Foreign Intervention: The Sinhalese-Tamil conflict attracted India's attention. India tried to play the role of a mediator in response to July 1983's riots. Foreign Minister of India was sent to SL to mediate in a dialogue between Sinhalese and Tamils. The dialogue eventually failed as both parties could not come to an agreement. On 3 June 1987, 20 Indian ships were sent to Jaffna to provide food and petroleum products to SL Tamils from India. This violated the Sri Lanka airspace. In July 1987, Sri Lanka agreed to sign a peace accord with India under India's pressure.
Armed Conflict: Policies had made the Tamils feel that they were discriminated. The Tamils tried various wats to voice their unhappiness, to no avail. 1. The Tamils in Sri Lanka (SL) made peaceful demands to be fairly treated by the SL Gov. 2. In the early 1950s, the Tamils' Federal Party asked for their areas to be recognized as a federation in the country, peacefully. 3. In 1976, their demands were still not met. New political party - Tamil United Liberation Front emerged. They then asked for a separate independent state in the north and east of SL, and requested for state's name to be named Tamil Eelam. They did that because they believed only separation ensured their rights. 4.The Sri Lankan Gov rejected Tamils' idea of a separated and independent Tamil State. 5. The Tamils were then dissatisfied with the SL Gov. Therefore, the LTTE )Liberation Tigers of Tamil Eelam) was formed, and they resorted to violence as that wa the only way to demand and obtain their rights.
Unemployment: The Sri Lanka riots in July 1983 led to massive unemployment due to thousands of factory workers, self-employed and plantation workers losing their jobs. Large number of jobless were Sinhalese who took part in vandalizing, looting and burning their places of work. All parties suffered in the conflict.
Investors from the other countries did not have the confidence to invest int eh country.
Tourism was seriously affected by the violence and internal conflict. Tourist arrivals steadily decreased after the July 1983 riots. The decrease then led to a loss of jobs and a fall in earnings. This is turn affected the economy adversely, There were limited funds to develop amenities and facilities such as transport and housing.
The conflict caused large-scale displacement beyond its borders. In the 1983 riots, thousands of Tamils fled to Tamil Nadu in South India. 65,000 Sri Lankans still remained refugees in India. In early 1990s, High Security Zone (HSZ) were set up by SL Army to keep LTTE away. HSZ were areas where access is controlled.