Creating Peace in Sri Lanka: Civil War and Reconciliation
232
Creating Peace in Sri Lanka: Civil War and Reconciliation
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Product Details
| ISBN-13: | 9780815775782 |
|---|---|
| Publisher: | Rowman & Littlefield Publishers, Inc. |
| Publication date: | 10/01/1999 |
| Series: | World Peace Foundation Study Series |
| Edition description: | New Edition |
| Pages: | 232 |
| Product dimensions: | 6.00(w) x 9.00(h) x 0.69(d) |
| Lexile: | 1530L (what's this?) |
About the Author
Read an Excerpt
Chapter One
Sri Lanka's Civil War:
From Mayhem toward
Diplomatic Resolution
Robert I. Rotberg
Sri Lanka's bloody civil war is at least sixteen years old. This book analyzes that war, the ethnic and religious antagonisms that fuel it, the political miscalculations that precipitated it, and the mistrust which permeates both battling sides. Even more, this is a book about peace, how to achieve it and keep it. It is about the consequences of peace and the post-war reconstruction of the now divided country. It is about Sri Lanka's economy and a potential peace dividend.
Peace eventually comes to divided societies riven by war. This book suggests how that peace could be encouraged and sustained, and how even societies as fractured as Sri Lanka can hope to come together and reverse the tragedies of the recent past. Yet this is a tough-minded book, not one written by Pollyannas: the myriad problems of Sri Lanka are viewed through uncompromising lenses of realism.
In mid-1999, as in the middle of most years since 1983, it was evident to observers in Sri Lanka and those outside that the army of the country had not and would not soon crush the guerrilla soldiers of the Liberation Tigers of Tamil Eelam (LTTE). The insurgency would not soon be ended, as President Chandrika Kumaratunga and her government kept assuming, by a military victory on the battlefields of the north. Despite numerical superiority, the 143,000 person government army had still not managed to gain battlefield superiority over the LTTE,whosetroops number fewer than 10,000.
In late 1998, the army tried and failed to remove the LTTE's control over the road north from Colombo and Kandy through Vavuniya to Jaffna. Despite taking the town of Mankulam from the LTTE in September, it lost a bitter battle for Kilinochchi, farther north, and took many casualties. Early in December 1998, Sri Lanka's minister of power and energy and the deputy defense minister and the chiefs of the army, navy, and air force were all ambushed in Oddusudan, in the north, but escaped a barrage of mortar fire from the LTTE. As the year ended, the army had demonstrated incapacity; the LTTE still maneuvered with relative impunity from its jungle encampments south of Jaffna, continued to harass the government at sea off the northeast coast, and remained capable of assassinating officials in Jaffna or setting off bombs as far away as Colombo. Deserters from the army were legion. In mid-1999, Sri Lanka remained at war, with no easy end in sight.
The official army is weak strategically, poorly led, poorly paid, demoralized by danger and sustained lack of success, and allegedly riddled with corruption. Strategically, its major handicap is a scarcity of intelligence about the enemy. It has few resources for gathering intelligence, few Tamils to do it, and very few trained analysts of the intelligence that is gathered. So the Sri Lankan army fights a committed, even fanatic, cadre of guerillas with overwhelming numbers but with insufficient training, knowledge, and motivation.
When Lieutenant General Srilal Weerasoriya assumed command of the army at the end of 1998, he acknowledged the failure to win the battle of Kilinochchi but he still believed that the LTTE was "on the run." It was possible to conquer the LTTE, he declared, but doing so would take time. The military objective was to "defeat them as a militant force." He also said that discipline in the army was essential. "I have certain standards and I'll enforce them. I'm not saying there is corruption. But if there are culprits they will be dealt with."
The LTTE is well funded for a small-scale, comparatively beleaguered insurgent operation. A movement of militant Tamils led by Velupillai Prabhakaran, a young, effective, charismatic, and obsessed commander, the LTTE is supported by the wealth and cunning of the worldwide Tamil diaspora. The LTTE seems to have easy access to arms and ammunition, even for its tiny navy.
