Money Can’t Buy Sri Lankans Peace

November 28, 2012 • Online Content, The Globalist Notebook • Views: 838

BY EMMA GOLDBERG: 

Sri Lanka topped the Lonely Planet travel publisher’s list as the best tourist destination of 2013 — a country only three years ago wracked by civil war is now a vacation hot spot. But underneath the country’s economic growth, ethnic tensions persist, giving authorities reason to worry that the nation’s rapid development is not sustainable.

Superficially, Sri Lanka seems to be flourishing despite a staggering global economy. With 17 percent growth since the war ended in 2009 and a 200 percent rise in stocks, conditions seem ideal for investment. Foreign hotels are spreading across Colombo’s seafront and the once war-ravaged Jaffna is now filled with high-tech motorbikes and cell phones. Some are claiming that Sri Lanka will be Asia’s new frontier market.

But while the government has focused its energy and funds on economic development, it has done little to heal the ethnic divisions that created the country’s 25-year civil war. President Mahinda Rajapaksa has failed to initiate reconciliation efforts between the ethnic minority Tamils in the north and the majority Sinhalese Buddhist population. Authorities have also failed to hold legitimate local elections or to implement a post-conflict justice system, so many of the issues that created the war still remain unresolved.

When looking at Colombo, Sri Lanka’s largest city and commercial as well as cultural hub, it’s hard to believe that just three years ago this country was amidst civil war. (srilanka-guide.org)

Reports by Central Bank Governor Ajith Nivard Cabraal and other financial officials in Sri Lanka suggest that the government’s strategy of focusing on financial development rather than post-war reconciliation is not an effective technique for long-term sustainability. Though Sri Lanka enjoyed a brief spurt of rapid economic growth, in recent months investors from the West have grown wary of the nation, concerned that almost four years have passed since the end of the war yet regional disputes over power and ethnic violence have continued. Moreover, reports that many of the tensions that created the war persist have driven away foreign direct investment, particularly from the West.

Sri Lanka is not the first country to drive away its foreign investors by turning a blind eye to the elephant in the room: post-war violence and lack of stability. Peru has similarly failed to attract long-term investment because the government has not found an effective way of rooting out the remaining Maoist rebels. Though military fighting in Peru ended more than a decade ago, the Shining Path rebels have maintained a financial foothold in the country through the cocaine industry. In recent years the rebels have used the industry to amass a significant amount of power and funding, making Peru the world’s largest producer of cocaine. Because the government has failed to address the very industry strengthening anti-government rebels, Peru has struggled to sustain its long-term economic growth.

If Sri Lanka wants to make its recent financial boom sustainable, it needs to take a hint from the Peruvians. Post-war economic development is not enough — it must be coupled with peace and security, achieved by resolving the issues that created the war. “Investors will come only when they see stability,” said the spokesman on economic affairs for the United Party of Sri Lanka Harsha de Silva. “The stability will come with genuine peace. There is no cohesiveness. There is no position of the government for the devolution of power,” de Silva said.

Emma Goldberg ’16 is in Saybrook College. She writes on post-conflict politics around the world. Contact her at emma.goldberg@yale.edu.

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