Sri Lanka

Phone Code: 0094

Root-level Domain Code: .lk

CIA Info

Background: The Sinhalese arrived in Sri Lanka late in the 6th century B.C., probably from northern India. Buddhism was introduced beginning in about the mid-third century B.C., and a great civilization developed at the cities of Anuradhapura (kingdom from circa 200 B.C. to circa A.D. 1000) and Polonnaruwa (from about 1070 to 1200). In the 14th century, a south Indian dynasty seized power in the north and established a Tamil kingdom. Occupied by the Portuguese in the 16th century and by the Dutch in the 17th century, the island was ceded to the British in 1796, became a crown colony in 1802, and was united under British rule by 1815. As Ceylon, it became independent in 1948; its name was changed to Sri Lanka in 1972. Tensions between the Sinhalese majority and Tamil separatists erupted into war in 1983. Tens of thousands have died in the ethnic conflict that continues to fester. After two decades of fighting, the government and Liberation Tigers of Tamil Eelam (LTTE) formalized a cease-fire in February 2002, with Norway brokering peace negotiations. Violence between the LTTE and government forces intensified in 2006, but neither side has formally withdrawn from the cease-fire.

Economy Overview: In 1977, Colombo abandoned statist economic policies and its import substitution trade policy for more market-oriented policies, export-oriented trade, and encouragement of foreign investment. Recent changes in government have brought some policy reversals, however. Currently, the ruling Sri Lanka Freedom Party has a more statist economic approach which seeks to reduce poverty by steering investment to disadvantaged areas, developing small and medium enterprises, promoting agriculture, and expanding the already enormous civil service. The government has halted most privatizations. Although suffering a brutal civil war that began in 1983, Sri Lanka saw GDP growth average 4.5% in the last ten years, with the exception of a recession in 2001. In late December 2004, a major tsunami took about 31,000 lives, left more than 6,300 missing and 443,000 displaced, and destroyed an estimated $1.5 billion worth of property. Growth, partly spurred by reconstruction, reached 5% in 2005 and more than 6% in 2006. Sri Lanka's most dynamic sectors now are food processing, textiles and apparel, food and beverages, port contstruction, telecommunications, and insurance and banking. In 2005, plantation crops made up only about 15% of exports (compared with more than 90% in 1970), while textiles and garments accounted for more than 60%. About 800,000 Sri Lankans work abroad, 90% in the Middle East. They send home more than $1 billion a year. The struggle by the Tamil Tigers of the north and east for an independent homeland continues to cast a shadow over the economy.

Geography Note: strategic location near major Indian Ocean sea lanes

Location: Southern Asia, island in the Indian Ocean, south of India

Natural Resources: limestone, graphite, mineral sands, gems, phosphates, clay, hydropower

Geographic Coordinates: 7 00 N, 81 00 E

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