In the North East of Srilanka, deprived economic conditions after independence led to Tamil Nationalism, and then to Tamil Separatism in the sole aim of self-rule for better economic prosperity of Tamils. After 1977, with the open economy, Srilanka was a striving economy in Asia, and most of the spoils of the wealth were with the Tamils in Colombo and other capital cities. This economic disparity was a key factor, which led the Sinhalese to target, destroy and plunder ‘Tamil wealth’ in the 1983 riots, which is officially the start of the ‘Civil war’. This catastrophic economic loss to the Tamils caused the huge surge in Tamil militancy after 1983.

History tells us that successful military revolutions/campaigns have been accomplished within 5 years of active struggle. Longer military campaigns in any society can not be tolerated/supported by the people under continuing economic hardships. The Srilankan civil war was characterised by both warring parties targeting the others’ economy. The Tamil militancy carried out several daring attacks on ‘economic targets’ such as the Srilankan International Airport, Central Bank etc. In turn, the Srilankan Govt. imposed economic embargos on the Tamils.

At times of economic strife both the Srilankan Govt and the Tamil militancy engaged in ‘peace talks’ while rebuilding their economies. Srilankan economy seems to have survived the odds while the Tamil economy had gradually weakened over time. This then lead to the weakening of the Tamil militancy. Tamils started to leave from the North-East seeking better economic conditions, and they moved to the South of the island, and some moved overseas for even better economic prosperity. It was indeed a sad state of affairs for the Tamil militancy when it had to impose ‘travel bans’ on its own people, which caused further loss of support from the people towards the militancy. Although the Tamil militancy initially viewed the Tamil exodus as detrimental to their economy, later on the migrated Tamils supported the war financially.

Many migrated Tamils supported the militancy out of guilt of abandoning the rebellion rather than of any direct economic benefit to them. The Tamil Diaspora proved to be the back bone of the Tamil militancy with the wealth they supplied from foreign economies. Although the Tamil Diaspora wealth propped up the Tamil militancy for more than 15 yrs, the Tamils in North East continued to live in relatively poor economic conditions compared to the rest of the island and their kin now living around the world. This installed a ‘migration’ mindset among Tamils, which they saw as the ONLY way out for a better economic life.

The ‘final war’ was in itself an economics of scale ‘numbers game’. First the Tamil militancy was economically weakened by depriving them the ‘Diaspora Wealth’ by the banning the Tamil Militancy in several countries. This was followed by the targeting of the Tamil militancy’s overseas economic assets, such as destroying the military hardware supply ships. Then the Srilankan Govt. under wrote its own economy to borrow heavily to fund the final war. The borrowed wealth was used to modernise the military and boosting the troop numbers.

On the other hand, the Tamil militancy had dwindling cadre numbers with a relatively small recruitment pool and a very poor supply of military hardware. The economic mismatch of the two sides in the final war was so wide that defeat of Tamil militancy was inevitable. The other mismatch was the economic wealth of the Tamils living in Srilanka and the Tamil Diaspora, which led the two groups to have different expectations from the Tamil militancy. The Diaspora Tamils, being far removed from the conflict and economically affluent, actively supported the militancy for a separate country. The Tamils living in the Tamil Homeland being passive supporters strived for a reasonable ‘settlement’ of some form of self governance to allow their economic aspirations prosper.

The ‘sudden’ demise of the Tamil militancy has left both groups in despair. But the Tamils living in Srilanka, being close to the war, who had little expectations, seem to be coping well compared to the Diaspora Tamils, who were far removed from the war and had more expectations from the Tamil militancy. Further, the group living in poor economic conditions seem to be more resilient over the demise of the Tamil rebellion compared to the group living in affluent economic conditions.

The Srilankan Government now hopes a nullified Tamil Militancy will bring the country more economic stability and access to previously untapped resources, which inturn will bring in more foreign investment and wealth to the country. These economic driving forces also influenced the decision of the countries that supported the Srilankan Govt. in the final war. The Srilankan Govt. seem to have also aligned itself correctly, and at the right time, with the shifting of the world economic power houses, i.e., moving from the West(US, UK, Europe) to East (China and India) for its economic support.

As for the future, economic interest of the people (and politicians!) will be the main driving force behind the politics of Srilanka. If the Srilankan Govt. actively fosters economic development in the Tamil homeland it can quail any extreme Tamil nationalistic aspirations rising again. If it chooses to continue to deprive the Tamils living in North and East of their rightful economic development another Tamil uprising is not far away. Do not mistake the fact that a prospering economy also brings in enormous wealth to the politicians as well, and these politicians have all the intention to strive for peace.

One could argue that the Srilankan politicians had hastily ended the war after seeing the enormous ‘kick-backs’ the military top-brass was earning from the war, and now the benefits of peace and economic prosperity would flow into their own coffers rather than of the Military Generals.

As for the Tamil Homeland, there is already some signs of increased economic activity in the North and East with trade booming between North East and the rest of the country and while tourism is another thriving industry. Opening of the major banks, supermarket chains in the North are signs of increased economic activity. Further more, the rise in property value over past 6 months in and around Jaffna has been phenomenal combined with the fall in property values in Tamil dominated areas in Colombo, indicating a tendency of return of the local Tamil economic ‘migrants’ to the North. This seems a clear sign of economic prosperity in the North and East in the short period. With the return of the Tamils form the other parts of Srilanka the economy of the North will continue to boom. The money they were spending in the South will now be spent in the North.

This would ensure better goods and services are available in the North. This would then lead to better hospitals, schools, public transport and other infrastructure development in the near future. This self-supporting economic cycle will be boosted with the Diaspora Tamil wealth spent in the North East. This is bound to happen with improving economic conditions more Diaspora Tamils holidaying with their families and buying properties for their families in the North and East of Srilanka. The improving economic climate would entice organised Diaspora Tamil investment into the North East in the form of IT support officers, Engineering and Accounting Services etc tapping the vast intellectual sources. Such level of economic activity would then entice the international economic migrants to return to work and live in the North East. This then would be the true sign of the advanced economy of the Tamil Homeland.

In conclusion, economics has been the success and failure of all ideas (politics, business, engineering) and only economically sustainable ideas will stand the test of time. Economics has both been the weapon of war and reward of peace.

Economics has been the cause of war Srilanka and will be the effect of Peace in Srilanka.