SRI LANKA: A HANDBOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00314R000300070002-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 59
• Document Creation Date: December 22, 2016
• Document Release Date: August 17, 2009
• Sequence Number: 2
• Publication Date: December 1, 1984
• Content Type: REPORT

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Directorate of Confidential
Intelligence
Sri Lanka:
A Handbook
USAID review completed
Confidential
NESA 84-10281
December 1984
Copy 3 1
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Directorate of Confidential
Intelligence
Sri Lanka:
A Handbook
This paper was prepared by I of
the Office of Near Eastern and out sian Analysis.
Operations
Comments and queries are welcome and may be
directed to the Chief, South Asia Division, NESA, on
Confidential
NESA 84-10281
December 1984
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Sri Lanka:
A HandbookF---] 25X1
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Introduction Sri Lanka is a small island nation in the Indian Ocean near India. The
Information available country has been favored by geography, climate, and history:
as of 13 August 1984 ? Its isolation has meant that it has been spared invasion in modern times.
was used in this report.
? Its temperate climate guarantees two and sometimes three rice crops
each year.
? Its citizens enjoy one of the highest literacy rates in Asia and one of the
highest standards of living in the region.
? It received its independence from Great Britain in 1948 without a
struggle.
? It has been governed since independence by a series of leaders elected by
universal franchise.
Although Sri Lanka was spared much of the suffering that accompanied
the birth of India and Pakistan, the country in recent years has come to
share some of the same social and political problems that characterize its
larger neighbors. Ethnic group identification has grown to be a major
divisive force in the society. Political parties have attracted support by
playing the aspirations of one caste or religious group against another.
Competition for the benefits of modernization and the increased isolation
of the major communal groups have led to a polarization of political views
and the rise of communal extremists to leadership positions.
Communal tensions reached a critical point in July 1983 when Sinhalese
mobs, infuriated by the government's failure to respond to increasing acts
of terrorism by Tamil separatists, rampaged through the streets of
Colombo burning and looting Tamil properties. More than 400 Tamils
died, and tens of thousands were displaced. The 18 months following this
outburst were characterized by continuing acts of violence by the Tamil
separatists in the north of the country, bombings and assassinations in most
of the major cities, and repeated instances of brutal reprisals by the
security forces against Tamil civilians.
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NESA 84-10281
December 1984
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The violence of the last several years has revealed serious tensions that will
continue to plague economic and social development in Sri Lanka. Large-
scale development programs made possible by international financing, such
as the Mahaweli Irrigation Project, raise problems in the equitable
distribution of the benefits they will offer the country. The national
economy, which had been so resilient during earlier ethnic frictions
between the Tamils and Sinhalese, now appears more vulnerable. Sri
Lanka's experiment in economic liberalization has helped stimulate rapid
economic growth, but a recent slowdown and continued political instability
have weakened both foreign and domestic investor confidence in the
country.
US interest in Sri Lanka is largely a reflection of the greater goal of
preserving regional stability in South Asia. The continued growth of strong
democratic institutions in Sri Lanka is an integral part of this regional
stability. Although a member of the Nonaligned Movement, Sri Lanka
under the guidance of President J. R. Jayewardene has drawn closer to the
United States and looks to Washington for increased economic support in
the coming years. Instability in Sri Lanka resulting from increasing
friction between Tamils and Sinhalese threatens to draw India and its 40
million Tamils into the situation, which could lead to greater regional
friction.
The Government of Sri Lanka is sensitive to the pressures of the continuing
communal struggle. The Jayewardene administration is attempting to find
a solution to the question of ethnic tensions that will satisfy the minority's
demands without offending the needs of the majority community. The
government hopes to find this solution before the continued unsettled
situation costs the country more in lives and social disruption.
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Figure 1
Sri Lanka and Its Neighbors
of
Bengal
Indian
Ocean
Boundary representation is
not necessarily authoritative. 25X1
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Lakshadweep
(India)
A Pittsburgh
.Char es ton
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Introduction iii
Geography I
Location 1
Topography
Climate 1
Natural Resources 3
Agriculture 3
Livestock 4
Fish 5
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Petroleum and Minerals 5
Human Resources 5
Ethnic Groups 7
Sinhalese 7
Ceylon Tamils 9
Indian Tamils 9
Muslims 10
Burghers 10
Economy
Buddhism 10
Hinduism 11
Christianity 12
The Colonial Legacy 13
Economic Policy Since Independence 13
Economic Growth, Income, and Employment 14
Main Sectors of the Economy 16
Agriculture 16
Industry 16
Foreign Investment 18
Foreign Trade, Balance of Payments, and Foreign Aid 18
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Party Politics
21
The Judiciary
23
Army
30
Navy
30
Paramilitary
31
Fo
reign Relations
33
India
33
Sri Lanka Within the Region
33
The United Kingdom
34
Military
35
Investments
36
C
hronology
43
St
atistical Su
mmary
45
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Geography
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Location
A teardrop-shaped island in the Indian Ocean, Sri
Lanka is 30 kilometers southeast of the Indian sub-
continent, separated by the narrow Palk Strait.
Farther south, the Palk Strait widens into the Gulf of
Mannar, which merges into the Indian Ocean. The
country's land area is 65,610 square kilometers-
about the size of the state of West Virginia. The
island is roughly 440 kilometers long north to south
and 260 kilometers at its widest point.
Sri Lanka has been featured in the mythology of
many cultures over the centuries. Arab traders blown
to its shores by storms believed they had found
paradise and called the island Serendip, the root of
the English term serendipity. In Hindu literature the
island is referred to as Lanka, the home of the demon
Ravana. Under the European colonial powers the
country was called Ceylon. With the adoption of the
1972 Constitution, the Ceylonese restored the Sinha-
lese name, Sri Lanka.
Topography
Sri Lanka's diverse topography ranges from low-lying
coastal areas to hilly regions in the interior. A coastal
plain that is narrow on the west, east, and south
broadens gradually to a large, dry zone in the north.
The plain surrounds a central massif with elevations
reaching 2,500 meters. Sixteen principal rivers origi-
nate in the hill country and flow in a radial pattern to
the sea. The longest river, the Mahaweli Ganga
(Mahaweli River), is 330 kilometers long. F__1
Sri Lanka's many rivers and heavy annual rainfall
produce ideal conditions for growing rice. Much of the
coastal plain is characterized by a thin layer of topsoil
over a base of impervious laterite, which provides
optimal conditions for rice cultivation. The country
regularly produces two rice crops, and intensely irri-
gated regions are capable of three annual harvests.F_
Climate
Sea breezes, the altitude of the land, and moist air
combine to keep the island reasonably cool despite the
tropical location. Located 800 kilometers north of the
Equator, Sri Lanka's climate is generally warm with
Victoria Dam, one of several projects connected
with the enormous Mahaweli Diversion Scheme,
is a development program that will provide water
and hydroelectric power to the island beginning
even temperatures and high humidity. The mean
annual temperature is 27.5?C with little seasonal
change. In the central highlands temperatures range
from 14?C to 29?C. Nuwara Eliya, the largest town
in the central mountains, averages 15.4?C, and Trin-
comalee, a major port, averages 28.6?C. January is
the coolest month, and May, the warmest.
Rains are regular and generous throughout the year.
Annual rainfall ranges from 130 centimeters in the
dry eastern zone to 350 centimeters in the west. The
first monsoon season occurs in late May from the
southwest; and the second, in late November from the
northeast. In the drier zones, rainfall is lost through
evaporation and runoff, making irrigation and water
storage systems necessary in spite of heavy rainfall
over the entire island. The central mountains above
600 meters, where rainfall is especially heavy, are
particularly favorable for tea, the country's major
export product.
Sri Lankans rely on artificial catchment basins and
irrigation canals to guarantee water for rice cultiva- 25X1
tion. Over the centuries, maintenance and control of
this enormous system of tanks and streams have
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Figure 2
Land Use in Sri Lanka
Rubber
Tea
Coconut
Cultivable land
Forest and woodland
Limit of major irrigation
project
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Confidential
tended to centralize political power in a single nation-
al authority. Dynasties have risen and fallen as a
consequence of gaining or losing control of the island's
irrigation system. Even today, the Mahaweli project,
the largest international development program in the
country, is attempting to update and extend the
centuries-old system of embankments, tanks, and
canals extending over much of the northeast of the
Natural Resources
Agriculture. Nearly half the Sri Lankan work force is
involved in agriculture either directly or through
related services. The agricultural sector is sharply
A Sinhalese woman in the densely populated southwestern coastal
region works in a rice nursery, bundling the young plants for later
divided between a well-defined, relatively sophisticat-
ed, large-scale plantation sector and a small-farmer
subsistence sector. The plantation sector has its roots
in the island's late 19th-century European colonial
administration and is characterized by large, highly
centralized holdings that produce largely for export.
The subsistence sector reflects the small holdings and
less formalized structure of the mixed paddy/slash-
and-burn agriculture found throughout much of the
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Men work husking coconuts in the deep south of the island,
producing copra for oil and animal fodder and coir to be made into
In Colombo two Sinhalese brothers work in a family fruit stand
that displays jakfruit, rambutans, mangosteens, bananas, coco-
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Tea, rubber, and coconut are Sri Lanka's main export
crops and are the mainstays of the plantation sector.
In 1982 these crops accounted for almost half of the
cultivated land. Sri Lanka, as the world's third-largest
producer of tea, exported 158 million kilograms in
1983, earning $355 million.
Rice is the staple food of Sri Lanka. Rice paddies
cover 30 percent of cultivated land and are found
throughout the island. Other market crops include
coconut, citronella, cardamom, tobacco, corn, manioc,
chilies, and tropical fruits
Livestock. Livestock-including meat production,
dairy farming, and egg production-traditionally has
been a minor portion of private agriculture. Cattle
and buffalo are valued most as draft animals. The
entire cycle of production, transportation, and mar-
keting of livestock products is in the hands of small
private holdings. Since the mid-1960s the central
government has become active in providing extension
services to help small producers obtain new genetic
strains, new production techniques, and cooperative
marketing techniques.
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Fishermen tend their nets near Negombo, center of Sri Lanka's
small but powerful Sinhalese Catholic minority. The small canoes
are used to fish the shallow lagoons that make up much of the
Fish. The coastal lagoons and the coral reef surround-
ing the southern half of the island, as well as the
major rivers, abound with fish. Foreign involvement in
an advisory and support capacity increased in fishing
and related services during the first part of the 1980s.
Through a variety of projects coordinated by the
United Nations, a number of Western development
and investment programs have radically modernized
the catching, production, and marketing of fish. Scan-
dinavian countries have helped develop the Sri Lan-
kan fishing industry, and each year an increasing
amount of the annual catch is shipped to northern
Europe.
Petroleum and Minerals. Sri Lanka possesses no
proved hydrocarbon resources and must import all of
its oil requirements, mostly in the form of crude oil
that is refined locally. Oil imports-mainly from Iran,
Iraq, and Saudi Arabia-account for nearly one-
fourth of the country's annual import payments. Sri
Lanka is rich in gemstones, graphite, mineral sands,
quartz, mica, salt, limestone, iron ore, and several
types of clay, but, except for gems, minerals are
relatively unimportant to the economy, constituting
about 1 percent of the value of Sri Lankan exports.
