Order Code RL31707
CRS Report for Congress
Received through the CRS Web
Sri Lanka:
Background and U.S. Relations
Updated May 16, 2005
Bruce Vaughn
Analyst in Asian Affairs
Foreign Affairs, Trade, and Defense Division
Severn Anderson
Analyst in Asian Affairs
Foreign Affairs, Trade, and Defense Division
Congressional Research Service ˜ The Library of Congress

Sri Lanka: Background and U.S. Relations
Summary
Sri Lanka is a constitutional democracy with relatively high educational and
social standards. Under Sri Lanka’s hybrid parliamentary model, an elected president
appoints the cabinet in consultation with the prime minister. The country’s political,
social, and economic development has been seriously constrained by ethnic conflict
between the majority Sinhalese and minority Tamil ethnic groups. Since 1983, a
separatist war costing some 64,000 lives has been waged against government forces
by the Liberation Tigers of Tamil Eelam (LTTE), a rebel group that has been seeking
to establish a separate state in the Tamil-dominated areas of the north and east.
A Norwegian-brokered peace process has produced notable successes, though
it was suspended by the LTTE in the spring of 2003 due to differences over interim
administration arrangements. In February 2002, a permanent cease-fire was reached
and generally has been observed by both sides. In September 2002, the government
in Colombo and the LTTE held their first peace talks in seven years, with the LTTE
indicating that it was willing to accept autonomy rather than independence for Tamil-
majority regions. The two sides agreed in principle to seek a solution through a
federal structure. However, LTTE leader Prabakaran has stated that there may be a
return to fighting. At the end of October 2003, the LTTE submitted to the
government a proposal for establishing an interim administration in the Northeast.
The period from 2004 to early 2005 has witnessed increasing instability within the
ranks of both the Sinhalese government and the LTTE which has led to increasing
concern over the future of the peace process.
Political rivalry between President Chandrika Kumaratunga, who leads the Sri
Lankan Freedom Party (SLFP), and then Prime Minister Ranil Wickremesinghe, head
of the United NationalParty (UNP), has hindered peace efforts. In early November
2003 the president removed three cabinet ministers, suspended parliament, and
deployed troops around the capital while the then prime minister was in Washington
seeking American support for the peace process. The crisis deepened in February
2004 when the president dismissed parliament and called for elections in April 2004.
The United People’s Freedom Alliance (UPFA), which is composed of the SLFP and
the People’s Liberation Front (JVP), won a slim majority of parliament and defeated
the UNP and replaced Ranil Wickremesinghe with Mahinda Rajapakse as prime
minister.
Government troops continue to occupy large swaths of Tamil-speaking territory
and there remains doubt about the willingness of the LTTE to renounce the use of
force and disarm. The United States designated the LTTE as a Foreign Terrorist
Organization (FTO) in 1997 and demands that the Tigers lay down their arms and
foreswear the use of force before that status can change. U.S. policy supports efforts
to reform Sri Lanka’s democratic political system in a way that provides for full
political participation of all communities; it does not endorse the establishment of
another independent state on the island. Since Sri Lankan independence in 1948 the
United States has provided over $1.63 billion in assistance funds. This report may
be of interest to congressional decision-makers as they consider legislation such as
H.R. 886, S. 191, H.Res. 12, and S.Res. 4. This report will be updated periodically.

