By Easwaran Rutnam The US dismissed various conspiracy theories which were circulating following the Easter Sunday attacks where rumours circulated over US involvement. In a wide-ranging interview with The Sunday Morning, US Ambassador to Sri Lanka Alaina Teplitz spoke on concerns being raised over Chinese funding to Sri Lanka, human rights, accountability, and inconsistent policies which may deter some US investors. US relations with Sri Lanka improved drastically in 2015, but there is a feeling that since recently, it has been on a downward trend. Where do you see the relationship between both countries at this point? We just passed our 70th anniversary of bilateral relations. It is a longstanding friendship between our two countries. I look at this and think of this not just for this year and next year, but for the next 70 years. To put this into context, this is not a short-term relationship. Of course, we will have moments of agreement and moments of disagreement. I see a growing partnership for us in the future being cemented around some key areas in particular. The first is our economic and business ties. I’d like to see greater business connectivity, more US investment, and more opportunities for partnership. We believe that a strong sovereign Sri Lanka with a growing economy is not only a great contributor for the people here and in the region, but globally too. It helps up the game for everybody. I also think we have a lot of common security interests and some challenges in the Indian Ocean. Partnerships are absolutely required to address them. For example, piracy; combating piracy, addressing challenges like smuggling and human trafficking, and looking at terrorism. How do we counter the terror threat? It's a global issue and therefore requires countries to co-operate. That requires good information sharing which requires a degree of collaboration that I hope we can continue to grow. We also have, I think, common interests around our democracies to grand democratic societies ensuring that our democratic institutions remain strong and durable. I think it’s very critical. And of course as Americans, we share with many Sri Lankans the value of civic space including the media and ensuring that there is professionalism and good investigative practices, making sure that people's civil liberties and human rights are respected. These are things that we value, and we know there are many Sri Lankans who share this view as well. So we want to continue working on those things. There are lots of areas of common interest and I think our strongest partnerships with countries in the region are where we have these shared values. How important is the upcoming election in Sri Lanka for the US? Are there concerns a change of government could result in a change of Sri Lanka’s foreign policy towards the US? Well, I want to emphasise that we have an interest in the democratic process and having a strong process. So in that sense, regular elections are very important because that's what your Constitution says needs to happen and of course, we have regular elections in our own country. These are important moments for people to express their will. And in that sense, the people of Sri Lanka are the ones who are going to vote. Come 16 November, who's going to choose the next government? It's not the US, it's going to be the people of Sri Lanka, and we will work with any government that emerges from the election process. We don't have a candidate in this. We maintain contacts with politicians across the political spectrum. We would of course like to see some policy continuity on issues that are important to us, but again, we know that when governments change, they come with different priorities and we will find a way to maintain our connectivity. You had met Sri Lanka Podujana Peramuna (SLPP) Leader Mahinda Rajapaksa recently. What are you hearing from them on the policy they will follow with the US in the event they come to power? I met the former President as the Leader of the Joint Opposition; I had a chance to talk with him. We had very cordial meetings and discussions. I always welcome the opportunity to express the policies of my Government and here, the priorities of others. I don't think that we will have an issue working with an SLPP government any more than we'd have working with a UNP government or a government led by any other party or coalition. As I said earlier, sometimes we don't agree. In the many times we do agree, we want to pursue areas of common interest and want to be able to have an open and honest dialogue about those things that we don't agree on. So at least, we can be clear and understand one another and maybe move forward to address issues of mutual concern. There has been a lot said and reported on the citizenship issue of SLPP presidential candidate Gotabaya Rajapaksa. Is he still a US citizen? US privacy laws prevent me from being able to discuss his case or any other individual case specifically. I'll just say that citizenship renunciation is an administrative process. It's very clearly defined. It's got a clear start, clear finish, and is very straightforward. The US was heavily involved with the human rights issue in Sri Lanka when the US was in the UN Human Rights Council. After the US withdrew from the Council, has that push on Sri Lanka’s human rights issue taken a backseat? No, is the short answer to that. From our perspective, the Government of Sri Lanka made a commitment to the people