When government forces in 1995 finally ousted the LTTE from Jaffna town and the Jaffna peninsula, which the guerrillas had controlled since 1990, the end of war seemed inevitable. But the LTTE regrouped in the jungle north of Vavuniya. Its operatives have managed ever since to prevent the government from resupplying Jaffna overland and have made contact by sea hazardous north of Trincomalee. The LTTE also managed to infiltrate a truckload of explosives into the heart of Colombo's financial and ministerial district in 1996, damaging tall buildings and killing and wounding more than 1,000 passersby. In 1998, LTTE suicide bombers destroyed part of the revered Buddhist Temple of the Tooth in Kandy and, subsequently, an area near the Colombo railway station.
The Kumaratunga administration went back to war against the LTTE in 1995 only reluctantly, after its peace overtures had been rebuffed. There had been several detentes and some talks about talks, if no serious negotiations, even before President Kumaratunga won the 1994 election and her People's Alliance (PA) gained a plurality of seats in parliament. During her campaign, she promised to seek peace and forge a workable compact with the LTTE. But the LTTE had never been consulted and was not pleased by the president's envoys, as Teresita C. Schaffer and William Weisberg and Donna Hicks discuss in this book. For strategic reasons also, the LTTE abruptly breached the government's unilateral ceasefire, and the war began again. President Kumaratunga felt doublecrossed and her military commanders felt vindicated in their suspicion of Prabhakaran.
In late 1998, in the wake of the LTTE's signal victory at Kilinochchi, peace overtures again were made. But this time, surprisingly, they were initiated by the LTTE. That was a new and major development. In late October, the LTTE unexpectedly released government soldiers and merchant seamen who had been held as hostages for up to five years. It appeared that this "goodwill gesture" indicated a desire to talk about peace for the first time since 1994. The government indicated its willingness to consider discussions facilitated by a third party. Then President Kumaratunga said she was ready for conditional talks: "Our government believes in a negotiated political settlement for the ethnic crisis. But we cannot rush to talks with the LTTE."
In late November, Prabhakaran publicly called for peace talks with the help of a foreign mediator. He rejected preconditions and asked for a ceasefire.
"The Tamils only want to live with dignity and peace in their homelands without any interference. We have every right to decide our own political destiny," said the LTTE leader. "On that basis we prefer to have a political agenda which could lead us to self-ruling." Moreover, in asking for third-party talks without any preconditions, he declared that the government had failed to destroy the LTTE on the battlefield. The LTTE remained formidable, he declared in a radio broadcast.
Both sides, in other words, had provided openings for talks about talks, or so it seemed. Admittedly, the LTTE had used similar tactics before to gain propagandistic and public relations advantages. And this time the LTTE may merely have been celebrating its survival as an insurgent force. In Prabhakaran's broadcast there was no mention of the constitutional reform package proposed by the government in 1997 (and discussed critically in this book by Rohan Edrisinha). Indeed, in 1998 the possibility of a peaceful resolution of the long-stalemated civil war was more tangible than it had been since 1994. But that did not mean that any conceptual breakthroughs had been achieved. Nor were the sides exhausted, drained economically, or otherwise being forced to the bargaining table. Instead, there was a wariness of traps and a meaningful mutual distrust of motives. The ambushing of the ministers and chiefs of staff, moreover, and the sinking of a navy ship in December, seemed to presage more combat rather than broadening discussions about a peaceful end to the conflict. In July, 1999, a suicide bomber blew up one of the moderate contributors to this book. A few days later, in August, LTTE bombers killed soldiers and civilians in Vavuniya. Shortly thereafter, the LTTE assassinated soldiers and civilians in Batticaloa. Chris Smith's chapter on the war provides detailed accounting of the failed military effort, the LTTE, and military capabilities, and a pessimistic assessment of the possibility of victory—by either side—on the battlefield. Jayadeva Uyangoda's equally pessimistic chapter about the war, and ending it, reflects a profound contemporary reality.
