Economy of the Conflict Region in Sri Lanka: From Embargo to Repression

This monograph examines the nature, extent, and causes of economic and social decline in Sri Lanka's Northern and Eastern Provinces - a region that has endured civil war between the Government of Sri Lanka and the Liberation Tigers of Tamil Eelam (LTTE) for the past quarter century. Based on analysis of primary source data, the study examines the economies of Northern and Eastern Provinces by district and sector; reveals the extent of the economic devastation, social marginalization, and poverty of the conflict region; and explores the challenges of reviving the economy during the recent ceasefire period.
          The monograph shows that the single most important cause of the economic and social decline in Northern and Eastern Provinces was the economic embargo imposed by the Sri Lankan government between 1990 and 2001. Following the Ceasefire Agreement signed in February 2002, economic repression by the LTTE, including illegal tolls on vehicle traffic, customs duties, and sales taxes - along with the earlier expulsion of the entrepreneurial Muslim community - seriously impeded economic recovery before renewed hostilities broke out in December 2005 and the formal end of the ceasefire in January 2008.
          
          The Policy Studies series is published by the East-West Center. Available exclusively from ISEAS for distribution in Asia.