Navigating the aid-exploitation spectrum in postwar Sri Lanka
Civilians displaced from portions of Kilinochchi and Mullaitivu in Northern Sri Lanka as a result of fighting, January 2009 (photo via Flickr user trokilinochchi)
How does a country that is emerging from a decades-long civil war balance between aid and exploitation in foreign assistance?
That was a fundamental question for the Sri Lankan government at the end of its three-decade-long civil war in 2009. The achievement of peace between the Sinhalese-majority government and the Liberation Tigers of Tamil Eelam (LTTE, or Tamil Tigers) marked the beginning of a period of postwar reconstruction, state building, and economic development in the island nation. The consequence of the protracted war was political, social, and economic vulnerability. Thus, the priorities of postwar policy involved reconstruction, economic development, reconciliation, and national security.
Sri Lanka could not achieve these targets alone and required substantial financial assistance, technical expertise, and diplomatic support. These conditions created opportunities for foreign governments, multilateral institutions, and international organizations to shape Sri Lanka’s postwar environment. Consequently, Sri Lanka’s policy trajectory unfolded at the intersection of domestic priorities and external interests, as successive governments sought to balance urgent reconstruction needs against the strategic objectives of foreign partners.
Understanding postwar Sri Lanka requires moving beyond simplistic debates over dependence and autonomy towards a more nuanced analysis of how the country navigated the spectrum between aid and exploitation. To do so, it is necessary to examine five factors: needs, options, government capacity, external motives, and trade-offs. Through this analysis, it is clear that foreign actors have been able to influence Sri Lanka’s postwar policy landscape through much-needed economic assistance. In the process, while subsequent Sri Lankan governments retained meaningful agency in navigating external partnerships, the lack of alternatives and weaking government capacity affected the country’s bargaining power in ways that tipped the balance from aid towards exploitation in some bilateral arrangements.
A group of LTTE fighters in Kilinochchi, April 2004 (photo via Wikimedia Commons, username Ulflarsen)
Foreign actors in postwar environments
The role of foreign actors in postwar environments remains one of the most crucial topics in peacebuilding as their involvement often extends beyond humanitarian assistance to include governance reform, economic recovery, state building and many other functional areas. Foreign actors normally enter a postwar country when the conflict-affected state lacks the resources, institutional capacity, and the political stability required to manage the reconstruction process independently.
The types of actors vary and include the following:
Individual countries
International organizations (e.g., UN, World Bank, International Monetary Fund)
Regional organizations (e.g., African Union, European Union, ASEAN)
Nongovernmental organizations
Civil society organizations
Their influence generally covers economic reconstruction, security stabilization and governance transformation. For example, a substantial share of Afghanistan’s GDP after 2001 came from foreign aid as international actors financed healthcare facilities, roads, and public administration while providing capital, technical expertise, and investment. After the Kosovo war, NATO and the United Nations assisted the process of establishing security institutions and maintaining peace.
One consistent feature of postwar interactions is that foreign actors in postwar environments operate with their own interests and agendas. This means that their engagement may be less about aid than strategic objectives, economic incentives, and ideological positions. This inclusion of external interests is what contributes to the risk of exploitation through the provision of services that may be otherwise characterized purely as aid.
Australian Ambassador Kathy Klugman with villagers in North Sri Lanka to open homes built in partnership between AusAID and UN Habitat, 20 September 2011 (photo via Conor Ashleigh/AusAID)
The aid-exploitation spectrum
When it comes to foreign actors in postwar environments, the most dominant question is how the recipient government navigates the aid-exploitation spectrum in its engagement with foreign actors.
This comes down to five factors: needs, options, government capacity, external motives, and trade-offs.
Needs refer to the immediate and long-term political, economic, humanitarian, and security requirements necessary for postwar recovery.
Options are the range of domestic and international alternatives available for meeting those needs.
Government capacity is the state’s institutional ability to negotiate with foreign actors, enforce agreements, deliver services, maintain accountability, and resist corruption.
External motives are the interests and objectives of the foreign entities seeking to deliver assistance in postwar environments.
Trade-offs are the political, economic, strategic, or resource concessions that a postwar government may exchange for foreign assistance.
The position on the aid-exploitation spectrum is determined by the interaction of these five factors. Greater needs and fewer options reduce bargaining power. Strong government institutions improve a state’s ability to negotiate favorable agreements and enforce accountability. The nature of external actors’ motives shapes the conditions attached to assistance, while the trade-offs a government is willing or compelled to make determine whether engagement remains mutually beneficial or becomes exploitative.