Gem production continues to be a small-scale non-
mechanized industry whose output has increased sub-
stantially in the past several years. Sri Lanka's
gems-including sapphires, rubies, topazes, and emer-
alds-are famous for their abundance, variety, and
quality. Most gem mines are in the southwestern
interior of the island.
Human Resources
Sri Lanka's population in 1984 was estimated at 15.9
million. The country has one of the lowest population
growth rates in Asia, largely a result of the national
custom of marrying late and the success of govern-
ment family-planning programs. Sri Lanka has one of
the lowest infant mortality rates in Asia because of
the success of disease eradication programs, a nation-
al health service, and food subsidies that ensure basic
nutrition for the bulk of the population.
fourth of the population is urban. Sri Lanka has
sufficient arable land and water for its population
About 70 percent of the people live in the island's
southwest, which has about three-fourths of the culti-
vated land and most of the country's industry. Al-
though people have begun moving to towns, only one-
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Figure 3
Population in Sri Lanka
Persons per square kilometer
0 50 200 500 2 000
0 130 518 1,295 5,180
Persons per square mile
Source: Statistical Abstract of the
Democratic Socialist Republic
of Sri Lanka, 1982
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Society
At the juncture of important sea routes in the Indian
Ocean, Sri Lanka has been a prize for foreign domi-
nation and subject to a range of foreign influences.
Various ethnic strains and cultural traditions have
yielded a fragmented society, divided sharply by
religious, cultural, class, and caste' differences. F_
Class and caste differences are firmly embedded in
Sri Lankan society. Caste and its social proscriptions
are more rigidly observed among the Hindu Tamils
than the Buddhist Sinhalese. In the large urban areas
of the southwest coast, caste is becoming a less
important definer of social interaction.
Although both Sinhalese and Tamil villages appear
isolated and conservative, as are most Asian agricul-
tural communities, the country's high literacy rate-
more than 85 percent-and the large number of local-
language newspapers have helped create an informed
and politically involved population
Ethnic Groups
The populace is divided into a large number of racial
and religious groups. According to the 1981 census,
74 percent of the population are Sinhalese; 12.6
percent are Ceylon Tamils; 5.6 percent are Indian
Tamils; and the remaining 7.8 percent include Moors,
Burghers, and Malays. The Tamils, the second-largest
ethnic group in the country, are related to the lowland
peoples of south India and are predominant in north-
ern and eastern Sri Lanka. Unlike the Sinhalese, who
speak an Indo-European language and have remained
largely Buddhist since 250 B.C., the Tamils have
retained their Dravidian language and the classical
Hinduism they brought with them from mainland
India in the eighth century A.D. Ceylon Tamils
arrived in Sri Lanka over 1,000 years ago and are
concentrated largely in the northern and eastern
provinces. Indian Tamils are immigrants from India
or descendants of immigrants who arrived on the
island in the mid-1800s, working mainly as laborers
on tea and rubber estates in the central highlands. F
The Burghers, Moors, and Ceylon Tamils in Colombo
and along the western coastal plains play a role in Sri
Lankan society disproportionate to their numbers in
the country at large. All three communities worked
closely with the Western colonial governments and
rose to positions of power and authority. By the time
of national independence in 1948, the new govern-
ment found that most of the country's commercial
banks were in the hands of a few Tamil families,
almost all of the lawyers and physicians were either
Tamils or Burghers, and much of the foreign trade in
the lucrative gem business was controlled by Ceylon
Moors through their Muslim foreign connections.
Efforts by the Sinhalese community to achieve parity
in these fields have contributed to communal prob-
lems in the country since the mid-1950s.
Sinhalese. The Sinhala-speaking people of Sri Lanka
have inhabited the island for about 2,500 years and
are an offshoot of the Indo-Aryans who settled north
India. Nearly constant war with the Tamil kingdoms
of southern India, dynastic squabbling, recurrent
drought, and European expansion forced the tradi-
tional culture from the coastal region to the moun-
tainous region centered on Kandy and its environs.F_
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' Caste refers to the hereditary classes into which Hindus in India
are divided by orthodox Hindu tradition. A person's caste tradition-
ally dictated his social status, rules of social intercourse, customs,
Scholarly studies note that the Sinhalese share a
common world view shaped by their self-perception as
the inheritors of a great classical tradition. This view
is marked by adherence to and respect for Buddhism,
preservation of the Sinhala language, and resistance
to foreign aggression-historically, Tamil expansion-
ism.
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Ethnolinguistic Groups and Religions in Sri Lanka
H
Figures shown are
percentages of the
total population of
Sri Lanka.
Sinhalese
Ceylon Tamil
Indian Tamil
? Ceylon Moor
ISLAM Religion
Source: Statistical Abstract of the
Democratic Socialist Republic
of Sri Lanka, 1982
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Table I
Sri Lanka: Population, by Ethnic
Group and Religion, 1981
Number of
Persons
Percent
Population
Religion
Number of
Persons
Percent of
Population
Total
14,851,000
100.0
Sinhalese
10,986,000
74.0
Ceylon Tamil
1,872,000
12.6
Indian Tamil
825,000
5.6
Muslim
1,135,000
7.6
Ceylon Moor
1,057,000
7.1
Roman Catholic
1,010,000
6.8
Other
111,000
0.7
Other Christian
102,000
0.7
Other
15,000
0.1
Although villages in both the Sinhalese-settled areas
and the Tamil regions of the north and east reflect the
largely agricultural life of both communities, Sinha-
lese villages tend to be dispersed and physically ill
defined. Village centers are little more than collec-
tions of a few shops situated around a general market
area. Farmers' households are spread among the
paddies, vegetable patches, and coconut groves in a
seemingly random manner. Members of a household
tend to be part of a nuclear family with the occasional
addition of a widowed parent or an unwed sister. A
large village may include a school, a Buddhist temple,
and district agricultural extension offices.
Ceylon Tamils. Ceylon Tamils migrated to Sri Lanka
in several waves during the past 1,000 years and are
concentrated largely in the north and northeast parts
of the island. They are important in mercantile and
financial activities throughout the country and form a
large proportion of the country's professional classes.
Tamil group identity is maintained through the use of
the Tamil language and by observing distinctive
features of caste and custom. Scholars note that
Ceylon Tamils, aware that they share their language
and customs with the much larger Tamil community
of south India and with the substantial Tamil commu-
nities of Africa and southeast Asia, lack the sense of
isolation and insularity exhibited by the Sinhalese.
Ceylon Tamils are more than 90 percent HinduF_
Ceylon Tamil settlements in the island reflect the
south Indian Hindu ideal of the extended family
living within its well-defined compound. Tamil house-
holds regularly include the oldest members of the
lineage-the father, grandfather, and their broth-
ers-as well as married sons, their families, and any
unwed daughters. Tamil compounds are generally
demarcated by fences or walls and optimally include a
family well, animal pens, and a few fruit trees.
Households are built close together so that the shared
walls and fences give an impression of a single solid
edifice to the casual observer.
Indian Tamils. The Indian Tamils form a distinct
segment of Sri Lanka's Tamil population. Most are
descendants of the agricultural laborers from south
India recruited during the British colonial period to
work on tea plantations in the central highlands.
Isolated geographically from the rest of the country's
Tamils, they are in large part members of low Hindu
castes and do not identify with the Ceylon Tamils.
They have not been actively involved in the country's
communal conflicts, although many isolated Indian
Tamil villages have become Sinhalese targets during
communal disturbances
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Muslims. Although the majority of the country's
population is either Tamil or Sinhalese, urban areas
and the east coast have substantial numbers of Mus-
lims, who comprise nearly 8 percent of the country's
population. Sri Lanka's Muslim community is com-
posed of two separate groups-Ceylon Moors, largely
the descendants of Arab and Indian coastal traders;
and Malays, a small community descended from
Malayan mercenaries brought to Colombo by the
British in the mid-19th century. Much of the coun-
try's lucrative gem trade is in the hands of Muslim
families, whose extensive foreign contacts in Islamic
countries have helped them internationalize the mar-
keting of Sri Lanka's precious stones.
Almost all Muslims in the country speak Tamil as
their native language, but they have not identified
with the larger Tamil community. Muslims are widely
dispersed throughout the country and are found in all
occupations. On the west coast they are generally
located in the maritime cities. Muslims in the east are
prominent in fishing and agriculture. Coastal Mus-
lims have on occasion been victims of Sinhalese
communal riots.
Burghers. Colombo is the center of the small Burgher
community, which traces its roots to the Portuguese
and Dutch colonial administrators who ruled Sri
Lanka until the 19th century. Burghers are often
English educated, urban, and either in the professions
or hold directing interest in the country's older mer-
cantile houses. The rise of Sinhalese nationalism has
driven many Burghers to emigrate, mostly to Europe
and Australia, taking with them their valuable skills
and talents)
Religion
Religion is important in the life of the nation and in
the daily interplay among members of various com-
munities. The Sinhalese majority is overwhelmingly
Buddhist (93 percent), and the cultural norms and
values common to Buddhism have prevailed since the
introduction of the religion in the third century B.C.
Buddhism. Sinhalese practice the Theravada school of
Buddhism common to Burma, Laos, Cambodia (Kam-
puchea), Thailand, and parts of Vietnam. Theravada
Buddhism is a highly conservative teaching that looks
back to the fifth century B.C. for its traditions. The
classical tradition calls for the veneration of the
Buddha, his teaching, and the order of the monks that
embody these teachings for the lay follower. In con-
trast to Western religious traditions, Theravada Bud-
dhism is highly personal, unstructured, and nonhier-
archical and appears to the outsider as casual and ill
defined.
Buddhism is embedded in the Sinhalese perception of
country and nation. Both Sinhalese and Tamil dynas-
ties ruled as consecrated protectors of Buddhism. For
the average villager, to be Sinhalese means being
Buddhist and speaking Sinhala. Although large num-
bers of the indigenous administrative class under the
various colonial powers converted to Roman Catholi-
cism or the Church of England and adopted Western
names, within months of independence they reverted
to their Sinhala names and their traditional Bud-
dhism. Since 1948 all the prime ministers and presi-
dents of the country have been Buddhists and, with
one recent exception, have been drawn from the
highest of the Sinhalese Buddhist castes.
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Richly decorated elephants carry the crystal casket that holds
Buddha's tooth through the streets of Kandy, traditional seat of
the Sinhalese kings, during the Esala Perahera, a weeklong
Sinhalese Buddhist festival that falls in late summer.)
Buddhism plays a profound role in shaping the social
and political thinking of the Sinhalese. The resur-
gence of the religion in the last few decades coupled
with the political utility of identifying the Sinhalese
people, the Sinhala language, and the Sinhalese
homeland as a rallying point are powerful factors
communities
Hinduism. Hinduism as practiced among Sri Lanka's
Tamils is less structured than the dominant Bud-
dhism. Although related to the forms of the religion
practiced throughout south India, it has developed
unique traditions. A prominent Hindu scholar, late in
the last century, led a movement to revitalize the
religion and transformed Jaffna into one of the main
centers for the study of the Shaiva Siddhanta school
of Hinduism. The majority of the Hindu community
follows the reform Shaiva Siddhanta school, which
evolved from his teachings.
