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Past Analysis
Poverty and Civil War in Sri Lanka
Aingkaran Kugathasan
February 27, 2012
Aingkaran Kugathasan details the multi-faceted impact of Sri Lanka's decades-long civil conflict on poverty, emphasizing the role of ethnic relations, migration and public policy in addressing socioeconomic challenges in the post-conflict period.

Sri Lanka has a record of solid and consistent economic performance. However, in recent decades, there is evidence that the economy has been slowly running out of steam due to the country’s disastrous civil war, which was brought to an end in 2009 through non-peaceful means. The ethnicized conflict was embedded in, as well as an expression of, existing social, political, economic and cultural structures. The thirty-year brutal war has had a devastating effect on all ethnic groups, causing widespread misery including displacement, loss of property, injury, death and the fragmentation of communities. This study seeks to understand how the conflict between the Government of Sri Lanka (GOSL) and the Liberation Tigers of Tamil Eelam (L.T.T.E) has affected the livelihood of local communities, seeking answers to the question of how poverty can be reduced in these war-torn zones.Widows and children of deceased fighters in Sri Lanka. Photo:

Conflict history

It is necessary to be aware of the history of the Sri Lankan conflict to understand the dynamic of the topic. Sri Lanka is home to a plurality of people: Sinhalese, Tamils, Moors, Malays and Burghers.[1] Unfortunately, successive governments have failed to recognize this cultural and ethnic heterogeneity in their nation-building and development policies and have, in practice and in Constitutional Law, favored the majority community while denying equality to the other communities, which has resulted in ethnic conflict. The civil war is an outcome of how modern ethnic identities have been made and re-made since the colonial period[2], with the political struggle between minority Tamils and the Sinhala-dominant government, accompanied by rhetorical wars over archeological sites, place name etymologies, and the political use of the national past.[3]

Though Sri Lanka has had several conflicts, the conflict between the GOSL and LTTE has severely affected the population’s ability to move beyond poverty in various ways. The armed conflict between the GOSL and LTTE began in 1983. Most of the fighting and war-related destruction occurred in the North and East of Sri Lanka, while other parts of the country remained free from the direct hits of that disastrous war. The geographical basis of the armed conflict is typically understood in terms of ethnicity-based population distribution in the country. The civil war in Sri Lanka is characteristically understood as an ‘ethnic war’, and it is important to understand the nexus between ethnicity and conflict in Sri Lanka. There are two contrasting views about the nature and indeed the genesis of the Northeast conflict in Sri Lanka. The first view treats it as primarily an identity struggle between the Sri Lankan state on the one hand, controlled by a Sinhala Buddhist majority seeking to establish and retain hegemony over the whole of Sri Lanka, and a section of the Sri Lanka Tamil minority on the other, resisting this hegemonic campaign through an armed struggle. The second view, in contrast, has paid closer attention to the intense competition for scarce resources like land, educational opportunities and employment within a developing country setting, where economic growth over the past several decades has been inconsistent if not altogether erratic, and key socioeconomic problems such as poverty, unemployment and environmental degradation have affected large sections of the population, irrespective of their ethnic background.

Impacts of the conflict on livelihoods and household economy

Conflict affects the livelihoods and economic status of individuals through the direct and indirect transformations it entails. Direct effects include changes in household composition due to killings, injuries and recruitment of fighters; changes in household economic status due to the destruction of assets and livelihoods; and effects caused by forced displacement and migration. Indirect effects can take place at the community level or at the national level. Local indirect effects include changes in households’ access to and relationship with local exchange, employment, credit and insurance markets, social relations and networks, and political institutions. National-level indirect effects include changes in economic growth and in distributional processes that impact household welfare.

Poverty is known to be widespread throughout the conflict-affected areas. If one considers the number of displaced people who continue to stay in welfare centers as an index of acute poverty, an estimated 220,000 people remained in welfare centers as of 2009, comprising roughly 8 percent of the total population in the Northeast. The Sri Lankan government has estimated the total number of internally displaced people inclusive of residents in welfare centers and those living outside the welfare centers to be 650,000, comprising roughly one-third of the population currently living in conflict-affected areas.