Roots of the Conflict
Although ethnic accommodation is a dominant theme throughout Sri Lanka's history, the taproots of discord reach equally deeply into the fearful soil of past discord. Resentments, remembered slights, perceived fears of the other, and the dangerous awareness of envy were never far from the surface, belying the Buddhist calm that otherwise seemed to pervade the serendipitous isle. The brutal race riots of 1915 punctuated that tranquility, and from time to time there were other, less explosive manifestations of ethnic and religious tension. But colonial rule largely contained whatever discontent there was until World War II, and the threat of a Japanese invasion, began to alter political circumstances in Sri Lanka (Ceylon), as in most of the rest of South and Southeast Asia.
The transition from colonial rule to independence may be easier to manage in conditions of great plurality and diversity, or where the population is nearly homogenous. But within Sri Lanka's population of 18 million, the Tamil minority is sufficiently sizable to pose a potential threat, not in reality, but in perception, to the Sinhala majority. (The fact that there are 55 million Tamils in Tamil Nadu, across the narrow Palk Strait, is a further consideration.) About 74 percent of all Sri Lankans are Sinhala and 18 percent Tamil, 12 percent Sri Lankan Tamils, and 6 percent Upcountry or Estate Tamils. The latter are descendants of immigrants from India (within the last century). Both of those groups primarily profess Hinduism. In addition, 7 percent of the national total are Tamils who are Muslims. There are a comparatively small number of Sinhala Christians, Anglo-Sri Lankans, and descendants of Dutch and Portuguese settlers.
For many decades, until the disturbances of the last few decades, Sinhala and Tamil homesteads were intermixed in the countryside, with many more Tamils in the north and east and very few Tamils in the south and west. But the cities, especially Colombo, were heterogeneous in numbers and settlement. Yet Sinhala and Tamil are differentiated by tradition, heritage, language, religion, and color—a powerful cocktail of differentiation. They were distinguished, too, by the extent to which Tamils took proportionally greater advantage of the colonial dispensation, with its connections to the Western world of commerce, professional opportunity, and governmental service. Within the largely agricultural and rural nation that emerged from British colonial rule, with thriving civil service, military, and commercial establishments, Tamils were more prominent and in greater number than predicted by their population percentages. They seemed to have been more aware than Sinhala of the relevance of educational achievement, although the Upcountry Tamils largely remained poor workers on British-owned tea estates.
Sri Lanka's civil war is not immediately about ethnic, linguistic, and religious differences. Yet, as David Little's chapter makes clear, the nationalism of the majority, led in part by Buddhist monks, and the countervailing nationalism of the minority, is an entanglement of religious and ethnic loyalty. "Ethnic and linguistic identity are profoundly important in distinguishing the two sides." The war is not about converts in the religious sense, but it is about those perceived attributes which separate one people's practices and dress from the other, and which make individuals as well as groups aware of who they are and what they represent.
Elections also do that. Indeed, elections in post-independence democracies have had the tendency to sharpen whatever edges had been smoothed over or neglected during the non-competitive colonial period. In Sri Lanka, because of the standard British parliamentary single-member-district plurality, first-past-the-post, winner-take-all method of election (as opposed to some form of proportional representation), national political hegemony shortly after independence was equated with hegemony among the Sinhalese electorate. Voting numbers and their distribution mandated that result; absent extraordinary statesmanship, the understandings and protections that Tamils (and the British) thought had been arrived at in 1948, and in the 1948 constitution, were soon seen to be inadequate. Sinhala nationalism was too strong, and the leverage of Tamils (without a complicated cross-voting requirement, or some similar arrangement) too weak.