Even among non-Hindu Tamils the classical literature
and cultural traditions associated with the religion are
powerful symbols and form the core of Tamil social
identity. A significant number of the leaders of Tamil
A Hindu priest in the largely Tamil Eastern Province stands
outside the gate of his temple near the beach. F__1
political organizations have converted to Catholicism
but continue to identify their community's goals with
that of other Tamil speakers on the island. Hindu
religious leaders have not taken an active role in the
political affairs of the Tamil community.
Islam. Nearly 8 percent of Sri Lankans are Muslims,
divided between a Malay community in the south and
the Ceylon Moor community found throughout the
coastal region and urban areas. Nearly all Muslims in
Sri Lanka are followers of the Sunni school and
maintain relations with the Islamic institutions of the
Arab world. Almost all Muslims use Tamil as their
native language, but many are bilingual in Sinhalese.
Efforts by Shia religious teachers from Iran to gain
influence within the Ceylon Moor community have
been unsuccessful.
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Through the patronage of ruling dynasties, Buddhism
rapidly became the dominant religion of the country
following its introduction from India. The Theravada
school became the established religion of the court by
the medieval period.
Under colonial rule the country's Buddhist institu-
tions came under increasing attack. Although the
British had guaranteed support and protection for
Buddhism in the Treaty of 1815, by the end of the
19th century they had nearly destroyed the tradition-
al social structure that maintained the clergy.
Schools, lands, and other sources of revenue passed
into the hands of the Colonial Office. The British
effectively disestablished the patronage and support
relationship between church and state. As a conse-
quence, the number of Buddhist monks was reduced
to a mere handful spread thinly around the country.
Buddhism began to reestablish itself in the country in
the first decades of this century. Nationalist groups
renounced the trappings of colonialism and began to
foster a resurgence of traditional Sinhalese culture,
including support to the Buddhist clergy and the
social institutions of the religion.
Christianity. Sir Lanka's Christian community traces
its roots to Portuguese colonial influence in the 17th
century. Almost all of the community subscribes to
Roman Catholicism, with smaller groups of Anglicans
and other Protestant groups. Since 1948 each govern-
ment has passed legislation to protect the country's
Buddhist majority from the influence of Western
missionaries-members of foreign religious orders are
not allowed in the country except as tourists. Even
more than the Muslim minority, the Christians have
created schools and institutions to preserve their
traditions, and their role in education has been impor-
tant in giving Sri Lanka one of the highest literacy
rates in Asia.
With independence in 1948, Buddhism reasserted its
influence as the reservoir of Sinhalese language and
custom. The number of monks in the country grew
rapidly, the traditional system of monk-teachers in
the schools reappeared, and monks began to enter
new fields such as politics, medicine, and government
service. Monks began to be seen as nationalist leaders
and to gain fame for their impassioned public ser-
mons calling for the establishment of Sinhala as the
national language. The apex of Buddhist monk in-
volvement in national politics occurred in 1959 when,
at the height of the "Sinhala Only" movement, a
radical monk assassinated Prime Minister S. W.
R. D. Bandaranaike.
At the village level Sri Lankan Buddhism has incor-
porated many of the beliefs and customs of the
minority Hindu community. Buddhism is absorptive
and tolerant-village temples regularly incorporate
shrines to a variety of Hindu deities who are de-
scribed as 'protectors" of Buddha and his followers.
Buddhists and Hindus share many of the facilities in
the large national shrines spread around the island,
and the civil courts are often clogged with cases of
Buddhist monks disputing ownership of a particular-
ly popular shrine with the resident Hindu swami.
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Economy
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Although Sri Lanka's per capita income in 1983 was
only $330, its low population growth, high literacy,
and high life expectancy are more consistent with
advanced rather than less developed nations. Sluggish
export performance, a growing debt burden, and
ethnic turmoil have slowed economic growth and
eroded investor confidence. Still Sri Lanka is one of
the more prosperous states in South Asia.
The Colonial Legacy
The colonial experience has shaped the major con-
tours of Sri Lanka's postindependence economy. Be-
ginning in the mid-19th century, British rule helped
establish an export-oriented economy built on planta-
tion crops-tea, rubber, and coconuts-which provid-
ed a healthy trade surplus. Sri Lanka's role in the
British imperial economic system as a supplier of tea
and raw materials inhibited the development of an
economy less dependent on volatile international com-
modity markets.
Economic Policy Since Independence
Since independence in 1948, Sri Lanka has experi-
mented with a series of economic plans to diversify its
commodity-based economy. The first two plans-the
six-year plan of 1954 and the 10-year plan of 1959-
were largely ineffective in restructuring the economy
and increasing employment. Sri Lanka suffered from
chronic foreign exchange shortages and poor plan
implementation. The government's attempts to devel-
op a more flexible policy during 1965-70 also failed,
and in 1971 the Bandaranaike administration re-
turned to comprehensive economic planning, which
provided a framework for socialism in Sri Lanka. F_
Prime Minister Sirimavo Bandaranaike's socialist-
oriented economic policies focused on equity, self-
sufficiency, import substitution, and regulated
growth. The populist policies included increased taxes
on the rich, land reform, nationalization of tea estates,
emphasis on public-sector industries, and wage in-
creases for low-paid workers. The centerpiece of its
new welfare system was a liberal rice distribution
program, which guaranteed low-cost food for most Sri
Although partly successful, the Bandaranaike pro-
gram proved financially untenable and caused eco-
nomic growth to stagnate. By 1973 the new welfare
policies helped increase the share of income earned by
the lower half of households by 37 percent, and
increased food rations raised nutritional levels, which
improved health and helped lower the population
growth rate. Spending on the generous welfare sys-
tem, however, raised public deficits, worsened foreign
payments problems, and nearly bankrupted the coun-
try. GNP growth slowed to under 3 percent per year.
With the election of J. R. Jayewardene in 1977,
Colombo attempted to revive the economy by moving
to a free market oriented system. One of its first steps
was to restructure foreign exchange regulations and
allow the overvalued rupee to fluctuate. The resulting
currency devaluation paved the way for the disman-
tling of onerous trade controls and facilitated the
import of consumer as well as capital goods and raw
materials necessary to the development of manufac-
tured exports.
The new economic policy emphasized growth through
diversification of exports and self-sufficiency in food-
grain production and energy. Export industries were
promoted in the newly established Investment Promo-
tion Zone (IPZ). Foreign capital was courted with the
aid of generous tax holidays, lower import duties, and
safeguards on capital repatriation. To protect estab-
lished local industries, a graduated tariff system was
substituted for import controls. Foreign aid was used
to bring containerization to the port of Colombo, and
the island's road system was repaved to facilitate the
distribution of goods.
To develop agriculture and energy, the government
accelerated the longstanding Mahaweli irrigation and
hydroelectic power project. The massive undertaking
Lankans.
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Figure 5
GDP Growth Rate, 1976-84
0 1976 77 78 79 80 81 82 838 84b
' Estimated.
b Projected.
is designed to provide irrigation for over 140,000
hectares and land for nearly 150,000 farm families in
Sri Lanka's underdeveloped "Dry Zone." The $2
billion project, largely financed by foreign aid, is due
to be completed by the end of the decade. The
projected increase in electric power and irrigation
could enable Sri Lanka to approach foodgrain and
energy self-sufficiency.
Economic Growth, Income, and Employment
The liberalization program under Jayewardene and
the accompanying increase in foreign aid have im-
proved the performance of the Sri Lankan economy.
Real GDP growth rates, which averaged less than 3
percent per year during the Bandaranaike period,
have averaged about 6 percent per year since 1977.
Much of the new growth has been concentrated in
construction and services, particularly trade and tour-
ism. An impressive increase was also registered in
nontraditional exports such as textiles and clothing.
Since 1982 the growth rate has slowed because of
poor economic policy implementation, world reces-
sion, drought, and severe ethnic riots that disrupted
the trade and manufacturing sectors and put nearly
50,000 people out of work during the summer of 1983.
Since 1977 annual growth in real per capita income
has averaged 3.6 percent as population growth slowed
and the economy expanded. In 1981 Sri Lanka esti-
mated that the lowest one-third of households in-
creased their share of income 30 percent, while the
top third's share declined 1 percent. But inflation,
which has averaged nearly 13 percent per year since
liberalization, threatens to erode Sri Lankans' income
gains.
One of the major successes of Jayewardene's liberal-
ization policy has been a reduction in unemployment.
New jobs created by increased investment have low-
ered the unemployment rate from a peak of 24
percent of the work force during the Bandaranaike
period to about 14 percent in 1983. Over the past five
years, most employment growth has been in manufac-
turing, construction, and tourism. The share of work-
ers in agriculture has declined but still accounts for
nearly half of all employment. Over the decade
unemployment is likely to rise because growth in
manufacturing, construction, and tourism is expected
to slow.
Labor migration to the Gulf states is an increasing
source of employment and foreign exchange for Sri
Lanka. The government estimates that over 150,000
Sri Lankans are working abroad with about 25,000
new migrants leaving each year. Official data may
seriously underestimate the dimensions of labor mi-
gration because over half of those seeking employ-
ment work through unlicensed and uncounted recruit-
ing agencies. Many expatriate Sri Lankan workers
are from the lower-income groups, particularly wom-
en who are destined for poor-paying service jobs.
Remittances from overseas workers provided a record
$290 million in 1983, second only to tea as Sri
Lanka's leading export earner.
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Figure 6
Sectoral GDP at Factor Cost, 1977 and 19838
Manufacturing-14.5
Agriculture- 26.3-
Services-52.1
Mining-3.2-
Services-55.1
Mining-3.5
Construction- 4.4-
Manufacturing- 13.0
Figure 7
Employment by Sector, 1971 and 1981
Construction- 2.8-
Other-8.6
Manufacturing-9.3
Services a-28.7-
Agriculture-50.0
Mining-0.6-
a Includes: Electricity, gas, water trade,
restaurants, transport, communication, finance,
business, community services.
i
lt
A
-48
8
4
8
=
gr
cu
ure
.
)
.
(-
Mi
i
-l
3
271
n
ng
.
(+
)
Construction-4.8 (+71.4)
"~ -
Oth
-6
3
5
6
er
.
(-
.
)
-
9 (+29
7
M
n
f
t
in
-I 1
.
)
a
u
ac
ur
g
.
--~
Services- 26.9 (-3-3)
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Figure 8
Crop Production Index, 1972-83a
160 160
100
80
60 1972 75 80 60 1972 75
1983 estimated.
I I I I JJ I I I I _,,
80 60 1972 75
Main Sectors of the Economy
Agriculture. Agriculture still dominates the Sri Lan-
kan economy. It accounts for about 25 percent of
GDP and provides jobs for nearly half of the work
force. The major crops-tea, rubber, coconuts, and
rice-are grown on over half of Sri Lanka's arable
land.
Tea remains Sri Lanka's major foreign exchange
earner, but declining production and foreign competi-
tion hamper export growth. With the entrance of new
producers, Sri Lanka's share, which had been nearly
40 percent of the world market in the mid-1950s, had
declined to about 20 percent by 1982. In 1983 tea
exports earned Sri Lanka over $350 million, a 16-
percent increase over 1982. In 1972 land reform and
nationalization divided tea production between small
estates and government-run plantations. Government
ownership and tenure reforms have done little to
improve production, which has steadily declined be-
cause of mismanagement, limited investment, and
occasional drought
60 1972 75 80
A dramatic increase in rice production has been a key
achievement of the Jayewardene regime. Previously
dependent on imported rice, Sri Lanka is now nearly
self-sufficient. By 1983 high-yielding varieties cov-
ered over 90 percent of Sri Lanka's rice land, raising
yields and production nearly 50 percent since 1974.
