The ICG said donor governments and the UN should tie their aid to an end to impunity for human rights violations and abuses of political power that undermine democracy and threaten the freedoms of Sri Lankans from all ethnic communities.
The Sri Lankan government has rejected allegations of rights abuses.
Western governments and multilateral funding agencies which give loans and aid to the island can press the government to ensure a lasting solution that addresses the grievances of minority Tamils, the International Crisis Group (ICG) said.
It not violence could revive, the ICG said in a report called 'The Sri Lankan Tamil Diaspora after the LTTE'.
Government forces crushed the LTTE (Liberation Tigers of Tamil Eelam) in May 2009, ending a 30-year war and leading to an economic revival.
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"India, Japan, Western governments and multilateral organisations can do much more to assist the political empowerment of Tamils in Sri Lanka and press Colombo to address the causes behind the rise of t