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Micro-Enterprise Development and Peacebuilding in Sri Lanka

Micro-Enterprise Development and Peacebuilding in Sri Lanka

Photo credit: Tom Greenwood

This analysis summarizes and reflects on the following research: Yoosuf, A. & Premaratne, S.P. (2017). Building sustainable peace through business linkages among micro-entrepreneurs: case studies of micro-enterprises in the North of Sri Lanka. Journal of Peacebuilding & Development, 12(1), 34-48.

Talking Points

  • Since the civil war in Sri Lanka arguably emerged as a result of economic forces, effective peacebuilding must involve economic development for war-affected communities, especially Tamils living in the North.
  • By participating in business development programs, micro-entrepreneurs broadened their market base and increased profits by developing relationships among themselves and with other business actors, government authorities, and customers in other parts of the country.
  • Business linkage activities among micro-entrepreneurs may have two effects on peacebuilding:
    • They improve overall economic conditions in conflict-affected areas, thereby “mitigating the causes of conflict.”
    • They create relationships/networks across ethnic lines, thereby contributing to social reconciliation.


Eight years ago, the Sri Lankan civil war came to a brutal conclusion, with some 150,000 Tamil civilians trapped in the war zone and perhaps one-tenth or more of them killed in the final onslaught as the Sri Lankan Army decimated what remained of the Tamil Tigers, the Tamil nationalist insurgency that had fought the government off and on for a quarter-century to gain control over a Tamil homeland in the North (and East) of the country. Despite a seemingly decisive military victory, the country is still struggling to achieve meaningful political reforms and reconciliation among its Sinhalese majority and Tamil and Muslim minorities to address the roots of the conflict, especially after years of violence between those communities. One component of peacebuilding that must not be overlooked, according to the authors, is economic development— especially in light of the economic roots of the conflict. The authors cite Abeyratne who argues that the conflict emerged out of the exclusion of educated youth from economic opportunity, with ethnicity acting only as a “mobilizing device” rather than as a “root cause.” As such, one key aspect of peacebuilding must be ensuring that war-affected communities— particularly Tamils living in the North—have access to resources to sustain their livelihoods. The authors focus on one particular model of small-scale economic development—the establishment of linkages between and support for micro-entrepreneurs—and ask how such business linkages and support activities can facilitate peacebuilding in Sri Lanka.

Examining the work of a specific organization called the Nucleus Foundation, the authors selected five micro-entrepreneurs from northern Sri Lanka who participated in the foundation’s activities to trace the effects such participation had on their micro-enterprises and economic well-being. While many micro-entrepreneurs in post-conflict contexts “operate in complete isolation with little if any access to business development services, financial services and information,” the Nucleus Foundation organizes groups of micro-entrepreneurs from the same sector, providing them with a small business counselor and facilitating business development activities such as training programs, trade fairs, and networking events. Over the course of such activities, relationships develop among same-sector 3 themselves, as well as between these micro-entrepreneurs and various other entrepreneurs, service providers, suppliers, government authorities, and even customers in other parts of the country. The five participants the authors selected for interviews are representative of the broader body of micro-entrepreneurs in the North, in terms of geography, age, gender, and rural/urban location.

The authors found that the foundation’s activities—especially broadening business networks and traveling outside of the North for various business enrichment activities—helped micro-entrepreneurs “develop their microenterprises, increase their income and further expand their businesses.” For instance, Rani (all names have been changed), a 37-year-old war widow and single mother who lost an eye during the war, had a small business cooking and selling food items. Participating in multiple activities with the Nucleus Foundation, which took her beyond the Northern Province for the first time, she noted a “change” within herself, as she “observed the factories, the machines, marketing strategies and new innovations,” and she also valued the group problem-solving and support she experienced through the project. Her profits, up one-hundred-fold since she began, exhibit the change. Another micro-entrepreneur, Luxmi, a 54-year-old mother who lost her home and land during the war, has been able to develop her small business selling gingili oil. The contacts she made over the course of multiple trade fairs and technical training programs throughout Sri Lanka expanded the market for her products, which she now sells in Colombo as well as in the North. Luxmi has refined her packaging and products to meet the needs of this broader customer base and has also “found many friends from different parts of the country,” some of whom “are able to advise and guide [her] in [her] business.” All five micro-entrepreneurs profiled experienced increased profits as a result of their participation. Furthermore, all of them gained access to experiences and networks that they would not have had they been operating alone.

The authors appear to make two claims with regard to the effect of such business linkage activities on peacebuilding: first, that strengthening micro-enterprises improves overall economic conditions in conflict-affected areas, thereby “mitigating the causes of conflict,” and, second (the less well-developed point), that developing business relationships and networks with those from “other ethnic groups and cultures” contributes to social reconciliation in Sri Lankan society.

Contemporary Relevance

Although Sri Lanka has largely fallen from international news headlines since the end of the civil war in May 2009, this research calls to mind the long-term peacebuilding work that continues long after the battles have been fought. People need to rebuild their lives, often with family members no longer living, homes and crops destroyed, years of schooling missed—decades of war marking their bodies and their psyches and their communities. The legacy of war means different things for people who are differently positioned in terms of geography, social identity, or economic status. While this research could pay greater attention, therefore, to the way in which power necessarily operates in “post-conflict” Sri Lanka and intersects with economic development projects in often unsettling ways, it nonetheless draws attention to the crucial issue of livelihoods—a fundamental concern that must be addressed in every country to safeguard citizens’ human security, as well as to make them less vulnerable to calls for violence. Still, grassroots economic development itself is not enough to address the deep-seated grievances that have emerged over years of violent conflict; even if ethnicity was originally only a “mobilizing device” in the conflict, the experience of discrimination and violence along ethnic/national identity lines has made its operation and implications all too real for many people—with legacies that must be recognized and addressed, not simply wished away.

Practical Implications

Since the article only suggests—rather than demonstrates—the effects of business linkage activities on peacebuilding in Sri Lanka, it is difficult to come to any real conclusions about how best to facilitate peacebuilding along these lines. But, on a broader level, the research reminds us of how multifaceted peacebuilding is and how important it is to address economic—along with social and political— aspects of peacebuilding and reconciliation in the wake of violent conflict. The organization One Earth Future, for example, has recognized exactly this nexus of economic development and peacebuilding in the organization’s programs in Somalia (Shuraako) and Colombia (Paso Colombia). While much attention is given to warfare, peace workers have their work cut out for them when the fighting finally stops, as a country’s social, economic, and political fabric, torn apart by years of war and mistrust, needs to be built up again and underlying grievances need to be addressed.

While structural changes are absolutely necessary to meaningful conflict transformation, there is also plenty to be done on the ground at the level of individuals seeking ways to survive and even thrive—but also to live with one another amid a legacy of violence and persistent inequalities and power disparities. Those working in economic development can usefully draw on insights from peacebuilding to make sure that efforts to build up livelihoods also forge links across ethnic identity lines in the process, so participants in such programs can build relationships with those they might otherwise stereotype as “oppressor” on the one hand or “terrorist” on the other.

Keywords: development, micro-enterprise, peacebuilding, reconciliation, Sri Lanka

The above analysis is from Volume 2, Issue 3, of the Peace Science Digest.

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