On Friday evenings, vans and tuk-tuks usually form long queues before Jaffna’s only shopping mall. There’s a hint of exquisite perfume in the air. Mothers in kurtas mind their colourfully attired children. Single young men sporting oversized wrist watches zip around on motorcycles. Though rare, one can even sight a few women in high heels.

Multiplexes screen the latest Indian blockbusters. Pizzas, hot chicken wings and ice cream sell like, well, hot cakes.

Even as the boisterous crowd inside the mall swells, hundreds of tradesmen and shopkeepers around the city perform a peculiar ritual: they kindle little bonfires in front of their stores, symbolically seeking the good by burning the bad.

This bruised and battered city of 88,000 (2012 figures) does have a lot of bad to burn, forget and let go of.

Located on the northern tip of Sri Lanka, Jaffna was once the bastion of the Liberation Tigers of Tamil Eelam – the dreaded terrorist group wiped out in 2009.

The nearly three-decade civil war between the LTTE-led ethnic Tamil minority and the government led to between 80,000 and 100,000 deaths and estimated economic losses of $200 billion – roughly five times the size of Sri Lanka’s GDP in 2009.

Its land once riddled with landmines and air constantly pierced by bullets, the capital of the country’s Northern Province has over the past few years been fighting a new battle: rebuilding itself.

A sudden turnaround story

Conflict taught Jaffna the virtues of thrift; for decades, it was on survival mode. “War-time economy was about producing one’s own food, using bicycles instead of cars and kerosene lamps instead of electric ones,” N Vithyatharan, a senior journalist, recalled. There were no goods to spend on, so the locals accumulated wealth.

This saving habit, along with transfers from families abroad, gave Jaffna’s Tamils relative prosperity over those in the mainland’s Vanni region to the south. So, in recent years, many Hindu temples in Jaffna have been renovated. Several high profile restaurants have sprung up. Billboards of money transfer companies are found everywhere.

The city railway station was rebuilt with government funds and train connections with Colombo restored in 2014.

Tourism, though still anaemic, is growing. The city’s cultural institutions are expanding. Houses are getting rebuilt and new vehicles bought.

People, in general, are on a spending spree. The average monthly household expenditure in Jaffna district grew from Sri Lankan Rs 22,725 ($158) in 2009 to Rs 35,405 ($246) in 2013. The provincial GDP has doubled.

Clearly, the economy has come a long way since 2009.

Old and new

Globalisation has funneled itself into Jaffna mostly through India. Often, people know more about what’s happening in New Delhi and Chennai – capital of the south Indian state of Tamil Nadu – than in Colombo. Although their families have been in Sri Lanka for centuries, they’ve always thought of themselves as nearly Indians. They watch Indian television channels, listen to music from Tamil Nadu, and sometimes are even unsure whether to cheer for Indian or Sri Lankan cricket team.

Middle class city dwellers are fond of western fast food and Indian pop culture. Expensive gizmos are the new status symbols. Though still conservative – Jaffna isn’t the best place in the world to party – the locals are turning increasingly consumerist.

“The lifestyle of Jaffna’s people has changed and so has their spending pattern,” says N Natharupan, vice-president of the local chamber of commerce and industry.

Old timers, however, miss the pre-war days. “Jaffna will never be the same again,” they murmur. The city’s social fabric has changed, they rue. Many original occupants who survived the war moved to other parts of the country, or left Sri Lanka altogether. The “nouveau rich” have taken their place and are eager to show off, say those who claim to remember “good old days”.

And it’s not just the people who have changed.

Take, for instance, the city’s eclectic architecture – a confluence of colonial and south Indian ideas. “Many old homes were destroyed in the shelling. Some old buildings were demolished to construct new ones in the manner seen in Indian movies. Today, it (the city) feels more like some random south Asian settlement,” says P Ahilan, a professor of fine arts, Jaffna University.

The bustling city centre is rather chaotic and disorganised, with a jungle of wires and crude concrete blocks. Most of the buildings are colourfully plastered. Some old houses now have fancy glass facades and some new constructions have glittering logos on their grey and red walls.

Honour suicides

Right after the war, Jaffna went through a phase of exuberance. But this was also accompanied by disappointment and tragedy.

Expectations were high, including those of businessmen. Assuming that the local economy would now grow, some borrowed heavily to increase their holdings.

But the bubble burst. S Sunthareswaran, a manager at the Colombo-based Hatton National Bank, says, “At that point, we noticed increased payment frauds and cheque returns.” That was one of the symptoms of the coming crisis.

