Economic cost of Sri Lanka's ethnic conflict

Despite its low income per capita, Sri Lanka has achieved remarkable succes s in human development, largely due to appropriate government policies on h ealth and education. However, Sri Lanka's economic performance has been bel ow its potential, and the unresolved civil conflict poses one of the greate st 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 r esulted in lower domestic and foreign investments, disruptions in trade and commerce, and lower revenues from tourism. As a consequence, economic grow th has suffered. With no end in sight to the civil war, these costs are lik ely to mount, with pernicious effects on future living standards.