This assessment's focus on employment and industrial relations is deliberate: this area has received less attention than have macroeconomic developments, which are more easily identified and monitored by both Sri Lankan (Central Bank) and donor (the World Bank and the Asian Development Bank) agencies. Moreover, decent work for all is the overriding objective of the ILO in the Asian Decent Work Decade,which commissioned this assessment. Hence the study deals with the macroeconomic situation only as part of the background and as the source from which many of the forces impact on employment derive. The analysis also aims to inform the industrial partners, policy makers and donors by evaluating measures taken thus far to deal with the fallout of the crisis and by highlighting areas that need more attention.