The term poverty, however broadly it is defined, can capture only a few minute details of the total misery experienced by the victims of nearly 30 years of war. With each outbreak of war, many people lost their loved ones as well as assets accumulated over many generations and were displaced repeatedly, often frustrating their sincere efforts to rebuild their lives. Given that the two primary economic activities in the northeast, farming and fishing, were paralyzed by a combination of factors including economic embargoes, transport difficulties, security restrictions, breakdown of market systems, and rent seeking by armed forces, there was a near total collapse of the rural economy in many areas in the Northeast. Photo: AFP Aerial bombardment and artillery attacks added to the misery of the people, causing the annihilation of much of the area’s physical infrastructure, including roads, hospitals, school buildings, houses, electricity supply, irrigation systems, water, sanitation services and communication facilities. The war-related displacements, population movements and violence served to break up communities, family structures and the very foundation of civil society.[4] Until the beginning of the ongoing peace process, many people had no hope of any lasting peace, and some believed that they were condemned to live in welfare centers for the rest of their lives.[5]

The war presented only a limited number of options for people living in and around conflict areas. One could join the security forces, home guards, LTTE or one of the other armed groups, depending of course on one’s own ethnic identity, contacts and inclinations in life. On the other hand, provided that one had the necessary resources and contacts, one could move out of the conflict area to greener pastures elsewhere, including overseas destinations. Either of these options was typically not available for certain categories of people, such as the elderly, physically handicapped and the like. The large majority of people, however, had to find livelihood strategies based on locally available resources capable of adapting to long-term deteriorating economic trends and scope with sudden political shocks, such as the escalation of violence.[6] Even though the war affected the lives of everyone who lived in the Northeast, irrespective of identity, status and income level, there are some reports that its devastating effects were more severe on the poorer and more marginalized sections of the population. Using their contacts and resources, particularly among the expanding networks of the Tamil Diaspora, and given that international amnesty is granted to war refugees, the richer people moved out of the conflict zone to safer areas, including Colombo and foreign destinations. There has been a selective outmigration of the rich, leaving behind the poor to fight it out with the security forces. This, in turn, explains the emphasis on “reducing conflict-induced poverty” in Sri Lanka’s newly formulated poverty reduction strategy.[7]

There is also evidence that the impact of the war was more severe in the case of the poor. For instance, according to one estimate, while one in every 12 households was killed due to the war in the general population in the Northeast, among the poor it rose to one in every 7 households.[8] Many of the long-term residents in the welfare centers, as well as those compelled to remain in LTTE controlled areas and border areas - the control of which is contested by the LTTE and the security forces - were poorer people with limited options. The recruitment to security forces has been most intense in the South of Sri Lanka, an area characterized by widespread poverty. Similarly, there is some evidence that in their recruitment efforts, the LTTE and other armed groups in the Northeast have targeted the more deprived sections of Tamil populations in the Northeast.[9] These processes indicate that widespread poverty does indeed contribute to the perpetuation of war in one way or another.

Vulnerability refers to exposure to contingencies and stress, as well as difficulty in coping with them. Vulnerability has two sides: an external side of risks, shocks and stress to which a household or individual is subject; and an internal side, which includes defenselessness, signifying a lack of means to cope without damaging loss. Certain vulnerabilities are present regardless of conflict and war. However, due to the reduced coping capabilities of people in general, and IDPs in particular, these vulnerabilities can become a dangerous burden on the household assets. Having been largely cut off from outside markets, the communities in the conflict zone have experienced certain market-related vulnerabilities. The war situation has seriously distorted local markets for food, labour and other commodities, because the Sri Lankan army and the LTTE have each imposed a system of checkpoints that restricts the movement of persons and goods. The prices of essential food items such as rice, flour, sugar and coconuts reportedly increased sharply. A black market situation has developed in regard to some essential food items in certain areas, including most of the conflict zone and more remote areas in the dry zone. Erratic fluctuations in food prices were more of a problem in communities heavily dependent on wage incomes such as those in conflict zones. In addition, traders often impose an oligopoly in conflict-affected areas based on close affiliation with local power holders, which leads to a quasi-monopoly and decreases the bargaining position of farmers. Food and other commodities produced in the study communities thus received very low prices in the market, particularly in comparison to prices of commodities purchased from outside, including the price of purchased inputs, because farmers and fishermen depend on local traders’ cartels. It must be noted here, however, that the transaction costs of middlemen can be quite high due to poor road and transport networks, as well as due to arbitrary taxes imposed by local power holders. Markets were often not accessible due to fighting and war. In particular, Tamil farmers living in remote spots of rebel controlled areas of the east had to cross the borderline between army and rebel controlled areas. They could not market their agricultural produce when fighting escalated, and there was a high risk involved in passing through checkpoints. Farming and fishing families had to resort to subsistence strategies. Such situations show an overlap of market and conflict-related risks and vulnerabilities.[10]

