Sri Lanka experienced armed conflict for more than thirty years, first in the South
and later in the North and East. The last two decades of intractable secessionist
conflict brought substantial social, political, economic and cultural ramifications. The
cost of the war from 1983-1996 is estimated at twice the GDP of 1996, and rose from
1 percent to 22 percent of the GDP during this period. Defence spending rose
dramatically and direct and indirect war costs are estimated at 168 percent of the
GDP at 1996 prices (Arunatilake, 2001; Tudawe, 2003; Kelegama, 2004). Economic
growth was below 6 percent during most of the period, recording the lowest growth
rate of -1.4 percent in 2000.2 Social costs are even more staggering. Loss of an
estimated 60 000 lives, internal and external displacement of nearly a million people,
war widows, trauma of survivors, insecurity for children including conscription by
militant groups, breakdown of the social fabric, disruption to livelihood activities and
deterioration of basic services are some of the conflict’s consequences. Mixed
communities in the North and East and in areas bordering these provinces have
become ethnically divided.