Because it was a relatively prosperous and peaceful, multi-ethnic independent nation (especially as compared to neighboring India and to Pakistan), Sri Lanka had been intended by its outgoing colonial rulers and its incoming indigenous leaders to become a model new state. But the gentle aura of the island was soon shaken. The 1948 constitution, written with little Tamil input and large amounts of wishful good feeling, lacked a bill of rights like India's or anything resembling effective formal protection for minorities. Within a year, the majority government deprived Upcountry Tamils of citizenship and the right to vote. Half of the Upcountry Tamils were forcibly repatriated to Tamil Nadu, primarily to give Sinhala candidates in the tea-estate area easier electoral victories.
In 1956, after several uneasy years, Solomon West Ridgeway D. Bandaranaike won a closely contested election by appealing to Sinhala chauvinism and Buddhist revivalism. Without a Sinhalese-only policy, Bandaranaike campaigned, the Sinhalese "race, religion, and culture would vanish." After becoming prime minister, he quickly introduced the pernicious Official Language Act of 1956. It declared Sinhala (in place of English) the country's official language, thus delegitimizing the Sri Lankan status of middle-class Tamils. Bandaranaike also closed the country's main teacher training college to Tamils. After Bandaranaike's assassination in 1959 he was succeeded as prime minister by Sirimavo, his wife. She was as ruthless as he in pursuing policies that were inimical to Tamils and injurious to the once vaunted ethnic harmony of the island. Mrs. Bandaranaike promoted Buddhism and Buddhists in Sri Lanka's public life. She made their primacy in politics a hard reality.
Pandering to Sinhala nationalism and legislatively restricting Tamil accomplishments had the practical results that the Bandaranaikes intended. Sinhala-speakers became more and more numerically preponderant in the civil service. From 1956 to 1970, the proportions of Tamils employed by the state fell from 60 to 10 percent in the professions, from 30 to 5 percent in the administrative service, from 50 to 5 percent in the clerical service, and from 40 to 1 percent in the armed forces.
The successful limiting of Tamil aspirations was compounded in 1972 when the radical populist United Front (UF), consisting of Mrs. Bandaranaike's party and Trotskyites and communists, legislatively imposed strict quotas on Tamils in higher education. The number of Tamil-speakers attending Sri Lanka's traditional multi-ethnic universities also fell dramatically, and, as in South Africa at about the same time, the government was compelled to open ethnically specific universifies in the north. Separation, in neither case, was truly equal.
The swelling chorus of demands by Tamils for some measure of autonomy, other protests (not least the riots of 1956), and intensive political negotiations led S. W. R. D. Bandaranaike in 1958 to grant significant home rule prerogatives to Tamils in the northern and eastern provinces. He promised to recognize Tamil as the administrative language in both provinces, to transfer taxing and other important fiscal powers, and to find further ways to assuage Tamil anxieties. Alas for the harmonious future of Sri Lanka, this major accommodation of Tamil political and economic aspirations fell afoul of party competition within the Sinhala community. Buddhist clergy protested vociferously. The United National Party (UNP), led by Junius Richard Jayawardene, campaigned against Bandaranaike's bargains with the Tamils. There were widespread racial riots, with hundreds of deaths. About 10,000 Tamils lost their homes and were evacuated to Jaffna. Bandaranaike called out the army, declared a state of emergency, and withdrew his grants of autonomy.
There was at least one partially positive result of the riots. The 1958 Tamil Language Act provided for the "reasonable" use of Tamil in the northern and eastern provinces and in the national government. It was approved by parliament. But no implementing regulations were ever promulgated. The act thus languished, becoming one among many Sinhala promises that Tamils could point to as being unkept. Likewise, in the 1960s, a promise to create district councils where Tamils would have effective authority was also breached. Later, too, as a result of the interventionist economic policies of successive Sri Lankan governments, the country became more and more centralized. The realization of any semblance of autonomy for Tamil-speaking sections of the nation receded farther and farther into the distance, even with some modest improvements at the beginning of the 1980s.
By this time Sri Lankan society had become irredeemably polarized, and a youthful secessionist movement (the LTTE) prominent. Direct intimidation of the Tamil minority was condoned, even orchestrated, by the Sinhala-responsive governments of the day. There was ethnically inspired violence in 1977 and 1981, led by Sinhala thugs with voter registration lists. The 1983 communal riots followed, making 100,000 Tamils homeless in Colombo and 175,000 elsewhere in the country. Thousands were killed.