Contents
Historical Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Political Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Ethnic Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Peace Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Obstacles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Indian Ocean Tsunami — December 26, 2004 . . . . . . . . . . . . . . . . . . . . . . . 13
Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
U.S. Relations and Policy Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Bilateral Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Trade, Investment, and Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Human Rights Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
List of Figures
Figure 1. Map of Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Sri Lanka:
Background and U.S. Relations
This report provides historical, political, and economic background on Sri Lanka
and examines U.S.-Sri Lankan relations and policy concerns. Congressional interest
in Sri Lanka focuses on the current peace process that seeks to end a two-decade-old
civil war as well as on terrorist activity, human rights, and U.S. appropriations for
food, economic, and military assistance.
SRI LANKA IN BRIEF
Population: 19.9 million (2005 est.); growth rate: 0.81% (2004 est.)
Area: 65,610 sq. km. (about size of West Virginia)
Capital: Colombo
Ethnic Groups: Sinhalese 74%; Tamil 18%; Arab 7%; other 1%
Language: Sinhala (official and national language); Tamil (national language);
English widely used
Religion: Buddhist 70%; Hindu 15%; Christian 8%; Muslim 7% (2004 est.)
Life Expectancy at Birth: 72.89 years (2004 est.)
Literacy: 91% (2005 est)
Gross Domestic Product (at PPP): $73.7 billion; per capita: $3,700; growth rate
5.3% (2005 est)
Inflation: 7.6% (2004 est.)
U.S. Trade: exports to U.S. $1.96 billion; imports from U.S. $164 million (2004);
38.1 % of exports go to the United States (2004)
Sources: CIA World Factbook; U.S. Department of Commerce; World Bank;
Economist Intelligence Unit; Global Insight
Historical Setting
Once a port of call on ancient maritime trade routes, Sri Lanka is located in the
Indian Ocean off the southeastern tip of India’s Deccan Peninsula. The island nation
was settled by successive waves of migration from India beginning in the 5th century
BCE. Indo-Aryans from northern India established Sinhalese Buddhist kingdoms in
the central part of the island. Tamil Hindus from southern India settled in the
northeastern coastal areas, establishing a kingdom in the Jaffna Peninsula. Beginning
in the 16th century, Sri Lanka was colonized in succession by the Portuguese, Dutch,
and English, becoming the British crown colony of Ceylon in 1802. In the late 19th
century, Tamil laborers were brought from India to work British tea and rubber
plantations in the southern highlands. Known as Indian Tamils, the descendants of
these workers currently comprise 6% of Sri Lanka’s population, while descendants
of earlier Tamil arrivals, known as Sri Lankan Tamils, constitute 12% of the
population.

CRS-2
Although Ceylon gained its independence from Britain peacefully in 1948, the
succeeding decades have been marred by conflict between the country’s mostly
Buddhist Sinhalese majority and predominantly Hindu Tamil minority. Following
independence, the Tamils — who had attained educational and civil service
predominance under the British — increasingly found themselves discriminated
against by the Sinhalese-dominated government, which made Sinhala the sole official
language and gave preferences to Sinhalese in university admissions and government
jobs. The Sinhalese, who had deeply resented British favoritism toward the Tamils,
saw themselves not as the majority, however, but as a minority in a large Tamil sea
that included the 50 million Tamils across the strait in India’s southern state of Tamil
Nadu. In 1972, Ceylon was renamed Sri Lanka (“resplendent land”), as it was known
in Indian epic literature.
Political Situation
Sri Lanka’s political life has long featured a struggle between two broad
umbrella parties — the Sri Lanka Freedom Party (SLFP) and the United National
Party (UNP) — both dominated by prominent family clusters. Since independence,
the two parties have frequently alternated in power. Initially, Sri Lanka followed the
Westminster parliamentary model. In 1978, however, the UNP instituted a strong
executive presidential system of government. Under this French-style system, the
popularly elected President has the power to dissolve the 225-member unicameral
parliament and call new elections, as well as to appoint the prime minister and
cabinet. President Chandrika Kumaratunga — leader of the SLFP and daughter of
two former prime ministers — was re-elected to a second six-year term in December
1999, three days after she lost vision in one eye in a Tamil separatist suicide bombing
that killed 26 and injured more than 100.
Although Kumaratunga’s People’s Alliance (PA) coalition won a narrow victory
in the October 2000 parliamentary elections, a year later she was forced to dissolve
parliament and call for new elections in order to avoid a no-confidence vote. In the
resulting December 2001 parliamentary elections, the UNP won 109 seats (to 77 for
the PA) and formed a majority coalition — called the United National Front (UNF)
government — with the Tamil National Alliance (15 seats) and the Sri Lanka Muslim
Congress (5 seats). UNP leader and Prime Minister Ranil Wickremesinghe pledged
to open talks with the Tamil rebels and to resuscitate the ailing Sri Lankan economy.1
In April 2004, a new parliamentary election was held after President
Kumaratunga dissolved parliament. As a result of the new election, the electoral
coalition, United People’s Freedom Alliance (UPFA), composed of the populist
SLFP and the Marxist-Leninist, Sinhalese nationalist People’s Liberation Front
(JVP), won a slim majority of the seats in parliament and defeated the UNP. The
UPFA won 105 seats and 45.6% of the votes as compared to former Prime Minister
Wickremasinghe’s United National Party (UNP) which won 82 seats and 37.8% of
the vote. UNP’s defeat was attributed in part to a perception among voters that too
1 Dayan Candappa, “New Sri Lanka Premier Sworn In Pledging Peace,”Reuters News,
December 9, 2001.

