35228 No. 23 / February 2006 The Dynamics of Conflict, Development Assistance and Peace-building: Sri Lanka 2000-05 Significant transformations in the socio-political and economic landscape of Sri Lanka in recent years encouraged five development partners--World Bank, Asia Foundation, and the governments of the United Kingdom, Netherlands and Sweden to collaborate on a conflict assessment in 2005. This reflects a growing trend in the development partner community of combining efforts, pooling resources, and taking advantage of comparative strengths to engage in conflict analysis exercises.1 The multi-donor conflict assessment revisits the underlying structures of conflict, identified in the previous conflict assessment,2 and explores the current dynamics of conflict factors with a particular focus on the peace process and international engagement.3 This note presents key findings of the assessment, in particular, the approaches supported by development partners in Sri Lanka. While this is drawn solely from the Sri Lanka experience, it is likely to have a broad relevance to many such countries. The State of the Conflict In spite of the ceasefire agreement and peace create the preconditions for peace talks, they have negotiations, the structural dimensions of the not as yet led to a radical reordering of political conflict within Sri Lanka have remained relatively forces inside the country. stable. There has been no `seismic shift' in the `tectonic plates' underpinning conflict in Sri Lanka. The peace negotiations of 2002-03 followed a The constellation of factors that contributed to the phased approach, which involved first ending the outbreak and sustenance of violent conflict-- violence, second creating a peace dividend, and including the nature of the state, its political culture, third dealing with the core political issues that are at the institutional framework of policy, uneven the root of the conflict. International actors, central development patterns and competing nationalisms to this three-phased strategy, facilitated peace (including Tamil perceptions of inequalities vis-à- negotiations, and provided security guarantees and vis the Sinhalese)--remain largely unaffected by the reconstruction assistance. Although this strategy peace process. In many respects the `peace' that was a success in the sense that the ceasefire has followed the signing of the Cease Fire Agreement outlasted the peace talks, it has so far failed to (CFA) has had the effect of freezing the structural deliver a lasting or even interim settlement. impediments to conflict resolution. First, although `no-war, no-peace' has meant an end On the other hand there has been a significant to large-scale militarized conflict, there have been change in the external context at both the regional high levels of political violence, including over and international levels. The global `war on terror', 3,000 ceasefire violations. Second, although there growing international engagement in `post conflict' was a peace dividend of sorts, it has been unevenly contexts and Sri Lanka's integration into a dynamic distributed and its impacts have attenuated over and increasingly assertive wider Asian region have time. Reconstruction funding was caught up in the together created new (and sometimes competing) politics of the peace process, thus limiting the peace incentives for domestic actors. Although these dividend in the North-East. Third, the step-by-step changes in the external context may have helped approach was based on the assumption that a limited peace could ultimately lead to a transformative the peace and conflict dynamics. Development peace. In hindsight, however, it is clear that a return partners have increasingly calibrated their policies to complete `normalization' would not have been and programs according to conflict and peace possible until the core political issues were dynamics within Sri Lanka. Their attempts to do this addressed. It proved impossible to circumnavigate can be divided into three areas of engagement: (i) or deal indirectly with the pivotal questions of applying peace conditionalities to reconstruction and power sharing and nature of future governance for development aid;4 (ii) dealing with the the North-East. Moreover without a clear road map consequences of conflict; and (iii) addressing the for peace talks, the nature of the end goal was underlying causes of conflict. always unclear, which created anxieties among external and internal stakeholders. The peace In the 2003 Tokyo conference, donors pledged $4.5 process acted as a `lightening rod' for wider billion in reconstruction and development aid but political and societal tensions in Sri Lanka. linked it to progress in the peace process. The application of peace conditionalities was a new Alongside the formal peace process, there was also development but did not have the desired outcomes the pursuit of so-called Track II initiatives, such as mainly because of an inflated view of the visits of the LTTE, government representatives, and importance of aid. Furthermore, no mechanisms parliamentarians to countries like Switzerland with were established to ensure compliance and some potential solution models. Such confidence-building development partners did not follow through on measures were seen to have the potential to linking peace with their assistance. Where the two contribute to an increased commitment to peace on main recipient actors were concerned, the LTTE, not both sides but the extent of their positive a participant in Tokyo, believed that conditionalities externalities is uncertain. were yet another form of punitive action that undermined them; whereas nationalist elements in Development Partner Engagement: Where It the South used conditionalities as a pretext to launch Stands vis-à-vis Conflict a tirade against international involvement in the peace process, articulating them as a threat to One of the