The improvement was aided by policies that provided
a mix of market and production incentives to small
ricegrowers.
Industry. Between 1976 and 1983 industrial output
grew at an annual rate of 12 percent with the most
rapid growth occurring in export-based industries.
Although liberalization under Jayewardene has em-
phasized new investment in private export-oriented
firms, over two-thirds of factory production remains
in the less efficient public sector.
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Figure 9
Economic Activity in Sri Lanka
Cement
Railroad equipment
and repair
Ceramics
Saltern
Chemicals
Sawmill
Fish processing
A
Ship repair
Mineral sands
processing $
Steel mill
Ip
Petroleum refining
Textiles
?
Plywood 0
Tires
MINING ELECTRIC POWER
Gem-bearing area
1% Hydro
G
Graphite
O Thermal
Fe
Iron ore
2 Diesel
M
Mineral sands
~~ - undalo Wellagangoda
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The dominance of publicly owned enterprises dates
from the early 1970s. In 1984, 27 state-owned indus-
trial corporations produced a wide range of products,
such as milk, tires, paper, and plywood. The major
state undertaking, petroleum refining, accounted for
over 40 percent of the value of industrial production in
1983. Growth in public-sector output has been slug-
gish with the exception of cement and metal process-
ing, which were stimulated by a rapid rise in construc-
tion. Industrial stagnation forced Colombo to absorb
losses amounting to $27 million in 1982 that strained
already massive public deficits. According to the
World Bank, public-sector inefficiencies have con-
strained export growth by misallocating scarce re-
sources and distorting production incentives.
Foreign Investment
Jayewardene's liberalization program has stimulated
foreign investment in Sri Lanka. Almost all foreign
investment has been channeled through two govern-
ment agencies, the Greater Colombo Economic Com-
mission (GCEC) and the Foreign Investments Adviso-
ry Commission (FIAC). GCEC regulates foreign
investment in the export-oriented production of the
Industrial Promotion Zone (IPZ) outside Colombo.
Foreign investment made outside the IPZ requires the
approval of the Foreign Investments Advisory Com-
mission. FIAC-approved joint ventures, which can
produce for the domestic market, require 51-percent
Sri Lankan participation
Joint ventures with domestic entrepreneurs outside
the IPZ appear to have attracted more interest from
foreign investors than solely export-oriented projects.
Since 1978 there has been a threefold increase in the
number of approvals by FIAC, although interest in
the export-oriented GCEC has steadily declined. The
decline in GCEC approvals reflects, in part, the
saturation of export quotas and increased foreign
competition in textiles and garments, which account-
ed for about 78 percent of the zone's export earnings
in 1982. Although down from the peak year of 1981,
foreign investment approvals outside the free trade
zone have remained relatively steady because equity
and risk are limited, opportunities are more varied,
and the domestic market has grown relative to export
potential.
The dilatory restoration of public order by the govern-
ment after the ethnic riots of July 1983 as well as
Figure 10
Exports, 1976-83
1.0
0.9
0.8
00.77
0.6
00.55
0.4
Other
0
Rubber and
coconuts
0.3 Petroleum 0.2 / ;Gems
Textiles
0 1976
vacillating government economic policies have re-
duced investor confidence in Sri Lanka. The 1983
riots are estimated to have caused $150,000 in dam-
age and a 23-percent drop in tourist earnings, which
has slowed economic growth. The unstable social
environment left in the riots' wake, followed by more
ethnic violence in 1984, has caused foreign and
domestic businessmen to reconsider new investment.
This is reflected in an 18-percent decline in GCEC
and a sharp drop in FIAC approvals, particularly in
manufacturing and tourism, which account for ap-
proximately 70 percent of collaborations with foreign
firms.
Foreign Trade, Balance of Payments, and Foreign Aid
Foreign trade is a major element in Sri Lanka's
economy. In 1983 trade totaled $3 billion, an amount
equivalent to nearly 60 percent of GDP. Although Sri
Lanka's traditional plantation crops still account for
over half of all exports in 1983, diversification under
liberalization has altered Sri Lanka's export profile.
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Table 2
Sri Lanka: Trade Balance, 1976-84
Million us $ Table 3
Sri Lanka: Debt Service Ratio, a
1976-84
Exports
(f.o.b.)
Imports
(c.i.f.)
Net Current
Account Balance
1976
556
640
-65
1977
747
716
78
1980
1,065
2,051
-798
1981
1,066
1,877
-603
1982
1,014
1,990
-734
1983
1,059
1,922
-646
Exports of textiles and garments have shown the most
dramatic growth and have captured nearly a 19-
percent share of exports in 1983, as compared with
only 7 percent in 1979.
A major destabilizing effect of the recent liberaliza-
tion program has been a rapid increase in imports.
With the relaxation of currency and trade controls
and increased foreign aid after 1977, imports have
grown twice as fast as exports, and the current
account deficit soared.
Sri Lanka recently has begun to reduce its massive
current account deficit. A sharp rise in tea prices in
1983, which alone accounted for over 50 percent of
the increase in export earnings, and a steady flow of
remittances from Sri Lankan workers in the Arab
Gulf states shrank the trade deficit. In addition,
imports have declined 6 percent between 1980 and
1983 because of reduced public investment and IMF-
mandated austerity measures, which led to a depreci-
ation of the rupee and a slowing of economic growth.
Foreign aid has played a crucial role in financing Sri
Lanka's ambitious development programs. The re-
structuring of the economy envisioned by the liberal-
ization program required a dramatic increase in exter-
nal aid. Since 1977 the major institutional and
a Debt service as a percent of of exports of goods and services.
b Projected.
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and Japan have provided the bulk of Sri Lanka's
concessional, grant, and commodity aid. Aid commit-
ments, after rising from $250 million in 1977 to a
peak of $800 million in 1981, had fallen to approxi-
mately $370 million by 1983.
To finance the large current account deficits and
proceed with ambitious development programs, Co-
lombo has increased its foreign borrowing, particular-
ly short-term loans. Outstanding short-term loans rose
from $23 million in 1979 to about $200 million in
early 1982. During the first six months of 1983, short-
term credits met over 45 percent of the external
resource gap. Foreign assistance financed up to 52
percent of Sri Lanka's current account deficits be-
tween 1980 and 1983. As medium- and long-term
loans come due over the next few years, Sri Lanka
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Government Structure
Sri Lanka is one of the few democracies among the
developing countries. Party strength and active partic-
ipation in the country's electoral process by the
majority of the electorate are the principal factors in
the country's political stability.
Sri Lanka's political system has its foundation in the
British colonial administration. During the 150 years
of British rule, the internal administration of the
country gradually passed into the hands of the Cey-
lonese in contrast to the violent revolutions that
marked the birth of other Asian democracies. The
Donoughmore Commission recommended that all
substantive functions of domestic government be
turned over to elected local officials in 1931. From
that time until independence in 1948, Ceylonese
politicians were responsible for the management of
the country with the exception of foreign affairs,
which remained in British hands.
The Constitution of 1947 has been amended several
times to adapt the Westminster parliamentary model
to the specific needs of a small, ethnically heteroge-
neous Asian country. The most recent update, the
Constitution of 1978 with its six amendments, has
reconfigured the government along the Gaullist presi-
dential/parliamentary model. This system, instituted
by J. R. Jayewardene and his UNP government
immediately after their landslide victory in the 1977
election, centralizes the essential powers of the execu-
tive branch in the President's office. The 168-member
unicameral Parliament shares power with the Presi-
dent
The President is head of state, head of government,
head of the executive branch, and commander in chief
of the armed forces. Although the President theoreti-
cally is responsible to Parliament and may not veto its
bills, the Parliament has no means, short of impeach-
ment, to make him accountable for his actions. Unlike
the previous system, the President does not need to
seek the advice of the Prime Minister before acting.
J. R. Jayewardene became the first President for a
Aerial view of the Colombo Harbor, with the center of the city
clustered around the colonial fort in the upper left of the picture.
Party Politics
The major political parties can trace their develop-
ment to the period before independence and the
network of local organizations that developed around
powerful personalities active in the independence
movement. Caste, family, and class connections domi-
nated the formation of the early parties. The founders
of the largest political parties were products of the
British colonial educational system and in many cases
were drawn from the same social class.
By the mid-1940s, Ceylonese parties were already
deeply split by ethnic tensions and religious rivalries.
The need to present a united front in negotiations with
the British blurred these cleavages, and an uneasy
truce was maintained until 1956. In that. year the first
Sri Lanka Freedom Party government led by S. W.
six-year term in October 1982.
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R. D. Bandaranaike launched the "Sinhala Only"
campaign, attempting to make Sinhala the sole lan-
guage of government. Mass demonstrations by Tamils
against this measure revealed for the first time the
depth of communal feeling dividing the country's
ethnic groups.
The forming of political constituencies along commu-
nal lines has accelerated. Subsequent elections have
consequently been marked by higher levels of ethnic
rhetoric and communal violence.
Political power in Sri Lanka has alternated between
the two largest Sinhalese parties, the Sri Lanka
Freedom Party and the United National Party. Since
independence in 1948, the government has alternated
between UNP and SLFP leaders five times. The chief
executives have been members of only three Sinhalese
upper-caste families during that period.
Seven political parties in Sri Lanka have significant
constituencies:
? The United National Party (UNP), the party of
President J. R. Jayewardene, was founded by Don
Stephen Senanayake in 1946 and rapidly became
the favored party of the Westernized Sinhalese
urban elite. The party has been dominated by
members of two wealthy, high-caste Buddhist fam-
ilies-the Senanayakes (including Don Stephen's
cousin, Sir John Kotelawala, Prime Minister 1952-
56) and the Jayewardenes. The party leadership is
often characterized by the opposition as dominated
by low-country Sinhalese who have inherited much
of the colonial mentality. Scholars have noted that,
although the Senanayake family name attracted the
masses, it has been Jayewardene's astuteness and
toughness that have given the party direction since
independence.
? The Sri Lanka Freedom Party (SLFP) is the main
threat to the UNP. The party was begun by S. W.
R. D. Bandaranaike in 1951 after he resigned from
Prime Minister Senanayake's UNP Cabinet. The
SLFP was billed as "a middle party between the
UNP of the extreme right and the Marxists on the
extreme left." Bandaranaike became Prime Minis-
ter in 1956 and put forward a foreign policy of
"dynamic neutralism," asserting that friendly rela-
tions with all countries should be established and
adherence to major power blocs avoided. The assas-
sination of S. W. R. D. Bandaranaike in 1959 led to
the election of his wife Sirimavo in 1960. During her
two terms in office (1960-65, 1970-77), Mrs. Ban-
daranaike led the country down a more socialist
path-nationalizing private industries, banks, tea
estates, foreign holdings, and most schools.
? The Tamil United Liberation Front (TULF) was
formed in 1976 out of the merger of other Tamil
parties to dramatize demands by moderate Tamils
for the creation of a separate Tamil homeland in the
country. The party's first president, Appapillai
Amirthalingam, became leader of the opposition in
Parliament following the 1977 general election. The
TULF remained a voice for the majority of Ceylon
Tamils until it was outlawed by the Sixth Amend-
ment to the Constitution (September 1983), which
forbids parties advocating partition of the country.