These variables are not static. As postwar recovery progresses, needs, institutional capacity, and available options change. Consequently, relationships that initially resemble mutually beneficial partnerships may gradually shift toward greater asymmetry—or, conversely, become more balanced as domestic institutions strengthen.
30 years of war in Sri Lanka
Sri Lanka’s civil war is best characterized as a protracted ethnic conflict between the government of Sri Lanka and the LTTE from 1983 to 2009. The primary cause of the conflict was the longstanding political, economic, and social grievances of the Tamil minority who were allegedly discriminated against and marginalized by the predominantly Sinhala-led state. The LTTE engaged in an armed insurgency with the aim of creating an independent Tamil state in the northern and eastern regions of the island.
The conflict was one of the longest-running civil wars in the world and resulted in an estimated 80,000 deaths, mass displacement of residents, and other economic and social disruption. The war came to an end in 2009 with the military defeat of the LTTE by government forces.
While Sri Lanka had achieved peace, the decades-long war had taken its toll. The country’s needs for foreign aid centered on development, humanitarian assistance, and security cooperation to enable immediate postwar stabilization and to set the conditions for durable peacebuilding in the long-term.
At the same time, its government capacity was highly militarized and centralized with majoritarian state control. The firm-handed leadership as well as military surveillance within the whole country were holdovers from the period of conflict and widely accepted during the early transitional phases.
However, Sri Lanka’s government capacity deteriorated after the war. The same top-down control that proved beneficial during the conflict and immediately thereafter proved susceptible to corrupt practices, which took place within almost every government institution. People gradually started to lose trust in the government, political leaders, and institutions. The combination of corruption and weakened governance increased the susceptibility to foreign exploitation.
A destroyed tank in Kilinochchi, November 2006 (photo via Flickr user Thomas Berg)
Navigating aid-exploitation dynamics in postwar Sri Lanka
Numerous foreign actors have played roles in postwar Sri Lanka since 2009. On the one hand, they were beneficial in contributing to reconstruction, development, humanitarian assistance, and economic recovery. On the other, some parties utilized the corresponding leverage to exercise outsize influence on the country’s policy priorities, strategic partnerships, and domestic decision-making. There are four—two countries and two international organizations—that offer different examples of how the Sri Lankan government navigated the aid-exploitation spectrum with varying degrees of success.
China
Given Sri Lanka’s strategic location, China’s main interests focused on expanding the country’s presence within the Indian Ocean. It further had economic motives tied to contracts for Chinese companies, including the preeminent use of Chinese labor, financing, and technology. Politically, engagement in postwar Sri Lanka would become tied to China's Belt and Road Initiative and its strategies related to aid-driven diplomacy.
The initial trade-offs were straightforward. China provided infrastructure financing, concessional and commercial loans, rapid project implementation, technical expertise, protection on human rights issues, and investment in large-scale development projects. In return, Sri Lanka provided access to major infrastructure projects, contracts with Chinese state-owned enterprises, and enduring diplomatic engagement. While postwar Sri Lanka obtained economic and diplomatic support, China gained strategic influence, commercial opportunities, and stronger presence in the Indian Ocean.
The mutually beneficial trade-offs eventually gave way to more exploitative outcomes. As Sri Lanka’s government capacity weakened through corruption and needs increased through economic degradation, the balance shifted in favor towards China. China did not need to change its objectives or approaches; rather, as Sri Lanka’s ability to negotiate from a position of strength weakened, it fell into debt and other obligations to Beijing that created exploitable dependencies.
Hambantota Port, circa 2013 (photo via Wikimedia Commons user Deneth17)
India
India’s main interests in postwar aid to Sri Lanka were geopolitical in nature. Given the proximity to India, there was a sense of competition based on China’s growing influence within Sri Lanka and presence in the Indian Ocean region. The government in New Delhi could not maintain a silent neighbor stance.
To contrast China’s transactional assistance, India sought to deliver more aid-oriented support to postwar Sri Lanka. This included development assistance such as housing projects and hospital construction, as well as medical aid, education initiatives, and community development projects. Many of these were grant funded or offered on highly concessional terms.
India also strengthened cooperation in security. This included direct assistance in maritime security and intelligence sharing, as well as cooperation in counterterrorism activities and naval exercises.
In return, India expected strategic reassurance. This translated to continued political and economic engagement, while also ensuring that the Sri Lankan government was not ceding too much influence to its Chinese partners. These conditions did not change as Sri Lanka’s needs grew or government capacity weakened over time; rather, it only reinforced New Delhi’s interest in ensuring that Sri Lanka did not fall deeper into exploitative arrangements with China.
Ultimately, India’s engagement oriented closer to the aid side of the spectrum. The desire to present itself as a foil to China led to more conciliatory reconstruction support, and while the broader geopolitical objectives were not dissimilar to Beijing’s, the manner in which New Delhi approached them with its Sri Lankan partners stood in stark contrast.