most salient recent changes in the national sovereignty. political landscape has been the "internationalization" of peacebuilding. Although Development partners have recognized the the policies and practices of different international importance of addressing the consequences of the actors varied significantly, two broad trends can be war and embarked on large-scale humanitarian and identified. First, in Sri Lanka there has been a more reconstruction assistance. Prior to the CFA, the robust and multi-faceted international response to World Bank and the ADB in particular decided to conflict and peace dynamics than has historically initiate programs in the North-East rather than wait been the case. This has included security guarantees, for a peace agreement. Their assistance for ceasefire monitoring, facilitation of peace rehabilitation programs for the North-East, however, negotiations (Tracks I and II) and humanitarian/ was definitely scaled up after the CFA. About one development aid provision (Track III). Second, there third of the program supported by the World Bank is have been changes in the division of roles between located in the North-East. With the increased flow various policy instruments and actors. Reflecting of aid funds for reconstruction, the North-East contemporary trends in `liberal peacebuilding', there Reconstruction Fund was established with the has been a blurring of the traditional distinction World Bank serving as custodian, although sadly between the conflict resolution and the economic this Fund was a victim of the abandoned peace talks aspects of peacebuilding. in April 2003, and was never fully activated. It is apparent that donor-supported programs for the In the past, aid agency involvement and North-East are sensitive to the current conflict development programming focused on working challenges, although support for programs and "around" conflict and political concerns. In recent projects in the South, which still receives the years however, the aversion to stay away from majority of development assistance, appear to carry conflict areas has been replaced by a greater on regardless of the state of the conflict. willingness to work "on" and "in" conflict, and to explicitly engage in programs that take account of 2 The Role Development Partners: Some Pointers dimensions of conflict by working in conflict for Future Focus sensitive ways on areas like governance, economic reform and poverty. If development partners are to work more effectively in or on conflict they must develop a This implies that development partners should more realistic assessment of their role and impacts. address the underlying issues of conflict by working By attempting to stand on the same ground as the in conflict-sensitive ways in areas such as diplomats, aid agencies have not been playing to governance, economic reform, and poverty, i.e. their their comparative advantages. The implications of support should be designed such that it does not our analysis in relation to the `three C's' contribute to conflict escalation but instead, if (conditionalities, consequences and causes) are as possible, contributes to conflict de-escalation. This follows: can be illustrated with a few examples. · First, the lesson about peace conditionalities is that applied crudely and without a strong The quality of governance, manifested in an political process to back them up, they have ethnicized education system and minority exclusion limited or even perverse impacts. Since the in the political process, has contributed to tsunami, the aid landscape has changed exacerbating conflict. While there have been several substantially. The threat of withholding aid in internationally-supported programs of good an `over-aided' environment will have very governance, evidence demonstrates that they have little effect. Therefore the debate should now had limited positive impacts. Development partners shift toward thinking about positive conditions and NGOs have succeeded at initiatives such as on aid and gaining influence through promoting discussions on decentralization and engagement. It is extremely important that federalism, supporting work with provincial and development partners invest the requisite local level governments, involving parliament, to political and financial capital to support the mention a few. It might be equally useful however practical implementation of joint mechanisms for development partners to conduct careful analysis that bring the parties together in post-conflict of the actual political realities and the key drivers of reconstruction work (or post-disaster change to develop conflict-sensitive governance reconstruction, as was tried in the case of the programs. Governance issues can be dealt with more abortive "Post-Tsunami Operation Management imaginatively by exploring Asian models which Structure," P-TOMS, the mechanism that may be more suited to Sri Lanka; by entering into almost became the framework to oversee the dialogue with diverse political groups and actors management of post-tsunami assistance in the particularly the "unlike-minded" and; by engaging North-East). with lower levels of government to understand their · Second, in order to address the consequences of challenges to ensure better social service delivery. conflict, there is scope (and a need) to substantially scale up assistance to the North- Poverty eradication is a top priority for Sri Lanka as East to build a visible peace dividend. This will identified in national development strategy help meet immediate humanitarian needs and documents and aid agency statements. However, also boost confidence in the peace process. vertical and horizontal inequalities between and Reconstruction programs may simultaneously among Sinhalese and Tamils have grown, and contribute to the de-escalation of conflict and pockets of exclusion and chronic poverty have address its underlying causes by tackling