In the current process of transition from war to peace, vulnerabilities associated with active armed conflict have declined and were replaced by new vulnerabilities and uncertainties associated with the change process. They include the fear of renewed conflict in some areas, fear of forced recruitment and increased tax burden, particularly in LTTE–held areas, fear of losing food subsidies from the government once peace is restored, and the fear of losing jobs on the part of home guards and other security forces personnel.

Assessing vulnerability and coping with ethnicity conflict

Even though the war in Sri Lanka has often been described as an ‘ethnic war’, the part played by ethnicity - independently or in combination with other factors such as resource competition - has not been fully elaborated. War-related population movements have led to increased ethnic segregation, making much of the Northern Province ethnically homogenous with only the Tamil population remaining. At the same time, Muslim refugees expelled from rebel controlled areas concentrated in Puttlam and settlers in many of the Sinhala and Tamil border villages have been compelled to move into mainstream Sinhala or Tamil areas respectively.[11] The implications of these trends for ethnic relations, conflict dynamics and ongoing peace processes have not been fully explored. In one insightful study in selected conflict communities in Sri Lanka, it has been argued that the war led to a strengthening of ‘bonding’ social capital within each ethnic group, while undermining ‘bridging’ social capital, which unites people of different ethnic groups for common socioeconomic goals.[12]

Interestingly, people of each ethnic group in the northeast, particularly internally displaced persons (IDPs), often use the ethnicity framework to understand not only conflict-related vulnerabilities but also market and even environment-related vulnerabilities. People in the war-torn areas use clientelistic support networks along their own ethnic lines as a distinct coping strategy. This places some ethnic groups in specific geographic locations at a comparative advantage to others. However, which ethnic group finds the strongest political patron differs considerably between the different regions. These patron-client relationships determine access to important livelihood assets, such as employment, trade networks and markets.

Threats to traditional livelihoods

Traditional livelihood patterns impose particular restrictions on movement. These livelihoods focus on primary production without a great deal of value-addition made to the final product. The products that are produced are not unique and do not occupy a special position in the market. There is no rising demand for these products. Conflict adds other dimensions to this complex set of problems by restricting physical movement and therefore access to raw materials and markets—displacing employers and workers, limiting employment opportunities even for wage labour (one of the more stable sources of livelihood), and forcing people to abandon prosperous enterprises.[13] Due to the restrictions imposed by the armed forces of the GOSL and LTTE, people were not able to access the markets and other livelihood related areas. The high security zones, which are mostly located in livelihood areas such as coastal areas, the sea, and paddy fields, are occupied by the military. Access to such high security zones (HSZ) is still limited to certain times of the day. Some HSZs are completely restricted to civilians. Photo: Contrastingly, some people were able to maintain their livelihoods in areas that were relatively less contested and experienced minimal overt violence. They were able to cope even within a wider conflict environment because of their ability to maintain their livelihoods.[14]


Conflict was a part of life in the North and East of the island, severely affecting the movement of individuals irrespective of ethnicity. Movement occurs at an individual level, largely because households and individuals are able to acquire and sustain multiple income sources. At the community level, potential for movement is perceived to be based on access to a certain factor that would allow the household or individual to get the maximum benefit of the community’s main livelihoods, or to be able to overcome one of the common livelihood-related threats faced by other members of the community.