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many concessions were being made to the Liberation Tigers of Tamil Eelamn
(LTTE) in peace negotiations.
The present phase of the ongoing crisis in Sri Lanka dates to November 2003,
when President Chandrika Kumaratunga suspended parliament, declared a state of
emergency, and dismissed key ministers responsible for peace talks with the LTTE.2
This undermined existing peace efforts by former Prime Minister Ranil
Wickremesinghe and cast doubt on the prime minister’s ability to follow through on
peace negotiations with the LTTE. The president’s dismissal of parliament on
February 7, 2004 and the LTTE’s statement that this was a “grave set back” to
negotiations cast further doubt on the future outcome of the peace process.
There have also been rumors that, in order to maintain political power, President
Kumaratunga is contemplating reverting the Sri Lankan political system back to a
Westminster-styled political model and doing away with the strong executive system
enacted in 1978. Under this new Westminster model Chandrika Kumaratungais is
viewed by some as likely to attempt to become the Prime Minister in order to
preserve her political power.3
Political Parties in Parliament — 2004
Election Results
Party
Votes
%
% Change* Seats
Seats Change*
Eelam People’s
Democratic Party
21,860
0.2
-0.06
1
-1
Illankai Tamil Arasu
Katchi
633,654
6.8
-
22
+22
Jathika Hela Urumaya
554,076
6.0
-
9
+9
Sri Lanka Muslim
Congress
186,876
2.0
+0.08
5
-
United National Front
3,410,174
36.8
-8.8
82
-27
United People’s
Freedom Alliance
(primarily composed of
Sri Lankan Freedom
Party and JVP)
4,317,996
46.6
+0.2
105
+12
Other
138,096
1.5
-
1
-15
Total
9,262,732
-
-
225
-
Note: The United People’s Freedom Alliance vote and seat totals are compared with the combined
People’s Alliance (2001 electoral coalition of SLFP and other leftist parties) and JVP vote and seat
counts at the 2001 election.
*All changes are in comparison to 2001 elections.
2 Scott Baldauf, “Woman Behind Sri Lanka’s Turmoil,” The Christian Science Monitor,
November 7, 2003.
3 Sri Lanka Country Report, Economist Intelligence Unit, February 2005.

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Ethnic Conflict
The combination of communal politics, as practiced by both Sinhalese and
Tamil political leaders, and deteriorating economic conditions created deep schisms
in Sri Lankan society. By the 1970s, the government was facing Tamil unrest in the
north and east, while the Sinhalese Marxist group, the JVP, waged a terrorist
campaign against Tamils in the central and southern regions. Periodic rioting against
Tamils in the late 1970’s and early 1980’s, culminating in the devastating communal
riots of 1983 spawned the creation of militant Tamil groups that sought to establish
by force a Tamil homeland that would include the Northern and Eastern provinces.
The Liberation Tigers of Tamil Eelam, led by its charismatic founder and chief
strategist Vellupillai Prabhakaran, emerged as the strongest and best organized of
these groups.
A full-scale separatist war broke out in the north following July 1983 riots in
which several thousand Tamils were killed in retaliation for the slaying of 13
Sinhalese soldiers by Tamil militants. Two decades of war have claimed some
64,000 lives and displaced between 800,000 and 1.6 million people. LTTE forces,
estimated at up to 10,000 men and women in strength, are armed with long-range
artillery, mortars, antiaircraft weaponry, and captured armored vehicles (including
several T-55 tanks and armored personnel carriers (APC’s) and control portions of
the Northern Province and some coastal areas of the Eastern Province. A small but
effective naval contingent, known as the Sea Tigers, includes speedboats, fishing
vessels, mini-subs of indigenous construction, and underwater demolition teams.
The LTTE air wing has also reportedly constructed an airstrip at Iranamadu in the
north and acquired at least two light aircraft (to go along with a few pre-existing
helicopters and gliders).4 Weapons reportedly have been obtained through illegal
arms markets in Burma, Thailand, and Cambodia, and from captured Sri Lankan
forces. Financial support for the LTTE reportedly has come from the worldwide
diaspora of Tamil emigres (especially the Tamils in Canada and Western Europe5),
as well as from smuggling and legitimate businesses. Tamil Tiger suicide bombers
are believed responsible for the assassination of numerous Sri Lankan political
leaders, including Sri Lankan President Ranasinghe Premadasa in May 1993, and
many moderate Tamil leaders who opposed the LTTE. Former Indian Prime
Minister Rajiv Gandhi (whose efforts to assist Sri Lanka in enforcing a peace accord
with the Tamils in 1987 ended in the deaths of over 1,000 Indian troops) was
assassinated in May 1991 by an alleged LTTE suicide bombing.6 One leading
scholar claims that the LTTE had been responsible for fully half of all suicide attacks
4 Sugeeswara Senadhira, “Kumaratunga’s Dilemma on Joint Mechanism”, Asian Tribune,
April 23, 2005.
5 “Expert Criticizes Canada for Not Banning LTTE”, Colombo, The Island, September
15,2003; Patterns of Global Terrorism: 2003 Report, U.S.State Department Publication,
2003
6 Many Indians are intent on seeing top LTTE leaders, including Prabhakaran, extradited to
India to stand trial for the death of Rajiv Gandhi (see V.S. Sambandan, “Looking Beyond
the Peace Talks,” Frontline (Madras), April 11, 2003).