the expanded in the South and North-East. problem of chronic poverty in the North-East. Impoverishment has increased animosities towards This may involve developing pragmatic the government in the North-East but higher poverty institutional arrangements in order to deliver levels have undermined faith in the government and such programs and to build capacities at the development programs in the South as well. It local level. would be valuable if development partners would · Third, there is potential for development support efforts that target social exclusion, since it partners to do more to address the underlying could have positive spin-offs vis-à-vis the peace causes of conflict, particularly in the South. The process. Interestingly, the Marxist Party (JVP), larger development partners in particular can which holds almost one-fifth of the seats in have a significant impact on the structural Parliament, and supported the President in the last 3 elections, has always given social exclusion a vital representatives, in structuring consultations and position in its agenda. Development partners--and incorporating diverse views. perhaps this applies in particular to the World · Long-term commitment: To transform the Bank--and the JVP have seemingly been suspicious situation, donors need to be committed and of each other, but they could potentially use this engaged for the long run. They should not be area of common concern as an opportunity to guided by short-term imperatives and quick- collaborate. fixes. They need to encourage programs that address the underlying causes of conflict and on In some cases, development partners have treated strategies that incorporate conflict-sensitive civil society as an alternative to the state and used it thinking in endeavors like tsunami aid and as their interface with the state. It is wrong, development projects in the South. These however, to view civil society as an apolitical space, programs include those that fight more responsive and efficient than the state, and unemployment especially among youth, support determined to bring about change. Instead, civil cross-ethnic programs to build bridges between society in Sri Lanka tends to mirror the state--both groups, and encourage activities that break are centralized, polarized, and characterized by down negative perceptions and stereotypes. client-patron relationships. Still, donor engagement · Complementarity: Development partners should with civil society has flourished in recent years, move toward strategic complementarity especially in peace-building but this has mainly whereby their distinctive approaches been with Colombo-based civil society groups complement and reinforce, rather than whose influence in rural areas is limited. Donors undermine, each other. It would also help if the need to continue their engagement with civil society current "western-centric" approach to peace is but need to go beyond viewing it as a mechanism of complemented by incorporating perspectives social service delivery. They could enable civil and concerns of Asian countries. society to be politically active and independent, and forge partnerships beyond Colombo. Civil society could be encouraged to take on a host of roles 1The need for conflict analysis is based on the recognition that there including educator, policy advocate, watchdog, is a strong link between development assistance and the factors service provider, and conflict manager. affecting the trajectory of conflicts. Thus development assistance and program effectiveness will be strengthened if the factors that escalate and de-escalate conflict are systematically examined. Moving Forward 2Jonathan Goodhand, "Aid, Conflict and Peacebuilding in Sri Lanka," 2001. 3For details, see Jonathan Goodhand, Bart Klem with Dilrukshi As development partners continue to engage in Sri Fonseka, S.I. Keethaponcalan and Shonali Sardesai, "Aid, Conflict Lanka, it will be helpful for them to consider key and Peacebuilding in Sri Lanka, 2000-2005", Netherlands Ministry principles to guide their involvement: of Foreign Affairs, Swedish International Development Cooperation Agency, The Asia Foundation, The Government of the United · Shared analysis: Since 2003, international aid Kingdom of Great Britain and Northern Ireland, and The World agencies have focused on strengthening Bank, 2005. 4 harmonization and sharing analysis in order to For example, the World Bank's recent Country Assistance Strategy Progress Report explicitly links the level and nature of the Bank's contribute to development and a durable peace. support to Sri Lanka to progress in the peace process, as measured in This is a positive development and efforts on a peace monitoring framework prepared on a quarterly basis by a Sri knowledge sharing and joint collaboration Lankan NGO. should continue to be prioritized, e.g., the current work on joint monitoring of conflict This note was prepared by Peter Harrold (Country Director, Sri trends. Lanka) and Shonali Sardesai (Conflict Prevention and · Mainstreaming inclusiveness: Exclusion Reconstruction Unit). generates resentments and hostile sentiments. This Note was also published as Social Development Note No. 103 This does not suggest that every stakeholder and is part of a series intending to disseminate good practice and key needs to be included. Rather an inclusive findings on conflict prevention and reconstruction. This series is edited by the CPR Unit in the Social Development Department of the approach should be established that carefully Environmentally and Socially Sustainable Development Network of thinks about intra- and inter- ethnic and the World Bank. CPR Dissemination Notes are distributed widely to religious divisions, different constituencies, Bank staff and are available on the CPR website civil society actors, and mid-level http://www.worldbank.org/conflict and can also be requested via e- mail at cpr@worldbank.org 4