Student Research Project Sri Lanka 2002 Supervisors: Prof. Dr ...

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Based on a ten-week field research in the Jaffna peninsula in Sri Lanka, this paper
examines the opportunities and constraints for entrepreneurial activities in the early post-
cease-fire situation of late summer 2002, from the perspective of local entrepreneurs.
Applying the key concept of contemporary economic sociology, the concept of the social
and political embeddedness of economic action, the paper provides an ethnographic
account of the interweavement of entrepreneurial rationale with moral and political
considerations. In the context of omnipresent peace and legal uncertainty, the lack of
supportive structures, the emerging competition with the “south” and the increasing tax
and protection money collection by the LTTE, the local entrepreneurs’ situation appears
as one of “standstill” in the midst of sudden change and increasing challenges. The
resulting absence of a substantial ‘peace dividend’ gives way to strong feelings of
injustice, illustrating the moral and political meanings attached to the (state) actors’
actions and inaction in the economic realm. While the absence of supportive structures
restrains the local entrepreneur capability to profit from the lifting of major restrictions
for entrepreneurial activities, a complex interweavement of contradictorary factors such
as the fear for LTTE reprisals, feelings of loyalty and moral obligation, reduces their
willingness to act on one of the most pressing constraints, the highly unpredictable
taxation and protection money collection by the LTTE. Doing business and attempting to
influence the conditions for doing so, becomes a balancing act of exerting pressure and at
the same time establishing and maintaining the status of a credible negotiation partner.
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