Following the end of Sri Lanka’s 30-year civil war, the eastern seaboard, which had been a primary theatre of war, became the centre for high-investment hospitality and tourism developments that could showcase Sri Lanka’s transition from war-torn country to ‘miracle of Asia’. This study examines the economic, social and political dynamics and effects of tourism development in in the Special Tourism Zone of Passikudah. It focuses on the effects on the traditional local fisher industry, wage labour, skills gap and employment opportunities in tourism, especially for women; self-employment and debt. While finding exclusion of the local population and subjectivities that reproduce ethnic animosity and patriarchal norms, the authors offer several pointers for a pathway from narratives of discrimination and exclusion to inclusion and distributive justice.