Competing Nationalisms
Sri Lanka's civil war is fueled by competing conceptions of nationalism. Sinhala patriots view Sri Lanka as a sacred island where Buddhists have a responsibility to preserve Buddhism and conjoined concepts of race, land, and nation. Tamil nationalism has responded directly to Sinhala expressions of chauvinism. The demand for autonomy arose as a counter to the attacks of both Bandaranaikes, to promises unfulfilled, and to continued majoritarian attacks on minority prerogatives and aspirations. The LTTE is a separatist enterprise; other Tamils, likely the overwhelming majority of Tamils, will settle for home role in the north and east. They have largely lost faith in Sinhala guarantees, so a future within a unitary state to them appears more and more precarious.
In 1976, the Tamil United Liberation Front (TULF) initiated the call for a separate Tamil state, albeit to be achieved constitutionally. Two years later, in 1978, young Tamils broke away from their democratically minded elders and took up arms against the state as the LTTE. Prabhakaran was 18, and a militant bomb-thrower from a town of seafarers and smugglers in the north. His LTTE was but one of several increasingly militant Tamil insurgent entities.
The LTTE's battle for secession has been unremitting since 1983, except for the ceasefires of 1989-90 and 1994. The LTTE has employed conventional guerrilla strategies, terrorism against civilians, assassination of Sri Lankan and Indian political leaders (including Prime Minister Rajiv Gandhi), assassination of local Tamil (non-LTTE) leaders, bombing of symbolic and military targets, hit and run raids, and almost anything that could help impress its supporters and antagonists.
Throughout the 1980s, the LTTE constructed a formidable apparatus of war. Drawing support at first from marginalized Tamils in the north, and then from the innumerable Tamils who fled the south to escape Sinhala-perpetrated mayhem, the LTTE in the 1980s struck boldly at the ill-prepared defense forces of the once bucolic country. It terrorized Sinhala governments and Tamil-speaking moderates. It killed those who stood in its way. And it carved out a swath of territory in the north, including the Jaffna peninsula, over which Prabhakaran's rule was complete.
Although most local Tamils gave no overt support to the LTTE, they were sympathetic to its goals, if not its methods. Financial backing came with ease from those Tamils who fled Sri Lanka in the 1970s and 1980s for India, Malaysia, Britain, France, Germany, Italy, Canada, and the United States. Despite international surveillance, despite South Africa's assurances that it would give no succor to the LTTE, and despite a United States declaration that the LTTE operatives were terrorists, the LTTE continued throughout 1998 to smuggle arms and import cash almost at will. The LTTE's military tactics and intelligence are formidable, and a clear match for the rather feeble information-gathering facilities of the Sri Lankan Defence Force. The latter is denied most intelligence-gathering assistance from more technologically capable powers—India, Britain, and the United States.
The protracted civil war in Sri Lanka has had profound regional consequences, particularly affecting the island's relations with India. In addition to the forced repatriation of Upcountry Tamils, there was an outpouring of refugees across the Palk Strait, to Tamil Nadu. These movements of mostly bedraggled Sinhalese Tamils served as a pretext for the bitterly controversial but officially arranged military intervention by Indians in northern Sri Lanka in 1987. Indian politicians (led by Rajiv Gandhi) and most Indian senior soldiers assumed that their well-trained, numerous troops could readily contain the Tamil insurgency and knock Prabhakaran and his associates to their senses.
