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Regaining Sri Lanka

Apr 22, 2009

Centre for Research on Inequality, Human Security and Ethnicity has published a paper titled: The making of Sri Lanka’s post-conflict economic package and the future of the 2001-2004 peace process. It points out the impact of market reforms in destabilising the peace-building process in the country.

The making of Sri Lanka’s post-conflict economic package and the future of the 2001-2004 peace process

Publisher: Centre for Research on Inequality, Human Security and Ethnicity, January 2009

The paper starts with brief background to the genesis of the conflict between the Sinhala and the Tamil communities and the declaration of a separate state by the secessionist groups in the mid 1970s.

The emergence of the Liberation Tigers of Tamil Eelam (LTTE) as the dominant force on the Tamil side, remaining militarily undefeated, and having gained control over large parts of the north-east led to fierce battle between the government and the secessionist groups.

Many attempts by the government for a peaceful resolution to the crisis failed to bring any possible outcome. With almost two decades of continuing war and failed peace, the ceasefire agreement (CFA) of February 2002 between the government of Sri Lanka (GOSL) and Tamil Tigers gave rise to the most promising possibility for a permanent resolution till date.

Turning point

The key turning point in the peace process was the midterm election of April 2004, when the UNP-led coalition government that had signed the CFA and negotiated with the LTTE lost power.

The author in the paper brings up the question on why the government that was voted in on an explicitly pro-peace mandate in December 2001 was voted out of power just 27 months later.

The paper goes a step ahead to give a background to the origin of the peace agenda in Sri Lanka. A comparative analysis of the election outcome of the 2000, 2001 and 2004 parliamentary elections has been provided to highlight the changes in the voting pattern.

Economic policies

The document emphasises on the inappropriateness of the economic package introduced by the government that contributed to the overall failure of the peace process. It throws light on the economic crisis from the 2000-2001 period and the government’s failure in addressing the financial crisis. Although the government felt that the market reform agenda would spur rapid economic growth and buy support for the peace process, it ended up doing the very reverse.

The document explores the role of domestic actors and the international donor community in the evolution of Sri Lanka’s post-conflict economic package of 2001-2004.

In addition to the international community’s role in the peace building process in Sri Lanka, the government’s simultaneous pursuit of fiscal austerity to secure desperately needed concessionary financing from the IMF led to displeasing outcomes that disproportionately affected the rural Sinhalese poor.

Also, the heavy market-reform laden economic agenda pursued by the government led to a very narrow social constituency of support; and indeed, generated considerable opposition and hostility in Sri Lanka.

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