of Sri Lanka about post-conflict issues, accountability, truth-seeking, and reconciliation and it’s those commitments that we continue to support. It’s the Government's commitment to its people. We really endorse the Government having made those commitments and are doing all we can to help them fulfil them. But are you satisfied with the progress made on those commitments? Progress has been slow. I think we can't fail to notice that the expectations were higher and that there could be more accomplished by this point in time, given that several years have passed. I understand, however, that these are very complex issues that need to be addressed. There are issues that centre on human beings and what they think and want. And so, we've got to be patient in that regard. But I do hope that the institutions that have been established, like the Office of Missing Persons for example, the reparations commission (Office for Reparations), can grow, that they can take on their mandate and fulfil the needs of the people that they were designed to serve. We would like to see that move faster. Because I think there is real value in being able to deliver for people who suffered as a result of conflict. There have also been concerns about certain military appointments, promotions, and so on. Is this something that you have taken up formally with the Sri Lankan Government and would this have some sort of impact on military ties? Of course, my job is to express the policy views of my Government. So I have publicly and privately expressed the view of our Government that we are concerned about Sri Lanka's reputation and the impact on commitments its Government has made with regard to human rights and redressing grievances of the past with the appointment of (Lieutenant) General Shavendra Silva. We obviously reserve the right to express our views. Because that's what we're here to do – represent our Government – we do have concerns. There are credible allegations of human rights violations. There has not been a process to adjudicate those allegations, no process of accountability. The allegations are there and they have been very well documented by the UN and other organisations. We can't ignore that it is out there in the public record. Does the US have concerns over China’s presence in Sri Lanka? It seems China will be more involved in Sri Lanka over the next few years. Well, I would hope that Sri Lanka has many partners and partnerships and I would think that a relationship with China is a natural one, given the long history and ties, just like there is that natural relationship with the US over our long history too. What concerns the US is not China per se or Chinese investment, but rather the nature of that investment. It's the nature of the relationship. Does it deliver value for the people of Sri Lanka or is it going to cause harm? Is it creating a mortgage for the future? Does it create vulnerabilities, because when there is debt there is obligation or is there no opportunity for the Sri Lankans, for example, to work on projects or to benefit from special arrangements? So I think those are the questions that we have out there. And I'd say, try to uphold a very high standard with regard, particularly, to development relationships and programmes and financing. Also in our business activities, we believe in transparency. We have laws against corrupt practices and we hold our businesses to really high standards and account. With countries that don't do that, you have to wonder what's going on behind the scenes and who is really benefiting from those relationships. But I recall the former Government once saying that when they were urgently in need of funds, no one but China offered financial assistance. Has the US given enough financial assistance to us in order for us not to depend on China? We have been longstanding development partners of Sri Lanka and contributed to pretty important milestones here like eliminating malaria, handling malnutrition, and a number of other projects over many years. So that's some of the assistance we passed. Today, we have focused mostly on technical capacity building, helping people learn new skills, and helping strengthen institutions. But we do have a programme that we have been discussing with the Government and have proposed and hope that it can move forward. That's the Millennium Challenge Corporation (MCC) compact or development agreement. It is to provide a grant – not a loan – a gift of almost half a billion US dollars for a defined programme; a programme to fund a set of projects that relate to transportation infrastructure and land administration systems. All of these projects have been identified by the Government and by stakeholders outside of the Government. So the business community, even academics who have been studying transportation problems for example, have highlighted the need to address certain barriers to further development. So this programme proposal is with the Government. I hope it's something that we can finalise. It's definitely something that would benefit Sri Lanka because, of course, it's a grant. There's no obligation, there's no interest, there's no loan, and there's no repayment. It's meant to help the country prosper and to ensure, in fact, that that prosperity is also inclusive so that people benefit, not just those with special interest or big companies, but everyday people. So did Sri Lanka agree to accept the MCC grant? We have not signed the agreement. I