Economic Transformations for Better Lives Through Better Jobs

Until May 2009, Sri Lanka was troubled by a violent separatist conflict, which resulted in widespread damage to human lives, communities, and property. Soon after the ending of the conflict, the government spearheaded a development program in the conflict-affected regions to revive its war-ravaged economies. The development programs aimed to rebuild and modernize damaged or destroyed social and economic infrastructure and facilitate livelihood activities and employment creation to uplift the living standards of people. This chapter examines the success of different strategies adopted by Sri Lanka to improve the labor markets in the aftermath of the war in the conflict-affected provinces. The analysis shows that the development programs have stimulated growth and reduced poverty. However, this was mainly done through the improvement of livelihood activities in the two selected provinces, namely Northern Province (NP) and the Eastern Province (EP). But, labor force participation rates (LFPRs) and employment-to-population ratios remain low in the conflict-affected regions, indicating low job creation and possible labor market imbalances. Further, the analysis shows that the economies of the conflict-affected provinces are not mature enough for the creation of professional and semi-professional jobs. The slow growth of the overall economy, muted attention given to the social sector developments, and unstable macro- and political developments in the country would have contributed to the slow recovery.