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Sri Lanka was facing a foreign exchange crisis when tsunamis caused massive loss of life, but analysts say spontaneous international aid may have saved the country from a bigger economic calamity. Donors had put bilateral aid on hold insisting on progress in Sri Lanka's Norwegian-backed peace process amid fears the country could slip back to a protracted separatist war in the New Year, but those fears have now subsided.
The tsunamis that killed more than 30,000 people in Sri Lanka and made nearly a million homeless have provoked an outpouring of international sympathy coupled with generous cash and material donations amounting to millions of dollars.
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In a bizarre twist to the tragedy, investor confidence had been restored despite three quarters of the island's coastline being destroyed along with tourist resort hotels, fishing communities and roads and rail tracks.
"The silver lining is that the prospect of war has receded. It has restored investor confidence," said Hasitha Premaratne, he