Although Amirthalingam has represented the
TULF at the communal reconciliation talks called
by President Jayewardene in January 1984, fear
and frustration have driven many Tamils to support
the more violent demands of the Tamil insurgents,
leaving the TULF to reevaluate its role in the
community's life.
? The Lanka Sama Samaja Party (Sri Lanka Social-
ist Party-LSSP), founded in 1935, began as a
Marxist group and turned Trotskyite in the late
1930s. As the most powerful of all the Communist
parties, the LSSP is continually involved with ques-
tions of unity of the left, electoral support, trade
unionism, and parliamentarianism versus revolu-
tion. From 1964 to 1975 the LSSP worked with the
SLFP to achieve a socialist-oriented, anti-UNP
government. In 1970 the United Front government
consisting of the SLFP and the LSSP was victorious
in the parliamentary election. In 1975 the LSSP
was expelled from the government by Prime Minis-
ter Sirimavo Bandaranaike. Much of the LSSP
leadership has been educated abroad (often at
Patrice Lumumba University, Moscow) and, al-
though highly educated, has failed to create a major
grassroots organization.
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? The Sri Lanka Mahajana Party (Sri Lanka Peo-
ple's Party-SLMP) is a splinter group from the
SLFP, begun in January 1984 by SLFP vice presi-
dent T. B. Ilangaratne and Chandrika, Mrs. Ban-
daranaike's daughter. They broke with the SLFP,
claiming it has become too capitalist in orientation
and strayed from the socialist path. The SLMP
purports to be the "true socialist party." The party
may rejoin the SLFP as other splinter groups have
in the past to form opposition coalitions during
elections.
? The Janatha Vimukthi Peramuna (People's Libera-
tion Front-JVP) was founded in 1964 as a semi-
clandestine organization to appeal to rural, unem-
ployed, Sinhalese Buddhist youths. The party's
leader, Rohana Wijeweera, expelled from the Cey-
lon Communist Party, began meeting with a group
of leftists to establish "true" Marxism/ Leninism in
Sri Lanka. The founders limited their support by
refusing to work with other leftwing organizations,
but they attracted enough disaffected young people
to their cause to mount a major insurrection in April
1971 that stunned the country. The insurrection was
contained after several weeks. Some 1,200 people
were killed, mostly students; more than 14,000 were
arrested or detained; and the JVP was officially
banned. The party regained legal status in 1977 and
has been slowly reorganizing and gaining member-
ship, estimated in 1981 to be 30,000. JVP candi-
dates were allowed to run for office in 1982. Com-
munist countries and international terrorist
organizations, such as the USSR, North Korea, and
the PLO, are thought to supply financial support to
the JVP.
? The Mahajana Eksath Peramuna (People's United
Front-MEP), originally a splinter group from the
LSSP, is a Sinhalese nationalist party founded by
Phillip Gunawardene in 1950. He was the party's
only elected member of Parliament and was a
member of the Cabinet from 1965 to 1970. One of
the pioneers of the Marxist movement in Sri Lanka,
Gunawardene moved away from doctrinaire Marx-
ism-Leninism toward less extreme socialist econom-
ic goals and a close identification with Sinhalese-
Buddhist objectives. Once a powerful and middle-
of-the-road socialist party, the MEP has been on the
The Judiciary
Sri Lanka's judiciary consists of a Supreme Court, a
Court of Appeals, a High Court, and a number of
subordinate courts. Parliament at its discretion may
create additional courts and tribunals and may re-
place, abolish, or amend the powers and jurisdictions
of any given court. Judges of the Supreme Court and
the Court of Appeals are appointed by the President
and may be removed only for misbehavior or incapac-
ity by the President with approval of the Parliament.
The Supreme Court, composed of a Chief Justice and
six to 10 other judges, has original jurisdiction on
constitutional matters, the protection of fundamental
rights, election petitions, breach of privileges of Par-
liament, and any other matters that Parliament legis-
lates. It is also the final appellate court.
Although the judicial system is in large part an
inheritance from the British colonial administration,
Ceylonese law is complicated by the concerns of the
country's ethnic communities. Common and civil law
regarding property, marriage, and inheritance are
mixtures of Dutch, British, Muslim, upcountry
(Kandyan), and low-country Sinhalese customs. The
Muslim community maintains regional courts to adju-
Communal Relations
Caste and community loyalties have always colored
most Sri Lankans' perceptions of politics. National
and local elections are hotly contested., and a high
proportion of the electorate regularly turns out at the
polls-generally to vote for the representative of their
ethnic or religious group.
Embers of Communal Conflict. Communal friction
between Sinhalese nationalist groups and minority
Tamils has been a persistent challenge to Sri Lanka's
leaders,. especially since 1977 when riots first chal-
lenged the capacity of the central government to
contain the conflict.
The causes of the violence between the religious and
ethnic communities of Sri Lanka lie not in philosophi-
cal differences between the Hindus and Buddhists,
decline since Gunawardene's death in 1972.
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Communal rioting destroyed large parts of downtown Colombo
during summer 1983. Mobs of Sinhalese raged through the capital
but in the different responses of each community to
the colonial experience. The traditional Sinhalese
leadership was drawn from the highest caste, the
landowning Goviyagama, whose power was (and is)
based on control of land and profits from agriculture.
In general, this class retreated from the colonial
challenge and sought refuge for their traditional life
in the mountainous interior of the country. Their
accommodation was grudging, at best.
The leadership of the Tamil community was more
adaptable. Drawn largely from the relatively high
Vellala caste, they proved themselves to be able
merchants, traders, and financiers within the Sinha-
lese settlements of coastal Sri Lanka. They quickly
learned the language and customs of the colonial
administration. Because Tamils in Singapore,
Madras, and other South Asian coastal centers were a
part of the colonial administration, Sri Lankan
Tamils had immediate access to an invaluable net-
work of foreign contacts that the insular Sinhalese
lacked.
Following independence, forming constituencies in-
creasingly followed communal lines and became the
basis of subsequent political groupings. A party's
electoral success grew in proportion to its ability to
appeal to a particular ethnic or religious group. Each
succeeding election campaign was marked by increas-
ingly extreme stands on communal issues and more
frequent outbreaks of ethnic violence
Tensions between the two racial groups flared initial-
ly in 1956 when the SLFP government came to power
with the promise of making Sinhala the only official
language in Sri Lanka. This led to promises by Tamil
leaders to "attain freedom for Tamil-speaking people
of Ceylon by the establishment of an autonomous
Tamil state on a linguistic basis within the frame-
work of a federal union. " The demand for total
separation came in 1976 when the Tamil United
Liberation Front (TULF) was formed and a list of
grievances drafted. The first trial of strength by the
separatists was during the parliamentary election in
July 1977. TULF sought endorsement of ` Eelam, " a
Tamil nation comprising all geographically contigu-
ous areas claimed as traditional homelands of the
Tamils in the country. TULF won all the seats in the
Northern Province and three of four seats in the
Eastern Province.
Despite their clear majority on the island, the Sinha-
lese fear the intervention of 50-60 million foreign
Tamils scattered from Southeast Asia to the Middle
East and the Caribbean. The fear of racial extinction
dates back thousands of years when Sinhalese terri-
tory was invaded by the Tamils of south India.
Official discrimination against Tamils began after
their demand for parity in national affairs in 1948.
The Sinhalese, in a racial backlash, passed laws
requiring Tamil students to have higher marks on
university entrance examinations and restricting their
opportunities to study abroad. Although Tamils are
largely Hindu, Buddhism was promoted in Tamil
areas through an increase in the number of govern-
ment-supported Buddhist schools.
President Jayewardene is sensitive to the issue of
Tamil grievances and in January 1984 convened a
conference with representatives from nearly every
religious and ethnic group to solve the communal
tensions that plague the country
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Tamil schoolboys gather outside their school in Jaffna, capital
the Northern Province and center of Sri Lanka's Tamil culture.
to be colored by communal favoritism.
Communalism and Politics. The competition for
power and leadership between the two communities
gained rapid momentum following independence.
Communal violence-language riots, land encroach-
ment disputes, and terrorist incidents-has become a
recurring feature of Sri Lankan society. Political
parties moved quickly to secure communal constituen-
cies, and the political life of the country has continued
By the time of the general election of 1956-only
eight years after independence-Sinhalese parties had
assumed control of the government and drove the only
Tamil party out of the mainstream of political life.
Politicization of the Buddhist Monkhood
By the end of the 19th century, the rising tide of
nationalism helped foster a resurgence of Buddhism
and other Sinhalese traditions. The number of monks
in the country rapidly increased, and they became a
highly vocal, politicized body actively involved in the
independence struggle.
Buddhist monks are prevented from running for
public office by their religious vows, but to be suc-
cessful in public life every Sinhalese politician must
court the monks and seek their blessing if he hopes to
secure popular support. This tradition has further
guaranteed that members of minority religious com-
munities are excluded from the political process.
With the advent of radio and mass communications
throughout the country, prominent Buddhist monks
have been able to shape public opinion through
sermons broadcast weekly from the country's impor-
tant monasteries. Monks have become national mar-
tyrs to Sinhalese chauvinism. A prominent landmark
in downtown Colombo commemorates the death of a
monk who was killed leading a demonstration calling
for Sinhala to be made the national language
government
Although the "Sinhalese Only" position proved unten-
able in implementation, no Tamil political group has
been reintegrated into the nation's official political
life, and the Tamils remain a group outside the
By the 1970s the Tamil demand for increased autono-
my was institutionalized in the founding of the major
Tamil political party, the Tamil United Liberation
Front. The TULF, third-largest party in terms of
voter support, is too narrowly based to become an
alternative to the UNP or the SLFP-both dominated
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Tamil Insurgent Organizations
Tamil dissident groups have drawn most of their
active members from unemployed, frustrated univer-
sity students, a group that has most acutely felt the
effects of Colombo's discriminatory educational and
employment practices. Such students have also been
exposed to the international rhetoric of terrorism and
have characterized their movements as "People's
Liberation, " "Resistance to Genocide, " and other
slogans reminiscent of international terrorism.
We believe the insurgents are well financed and
maintain large stores of arms obtained from robber-
ies of security forces and police stations and through
contacts in the Middle East. The expatriate Sri
Lankan Tamil community is well organized and
remits substantial sums to the insurgents. Bank
robberies are another source offunding and have been
a special favorite of the PLOTE and LTTE groups.
The term "Tigers" came into use in Sri Lanka in the
mid-1970s to identify members of the Tamil extrem-
ist separatist organizations representing a wide range
of dissident sympathies. We believe none of these
groups consist of more than a few dozen hardcore
members at any one time. The most important groups
are listed below in order of their prominence and level
of activity:
? People's Liberation Organization of Tamil Eelam
(PLOTE), also known as Tamil State Liberation
Tigers, TSLT. Founded by Uma Maheshwaran in
the mid-1970s, PLOTE is the major group in the
Vavuniya-Batticaloa-Trincomalee area and is be-
lieved to have nearly 2,000 members of which
? Tamil Eelam Republican Army (TERA). Also led
by Uma Maheshwaran; considered to be the more
radical wing of PLOTE.