But determined guerrillas often have surprisingly deep reservoirs of support and strength. The Indo-Sri Lanka Accords of 1987, forged between the two governments with only an eleventh-hour offer to the LTTE for its views, led to the introduction of the Indian Peace Keeping Force about which Chris Smith writes in detail in his chapter. It was charged with disarming the LTTE and other militant Tamils and restoring the rule of law. But deploying massive force was to no avail. Although the Indian troops were able to marginalize the effectiveness of the LTTE, the Indian incursion aroused renewed Sinhala nationalism in the south. That nationalism was fueled by rumors and fears of an Indian assault on the entire island, not just the difficulties in the north. Then, too, the government of Sri Lanka undercut its own efforts to oppose the LTTE. Alarmed by hostile reactions in the south and the threat of renewed violence there, the government covertly gave arms to the LTTE to attack the Indian peace enforcers. The government, fueled by the chauvinistic forces it had itself unleashed, sabotaged the accords and its own desire to crush the LTTE. The Indian army withdrew in 1990, leaving the LTTE in de facto control of Sri Lanka's north and east, including Jaffna. There the LTTE established its political headquarters.
In that year, the LTTE broke off peace talks, renounced a ceasefire, and declared Eelam War II—its renewed all-out attempt to free the north from the Sinhalese yoke. The government responded with equal determination and force. Using counter-terrorist tactics that had within the last year effectively ended an armed revolt in the south led by the Janatha Vimukthi Peramuna (JVP), or People's Liberation Front, a Sinhala youth movement, government troops attempted to overwhelm the numerically weaker LTTE. Exemplary killings and officially-sponsored death squads—methods which had proved effective against the JVP—were widely employed against the LTTE. So were scorched earth methods in the countryside, thoroughgoing denials of human rights in the north and east, and assaults by sea and air. But these tactics emboldened the LTTE and solidified its tight control of Jaffna and its periphery as far south as Trincomalee and Vavuniya.
The voters of Sri Lanka finally demonstrated their displeasure at this sorry turn of events, and possibly at the repressive human rights records of successive governments. In 1994, after seventeen years in opposition, the People's Alliance coalition, led by Kumaratunga, swept to power. Her seemingly sincere platform of peace and meaningful constitutional reform swayed the voters. Although the daughter of two high-handed prime ministers of Sri Lanka—Solomon and Sirimavo Bandaranaike—she seemed cut from a much more modern cloth. Sri Lanka had been consumed by war. Peace was the better path.
Within two months of President Kumaratunga's inauguration early in 1995, her government initiated peace talks with the LTTE and declared a unilateral ceasefire. Constitutional reform was at the heart of her pursuit of peace. She and others in her government recognized that shifting some power to Tamils was essential. Yet her devolutionary proposals, released in 1997, only crept up (as Edrisinha's chapter makes abundantly clear) to the edge of autonomy. Insofar as the devolutionary propositions were fully articulated by the end of 1998, they stopped far short of separation, and even far short of transferring what most Tamils might recognize as sufficient power to run regions or provinces without too much interference from the central government.
The LTTE had not been consulted about devolution. The government and the LTTE talked in a desultory way for three months in 1995. Then the LTTE, having used those months to regroup and rearm, attacked military establishments and broke off the preliminary negotiations. This was the start of Eelam War III. The army retaliated with a campaign to end all campaigns. In 1995 and 1996, after rapidly sweeping the LTTE out of the Jaffna peninsula, the government offensive bogged down. In late 1997 and the first quarter of 1998, the LTTE managed to attack government naval patrols, arrange three major bombings, and keep control, at least at night, of the thinly populated coastline north of Trincomalee and the northern interior either side of the main road from Vavuniya to Jaffna.
Just as the government's forces were congratulating themselves anew in late 1998 on finally overcoming the LTTE's long-seeming invulnerability, there were new setbacks on the southern edges of the Jaffna peninsula, assassinations within the town, and ambushes of senior officials. The war continued harshly into 1999, with the signal, admittedly defensive, victories of the LTTE in late 1998 demonstrating the limitations of the army's most recent exertions.