People always see movement from their own perspectives. They speak of movers as people that have access to things that they do not. Often, they see movers as people who have more of the livelihood resources that are available to the community. Communities in which the main source of income is agriculture spoke of movers as those who have access to larger parcels of land. The impact of the conflict was clear in many of the communities. The high conflict communities in the North and East revealed strong links between conflict affectedness and movement. The conflict and displacement had destroyed livelihood assets and made it harder to move out of poverty. Conflict-related migration to Western countries and subsequent remittances were frequently mentioned as factors that led to the most upward movement. Economic migration (mainly for women) to countries in the Middle East was also affected by this conflict. This migration was made necessary in part by the general depressed economic conditions created by the conflict, though economic migration is in no way characteristic only of conflict affected communities. The conflict created a great deal of migration away from the affected areas. The remittances that migrants sent back to the members of their families helped their households cope with conflict-related economic shocks, and in some instances combined with other factors to allow them to move out of poverty. Migration of a member of the household was not a standalone factor of movement. The families who moved received remittances but also continued to have other members engaged in livelihood activities within the community. In addition, they saved the money sent back as remittances, managed it wisely, and channeled some of it into assets and savings.[15]

The breakdown of migrants in upwardly mobile households by origin and destination suggests that people in the high conflict areas in the North were able to move to European countries, while people from other communities migrated to countries in the Middle East. One of the features of conflict-related migration in Sri Lanka was that people in conflict areas were able to access European and other Western countries because of special considerations for conflict affected people. It is possible that people in the high conflict areas in the North and East had networks in place in European countries made up of people who had migrated before, who later helped facilitate the migration processes of others.

Migration to countries in the Middle East occurs largely because it provides opportunities for earning incomes that are greater than those available in already economically depressed areas in Sri Lanka. Economic migration to the Middle East is not confined to the conflict areas. However, migration to European and other Western countries seems to be a special feature of conflict areas.[16]

Moving out of poverty

To reduce or eradicate poverty and to prevent future conflicts, the GOSL should come up with a holistic approach for providing humanitarian assistance to create livelihood opportunities so that people can move out of poverty. Immediate and long-term projects should be implemented to address the issue. The entire system and structure of societies in the worn-torn zones have been affected by the war.

It is obvious that social structure and social relationships have changed due to increased migration as economic activities in the communities have become increasingly less viable. They may also be influenced by new needs and increased awareness of the outside world. It represents change and transformation, and although this may be expected, it is important that development projects take this into account when designing their projects. This means that traditional livelihood support activities and income generation schemes may no longer be relevant.

Empowerment of the poor is of greatly needed to fight inequality and create access to the power structures that control the socioeconomic environment. It is necessary to establish agency so that the poor will be able to address the issues at hand and be a part of the system.

The migration economy is a major element in war-torn zones. The government should formulate improved policies and legislation to assist the war victims so that it is easier for them to migrate to European, Middle Eastern and other countries for employment. Although this kind of migration helps the poor to move out of poverty, it creates some risks for the migrants. It is GOSL’s duty to ensure the safety of these migrants by formulating and implementing appropriate policies.

Structural changes in local, regional and national economies are important to address needs and cope with the issues in an effective way. The economic environment in which movement takes place is affected by larger macro-level changes. Changes such as shifting expenditure patterns, rising factor prices, and the emergence of new social and economic needs pose challenges to the process of movement out of poverty. In addition, the existence of certain government policies (or their removal with subsequent changes of government) has an impact on these communities.

Education is a potential aspect to develop in the future. Despite the fact that many poor people are not in a position to obtain education, communities still continue to hold education in high esteem. This is seen particularly where households engaging in traditional livelihoods continue to struggle to give their children the best possible formal education, with the hope that it will allow them to develop in the future. And the GOSL should take notice that people can improve their situation though informal livelihood-related education and experience, and not necessarily through formal school-based education alone.


This paper highlighted the manner in which perceptions of vulnerability, risk and coping among conflict-affected populations are shaped by actual poverty experiences on the one hand and ethnic consciousness and notions of identity on the other. It shows the complex manner in which notions of ethnic grievances are fueled by actual experiences of displacement, victimization, and impoverishment caused by armed conflict. While ethnicity may be “imagined” in the sense of being an important basis of self-consciousness that often simplifies and, at the same time, exaggerates the issues involved, it is “real” in the sense of guiding thinking and action of the people concerned, and it is somehow rooted in the real problems faced by conflict-affected populations.

Ethnicity may be seen as an intervening variable that amplifies the interaction between poverty and conflict. Ethnicity is the lens through which affected populations understand their overall suffering, articulate collective grievances, and work out their individual and collective responses and coping strategies.