? Liberation Tigers of Tamil Eelam (LTTE), also
known as Terros. Founded by Velupillai Prabha-
karan in 1974; central cadre is estimated to be
about 50 men, all drawn from the Karaiyyar (fish-
ing) caste; strongest in the Jaffna-Point Pedro area.
? Tamil Eelam Liberation Army (TELA). Founded by
Kuttimani (killed in the Colombo prison riots of
July 1983); then led by Kulasegaram Devasegaram
(also known as Oberoi Devan), who was assassinat-
ed by the rival LTTE in August 1983.
? Tamil Eelam Liberation Organization (TELO).
Founded in 1974 by members of a subgroup of the
Karaiyyar (fishing) caste, which specializes in
smuggling between India and Sri Lanka; several of
its leaders died in July 1983 in riots in Welikade
Prison, Colombo; the resulting leadership vacuum
has been filled by the 35-year-old Sri Sabaratnam
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? General Union of Eelam Students (GUES). Found-
ed in 1977 as a student group for political action by
Eliyathamby Ratnasabapathy; almost all of the
group's members are Tamil students abroad.
(also called Tall Sri). The group has claimed
responsibility for several police killings, bank rob-
beries, and the execution of numerous informers.
? Eelam Revolutionary Organization of Students
(EROS). Leadership broke with Ratnasabapathy
and GUES in 1980. Under the direction of V.
Balakumar (known as Bank Bala for his many
robberies), it now has its headquarters in Madras,
India. Reported to be the parent organization of the
more militant EPRLF.
? Eelam People's Revolutionary Liberation Front
(EPRLF). Led by U. Ranjan and V. Perumal;
claims to have more than 600 members training in
India. Refers to its action squads as the People's
Liberation Army (PLA), which claimed responsibil-
ity for kidnaping two US AID workers in Jaffna in
May 1984.
? Tamil Eelam Liberation Front (TELF). Broke with
the more moderate Tamil United Liberation Front
(TULF) in 1981; led by Kovi Mahesan and V.
Dharmalingam.
? Cobras. Local Tamil group in the Batticaloa area;
said to represent local Tamil and Muslim interests
distinct from the Jaffna groups
by Sinhalese-and has no aspirations for national
leadership. By commanding 18 seats in Parliament,
TULF became the official opposition from 1980 until
its prohibition for espousing separatism in October
1983. While in Parliament, TULF remained aloof
from political activity, voting only on those issues that
touched on Tamil affairs.
Although the TULF has been the only minority party
to reach national prominence in the country, it has
been hamstrung by its commitment to work for a
separate Tamil state and its recognition that no useful
purpose would be served by launching a confrontation
with the predominantly Sinhalese government on this
issue. Since its official banning by the government,
the TULF has become increasingly irrelevant to the
separatist effort, as the momentum of the struggle has
passed into the radical insurgents' hands. TULF's
efforts at peaceful negotiations were overtaken by
guerrilla violence and the ferocity of the Sinhalese
chauvinist backlash.
lese groups by 1984.
Communalism and Sri Lanka's Future. The increas-
ing rigidity of communal politics and the continuing
failure of legislative responses to communal
demands-either Sinhalese or Tamil--fostered the
growth of radical elements within all sectors of Sri
Lankan society. Disaffected Tamil youths formed
armed "Tiger" organizations in the raid-1970s that
have been responsible for bombings, robberies, and
political assassinations. Elected Tamil officials who
have tried to voice moderate Tamil demands for
communal equity have faced the possibility of murder
by Tamil extremists for failing to take a strong
enough stand on communal issues. Al. the same time,
Sinhalese formed secret gangs to terrorize Tamils
living in predominantly Sinhalese areas. Scholarly
research suggests that the JVP Marxist insurgents
who disrupted the country in 1971 began collaborat-
ing with both the Tamil Tigers and extremist Sinha-
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June 1956 Crowds of more than 10,000 Sinhalese attack
peaceful Tamil demonstration callinr for lan-
Spring 1958 Failure of the Bandaranaike-Chelvanayakam
Agreement to create a Tamil state within a
national federal government results in mass
riots and the movement of thousands of Tam-
April 1961
January 1966
July 1975
National emergency imposed to halt riots
following Tamil Federal Party's peaceful
Sinhalese in Colombo riot following passage
of Tamil Language Special Provisions Act;
large numbers of Tamils flee north.
Assassination of mayor ofJa/fna (a Tamil) by
Tamil insurgents for cooperating with the
predominantly Sinhalese central government
August 1977 Communal violence originating in Jaffna
spreads to urban areas of south Sri Lanka;
120 dead, 50,000 displaced, and 5,000 Tamils
Following dissident attacks and riots. state o
emergency declared in JgffnaI
November 1979 Sinhalese security forces clash with Tamil
demonstrators, burn the Tamil manuscript
Spring 1983 More than a dozen insurgent incidents leave
over 30 dead, 100 wounded, several hundred
arrested, and the imposition of an islandwide
July 1983 Following increased guerrilla attacks in the
northern part of the island, Sinhalese mobs in
Colombo and other southern cities riot, leav-
ing more than 400 dead and 130,000 Tamils
March 1984
April 1984
May 1984
Lalith Athulathmudali made Minister of Na-
tional Security; initiates "Surveillance Zone"
Sri Lankan Navy fires on alleged insurgent
craft in Surveillance Zone, capturing Jive
Tamil suspects and killing 13 others.
Two US AID workers kidnaped by the
EPRLF; held five days and released un-
According to scholars, Sri Lanka's recurring commu-
nal violence has hastened a deterioration of funda-
mental democratic processes in the country. In the
name of antiterrorism, the Jayewardene administra-
tion instituted a wide variety of extraconstitutional
measures in 1983-84, some of which are the hallmarks
of more reactionary governments. President Jayewar-
dene replaced the British-style prime minister/parlia-
ment system in 1980 with a relatively more rigid
president/chief executive system based on the Gaull-
ist pattern. The harsh measures adopted by Colombo
in the name of reducing insurgent activities drew
criticism from such international human rights orga-
nizations as Amnesty International and the United
Nations and were the subject of Congressional hear-
ings in this country in summer 1984
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with internal dissidents.
Sri Lanka's active 18,000-man armed forces are ill
equipped, poorly trained, and poorly disciplined. Even
given the strategic advantages of home terrain, popu-
lar sympathy, and perhaps initial numerical advan-
tage, the Sri Lankan forces would be no match for an
invading modern force and have difficulty in coping
ment.
The military is plagued with mismanagement, favorit-
ism, and other administrative problems. Although the
Army has not been involved in politics as in many
other parts of the Third World, scholarly studies
reveal a history of inept coup planning by the military.
Political maneuvering by members of the government
to assure control of the armed forces has sapped
morale and commitment. Initial appointment to all
branches is dependent upon patronage by a member
of Parliament. All subsequent opportunities for train-
ing, advancement, and other perquisites are as much a
function of political alliances as talent and achieve-
The military is overwhelmingly Sinhalese, a factor
that seriously hinders the military's ability to deal
with Tamils. Soldiers participated in the Colombo
riots of July 1983. The President-who is also com-
mander in chief of the armed forces-did not disci-
pline soldiers found guilty of reprisals against Tamil
civilians.
We believe the military's repressive tactics have fur-
ther radicalized the Tamil citizenry and destroyed
any rapport that might have existed between Colombo
and the Tamil population. In regions where Tamils
are in a majority, the security forces are seen as an
army of occupation. Tamils note that the Sinhalese
soldiers administering the area have to recruit Tamil-
speaking Muslims to communicate with the popula-
tion.
ping Tamil officer applicants.
The minority Tamil community is underrepresented
in the armed forces for several reasons. Nearly a third
of all Tamils are ineligible because they are not
property owners. The military tends to recruit and
promote Sinhalese over Tamils, and instruction at the
officer training school is in Sinhala, thus handicap-
Ground Forces
Personnel
Artillery mortars
(various)
Field (including
AA) pieces
Armor (APCs and
so forth)
Transports
(various)
Navy
Personnel
Ships
Patrol craft
Yard/service
craft
13,000 (active)
8,000 (reserve)
12,000 (volunteer force)
5 infantry regiments
I commando squadron
1 artillery regiment
1 armored reconnaissance
regiment
1 engineer regiment
I signal regiment
138
2,700 (active strength)
Air Force
Personnel
Paramilitary
Personnel
National Police
Force
2,270 (active)
1,100 (reserve)
51 (no fighters; transport re-
sponsibilities only)
fixed wing-26 prop
helicopters-9 turbine
other-11 (various states of
repair)
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Army
The Army has an authorized strength of 21,000
personnel. Approximately 13,000 are regulars, aug-
mented by a volunteer force of 12,000 men, of whom
approximately one-third are on active duty at any one
time. Military service is not compulsory. Army enlist-
ment, for a minimum of five years, is permitted at 18.
The Army Commander exercises overall command
and coordination for all three services in times of
national emergency.
The Army is responsible for defending national terri-
tory, assisting in internal security, and participating in
civic action projects. The formal structure of the
Army is a carryover from the British colonial period.
The officer corps follows Western theories of military
doctrine and organization. Most foreign training is
either in the United Kingdom or the United States.
The Army leadership is conservative and slow to
adapt to new methods or ideas.
The Army in January 1981 completed a total reorga-
nization to correct longstanding command and control
problems. The Regular Force, Volunteer Force, Regu-
lar Force Reserve, and Volunteer Force Reserve were
combined into a single force. The reorganization
attempted to make the Army more responsive to
communal problems that were likely to arise in the
northern sector of the country in the face of growing
racial discontent. The majority of the Army's assets
remain garrisoned, however, either in Colombo or at
Panagoda, approximately 25 kilometers to the south-
east of the capital, reflecting the Army's continuing
preoccupation with security in the capital area.
The Army is dependent upon foreign sources for
military materiel of all kinds. Supply levels have
improved over the last few years, but they are not
believed to be sufficient to sustain full-scale opera-
tions for long. Operational readiness is also severely
limited by a lack of skilled technicians and mainte-
in a large influx of equipment from the United
Kingdom, the United States, the Soviet Union, China,
Yugoslavia, and India
Navy
The 2,700-man Sri Lankan Navy is barely capable of
meeting its mission to conduct coastal patrols, contain
illegal immigration and smuggling, assist in maintain-
ing internal security, and participate in civic action
projects.
Command of the Navy is vested in the Commander of
the Navy, assisted by the Naval Board of Manage-
ment and Administration. The Navy is headquartered
at Colombo, although the principal naval base is at
Trincomalee on the east coast.
The Navy's effectiveness is severely restricted by
geography, equipment, and personnel problems:
? The ships are generally in poor repair because of a
chronic lack of spare parts, often resulting in canni-
balization of existing ships. Materiel procurement
procedures are cumbersome.
? Leadership, morale, and training are inadequate.
Poor pay, poor advancement opportunities, and po-
litical favoritism combine to make retention of
qualified personnel a persistent problem.
? Sri Lanka's coastal waters are shallow, uncharted,
and plagued by continually shifting sandbars. More-
over, there is a lack of navigational aids in the Palk
Strait.
The current 32-vessel fleet includes seven Chinese
Shanghai Ils, a Soviet MOL (all medium-sized coast-
al vessels), and a mix of smaller ships from the United
Kingdom and other countries. Colombo has ap-
proached the United States, Australia, and China
with procurement requests for new coastal craft, a
move that will add to the logistic nightmare of
maintaining a fleet with mismatched naval hardware.
