While deliberately perpetuating and sustaining the humanitarian crisis engulfing the Tamil people, Sri Lanka's ultra-Sinhala nationalist government is (again) demanding international aid to alleviate their suffering. This is a ruse undertaken by Sri Lanka's ruling elites and Sinhala-dominated state bureaucracy for decades: exploiting the international desire to help end suffering to instead fund the further consolidation of Sinhala hegemony over the Tamils - and line their pockets.

The international donor community must now insist on close monitoring and micro-supervision of how every penny Sri Lanka receives is spent. As a range of international monitors have recently outlined, Sri Lanka is simply not a responsible member of the international community. It must not be treated as such. The present crisis - that of a rampant, chauvinistic state undertaking a slow genocide - could not have come about without donors' reluctance and refusal over the years to accept the signs of its emergence.

Despite near-universal condemnation, the Sri Lankan state is brazenly continuing its internment and brutalization of over 300,000 Tamils in over-crowded, diseased and violent camps. Dozens of people are dying of sickness and starvation each day. Others are being 'disappeared' and raped. Sri Lanka's response to international demands for humanitarian access is to impose further restrictions on aid workers. Sri Lanka's response to the ongoing flow of horrific reports is to throw foreign journalists out and intimidate their local counterparts.

In the meantime a macabre shadow economy has emerged around the plight of the inmates. Government and military officials are taking massive payments to release those able to raise the money. A prostitution ring run by government officials has been identified in at least one of the camps. The feeding of the hostage population has spawned a network of payments to officials. The intolerable conditions in the camps are being made gradually worse, making escape worth any price.

At the same time, Sri Lanka's broader economy of extortion turns on international funding to alleviate and repair the damage the Sinhala leadership has itself consciously and actively brought about. Sri Lanka is again seeking foreign 'reconstruction' aid ostensibly to repair the very towns and villages that its military has systematically destroyed. It wants funding to build infrastructure that have been funded before and never built or poorly constructed. The money vanished into elites' pockets and patronage networks. The political system turns on clientelism.

For years, donors have been stuck in a logic that has reinforced the very problems they have sought to alleviate. Since 1977 donor money has flowed largely uninterrupted into this country - in the same period that ethnic polarization, and Tamils' alienation from the state has inexorably reached today's crisis. Meanwhile, Sri Lankan elites have always done well out of their terms in office and Sinhala supremacy has been entrenched in the state bureaucracy and the wider economy.

That free markets and democracy have not lifted Sri Lanka out of ethnic antagonism and poverty, despite the billions of dollars poured into the state, has less to do with these goals than with how donors have actually pursued them. It was four years into her rule that donors decided President Chandrika Kumaratunga’s regime - then a darling of global liberalism - was actually no different to any other authoritarian kleptocracy. As the World Bank noted, without any irony, when they visited Jaffna (four years into the peninsula's 'liberation'), they couldn't find a single person who had been helped by foreign funding. The World Bank called this a 'disconnect' between expectations and reality.

Not that foreign aid had no impact on the ground. On the contrary. Sinhala colonization of traditional Tamil-speaking areas has been made possible primarily by international donor money allocated to the supposedly 'apolitical' projects of reviving local agricultural economies, building roads and so on. The expansion of the state's bureaucracy has been made possible by the varying, but uninterrupted flow of foreign funds.

Now, of course, things are blatantly much worse. The marginalization, immiseration and genocide of the Tamils is now an open, rather than surreptitious, project. But the Sri Lankan state, for all its bluster, is vulnerable to international pressure. If donors carry on with past policies and hope for the best, the crisis will simply get worse. Unless donors are prepared to exploit Sri Lanka's vulnerability and deploy sanctions and conditionalities - rather than the ineffective incentives for reform as in the past - neither peace nor stability will emerge in the coming years, but the reverse.