Sri Lanka has enjoyed an unprecedented period of peace since the Government and the Liberation Tigers of Tamil Eelam (LTTE) agreed on a permanent cease-fire in February, 2002. This has been the longest cease-fire to hold in two decades and has re-opened the space for a political settlement. The cessation of hostilities led to increased levels of economic growth in the country and facilitated the revival of commercial activity in the North East. The international development community, in turn, demonstrated its support to the peace process with significant financial commitments. The World Bank, the Asian Development Bank, UNHCR, UNICEF, UNDP, the World Food Program, the European Commission, Australia, Canada, France, Germany, Italy, Japan, Netherlands, Switzerland, Sweden, the United Kingdom and the United States have committed a total of US$ 662 million to the North East to date. The donor community stands ready to support reconstruction and recovery in the conflict-affected areas.

Sri Lanka now has a rare opportunity to strengthen peace, reduce poverty and broaden the space for economic development. The road to Jaffna was reopened after 12 years, the economic embargo on LTTE-held areas lifted last year and large tracks of land de-mined. 311,000 IDPs have returned to their homes since the cease-fire. This represents 40% of the internally displaced population registered in January, 2002 and over 50% of the IDPs who had indicated a willingness to return to their homes in a joint Government-UNHCR survey conducted in mid-2002.

The extent of land under paddy cultivation in the North increased by 35%. Provincial statistics indicate that paddy production in the North East increased five-fold from 84,000 metric tons in 2000 to 400,000 metric tons in December 2002/January 2003. The total fish catch in the North East almost doubled from 44,000 metric tons in 2000 to 85,000 metric tons in 2002.

20,000 school drop-outs have returned to school in the North East. 35,000 children in the region now have tables and chairs in their class rooms. Catch up education is provided in all 8 districts. The Government and LTTE have developed an Action Plan for Children Affected by War to address the needs of 50,000 vulnerable children. This is the first time in Sri Lanka that there is a formal mechanism to address reported cases of underage recruitment.

The donor community pledged increased financial resources for relief and reconstruction in the North East in response to a joint Government-LTTE appeal in Oslo in November, 2002. 55 schools and 25 health facilities have been reconstructed using donor funds. Another 93 schools, 90 health care centers and 75 office buildings in the North East have been identified for repair in 2004 using US$ 12 million of international resources. 45 kilometers of the A-9 highway have been rehabilitated and work on the remaining 50 kilometers almost complete. Donor resources financed the repair of 238 kilometers of rural roads, 108 irrigation tanks and 156 wells. 32,734 IDP families received the donor-financed Unified Assistance Scheme cash grant of Rs 25,000 as at September 30, 2003.

International donors also provide significant levels of assistance to the South of Sri Lanka where levels of poverty exceed the national average. The donor community remains committed to the development of the South evidence of which came to the fore at the recent floods disaster in May 2003. Several agencies have supported education, health care and community water initiatives in the South. The international community pledged US$ 4.5 billion for development initiatives throughout the island at the Tokyo Conference on the Reconstruction and Development of Sri Lanka in June, 2003. However, much of the future programs will take into account progress made in the peace process as reiterated in the Tokyo declaration on the reconstruction and development of Sri Lanka.