CRS-5
worldwide in recent years.7 Four previous attempts at a peaceful settlement ended
in failure and violence.
Peace Process
The current Norwegian-brokered peace effort, which began in 1999, has
produced notable success since Prime Minister Wickremesinghe revived the process
upon taking office in late-2001. In February 2002, a permanent cease-fire was
reached and, despite several incidents of alleged violations, has since been observed
by both sides. In addition, confidence-building measures called for under the cease-
fire have been implemented. In April, LTTE leader Prabhakaran emerged from
hiding for his first press conference in 12 years and suggested for the first time that
the LTTE would be willing to settle for less than full Tamil independence. In
September 2002, Sri Lanka lifted its 1998 ban on the LTTE, a move which the Tigers
had demanded as a pre-condition for peace talks. Buddhist clerics and the JVP,
however, have opposed negotiating with the LTTE.8
In September 2002, at a naval base in Thailand, the Colombo government and
the LTTE held their first peace talks in seven years. The meeting, which resulted in
an agreement to establish a joint task force for humanitarian and reconstruction
activities, was deemed successful by both sides. On the third day of talks, the LTTE
announced that it would settle for “internal self-determination” and “substantial
regional autonomy” for the Tamil population rather than full independence — a
major shift in the rebels’ position. A second round of talks in October-November
2002 brought another breakthrough when the two sides agreed on a framework for
seeking foreign aid to rebuild the country (officials estimate that repairing the war-
damaged infrastructure in the island’s northeast could cost as much as $500 million9).
A multilateral “donor conference” in Oslo in late November brought numerous
pledges of external assistance, with the United States promising to “play its part”
toward implementation of a peace plan.10
In what appeared to be an important breakthrough, talks in early December 2002
ended with the issuance of a statement that “the parties have agreed to explore a
solution founded on the principle of internal self-determination in the areas of
historical habituation of the Tamil-speaking peoples, based on a federal structure
7 Cited in Amy Waldman, “Suicide Bombing Masters: Sri Lankan Rebels,” New York Times,
January 14, 2003.
8 Amal Jayasinghe, “Sri Lanka Lifts Ban on Tigers Ahead of Thai Talks,” Agence France-
Presse
, September 4, 2002.
9 “Sri Lankans in Reconstruction Talks,” BBC News, November 18, 2002. Large numbers
of Tamil refugees have already begun returning to the war-torn region since the February
2002 cease-fire (Dilip Ganguly, “100,000 Refugees Return to Sri Lanka,” Associated Press
Newswire
, September 20, 2002).
10 “Transcript: U.S. Prepared to ‘Play Its Part’ to Further Peace in Sri Lanka,” U.S.I.S.
Washington File, November 25, 2002.