The CTF on Reconciliation Mechanisms holds a sectoral consultation on persons missing in action, July 2016 (photo via Facebook/@CTFSL)
International organizations
Unlike the infrastructure-focused engagement from China and India, international organizations exercised influence through governance conditionality. The main motives of international organizations (IOs) in postwar Sri Lanka were to uphold human rights, accountability, and transitional justice while ensuring equitable practices in governance, promotion of economic stability, and postwar reconstruction.
IOs such as the International Monetary Fund (IMF) and United Nations (UN) provided financial assistance, technical expertise, humanitarian assistance, and international legitimacy. In return, the IMF and UN expected economic reforms, improvement in governance, and human rights commitments. This included the necessity for establishing separate institutions for transitional justice in Sri Lanka such as the Office of Missing Persons, an office for reparations, a Truth, Justice and Non-Recurrence Commission, and a new judicial mechanism. The Consultation Task Force (CTF) on Reconciliation Mechanisms which was established in 2015 was responsible in obtaining public views on the implementation of these bodies.
In return, Sri Lanka received international financial and policy assistance across multiple areas of governance. The country gained support for macroeconomic reforms, monitoring mechanisms, and policy protections both at home and in international engagements.
As a result, IO contribution can be categorized as conditional aid rather than exploitation. Unlike bilateral donors, IOs generally sought policy implementation rather than direct geopolitical or commercial gains, although they also pursued institutional mandates and normative objectives. Nevertheless, the short-term costs from the conditionality received criticism. By actively influenced what policies were to be prioritized, how to allocate resources and overall government models, and which postwar security initiatives were most appropriate for Sri Lanka, the IO efforts were at times characterized as interferences in domestic affairs and constraints in national policy autonomy.
This raises an important consideration in the aid-exploitation spectrum: the interpretations of different stakeholders on the recipient side. If it would have been an option for Sri Lankan government, many of the policies related to transitional justice, human rights, and missing persons would likely have gone unaddressed. Thus, it is fair to say that the influence increased the Sri Lankan government’s accountability. Whether this is considered aid or exploitation depends entirely on the interpretations of both the Sri Lankan government and the preferences of its constituents, which were split in their positions on the matter.
Sri Lanka’s Factors | China | India | IMF | UN |
Primary needs | Infrastructure finance and investment | Reconstruction,housing, security cooperation | Macroeconomicstabilization and fiscal support | Humanitarian aid, reconciliation, governance reform |
Alternative options | Few alternative infrastructure financiers | At scale, feasibly only China | Few credible alternatives for financial recovery | Few alternatives for peacebuilding and transitional justice support |
Government capacity | Weak institutions eventually reduced bargaining power | Greater flexibility through grants and regional ties | Economic crisis increased dependence on IMF conditions | Limited administrative capacity slowed reform implementation |
External interests | Strategic influence and commercial interests | Regional security and balancing China | Economic stability and institutional credibility | Human rights, accountability, and international norms |
Trade-offs | Infrastructure finance and diplomatic backing for strategic access and commercial contracts | Development and security assistance for continued strategic alignment | Financial support for fiscal and structural reforms | Technical and humanitarian assistance for governance and transitional justice reforms |
Position on spectrum | Shifted toward exploitation as dependence increased | Closer to aid despite the role of strategic interests | Conditional assistance that limited policy autonomy | Accountability-focused assistance with contested sovereignty implications |
Conclusion
Sri Lanka offers a clear demonstration of how the distinction between aid and exploitation is rarely binary and can evolve over time. External assistance simultaneously expanded the country’s opportunities for reconstruction, economic development, security cooperation, and institutional reforms while narrowing its strategic autonomy in Sri Lanka’s ability to negotiate and pursue independent policy choices. Ultimately, whether assistance became beneficial or exploitative depended less on the intentions of individual donors than on the interaction between Sri Lanka's own needs, institutional capacity, available alternatives, and willingness to exchange policy concessions for external support.
This framework has broader relevance beyond Sri Lanka. Other post-conflict states—from South Sudan to Bosnia and Herzegovina and Afghanistan—face similar dilemmas as they navigate reconstruction amid competing geopolitical interests. The aid-exploitation spectrum therefore provides policymakers with a more useful framework for evaluating foreign engagement than binary narratives of dependence or sovereignty.
Dinithi Pallewatta is a Postgraduate Student from the International University of Japan. Her research interests include geopolitics, power rivalry, and the agency of small states. She also researches on the role of collective memory as a way for Transitional Justice in postwar countries.
