Sri Lanka

Sri Lanka fact sheet Feb 2003

News and Press Release
Originally published
United States Agency for International Development
Bureau for Democracy, Conflict and Humanitarian Assistance
Office of Transition Initiatives


After two decades of civil war that has short-circuited development and torn the nation's social fabric, Sri Lanka finds itself with a pivotal opportunity to achieve sustainable peace. The change of administration in December 2001 gave renewed impetus to finding a negotiated settlement. A ceasefire agreement between the Government of Sri Lanka (GSL) and the Liberation Tigers of Tamil Eelam (LTTE) was signed in February 2002 and formal talks began seven months later, mediated by the Norwegian Government. Throughout the negotiation both parties have demonstrated a willingness to take risks and make compromises to advance the peace process. Though agreements on many of the most contentious issues underlying the conflict have yet to be reached, most observers concur that the current domestic and international political-economic climate has significantly raised the stakes, and increased the prospects, for ending a war that has claimed the lives of more than 65,000 Sri Lankans.

A key factor in bringing both the GSL and LTTE to the negotiating table -- severely depleted economic resources -- will continue to be a post-conflict constraint. Substantial international assistance will be required to meet enormous reconstruction, rehabilitation and reconciliation needs. To ensure that peace dividends are perceived as benefiting all Sri Lankans, economic and social development must occur island-wide, accompanied by a viable devolution arrangement that meets the aspirations of the country's pluralistic society. The short-term focus of support must be on the war-ravaged North and East, to where more than one-fourth of an estimated 800,000 internally displaced persons (IDPs) have returned. At the same time, having learned from post-independence history that high unemployment usually leads to social unrest, in other parts of the country the GSL is seeking to better align the supply of adequately trained labor with the demands of a modernizing and increasingly outward-looking economy. The need for new jobs, particularly among youth, will be critical during the next few years.

Bilateral donors pledged more than $70 million to support reconstruction and rehabilitation in the North and East at a November 2002 conference in Oslo. A follow-up donor conference scheduled for June 2003 in Tokyo, where multilaterals will also attend, is expected to have a broader focus, including medium- and long-term developmental needs island-wide.

Ongoing Grants

The USAID/Sri Lanka program seeks to promote sustainable, broad-based human development through economic growth. Ongoing programs support increased economic competitiveness in the global marketplace; good governance, active civil participation and respect for human rights; and improved social and economic integration for disadvantaged groups, with a special focus on the disabled, war-affected children and victims of violence. Though earlier scheduled for close-out, USAID/Sri Lanka is bolstering its presence in response to the radically changed environment. Funding levels have increased from $4 million in 2001 to $8 million in 2002 to $10 million in 2003, not including additional funds from the Office of Transition Initiatives (OTI). USAID/Sri Lanka is in the process of revising its five-year Country Development Strategy to respond to emerging opportunities and challenges in the post-conflict environment. This exercise is being informed by findings of a Conflict Vulnerability Assessment conducted in November 2002 with support from key USAID/Washington staff and two USAID/OTI personnel.

Future Programming

The gradual downsizing of USAID/Sri Lanka during the 1990s and the commitment to continue activities begun under the current country strategy constrain the Mission's ability to reprogram existing funds as desired in support of the peace process. To address the need for fast, flexible interventions required in an evolving post-conflict scenario, USAID/OTI is setting up a new $4 million small-grants program in Sri Lanka that will balance the need for quick, demand-driven response with USAID/Sri Lanka's commitment to integrating these short-term initiatives into the long-term development strategy under revision. Using a funding mechanism known as SWIFT (Support Which Implements Fast Transitions), USAID/OTI and USAID/Sri Lanka hope to demonstrate to ordinary Sri Lankans throughout the island the tangible benefits that can result from peace.

The 18 - 24 month USAID/OTI/SWIFT program, titled "Promoting the Benefits of Peace," will focus on support of interventions under the following three broad categories:

  • Constructing and repairing small-scale infrastructure;

  • Improving livelihoods and providing skills training; and,

  • Building constituencies for peace.
Small grants will be disbursed mainly to local partners for activities that fall within these general program areas. USAID/OTI programs in other countries such as East Timor, Kosovo, Macedonia, Peru, and Afghanistan, have been successful in encouraging basic democratic practices at the grassroots level while helping communities to address reconstruction needs. In Sri Lanka, institution building and self-help, using a community-based approach, will be emphasized.

For more information, contact Justin Sherman (, 94-1-472855) or Carol Becker (, 94-1-472855) in Colombo, Karma Lively (, 202-712-5755) in Washington, DC.