More that half a century ago, Sri Lanka social

indicators were rated amongst the highest in Asia - far superior to
Malaysia, South Korea and even Singapore - in terms of education, health
needs and looking after the poor and the aged.

But its economy has been lagging far behind while other Asia Tigers made
giant strides in both economic and social development. So what went wrong?
Most people believe that politics ruined this country and its development
phase leading to the ethnic conflict.

"It's the politicians who have ruined this country and let it rot while the
rest of the world speeds ahead," laments an elderly Tamil professor, who
has had a birds-eye view of the ruination of a nation that was once on par
with other now-affluent Asian countries.

The ethnic conflict is the country's biggest stumbling block, retarding
growth and effectively driving away cash-rich foreign investors and foreign
tourists. "Look, if not for the 1983 race riots, this country would have
prospered and rivalled only Singapore or other top nations," says Ronnie de
Mel, a former finance minister and the architect of Sri Lanka's
free-wheeling liberal economic policies in the early 1980s which drove
investment to high levels.

Up to 400 Tamils, many of them burnt alive by rampaging Sinhalese mobs,
died in one week of mayhem in July 1983. Those race riots sparked off the
ethnic conflict that has raged on to this day, killing up to 75,000
civilians, government soldiers and Tamil rebels and devastated the economy.

Sri Lanka's population is made up of Sinhalese who account for 74 percent,
Tamils who represent 18 percent while the Muslims total seven percent.
Buddhist is the main religion among the Sinhalese while Christianity,
Hinduism and Islam follow in that order.

The Tamils, who claim to be the country's indigenous people along with the
Sinhalese, are demanding equal rights in education, allocation of
government jobs and in land and housing policy.
A subdued cry by a moderate Tamil group for independence in the north and
the east for the Tamils, who mostly live there, was taken up with much more
vigour and deadly enthusiasm by armed, fanatic militant groups in the late
1970s.

In recent years, the Liberation Tigers of Tamil Eelam (LTTE) guerrilla
group has stood alone in battling government troops for a separate state
called "Tamil Eelam (nation)". The LTTE - brutally killing off all its
Tamil opponents - claims to be the main voice for the Tamils.

Before the 1983 riots, Sri Lankans of all religions, race and creed treated
each other as equals. Not anymore. The ethnic conflict has split
communities on communal lines - Sinhalese vs Tamils, Muslims vs Tamils,
Sinhalese vs Muslims.

Many Sinhalese, considered moderate and believed Tamils were not given
their due rights in the past by majority-Sinhalese governments, have in
recent years turned hardline - as the conflict grew and rebel violence
escalated - and led to the formation of hardline and nationalistic forces.
The Tamils in turn have hardened the rights issue and mere wishes in the
past have become demands.

The Sihala Urumaya or Sinhalese Heritage group was born a year ago out of a
need to ensure the country is not broken up on ethnic lines and to deter
the government from giving in to all the demands of the Tamils. The party
is made up of middle class Sinhalese and is contesting, for the first time,
the October 10 parliamentary elections in Sri Lanka. It is expected to
clinch a few seats in the 225-seat house of parliament.

"Governments present and past are giving in too much to the Tamils. Sri
Lanka is a country for the Sinhala Buddhists but our rights are being
eroded," argues Sihala Urumaya's national organizer Champaka Ranawaka at
election rallies.

Political parties formed on communal lines is not a new phenomenon. More
than a half a dozen Tamil parties were formed in the 1980s mainly aimed at
protecting the rights of their communities. Muslim minority parties also
thus emerged from this equation.

Ironically, while Sinhalese hardliners reject most of the demands of the
minorities - that they have been isolated and not treated as equals -, the
two main political parties in the country have had to rely on minority
votes to form governments.

The ruling PA and the main opposition United National Party account for
about 40 percent each of the country's 12 million voting population leaving
another 20 percent which is divided amongst smaller and minority political
groups.

When the PA formed a government in August 1994, it had to rely on the
support of Tamil and Muslim groups and has the same expectations at next
month's election. The UNP, if it wins the election, would also have to
entice minority parties to its government in the absence of securing a
working majority as a single party.

President Kumaratunga is considered a better leader than UNP chief Ranil
Wickremasinghe, though there is nothing radically different in the policies
of the two. Both want to end the war, negotiate a peace deal with Tamil
Tiger rebels and continue current economic reforms. But they have largely
different ways of tackling political and economic issues.

"I believe Kumaratunga is a more determined person than Wickremasinghe to
end the war and negotiate a peaceful solution for the Tamils," says Jehan
Perera, a political commentator and media director at the National Peace
Council, a peace think-tank. "She is the only leader prepared to offer
far-reaching political reforms to the Tamils in return for peace."

Both the UNP and the PA have entered into peace talks between the rebels in
the past but failed to reach a workable solution. A peace pact with India -
a key player in the conflict - also failed in the 1987 and Indian troops
sent to enforce the pact, returned a few years without much success.

The war apart from devastating Sri Lanka in terms of human suffering and
national economic development has caused social unrest. A crime wave is
soaring, the cost of living has shot through the sky this year due to a
string of increases in fuel prices and commodities, the country has been
placed on a war footing and extra taxes imposed on the people to buy extra
arms for the military while education reforms are not achieving its objective.

Solutions

The key to ending the conflict is by offering a peace package to the Tamils
that goes some distance in meeting their demands for regional autonomy and
being able to take charge of their own affairs, with some control from the
federal government.

There have been proposals placed on the table in the past but deep mistrust
between the Tamils and the Sinhalese have led many Tamils to believe that
these proposals - though wide in nature - may not be implemented. It is
true to some extent. "When the government wants to offer something to the
Tamils, chauvinistic Sinhalese forces rise up and stop this from
happening," asserts Dharmalingam Siddharthan, a Tamil pary candidate.

While this argument holds water, it is up to the government to devise a
package that fits the aspirations of both the Tamils and the Sinhalese and
proceed with it whatever the consequences. It is important for leaders to
behave in a statesmanlike manner and commit themselves to a solution
instead of worrying about their own political future.

The rebels get wide support outside Sri Lanka and its war machine is being
run by financial contributions from overseas Tamil supporters and
like-minded institutions. The rebels are determined to negotiate on their
own terms similar to the government's line of thinking and that's where the
stumbling block is. Both sides are not prepared to negotiate the terms for
restarting peace talks.

There is a need for international pressure to be brought on rebels and
persuade them to resume negotiations with the government or threaten to
shut down their offices and fund-raising institutions in western capitals.

That perhaps would happen only if the west gets a firm signal from Colombo
that it has a peace package that has the support of all Sri Lankans, not
only a few. And for that to happen, a national government formed by the PA
and the UNP and all other parties appears to be the best hope for this
country in ending civil strife forever