There may be certain positive functions of ethnicity within a conflict situation in so far as ethnic networks serve to assist people from war zones, referring to IDPs in particular, thereby helping them cope with the adverse consequences of armed conflict, including the disintegration of many of the preexisting social institutions and mutual support mechanisms. However, articulation of collective grievances around ethnicity can lead to an escalation of conflict and a never-ending spiral of violence, as already evident in Sri Lanka, making it more difficult for people to escape from chronic poverty. Furthermore, the evolution of ethnic exclusiveness in exchange patterns reduces livelihood options and increases dependence on ethnicity-based client-patron networks. These increases dependence and perpetuates poverty and chronic poverty. Careful analysis should be conducted regarding how families manage to escape from chronic poverty in the current transition process from war to peace and the new opportunities presented. As regards social policy implications for a post-conflict situation, development practice cannot simply concentrate on humanitarian assistance and poverty alleviation while totally ignoring ethnicity as something extraneous to relief and development. While community support for the displaced must certainly be encouraged, steps must also be taken to arrest any resulting impact on ethnic polarization that may directly or indirectly contribute to the perpetuation of conflict.

[1] UN Commission on Human Rights “Discrimination of Tamils in Sri Lanka” (2000) in

[2] Spencer J. A nation living in different places: Notes on the impossible work of purification in post-colonial Sri Lanka (2003)

[3] Spencer J, Sri Lankan history and roots of conflict. P.23

[4] Silva K. T., The impact of civil war on population mobility and ethnic segregation in Sri Lanka,(2001) 328. [As cited in Korf B. and Silva K. T., Poverty, Ethnicity and Conflict in Sri Lanka, (2003)]

[5] Silva K. T., Armed conflict, displacement and poverty trends in Sri Lanka: evidence from selected displaced populations, (2003), pp. 245.

[6] Korf, B. et al., Conflict-Threat or Opportunity? Land use and coping strategies of war-affected communities in Trincomalee, Sri Lanka. Berlin: Humbolt University, SLE. (2001) [As cited in Korf B. and Silva K. T., Poverty, Ethnicity and Conflict in Sri Lanka, (2003)]

[7] GOSL, Connecting to growth: Sri Lanka’s poverty reduction strategy, (2002)

[8] Ibid.

[9] Patricia Justino, Poverty and Violent Conflict: A Micro-Level Perspective on the Causes and Duration of Warfare, (2009)

[10] Korf, B. et al., Conflict-Threat or Opportunity? Land use and coping strategies of war-affected communities in Trincomalee, Sri Lanka. Berlin: Humbolt University, SLE. (2001) [As cited in Korf B. and Silva K. T., Poverty, Ethnicity and Conflict in Sri Lanka, (2003)]

[11] Dunham D. and Jayasuriya S., Economic Crisis, poverty and war in contemporary Sri Lanka; An Ostriches and Tinderboxes,

[12] Ibid.

[13] Silva K. T., Armed conflict, displacement and poverty trends in Sri Lanka: evidence from selected displaced populations, (2003), pp. 245.

[14] Dunham D. and Jayasuriya S., Economic Crisis, poverty and war in contemporary Sri Lanka; An Ostriches and Tinderboxes,

[15] Silva K. T., The impact of civil war on population mobility and ethnic segregation in Sri Lanka,(2001) 328. [As cited in Korf B. and Silva K. T., Poverty, Ethnicity and Conflict in Sri Lanka, (2003)]

[16] Ibid.


Dunham D. and Jayasuriya S., Economic Crisis, poverty and war in contemporary Sri Lanka; An Ostriches and Tinderboxes

GOSL, Connecting to growth: Sri Lanka’s poverty reduction strategy, (2002)

Korf B. and Silva K. T., Poverty, Ethnicity and Conflict in Sri Lanka, (2003)

Patricia Justino, Poverty and Violent Conflict: A Micro-Level Perspective on the Causes and Duration of Warfare, (2009)

Silva K. T., Armed conflict, displacement and poverty trends in Sri Lanka: evidence from selected displaced populations, (2003)

Spencer J. A nation living in different places: Notes on the impossible work of purification in post-colonial Sri Lanka (2003)

Spencer J, Sri Lankan history and roots of conflict. P.23

UN Commission on Human Rights “Discrimination of Tamils in Sri Lanka” (2000) in

Aingkaran Kugathasan is an Asia Leaders Fellow in the International Law and Human Rights Masters Programme at the University for Peace of Costa Rica.