Sri Lanka

The first Sinhalese arrived in Sri Lanka late in the 6th century B.C. probably from northern India. Buddhism was introduced in about the mid-third century B.C., and a great civilization developed at the cities of Anuradhapura (kingdom from circa 200 B.C. to circa A.D. 1000) and Polonnaruwa (from about 1070 to 1200). In the 14th century, a south Indian dynasty established a Tamil kingdom in northern Sri Lanka. The coastal areas of the island were controlled by the Portuguese in the 16th century and by the Dutch in the 17th century. The island was ceded to the British in 1796, became a crown colony in 1802, and was united under British rule by 1815. As Ceylon, it became independent in 1948; its name was changed to Sri Lanka in 1972. Tensions between the Sinhalese majority and Tamil separatists erupted into war in 1983. After two decades of fighting, the government and Liberation Tigers of Tamil Eelam (LTTE) formalized a cease-fire in February 2002 with Norway brokering peace negotiations. Violence between the LTTE and government forces intensified in 2006 and the government regained control of the Eastern Province in 2007. In May 2009, the government announced that its military had finally defeated the remnants of the LTTE and that its leader, Velupillai PRABHAKARAN, had been killed.

total: 65,610 sq km
country comparison to the world: 121
land: 64,630 sq km
water: 980 sq km
In 1977, Colombo abandoned statist- and import substitution-policies for more market- and export-oriented policies, including encouragement of foreign investment. Sri Lanka suffered through a brutal civil war from 1983 to 2009. Despite the war, Sri Lanka saw GDP growth average nearly 5% in the last 10 years. Government spending on development and fighting the LTTE drove GDP growth to about 7% per year in 2006-08. Growth was around 3.5% in 2009. Sri Lanka's most dynamic sectors are now food processing, textiles and apparel, food and beverages, port construction, telecommunications, and insurance and banking. About 1.5 million Sri Lankans work abroad, 90% of them in the Middle East. They send home more than $3 billion a year. President RAJAPAKSA's reelection in 2010 means that the Government of Sri Lanka will likely continue its more statist economic approach, that seeks to reduce poverty by steering investment to disadvantaged areas, developing small and medium enterprises, promoting agriculture, and expanding the already enormous civil service. The end of the 26-year conflict with the LTTE has opened the door for reconstruction and development projects in the north and east. Funding these projects will be difficult, as the government already is faced with high debt interest payments, a bloated civil service, and high budget deficits. The 2008-09 global financial crisis and recession exposed Sri Lanka's economic vulnerabilities and nearly caused a balance of payments crisis, which was alleviated by a $2.6 billion IMF standby agreement in July 2009. But the end of the civil war and the IMF loan restored investors' confidence. The Sri Lankan stock market gained over 100% in 2009, one of the best performing markets in the world. Official foreign reserves improved to more than $5 billion by November 2009, providing over 6 months of imports cover.

current situation: Sri Lanka is a source and destination country for men and women trafficked for the purposes of involuntary servitude and commercial sexual exploitation; Sri Lankan men and women migrate willingly to the Persian Gulf, Middle East, and East Asia to work as construction workers, domestic servants, or garment factory workers, where some find themselves in situations of involuntary servitude when faced with restrictions on movement, withholding of passports, threats, physical or sexual abuse, and debt bondage; children are trafficked internally for commercial sexual exploitation and, less frequently, for forced labor
tier rating: Tier 2 Watch List - for a second consecutive year, Sri Lanka is on the Tier 2 Watch List for failing to provide evidence of increasing efforts to combat severe forms of human trafficking, particularly in the area of law enforcement; the government failed to arrest, prosecute, or convict any person for trafficking offenses and continued to punish some victims of trafficking for crimes committed as a result of being trafficked; Sri Lanka has not ratified the 2000 UN TIP Protocol (2008)