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nance personnel.
Sri Lanka's materiel acquisitions from a number of
countries have left the Army with a wide range of
obsolete equipment and a logistic nightmare. Before
1971 most of the Army's equipment was of World
War II British manufacture. Although much of this
materiel remains in use, the 1971 insurgency resulted
The Navy has not been effective in responding to Sri
Lanka's ethnic needs. Naval discipline is a serious
problem. Sailors rioted during the summer of 1983 in
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Trincomalee, killing Tamil civilians and burning and
looting large sections of the city. Subsequently, Co-
lombo has not called on naval units to participate in
suppressing communal unrest.
Air Force
The Air Force has no real combat capability. The Air
Force includes about 2,300 personnel and approxi-
mately 26 operational aircraft, most adequate for
transport duty only. Chronic lack of spare parts has
forced the retirement of five MIG-17s and four MIG-
15s. Although Air Force personnel are considered the
most elite and trustworthy of the three services, the
Air Force suffers from the same problems of indisci-
pline and poor morale that plague the rest of the
military.
The mission of the Sri Lankan Air Force is transport,
air patrol and rescue, and supporting ground opera-
tions for the internal security of the country. The Air
Force also operates "Helitours," a charter tourist
airlift within the island and to the Maldives, and
operates two aircraft for Air Maldives. The charter
service is beginning to earn foreign exchange to
support spare parts acquisition and an aircraft re-
placement program. Present plans call for increased
Air Force involvement in antismuggling operations.
The charter tourist service has improved pilot morale
and proficiency.
Paramilitary
The country's 17,000-man police force may be called
into national service at the request of the President in
the event of a national emergency. Similarly, the
12,000 members of the volunteer force who regularly
serve short terms of active duty in the regular Army
can be pressed into emergency service by the Presi-
dent. Both groups are ill equipped and poorly trained,
however, and cannot make a substantial contribution
to national defense capabilities. The country lacks a
formal paramilitary force.
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Foreign Relations
ties representing a range of leftist opinion.
The Jayewardene government pursues a moderate
and nonaligned foreign policy. Traditionally, foreign
policy concerns have been largely ignored by the
electorate and have been left to the leadership of the
party in power. The country's first two Prime Minis-
ters, D. S. Senanayake and Sir John Kotelawala,
followed a conservative, pro-Western policy, shifting
only slightly to develop the country's nonaligned
credentials among the other Afro-Asian nations
emerging from colonialism. Governments formed by
the Sri Lanka Freedom Party (SLFP) veered slightly
leftward after the SLFP won the 1956 and 1970
elections by forming coalition governments with par-
The chief executive is the primary foreign policy
decision maker in Sri Lanka. Under the Constitution
the Prime Minister (President since 1980) may retain
the portfolio for national defense and internal security
as well as control foreign policy, and this has been
done by all chief executives since 1948. Foreign policy
has never been an issue in Sri Lanka's elections)
outsiders.
India
Like the other smaller South Asian states, Sri Lanka
pays deference to its large and militarily strong
neighbor to the north, while at the same time seeking
ties elsewhere to gain some leverage and protect its
independence. New Delhi wants stability on the island
and is eager to forestall intervention in Sri Lanka by
Colombo's relations with New Delhi have been fragile
during periods of tension and violence between Sinha-
lese and Tamils. The Indian Government believes
ethnic violence in Sri Lanka could have serious reper-
cussions in India's Tamil areas. Colombo's handling
of communal violence in 1983 heightened Indian
concerns about Sri Lanka's commitment to protect its
Tamil minority.
Although the Indian Government has used its good
offices to bring together representatives of the Tamil
separatists and the Sri Lankan Government, New
Delhi is also granting sanctuary to Sri Lankan Tamil
insurgents in Tamil Nadu and has permitted the
creation of numerous training camps near New Delhi,
Madras, and elsewhere in the country. We believe
New Delhi's support for Sri Lanka's Tamil separatists
probably is an attempt to control a movement it
cannot eradicate.
Since India and Sri Lanka gained independence from
the United Kingdom in 1948, both countries have
been involved in resolving the citizenship status of the
nearly 1.5-million stateless Tamil estate workers in
Sri Lanka. More than half of these "Indian Tamils"
were repatriated to Tamil Nadu under a series of
agreements between New Delhi and Colombo. The
status of the remaining 825,000 is still unresolved, but
Colombo is likely to award them Sri Lankan citizen-
ship to curry favor with India and deprive New Delhi
of a rationale to meddle in Sri Lankan internal
affairs.
Sri Lanka Within the Region
Sri Lanka has been an active participant in a number
of regional political and economic programs within an
organization called South Asian Regional Coopera-
tion (SARC). Since 1980, Sri Lankan representatives
have met regularly with their counterparts from Ne-
pal, Bhutan, India, Bangladesh, Pakistan, and the
Maldives to develop SARC into a permanent regional
organization similar to the European Economic Com-
munity or the Association of Southeast Asian Nations
(ASEAN). These efforts have been stymied by New
Delhi's reluctance to enter into multilateral arrange-
ments with its smaller neighbors.
Colombo has petitioned ASEAN twice to be admitted
as a full member and been rejected both times. Under
both UNP and SLFP governments, Sri Lanka has
consistently attempted to create strong bilateral ties
with its neighbors in the region to offset India's
enormous influence in Sri Lanka's political affairs.
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Under Jayewardene's direction, Colombo has sought
to conclude a friendship treaty with the United States
similar to the one it has with the USSR, but it has
received little encouragement from Washington.
The West
The United States. Jayewardene feels a strong person-
al friendship toward the United States and is general-
ly sympathetic to American values, but he is sensitive
to longstanding charges by domestic critics that he is
a US stooge. Jayewardene is eager to offer appealing
opportunities to US and other foreign companies. Sri
Lanka has openly welcomed visits by US naval ves-
sels.
Relations with the United States were often less
cordial under previous governments. A major crisis
occurred in 1962 when the SLFP government nation-
alized the US-owned Esso Standard Eastern and
Caltex distribution facilities. When the government
refused to pay adequate compensation, the United
States suspended economic assistance. In April 1965 a
new UNP government negotiated a compensation
agreement. Five years later, the SLFP returned to
power. Fulfilling its campaign promises, it expelled
Peace Corps and Ford Foundation personnel. During
the mid-1970s the Bandaranaike government eased its
more radical positions, and relations slowly improved.
Before 1974 relations with the United States were
complicated by the conflict between the island's eco-
nomic needs and US legislation regarding China. In
1952 the United States cut economic aid to Sri Lanka
when the rubber-rice barter agreement was signed.
US aid resumed in 1956 but was terminated again in
1963 when Sri Lanka nationalized US-owned petro-
leum-processing plants. Aid was resumed in 1965, but
Prime Minister Sirimavo Bandaranaike decreased US
aid levels in 1970, when she terminated a number of
US programs in the island, claiming they were fronts
for US intelligence operations.
The United Kingdom. Colombo has benefited sub-
stantially from its close relationship with the United
Kingdom. When Sri Lanka became a republic in
1972, Colombo chose to remain in the Commonwealth
largely to maintain its special trading relationship
with London's international tea markets and the
military advantage to be gained by Commonwealth
membership. Both UNP and SLFP governments have
used the Commonwealth to advantage as a forum to
solicit development funds and to enlarge its role in
international affairs. The United Kingdom dominates
a development program referred to as the Colombo
Plan, which has provided millions of dollars of devel-
opment aid to the poorer nations of the region, such as
Sri Lanka.
The USSR
Sri Lanka's relations with Moscow vary depending on
the degree to which Colombo wants to emphasize its
nonaligned credentials. Since 1970 relations with the
Soviet Union have been cool. During Prime Minister
Sirimavo Bandaranaike's visit to Moscow in 1970,
Soviet President Brezhnev did not receive her, and, in
retaliation, Bandaranaike ignored a high-level Soviet
official who visited Colombo. Soviet offers of aid were
refused or put on hold. Colombo's denunciations of
Soviet intervention in Afghanistan and Vietnamese
interference in Cambodia have contributed to the cool
relations. President Jayewardene, known for his pro-
West leanings, has canceled a Soviet-sponsored pro-
ject.
China
Sri Lanka's ties with China have been closer and
more cordial than with any other Communist state
and are reflected in Sri Lanka's almost immmediate
recognition of the Communist government in 1949,
the bilateral rice-rubber agreement of 1952, and the
two countries' similar foreign policy concerns. China
is Sri Lanka's major Communist trade and aid part-
ner. Loans from China for economic development
projects, though not extensive, have concentrated in
areas important to Sri Lankans like the Mahaweli
Development Plan and the Ginganga Flood Protection
Project. Given Sri Lanka's good relations with both
India and China, Colombo took a neutral position
toward the Sino-Indian border conflict of 1962.
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Confidenitial
US political and economic interests in Sri Lanka are
largely strategic and ideological. Sri Lanka poses no
threat, direct or indirect, to vital American interests.
In general, relations between Washington and Colom-
bo have been good. Since 1977 bilateral relations
between the two countries improved following the
election of J. R. Jayewardene and his restructuring of
the country's political and economic orientation along,
US interests in Sri Lanka have to be viewed against
the larger concern for Sri Lanka's role in the overall
political stability of South Asia. Instability in Sri
Lanka could lead to far more serious regional conse-
quences affecting India and Indo-US relations. Re-
gional disputes between India and Sri Lanka might
lead the Sri Lankan Government to seek US involve-
ment
Economic Assistance
US aid to Sri Lanka has been substantial-both
monetary and material-and under the Jayewardene
government has become an important aspect of na-
tional development planning. Aid to Colombo from
the United States for 1984 totaled $110 million, with
a small decrease projected for 1985 ($88 million) and
a leveling off of commitments at approximately $100
members of the international donor community-
supported the initial development of major national
irrigation and power projects. As these projects have
come on line, further aid has been tied to the comple-
tion of downstream development programs related to
these massive dams and reservoirs. Current planning
calls for the completion of farm water management
programs, irrigation diversification schemes, and es-
tablishment of farmer training organizations to sup- 25X1
port the new settlers who are to be brought into the
new projects.
Since 1977 US aid policies toward Sri Lanka have
shifted from the strictly governmental to an emphasis
on private US contractors and nonprofit groups. Con-
sequently, aid activities through US private voluntary
organizations have grown rapidly. These organiza-
tions were involved in more than 20 development
programs in 1984. The programs emphasize small-
scale village and social development. Almost all have
been carried out in concert with indigenous private
institutions active throughout the country
million per year for the following four years.
The US Agency for International Development's
analysis of Sri Lanka's development needs emphasizes
the shift from the previous need for resource transfer
to one focused on the priorities of private-sector
development, technology transfer and research, and
institutional development. Although US Title II and
Title III food and money will continue to support a
number of nutrition programs, the overall goal of AID
policy is to assist Sri Lanka in becoming independent
in food production and resource utilization.
Military
Although US military training programs for Sri
Lanka remain modest in comparison with other allied
programs, the expenditure for the US International
Military Education and Training Program (IMET) 25X1
has grown from $26,000 in 1979 (two trainees) to
more than $150,000 in 1984 (26 trainees). Colombo
values this exchange very highly both for the quality
of training involved and for the symbolic importance
of participating with the United States in military
preparedness training. Colombo perceives the pro-
gram as an international symbol of US commitment
to friendship and cooperation with the democratic
reforms and economic liberalization efforts made over
the past few years by the Jayewardene government.