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within a united Sri Lanka.”11 This language marks a significant concession from both
parties: the Colombo government for the first time accepted the idea of federalism,
and the rebels, in accepting a call for internal self-determination, appear to have
relinquished their decades-old pursuit of an independent Tamil state.
A fifth round of negotiations took place in Berlin in February, 2003, but made
no notable progress other than to schedule further talks on revenue sharing issues.
The meetings began only three hours after three LTTE rebels incinerated themselves
at sea when Norwegian truce monitors boarded their weapons-laden craft. Although
“very clearly a violation of the cease-fire,” the incident did not derail the peace
process; it did, however, erode somewhat international confidence, especially among
potential donor nations. The United States called the Tigers’ arms smuggling effort
“highly destabilizing” and urged the LTTE to “commit itself fully to peace and desist
from arms resupply efforts.”12
Talks in Japan in March, 2003 produced no major breakthroughs on political or
human rights issues. Norwegian brokers noted that the main purpose of the meetings
was to lay a foundation for a donor conference that Japan had offered to host in early
June. A Japanese participant suggested that the promise of major external assistance
— expected to be some $3 billion over three years — is what has kept the disputing
parties at the negotiating table.13 As in February, violence again threatened to derail
the process. On March 10, 2003, a Sri Lankan Navy vessel sank what the Colombo
government described as an attacking Tiger boat, killing 11. The Tigers condemned
the attack, claiming that their unarmed “merchant vessel” was not a threat. It is not
clear whether the incident took place in international waters or whether the Tiger boat
was carrying munitions. Norwegian truce monitors criticized both sides while
refraining from ruling who was at fault.14
Also in March, 2003, the World Bank established a special North East
Reconstruction Fund and pledged its “unconditional support” for Sri Lanka’s
development programs. A new Country Assistance Strategy (CAS) was announced
on April 1, the first for Sri Lanka since 1996. Organized around the central themes
of peace, growth, and equity, the CAS includes $800 million in grants and interest-
free loans over the next four years, more than tripling average annual World Bank
lending to Sri Lanka since 1998.15
11 Amy Waldman, “Sri Lanka to Explore a New Government,” New York Times, December
6, 2002.
12 “Sri Lankan Peace Talks Start in Berlin,” Reuters News, February 7, 2003; Amal
Jayasinghe, “Suicide Bomb Blunts Sri Lanka’s Peace Momentum,” Agence France-Presse,
February 10, 2003; “U.S. Criticizes Tamil Tiger Smuggling,” BBC News, February 12,
2003.
13 Scott McDonald, “Sri Lanka Propose Aid Body to Tamil Tigers,” Reuters News, May 28,
2003; Amal Jayasinghe, “Sri Lanka Negotiators Leave Japan With Little Progress, But Cash
Hopes Alive,” Agence France-Presse, March 22, 2003.
14 “Sri Lanka Monitors Chide Both Sides Over Sea Clash,” Reuters News, March 17, 2003.
15 Florence Wickramage and Kushani Ratnayake, “World Bank Pledges Unconditional
(continued...)

CRS-7
In April, 2003, the Colombo government said that it was considering holding
an island-wide non-binding referendum to endorse its current peace negotiations with
Tamil rebels. A public opinion poll found that nearly 84% of all Sri Lankans
believed that peace could be achieved through peace talks, including more than 95%
of Tamils.16 The LTTE pulled out of the peace negotiations on April 21, 2003. This
prevented a seventh round of peace talks from taking place in Thailand that were set
to begin on April 29, 2003.
In September 2003, Norway and Japan headed an effort to revitalize the peace
process in Sri Lanka and get the Sri Lankan government and the LTTE negotiating
again. The Japanese and Norwegian efforts have been aimed at keeping the faltering
peace process between the LTTE and the Sri Lankan government from devolving
back into further conflict.
The peace initiatives by Norway and Japan followed an August meeting of the
Tigers with their constitutional experts in Paris. The meeting was part of the Tigers’
effort to respond to a July 17 Sri Lankan government proposal for an interim
administration in the northeast of Sri Lanka. This was a major concession by the
government to Tiger demands which were a prerequisite for further talks.17 For their
part, the Tigers had previously made the key concession that they would settle for an
autonomy agreement rather than their previous goal of a separate state. Despite these
concessions by both sides, a peace agreement is not guaranteed. The LTTE has
indicated that they will once again seek secession and an independent state if
substantial autonomy is not achieved through the negotiation process.18
The government is split between a more conciliatory faction represented by
President Chandrika Kumaratunga and a more hardline faction represented by the
JVP. The UNP opposition is also regarded as the party most willing to negotiate
with the LTTE in order to end the conflict. Many observers believe that this is due
to the fact that a large portion of UNP political support is derived from the business
class whose success depends on limiting the impact of uncertainty and instability
which the conflict creates.

