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Sri Lanka's armed conflict highlights the relations between war/peace and development, both in terms of impacts of war on livelihoods and in terms of reconstruction and development as means for peace-building. It should be recognised that the grievances behind a conflict may not be identical with post-conflict needs. Such transformation of development needs is demonstrated by the case of Jaffna fisheries. Whereas the fishery sector was peripheral to pre-war Tamil nationalism, the impact of war has made it central to post-war reconstruction and development. The most obvious obstacle to fishery reconstruction is the massive destruction of fishing equipment. While post-tsunami emergency relief has replaced significant proportions of the damaged boats and fishing gear, little has been done to build local institutional capacity for development and peace. Thus, the strategic links from emergency relief to development and peace seem relatively weak. Another pressing concern is the dismantling of army-imposed security restrictions to create normal preconditions for fishing. As these security regulations are closely linked to the balance of power between the protagonists, development of Jaffna fisheries is highly contingent on progress in the peace process. Thus, the potential for conflict transformation through local fishery development seems quite limited without substantive conflict resolution.