the South is supervising the construction in this predominately Muslim area to facilitate sharing of information and experience. A multi-ethnic local workforce is constructing the polyclinic. Once completed, this building will be the first in the region owned by the Provincial Ministry of Health.

Next Steps/Immediate Priorities

In December, OTI will focus on further implementation of existing grants. OTI will also conduct a year end review of management systems in place which is expected to help strengthen operations in 2004. Given recent violence in Trincomalee, locally-based staff are discussing OTI's overall strategy in Sri Lanka as it relates to the conflict-prone environment of Trinco. During December OTI staff will also prepare for the official opening of the Ampara and Trincomalee offices by the U.S. Ambassador to Sri Lanka.

For further information, please contact:

In Sri Lanka: Justin Sherman, Sri Lanka Country Representative, jsherman@usaid.gov
In Washington, D.C.: Rachel Wax, Asia and Near East Program Manager, 202-712-1243, rwax@usaid.gov