Peace in Sri Lanka

A study was recently undertaken by two staff members of the Peace Secretariat (Seneka Abeyratne and Rajith Lakshman), based on numerical data published in the Central Bank Annual Reports, to assess the economic impact of the February 2002 Ceasefire Agreement (CFA) in the conflict-affected areas (North and East) in relation to the other areas, with 1996-2004 serving as the reference period. The study found that the most positive feature of the post-CFA economic experience has been the significant growth of the agricultural sector (in real terms) in the Northern Province (32% per annum) and Eastern Province (19% per annum), compared with 4.3% and 4.9%, respectively, during the pre-CFA period. Due to these high growth rates in the agricultural sector, the North and East also realized significantly higher GDP growth rates than the other provinces during the post-CFA period.

In the Northern Province, annual paddy production averaged 138,000 metric tons during the post-CFA period (2002-2004) compared with 65,000 metric tons during the pre-CFA period (1996-2001), while in the Eastern Province, it averaged 752,000 metric tons during the post-CFA period as against 619,000 metric tons during the pre-CFA period. The combined share of the North and East in national paddy production is also considerably higher in the post-CFA period (31%) than in the pre-CFA period (27%).

Paddy Production in 2005

The rapid recovery of the agricultural sector in the North and East is the result of a tremendous drive by the Government, spearheaded by the Ministry of Relief, Rehabilitation and Reconciliation, to improve the livelihoods of the rural community in the North and East. 2005 has been a landmark year in this regard. For the first time, the production and extent of paddy (sown area) have exceeded the 1983 levels, as shown in Tables 1 and 2. (It will be recalled that the conflict in the North and East intensified in the latter half of 1983 and lasted for 18 years. During this period, economic activity, especially agriculture, was severely disrupted in the war-torn areas.) This milestone in respect of paddy production could be viewed as one of the major achievements of the present Government and clearly shows that its efforts to buttress the peace process with development have realized significant economic dividends, especially in the war-torn areas.