Economic cost of Sri Lanka's ethnic conflict

Despite its low income per capita, Sri Lanka has achieved remarkable success in human development, largely due to appropriate government policies on health and education. However, Sri Lanka's economic performance has been below its potential, and the unresolved civil conflict poses one of the greatest obstacles to its long terms growth prospects. This article examines some indirect costs of Sri Lanka's civil war. It argues that the conflict has resulted in lower domestic and foreign investments, disruptions in trade and commerce, and lower revenues from tourism. As a consequence, economic growth has suffered. With no end in sight to the civil war, these costs are likely to mount, with pernicious effects on future living standards.