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 Post subject: The Cost of Ethnic Conflict
 Post Posted: Thu Jan 17, 2008 10:03 pm 
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The Cost of Ethnic Conflict
A socio-economic analysis

by Sajith de Mel
@ The Island / 11Jan2008

Social stratification involves the hierarchical ranking of society’s members into categories of unequal wealth, power and prestige. Human societies are almost universally stratified or differentiated into categories of superiority and inferiority, dominance and subordination. In its categorization, "race" and "ethnicity" are two terms that are heard frequently. From a sociological perspective, a "race" is a category of people who see themselves and are seen by others as different because of characteristics that are assumed to be innate and biologically inherited, while an ethnic group is a category of people who see themselves and are seen by others as set apart because of their cultural heritage. Historically, man has been involved in conflicts based on these inconsequential classifications. More than two decades of war in the North East, testifies to one of the ruthless wars in the history of mankind.

The evolution of an ethnic identity

In the Mahavamsa, that irreplaceable literary source for the reconstruction of the early history of the island, the story of man in Sri Lanka begins with the arrival there, sometime in the 5th century B.C, of Vijaya and his turbulent companions-700 in all who had been banished for misconduct from the kingdom of Sihapura in Northern India by Sinhabahu, Vijaya’s father. With the rise of the Tamil empires in the seventh century, namely the Pandya and Pallava, the north of Sri Lanka was at the receiving end of significant influences from South-India. Influences were Buddhist as well as Saiva, Tamil as well as Sanskritic, political as well as religious. But ultimately the Tamil language and the Saiva religion became the dominant factors that helped to forge a single ethnic identity in the north-western, northern and eastern regions. In the south and centre, Hela-speakers were in a strong position with its power-centre in Anuradhapura. The melting pot was simmering for over a thousand years and the end product was seen when the lid was lifted with the CÖla invasion at the end of the tenth century. The Tamils who lived in the south of Anuradhapura were assimilated into the language, religion and culture of the Sinhalese whereas in the areas north and east of Anuradhapura, the Helas and others were assimilated into the Tamil population. However one should never assume an environment of hostility between these two ethnic communities during this era. Numerous are the instances where the Sinhalese royal families often sought beautiful princesses from the CÖla kingdom.

The animosities and the hostilities occurred with the twentieth century writings on the history of Sri Lanka having been marred by the impact of the myths relating to "Aryan" and "Dravidian" races. Colonial writings on Sri Lanka made to believe that the Sinhalese belonged to the "Aryan race" while the Tamils formed part of the "Dravidian race". The word "arya", originally had the denotation "noble" but, in modern times, acquired the connotation of racial superiority. The new Aryan theory was eagerly welcomed by most Sri Lankan scholars who found the Aryan theory flattering in that it elevated them to the ranks of the kinsmen of their rulers. Not only did they believe in an Aryan colonization of the island, they even ventured an opinion on who came first-the Aryan settlers or the Dravidian settlers.

The march to an ethnic conflict

The 1956 government decision to make Sinhala the official language was the first step to hurt the Tamils. Bandaranaike promised that he would make Sinhala the official language of the State if he was voted to power. Bandaranaike who swept to power kept his word. Ever since Sinhala was made compulsory for government jobs, Tamils realized that learning Tamil was a futile exercise. The job seekers were required to be proficient in Sinhala if they wanted government positions. Tamils traditionally placed great emphasis in the education of their children. The Sinhalese hardliners attributed the high proportion of Tamils in universities to collusion between Tamil teachers and students. The government responded to this with a policy of "standardization", where its worst impact was felt in the Tamil dominated Jaffna. In responding to this thousands of Tamil students took to the streets in protest against this policy. They felt discriminated. As the fissures between the Tamils and the Sinhalese kept widening, Velupillai Prabhakaran was emerging as the world’s most ruthless guerrilla leader. His first act of violence was when he set fire to a State owned bus in 1970. He made his first political assassination with the killing of the Jaffna Mayor, Duriappah in 1975.This stunned Sri Lanka. Until that day most Sri Lankans were unaware that the sense of injustice felt by the Tamils was articulated and exaggerated by the Tamil politicians. Duriappah’s killing brought home the realization that the malaise was more serious than they realized. The ravaging war in the North-East is a result of the ever widening split between the Sinhalese and the Tamils fuelled by the petty political agendas of successive governments in the post-independence era. The socio-economic cost of the deadly conflict should never be underestimated, as its costs are to be seen in every sphere of activity in the Sri Lankan society.

