The socio-economic cost of the war

During fifty years of post independent Sri Lanka, no government has succeeded in building a "Sri Lanken" national Identify idenity transcending racial and otber prejudices. As a result, distrust and misapprehension are further distancing the communities and today the country is Facing a war which will ultimately bring only destruction to all. Therefore, a true understanding of the damage caused to the society and economy by the war will help lay the foundation for a realistic solution to the problem and provide an insight into the root causes.

Loss of Human Resources

*The war has to date devoured around 60,000 human lives. About 12,000 members of the Police and armed forces, 22,000 members of the LTTE and 20,000-30,000 ordinary civilians have perished in the Northeast war and in terrorist attacks.-

* Hundreds of thousands of Sinhala, Tamil and Muslim civilians in the North and East and neighbouring villages have been made destitute by the war. They are alienated from active participation in the national economic activity causing immense damage to the country's economy. By January 2000, the government had provided relief to 41,096

families (consisting of 172,728 persons) at camps for displaced persons and 145,955 families (501,098 persons) living outside such camps. Another 5,097 disabled families (22,576 persons) alienated from the normal national economic process have also been provided relief. During the period 1984-1996, the government has spent altogether a sum of Rs. 21 billion to sustain the displaced.
* The individual economies of the inhabitants of villages bordering the North and East have crumbled and poverty has engulfed them. The health of the people has declined. This is a result of doctors and health officers not visiting the area due to collapsed infrastructure facilities, a bad security situation and non-development of the area. The maternity and infant mortality rates have increased. The standard of education has deteriorated due to a paralysed educational infrastructure, shortage of teachers and forcible conscription of children by the LTTE. The percentage of G.C.E. (A/L) passes in the Jaffha district, which was 63% in 1994, had declined to 33% in 1996. * The direct impact of the war and the resultant social instability has compelled large numbers of the educated, traind and experienced manpower to emigrate.foreign countries, and the trend is continuous. The nu of Tamil civilians alone who have emigrated so far exceeds 650,000 and the resultant damage to the economy during the period 1984-96 is estimated at Rs. 17 billion. The extent of the social damage cannot be assessed. Collapse of the economic foundation * The damage to the economy by the war is inestimable. Some economic experts have however prepared rough estimates. According to them the total damage suffered by the government during the period 1984-1996, both direct and indirect, was Rs. 1,167 Billion (ie. 170% of the GNP,1996),which is 17 times the amount spent on the Mahaweli. * The defence budget, which was 1.3% of the GNP in 1980 rose to 6% by 1996. The total defence expenditure of the government during 1984-96 was Rs. 288 billion, which was 41% of the GNP of 1996. The overwhelming defence vote is one of the causes of the budget deficit. It upsets government fiscal policies, derailing measures taken to maintain competitive exchange rates, control inflation and rising interest rates. This situation reduces private and public sector investments. Its impact on short and long term state investments is several times more. Economists point out that a 1% increase in the defence budget reduces state investment by 2.4%. * Most significantly, the war has impaired the influx of forign investment. Direct forign investment denied to the country during the period 1984-96 caused a loss of Rs. 495 Billion to the economy. It is equivalent to 71% of the 1996 GNP. The upward trend of foreign investment after liberalisation of the economy in 1977 took a downward trend after 1983, and increased again in 1994. Investments declined to Rs. 16,261 million after the war broke out again in 1995. * The cultivation of arable lands in the North and East and neighbouring villages has been abandoned, resulting in a decline in the domestic food supply and an increase in prices. In view of the security situation, in some areas fishing has been prohibited or the fishing hours have been restricted. As a result, a large share of agricultural and fishing products has been denied to the country. Farmers and fishermen who lived with dignity; lost their means of livelihood and were impoverished and subjected to immense socio-economic hardships and frustration. * The tourist industry grew consistently until 1982. Tourist arrivals were 407,000 in 1982. After the war began in 1983, it gradually declined to 183,000 in 1988. It took 17 years to revive the tourist industry, which collapsed in 1983. There were 4-36,440 tourist arrivals in 1999, but the opportunity to realise the true potential of the tourist industry has been prevented by the war. *The government incurs a heavy expenditure in rehabilitating the North-East and other areas of the island. Foreign funds have been obtained to rehabilitate the Kolonnawa oil tanks and the Central Bank building destroyed by the terrorists. The government is also obliged to maintain those the disabled soldiers and families of those who died in action. The need for a change in attitudes *Negotiation and military action can both be used to resolve political conflicts. When the bullet becomes the medium of dialogue the outcome will be destruction. The natural outcome of such a dialogue is now being experienced by the LTTE cadres and members of the security forces who are in active combat as well as ordinary civilians of the North- East and people of the border villages, victims of terrorist bomb attacks and people living in Colombo and its suburbs in constant fear of such attacks. This war and its destruction should not be handed down to future generations. * If the public demand for peace is strong, no party can ignore it. This has been proved by the experiences of South Africa, North Ireland and East Timor. In a multi-ethnic country like Sri Lanka, to arrive at a political solution with rights to every ethnic group and respect for the cultural identities of all races, it is necessary to mobilise the public without delay.* P r s a i d e n t i a l S e c r e t a r i a t 27 February 2001 Number 25 * A n a A l y s e s