The Wages of War
In addition to the loss of more than 60,000 Sri Lankan lives, the ongoing civil war has cost the country untold millions of rupees. Saman Kelegama's chapter in this volume outlines the war's enormous economic cost "in terms of lost productivity, lost investment, and misallocated resources." Overall, the result of the sixteen or so years of war has been a reduced standard of living, reduced levels of foreign investment, falls in tourist numbers and expenditures, drastic slippages in the production of food and export crops in the north and east, declining fish catches, and the loss of 2 or 3 percentage points of GDP growth for a decade. Infrastructural damage is an additional cost.
Kelegama estimates that the loss to Sri Lanka of the war is, in terms of output forgone, about $12 billion through 1994, with a significant addition since then. Physical damage adds another $1 billion, and tourist income never achieved adds a further $2.6 billion. Rehabilitation costs—the settlement of displaced persons—may amount to $0.5 billion. (Darini Rasjasingham-Senanayake's chapter discusses the human, social, and political costs of displaced persons, resettled villages and villagers, and the consequences of what she calls a dirty war.) Defense expenditures alone, an obvious drag on economic performance, grew from 3.5 percent of GDP in 1985 to 5.4 percent of GDP in 1995. They now account for nearly 6 percent of GDP, about double the average defense expenditures as a percentage of GDP of developing countries.
Given the unremitting war, and given the arresting calculations provided by Kelegama, it is a wonder that Sri Lanka has performed as well economically as it has. Donald Snodgrass, in his chapter in this book, calculates that from 1994 to 1997, Sri Lanka's economy grew at an annual rate of 5.5 percent. Over the period from 1983 through 1995, Sri Lanka's real GDP grew at an average annual rate of 4.1 percent, more than double its rate of population increase. As a result, Sri Lanka experienced significant economic growth, not at the rapid rates of the Asian tiger economies, but at a respectable 2.6 percent level (GDP growth minus population growth). Indeed, since the low-growth controlled-economy period of the 1970s and 1980s, when Sri Lanka was governed by a coalition including communists and Trotskyites, and when central direction was in vogue, Sri Lanka has benefited from the economic liberalization that began in 1977 and has gradually been continued and extended by the Kumaratunga administration.
Since 1995, budget deficits have been reduced from 10 percent of GDP to appreciably lower levels. Privatizing state-controlled loss-making operations and industries, honoring a flexible exchange rate, and pursuing an open trade regime have helped as well. But of greatest significance has been the creation of export processing zones. Like in Malaysia, Taiwan, Mauritius, and other countries, the existence of these zones, and Sri Lanka's favorable treatment of the companies that manufacture in the zones, has meant a major shift in Sri Lanka's merchandise exports from primary commodities to manufactures, especially textiles. That shift has fueled much of Sri Lanka's growth in this decade, despite the war and despite a previous decade of policies largely inimical to productivity.
Sri Lanka is in fact poised for steady growth if and when peace breaks out, defense expenditures are reduced, and the export-driven prosperity in the south of the country is free to spread to the north. Few countries have managed as well as Sri Lanka to prosecute a desperate local war while liberalizing the economy and turning itself into a significant exporter of clothing. A peace dividend would be welcome for its social benefits and presumed budgetary advantages. But a sustainable peace would also permit Sri Lankans to focus on further growth in the manufacturing and agricultural sectors, thus on job creation and on improvements in the provision of education, medical, and other human services to a population long deprived of such advances.
Whereas Sri Lanka once led much of Asia in social indicators, its comparatively long period of slow economic improvement at a time when other countries in Asia were growing much more rapidly has considerably reduced the gap between the high initial performance of Sri Lanka and other Asian nations like Korea, Indonesia, and Malaysia in terms of life expectancy, infant mortality, average years of schooling, and other critical social indicators. In education alone, Chandra de Silva's chapter describes the devastating impact of the war on learning, especially in the northeast but throughout the country. Teacher-pupil ratios have worsened, buildings have deteriorated, classrooms have been disrupted, and supervision has become very limited. The quality of Upcountry Tamil schooling has also worsened, with 86 percent of Upcountry Tamils now receiving less than five years of instruction. Tamil higher educational attainments have suffered, too, primarily because of the district quotas introduced under the first Prime Minister Bandaranaike.