The economic cost of ethnic conflict

With the opening up of the economy in 1977, and thereby plans for liberalization, was to set the island’s economic growth in par with the East Asian high performing nations. Such dreams were shattered with the break of Elam war I in 1983. The period 1977-82, experienced an average GDP growth which exceeded 6%. Following the escalation of hostilities between the State and the rebels in 1983, the period 1983-89 experienced an average economic growth of 3.7%. During this period, the defence expenditure as a percentage of government expenditure increased from 4.4% in 1983 to 14.3% in 1988 and consequently a steep reduction in the GDP from 5% in 1983 to 2.3% by 1989. The first quarter of 1990 saw the cessation of hostilities between the state and the LTTE. The direct impact of the same was felt by the economy which recorded a growth rate of 6.2% in 1990. This was short-lived with the starting of Elam war II in mid 1990. During the period 1990-94, the growth rates fluctuated from 4.3% in 1992 to 6.9% in 1993 and the defence expenditure as a percentage of government expenditure increased from 14.6% in 1990 to 15.2% by 1994. With the breaking of Elam war III (April 1995-2001), the defence expenditure as a percentage of government expenditure fluctuated from 17.3% in 1999 to 22.7% in 2000.

High defence expenditure as a percentage of the GDP has serious economic implications. The economic cost of war is directly accompanied by a sharp reduction in the productive capacity of the economy. War in the north and the east confesses a reduction in the goods and the services produced in that area. Many industries such as the cement factory of Kankasanturai, the chemical factory in Paranthan, the salterns in Elephant Pass and Nilaweli, the ilmenite in Pulmoddai, ceramics at Odduchuddan and Amparai, the paper mill at Valaichenai either stopped functioning or were running far below capacity. In the agricultural sector, the rice supply from the Eastern province declined substantially and so did livestock and fish supplies. The Northern and the Eastern provinces account for nearly 59% of the island’s fish production, but many fishermen ceased to operate in the waters from Kalpitiya in the West to Pottuvil in the East.

A war economy certainly frightens the foreign investors. Data available explains that the aggregated expected annual foreign direct investments in dollars millions for the period 1982-2006 was estimated at 6432, while the net foreign direct investments were $ Mn 2872, there-by recording a loss to the economy of $ Mn 2937. Some examples would suffice to explain the missed opportunities. The two major electronic multinational companies, namely Motorola and Harris Corporation had finalized plans to establish their companies in the EPZ prior to the change in the political climate. Both the companies withdrew their plans away from Sri Lanka with the breaking of ethnic riots in 1983. Besides these two corporations, Marubeni, Sony, Sanyo, Bank of Tokyo, Chase Manhattan Bank, were in the pipeline to invest in Sri Lanka after 1983. All these big companies decided against investing in Sri Lanka after 1983.