“In 2013, newspapers reported over 30 cases of honour suicides by businessmen, mostly small traders, in Jaffna. Now bankruptcy has become quite normal and broke entrepreneurs just abandon their businesses and run away,” says Natharupan.

After one of his clients had killed himself, Sunthareswaran wrote an article explaining how the post-war economic change resulted in suicides. After it got published, trade organizations urged businessmen not to buy too much. But some problems remained.

Banks were among the first institutions to reopen after the war and proliferate. They started giving away loans on very bad terms, at least from the lender’s point of view, says M Nilanthan, political columnist and university teacher. Farmers were some of the worst sufferers. They would also get lured by private finance companies into buying vehicles, paddy cutting machines and tractors that they didn’t really need.

Many of them, too, committed suicide. With almost 6,000 people (288 per 100,000 inhabitants) killing themselves every year, Sri Lanka has the fourth highest suicide rate in the world.

“They (banks) would extend loans prior to the harvest. Farmers would then splurge on, for instance, a flat TV for Rs (Sri Lankan) 50,000 (roughly $345),” explains Nilanthan. “But when they sold their crops, they couldn’t make ends meet. Unable to pay the installments, they then sold the TV for Rs 40,000, ending up with no money and no TV.”

The business challenges

Decades of conflict has left northern Sri Lanka’s Tamil little to restart their lives with. Industrial machinery was destroyed and buildings flattened. Skilled workers either fled or got channelised into the war. But something else weighed heavily on the economy: systemic bias.

Many local entrepreneurs feel they are being discriminated against by the state.

Jaffna’s streets today showcase the old and new. War ruins alternate with new construction sites. But the largest hotels being built either belong to those from outside the region or to joint companies with Sinhalese (country’s ethnic majority) capital.

Local businessmen claim it is easier for firms from southern Sri Lanka or even from abroad to establish businesses here. Yet, Tamils rarely get to tap the southern market. T Jurison Jenaraj, CEO, Chamber of Commerce and Industries of Jaffna, says: “Somehow, companies from the south get permissions and approvals faster.”

Another Tamil businessman, requesting anonymity, claims that dealing with Sinhala retailers gets problematic at times, especially when they learn that a brand is owned by a Tamil. Besides, government officials get very strict when dealing with Tamils – authorities persistently obstruct applications citing every conceivable rule.

Niroshan Perera, state minister of national policies and economic affairs, however, told Quartz that he wasn’t aware of any specific targeting of Tamil-owned business, but had concerns about red tape. Board of Investments, the main body granting investment approvals, did not respond to queries from Quartz.

While the Northern Province is home to 5.2% of Sri Lanka’s population, it’s gross domestic product in 2014 stood at Sri Lankan Rs 367 billion ($2.8 billion) – 3.6% of the national GDP (Central Bank of Sri Lanka figures).

Jaffna’s economy is service-oriented. There are only small and medium scale manufacturers and family-run businesses—none big enough to enter the Colombo Stock Exchange. They mostly operate in the local market. Southern products are cheaper and competition is fierce. In 2014, industry made up 19.6% of the provincial GDP (Sri Lankan Rs72 billion, roughly half-a-billion dollars). The national average stands at 30.1%.

“Without genuine support from the government we can’t develop our manufacturing sector,” Jenaraj says.

Crouching Tiger

People of Jaffna today build high and consume much. But they also whisper bitter stories. The wounds are deep and unhealed. Almost every family here has had at least one member in the LTTE. Everybody knows someone who died in the war. Yet, in an act of collective repression of memories, the topic is rarely broached within families.

But Sri Lankan soldiers on the streets are a grim and constant reminder of the past.

The new government has scaled down military presence. Patrolling by troops in armoured vehicles is less common than it was till even a few months ago. Yet, militarisation remains an issue.

“Sinhala politicians are paranoid about the next uprising. But, we cannot build trust among these people if we keep so many armed personnel there,” says Sanjana Hattotuwa, Colombo-based founder of the Groundviews, dubbed Sri Lanka’s first citizen journalism portal. “Military presence reminds Tamils about what the state did to them.”

Nilanthan says, “We are still unable to count our dead and those who disappeared… The army hasn’t given back the land it holds and we are being monitored by the intelligence. Prevention of Terrorism Act (a 1978 law that gives police and security agencies broad powers) states that virtually anybody can get arrested merely on the basis of suspicion.”

Thousands of traumatised people, forced from their homes, remain in the internal displaced person camps without jobs, running water, or even the hope that they may one day return to their former homes.

Yet, as Jaffna continues to grow, so does that hope.

“Life is not a masala movie,” the university professor Ahilan says. “We need some time to move on.”

This article was first published on Quartz.