want to emphasise that this is a development assistance agreement for a defined programme just like the Government of Sri Lanka might negotiate with the World Bank for a defined project or programme. That's exactly the same thing that we have on the table here. So it hasn't been finalised. I hope it can be finalised soon because the World Bank has designated Sri Lanka as an upper middle-income country. And that is an ineligibility criteria for this programme. We have been negotiating this agreement. It has been talked about for almost a decade and a half. So we are finally at the point where we have shaped the scope of work of the programme. We have co-ordinated with everybody and it is ready to be signed. And now, this designation has come. And so there will be a point at which we can no longer offer the programme because of the designation and I think you know it would be important, because the development needs in Sri Lanka are real. There are a lot of other countries that also have serious development needs and there is not enough either bilateral or multilateral financing or grant funds available to meet all of these needs. So I think as a gift from the American people, this is something that can make a very significant difference here. If Sri Lanka does not sign the deal soon, will these funds not be available for us later? That’s right. It can no longer be an open-ended negotiation. The MCC is not a private corporation; it is a US Government development assistance agency. It operates sort of on private sector lines and it has a board of directors and the board meets every quarter and reviews the portfolio of development agreements. It met on Wednesday (last week) and it will meet again in December. And of course, as they review their portfolio, they are going to review this agreement. There was no particular timeline other than, of course, wanting to be able to start on projects that we think can really deliver for the people here. But now, there is more time pressure because of this designation; the eligibility status. The Easter Sunday attacks put some focus on the US with rumours spreading related to a Federal Bureau of Investigation (FBI) presence here. There were strong rumours of US military officers being in Sri Lanka at the time. Some even accused the US of being involved in some way with the attacks. After the attacks, the Government of Sri Lanka requested help from the US to support the Sri Lankan investigation into the attacks. As a good partner, we responded and offered support from the FBI and the US military to conduct the investigation. So we have done that. The support is through the FBI. The military's power really wasn't required. And so we continue to provide that support. Everything that we learn is passed on to Sri Lankan law enforcement authorities. So I think it has been a very good partnership and I hope it will lead to the conviction of any perpetrators who are still alive. How do you see the investment opportunities in Sri Lanka for American businesses? Concerns have been raised in the past over inconsistent policies which deter some investors. Sri Lanka is not the easiest business environment and so investors are looking for improvements. I know that some improvements have been made over the last couple of years, but still more can be done. There is room to grow and I admit that one thing that investors do talk about is exactly what you raised – policy consistency. Not that regulations can't change, but if they're going to change, it should happen in a measured way through consultation, allowing the industry a chance to respond. And I think that investors want to see that kind of consistency because obviously, that impacts their bottom line. They don't want capricious rule making. They want to know there's a deliberate process and that they'll have a chance to adjust to whatever final rules are put forward. US businesses understand regulation, so that's not an issue; the issue is just doing so in a measured and deliberate way. I think investors also want to be assured that their contracts will be fully enforced and that the rule of law is strong. Also the elimination of other barriers, i.e. being able to register your business and being able to import inputs for your business – basically red tape issues. These exist in all countries. I think investors would say that in Sri Lanka there might be more than a fair share of red tape, and those are the kinds of things that can continue to be improved upon. I would say many investors comment about the labour environment and labour laws. Some of the laws on the books are quite old and need to be revised for a modern 21st-Century economy. And I know the Government has been working on that and I think that would be a positive step forward. Of course, there is some great talent here in Sri Lanka and being able to take advantage of the skills and the expertise that people here have developed is something businesses look forward to doing. Hopefully, Sri Lankans want to stay here and work for these businesses, whether it's in the tech sector or manufacturing or wherever. And what opportunities are there for Sri Lankans in the US? In fact, we welcome investment from Sri Lankan businesses in the US. We are active in trying to court that investment in the US. It's not just an issue of the central government or the federal government, but states and individual states also court investment. We look forward to receiving investment in any sector.