The emphasis in US aid programs to Sri Lanka
shifted during the late 1970s and early 1980s to fulfill
the country's overall development needs. Earlier funds
provided by the United States-as well as other
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Sri Lanka's main ports-Colombo and Trincoma-
lee-are open to ship visits by vessels of friendly
nations. More than a dozen US vessels visited these
two ports in 1983. Personnel from these ships spent an
estimated $5 million while on shore leave. These visits
are highly symbolic for Colombo, and the government
attempts to balance the number and nature of US and
Soviet ship visits to preserve and enhance its standing
among the world's nonaligned nations.
Trade
Trade between the United States and Sri Lanka is
expanding. In 1983 imports from the United States
amounted to $114 million, 31 percent of which was
wheat. Almost all of the wheat was sold under the PL
480 concessionary sales program. Imports from the
United States rose by 16 percent in 1983, and the
United States was in sixth place among suppliers to
Sri Lanka with a 6.4-percent share of the country's
imports. Exports to the United States totaled $185
million, 75 percent of which was textiles and gar-
ments. As exports to the United States increased 29
percent over the 1982 level, the United States re-
mained in first place as a market for Sri Lankan
exports with a 17-percent share of the country's
exports.
Investments
US direct investment in Sri Lanka is estimated at a
modest $7-8 million. American Express, Bank of
America, and Citibank all have branch offices in
Colombo, and Girard Bank has opened a representa-
tive office. Other major US investments include IBM,
Pfizer, Singer, Union Carbide, and Warner-Hudnut,
all of which have manufacturing facilities aimed at
the domestic market. In addition, there are several
other prospective US investments in Sri Lanka that
would collectively multiply the dollar equity several-
fold. Two electronics firms, Harris Corporation and
Motorola, have signed agreements for semiconductor
production plants to be built in the near future.
Confidential 36
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Confidential
B.C.
500
A.D.
100
Chronology
Sinhalese arrive on the island from northern India.
Buddhism introduced.
First major irrigation reservoir constructed.
Anuradhapura, seat of Sinhalese kings and capital for 1,200 years, is established.
Tamils establish kingdom in northern part of island.
1517 Portuguese build fort at Colombo.
Dutch drive out the Portuguese and gain control of entire island except for Kandy,
which remains independent.
Ceylon is ceded to Great Britain by Treaty of Amiens and becomes Britain's first
crown colony.
British take Kandy and exile Kandyan king to India.
Limited self-rule by State Council inaugurated. Elections through universal
franchise.
First parliamentary elections held, Ceylon granted internal self-government; D. S.
Senanayake (UNP) becomes first Prime Minister.
New Ceylonese Constitution comes into effect; Ceylon becomes an independent
dominion within the British Commonwealth.
Colombo Plan for the cooperative development of South and Southeast Asian
nations is set up.
First "rice-for-rubber" agreement concluded with China.
Prime Minister Dudley Senanayake resigns after widespread opposition to with-
drawal of government rice subsidy.
1955 Ceylon admitted to United Nations.
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S. W. R. D. Bandaranaike becomes Prime Minister. "Sinhala Only" legislation
passed, making Sinhalese the official language.
British military bases turned over to the Ceylonese Government.
Communal riots between Sinhalese and Tamils; loss of life and extensive property
damage; government declares state of emergency.
Prime Minister Bandaranaike assassinated by Buddhist monk.
Sirimavo Bandaranaike elected Prime Minister.
State of emergency declared in Northern and Eastern Provinces over Tamil civil
disobedience protesting government language policies.
US economic aid suspended for two years because of Ceylon's failure to
compensate US oil companies for expropriated properties.
Pro-Western United National Party wins national elections; Dudley Senanayake
becomes Prime Minister.
Communal riots in Colombo result in a government-declared state of emergency.
SLFP-led coalition with the leading leftist parties win seventh election; Sirimavo
Bandaranaike becomes Prime Minister for the second time.
J. R. Jayewardene and UNP win overwhelming victory in elections; lead country
toward free market economy; communal riots result in government declaring state
of emergency.
Communal violence; new Constitution introduces Gaullist system, replacing
position of prime minister by president.
Jayewardene amends the Constitution to allow for early presidential elections in
which he is returned for another six years.
Jayewardene amends the Constitution to allow a public referendum to extend the
current Parliament for another six years.
1983 July
1983 December
1984
J
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Major cities racked by worst ethnic violence in the country's history; Jaffna
flooded with Tamil refugees.
With urging from the Government of India, Jayewardene inaugurates "All-Party
Conference" to seek answer to country's ethnic problems.
Periodic violence erupts in the north as Tamil dissidents increase pressure on
security forces.
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Statistical Summary
Official name: Democratic Socialist Republic of Sri Lanka
Capital: Colombo
Type: independent state since 1948; constitutional parliamentary democracy; head
of state-President
Political subdivisions: nine provinces, 24 administrative districts, and four catego-
ries of semiautonomous elected local governments
Legal system: a highly complex mixture of English common law, Roman-Dutch,
and Muslim law, as well as Sinhalese and Tamil customary law; strong,
independent judiciary; has not accepted compulsory ICJ jurisdiction
Government leader: J. R. Jayewardene, President
Suffrage: universal over 18
Elections: national elections ordinarily held every six years
Political parties and leaders:
? Sri Lanka Freedom Party (SLFP), Sirimavo Ratwatte Dias Bandaranaike
? Lanka Sama Samaja Party (LSSP; Trotskyite), C. R. de Silva
? Sama Samaja Party, V. Nanayakkara
? Tamil United Liberation Front (TULF), A. Amirthalingam
? United National Party (UNP), J. R. Jayewardene
? Communist Party/Moscow, K. P. Silva
? Communist Party/Beijing, N. Shanmugathasan
? Mahajana Eksath Peramuna (MEP; People's United Front), M. B. Ratnayaka
? Janatha Vimukthi Peramuna (JVP; People's Liberation Front), Rohana
Wijeweera
? All-Ceylon Tamil Congress, Kumar Ponnambalam
? Sri Lanka Mahajana Party (SLMP), T. B. Ilangaratne, Chandrika Bandaran-
aike, and Vijaya Kumaranatunga
Voting strength (October 1982 presidential election):
UNP 52.91 percent
SLFP 39.07 percent
JVP 4.18 percent
All-Ceylon Tamil Congress 2.67 percent
LSSP 0.9 percent
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Confidential
Communists: approximately 107,000 voted for the Communist Party in the July
1977 general election; Communist Party/Moscow approximately 5,000 members
(1975); Communist Party/Peking approximately 1,000 members (1970)
Other political or pressure groups: Buddhist clergy, Sinhalese Buddhist lay groups;
far-left violent revolutionary groups; labor unions
Member of: ADB, ANRPC, Colombo Plan, Commonwealth, FAO, G-77, GATT,
IAEA, IBRD, ICAO, IDA, IFAD, IFC, ILO, IMF, IMO, INTELSAT, IPU,
IRC, ITU, NAM, UN, UNESCO, UPU, WFTU, WHO, WIPO, WMO, and
WTO
65,610 square kilometers (approximately the size of West Virginia)
44 percent forest
31 percent waste, urban, or other
25 percent cultivated
Limits of territorial waters (claimed): 12-nautical-mile (fishing 200 nautical mile,
plus pearling in the Gulf of Mannar; 200-nautical-mile exclusive economic zone)
Coastline: 1,340 km
Population: 15,925,000 (July 1984); average annual growth rate 1.8 percent
Ethnic divisions: 74 percent Sinhalese, 18 percent Tamil, 7 percent Moor, 1
percent other
Religion: 69 percent Buddhist, 15 percent Hindu, 8 percent Muslim, 8 percent
Christian, 0.1 percent other
Language: Sinhala official; Sinhala and Tamil listed as national languages;
English commonly used in government and spoken by about 10 percent of the
population
Literacy: 84.8 percent
Labor force: 4 million; 15 percent unemployed; employed persons-45.9 percent
agriculture, 13.3 percent mining and manufacturing, 12.4 percent trade and
transport, 28.5 percent services and other extensive underemployment
Organized labor: about one-third of the labor force, over half of which employed
on tea, rubber, and coconut estates
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GDP: $5.2 billion (1983)
1983 real GDP growth: 4.9 percent
Per capita income: $330 (1983)
Agriculture: 24 percent of the GDP (1983); main crops-tea, rubber, coconuts, and
rice; national diet-2,060 calories and 42 grams protein per day per capita (1977)
Fishing: catch 176,720 metric tons (1982)
Major industries: processing of rubber, tea, and other agricultural commodities;
manufacture of consumer goods, garment industry
Electric power: 562,000 kw capacity (1982); 2 billion kWh produced (1982); 130
kWh per capita
Exports: $1.1 billion (f.o.b., 1983); tea, rubber, petroleum products, textiles
Imports: $1.9 billion (c.i.f., 1983); petroleum, machinery, food, and consumer
goods
Major trade partners: (1982) exports-14 percent United States, 6 percent United
Kingdom; imports-15 percent Saudi Arabia, 14 percent Japan
Budget: (1983) revenue $1.2 billion, expenditure $1.7 billion
Monetary conversion rate: 25.161 rupees = $1 (1983 average)
Fiscal year: 1 January-31 December
Communications Railroads: 1,496-km total (1980); all broad gauge (1.435-meters); 102-km double
track; no electrification; government-owned
Highways: 66,176-km total (1979); 24,300-km paved (mostly bituminous treated),
28,916-km crushed stone or gravel, 12,960-km improved earth or unimproved
earth; in addition, several thousand kilometers of tracks, mostly unmotorable
Inland waterways: 430 km; navigable by shallow-draft craft
Pipelines: crude, 13 km; refined products, 77 km
Ports: three major, nine minor
Civil air: eight major transport (including one leased)
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Airfields: 14 total, 11 usable; 11 with permanent-surface runways; 1 with runways
2,440 to 3,659 meters, eight with runways 1,220 to 2,439 meters
Telecommunications: good international service; 75,000 (estimated)
telephones (0.5 per 100 population); 16 AM stations, two FM stations, and
one TV ground station; submarine cables extend to India; one ground
satellite station
Defense Forces Branches: Army, Air Force, Navy, Police Force
Military manpower: active military personnel, 19,000; males 15 to 49, 4.2 million;
3.3 million fit for military service; 185,000 reach military age (18) annually
Military budget: for fiscal year ending 31 December 1984, $93.5 million, 5.4
percent of central government current budget (estimate)
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Figure 11
c-
Pamban
Island
- Kankesantural Valvedddturai?Poinl Pedro
~~ ~,~- Nelladyr
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- Province boundary
(non-administrative)
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'J* National capital
Mannar District capital
Railroad (5' 6" gauge)
Railroad (2' 6" gauge)
Road
Airfield
Major port
Populated places
Colombo 585,770
p? 100.000 to 200,000 p 10000 to 35.000
0 35,00010 100,000 ? under 10,000
Based on 1982 Census
Src! zlecai!ens is n'erjs
Scale 1:1,000,000
0 1,0 20 3,0 40
Kibmeters
0 1,0 2,0 30 40
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@ Akuressa r ungama
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p9 9
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Head
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Confidential
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