Tourism plays a leading role in the economy as a foreign income earner as well as an employment generator. The on-going ethnic conflict had been disastrous for this industry. Prior to the escalation of the ethnic conflict, the number of tourist arrivals increased from 192,592 in 1978 to 407,230 by 1982. Correspondingly, the earnings on tourism increased from USD Mn 56 in 1978 to USD Mn 146 by 1983. With the breaking of war in 1983, the number of tourist arrivals dropped to 337,530 in 1983, when it continued to decline to 184,762 tourist arrivals by 1989. The period 1983 to 1989 saw a sharp decline in the earnings from tourism from USD 125.8 Mn to USD 76 Mn. With the cessation of hostilities in the first quarter of 1990, the tourist arrivals shot up to a figure of 297,888 and the earnings in USD 132 Mn. Data available explains that for the period, 1983-2004, the total number of tourists arrivals were estimated at 18,730,884. However due to the escalation of war, the actual number of tourist arrivals stood at 7,587,918, there-by recording a loss of 11, 142,966 tourists. The estimated loss in monetary terms stands at $ Mn 6341. As such it is evident that there is a direct impact on tourism resulting from the ethnic conflict.

An exact estimation of the cost of an ethnic conflict is quite debatable. However, the cost of violent conflict can usefully be labelled, primary, secondary and tertiary. Primary costs include the value of houses, commercial establishments, factories, government buildings, roads, irrigation systems and other infrastructure damaged by war. It also includes the expenses of ammunition expended, fuels consumed and weapons lost over and above normal training and maintenance, by protagonists. This is to be added to the lives lost and the injuries sustained, though the economic cost of these is difficult to be quantified. Secondary costs include funds expended to build up military, police and opposition forces in preparation for or in response to violent conflict. Loss of foreign income and local investment and the flight of capital and educated citizens abroad are also added to this. This to be added with the loss of production due to the destruction of infrastructure, disruption of work schedules, loss of trained man power and loss of investment.

The social cost of ethnic conflict

One of the greatest scars of war could be seen by way of unemployment. The national figure for labour force participation rates in 2004 stood at 48.6%, whereas the corresponding figures for the north and the east were considerably lower. For North, Jaffna recorded the lowest figure of 36.2%, while the highest was recorded from Killinochchi (40.3%). For East, Trincomalee recorded the lowest at 38.1%, while Ampara recorded the highest at 46.1%. The national unemployment figure for 2004 stood at 8.3%, while the recorded unemployment figures for the war affected areas stood considerably higher. (Jaffna 9.7%, Mullative 11.3%, Killinochchi 8.5%, Vavuniya 11.1%, Batticoloa 10.6%, Ampara 11.5%, Trincomalee 8.4%). One should never underestimate the social aspects of unemployment which reaches far beyond its economic implications. Frustration over jobs was at the root of two violent uprisings by educated youth, in 1971 and 1987-89. The Marxist youth insurrections brought the country to a virtual standstill. The rebellion was mostly led by disadvantaged youth from rural areas of the country, especially the Southern province, where unemployment has traditionally been highest. Youth unrest was also a contributory factor in the Northern secessionist conflict which began in the early 1980s and continues to date. Memories of these two insurrections as well as the trauma of the on-going conflict continue to haunt the people of Sri Lanka making the issue of youth unemployment a serious concern for civil society and policymakers.

Education in Sri Lanka is being viewed as a basic right and as a result the government from as early as 1943 adopted policies to encourage schooling amongst children. Irrespective of the devastating conflict in the North-East, the literacy levels reported from Jaffna (99.6%), Manner (97.8%) remains the highest. However the conflict has heavily impacted children of the North East and all aspects of education system are damaged. Problems such as non-enrolment, drop-outs, absenteeism, and poor learning and teaching are widespread. According to a needs assessment survey made in 2003, 50000 school aged children in the North East were out of school and there was a 15% drop-out rate. Also there was a deficit of 5000 teachers and principals. Approximately 15000 classrooms in about 500 schools had been either damaged or destroyed and they lacked furniture, libraries and other basic facilities. With the returning internally displaced persons, the demand for such services is likely to increase and the demand on the educational system would be greater.

A critical aspect of regional dimension is poverty in the North East. While data is not available with respect to North East, the scale of devastation and displacement suggests wide-spread poverty arising out of deprivation.

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