It was hoped that the LTTE would respond to the government’s offer and rejoin
peace negotiations by the end of September 2003.19 An earlier proposal for an interim
administration in June 2003 was rejected by the LTTE. The government is still
15 (...continued)
Support to Lanka,” Daily News (Colombo), March 28, 2003; “World Bank Discusses New
Country Assistance Strategy for Sri Lanka,” World Bank Press Release, April 1, 2003.
16 Francis Harrison, “Sri Lanka Ponders Peace Vote,” BBC News, April 4, 2003;
“Overwhelming Support for Peace Talks — Poll,” Daily News (Colombo), March 24, 2003.
17 Amal Jayasinghe, “Norway to Make Fresh Bid to Revive Sri Lanka Peace Process,”
Agence France Presse, September 3, 2003.
18 Amy Waldman, “Sri Lanka to Explore a New Government,” The New York Times,
December 6, 2003.
19 “Tamils Begin Paris Talks on Sri Lanka Peace Offer,” Agence France Presse, August 21,
2003.

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having difficulty making offers as some observers have noted that a constitutionally
viable solution will require the consent of the more hardline faction in the
government led by the JVP who have gone on record as opposing further concessions
to the LTTE.20
The international community has made an effort to support the peace process
by offering inducements for peace. An international donors conference held in Tokyo
in mid June 2003 obtained aid pledges for Sri Lanka totaling $4.5 billion. One billion
of the $4.5 billion was pledged by Japan over the next three years. Some 51 nations
and 20 international institutions participated in the conference, though the LTTE
boycotted it.21 Later in June, the World Bank approved a loan of $125 million to
assist Sri Lanka for poverty reduction, reconstruction in the northeast and to support
the peace process.22 Deputy Secretary of State Armitage expressed his support for the
peace process at the Tokyo conference by asking the LTTE to end their boycott of the
talks.23
As of April 2005, the peace process remains stalled. The LTTE insist on interim
self-rule in the Tamil northeast as the basis of resumption of peace talks. The
Government has expressed a desire that the LTTE restate that they would explore a
federal solution to the conflict and that discussion of Interim Self Governing
Authority (ISGA) be part of a comprehensive peace discussion and not a precondition
of such negotiations. Further, divisions within both the government and the LTTE
cast doubt on the eventual outcome of the peace talks.
The period from 2004 to early 2005 witnessed increasing instability within the
ranks of both the Sinhalese government and the LTTE which has led to increasing
concern over the future of the peace process. Peace talks, which broke down in April
of 2003, continue to be stalled though the cease fire remains largely intact. Despite
this, LTTE leader Prabakaran has stated that there may be a return to fighting. The
aid pledges of $4.5 billion for Sri Lanka are largely contingent on peace.
The cease-fire is still holding at present, although it is under strain. The present
crisis has continued past the April 2, 2004 elections and has been exacerbated in early
2005 by a number of factors. These include tensions between the SLFP and its
coalition partners, the JVP, over the privatization of the university educational system
and the petroleum sector, the possibility of a joint distribution mechanism with the
LTTE of foreign aid as a result of the tsunami of Dec. 26, 2004, to LTTE controlled
areas, and the prospect of a peace agreement that grants greater autonomy to the
Tamil-controlled North and East. The JVP strongly opposes all of the above and
20 Voice of America, “Sri Lanka Peace,” Federal News Dispatch, June 20, 2003.
21 “Donors Pledge $4.5 Bill for Sri Lanka Peace,” Ji Ji Press, June 10, 2003.
22 “World Bank Gives $125 Million,” Agence France Presse, June 18, 2003.
23 “U.S. Asks Tamil Tigers to Resume Talks with Sri Lankan Government,” BBC
Monitoring News File
, London June 13, 2003.

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have threatened numerous times that they would withdraw from the United People’s
Freedom Alliance, thus depriving the electoral coalition a majority in parliament.24
The LTTE too has experienced instability and intra-factional disagreements. In
March 2004 there was a major rupture within the LTTE ranks. Vinayagamoorthi
Muralitharan, alias Col. Karuna (who, as Special Commander, Batticaloa-Amparai
District, was in over-all charge of the LTTE’s military operations in the Eastern
Province) split with the Northern command of the LTTE headed by the supreme
commander of the LTTE (Veluppillai Prabhakaran) and took an estimated 6,000
soldiers with him. Col. Karuna then called for a separate truce with the government.
Factional fighting ensued between Karuna’s splinter group and the Northern faction
of the LTTE and resulted in Prabhakaran’s reassertion of control over the eastern
areas which Karuna had previously operated.
Since that time there have been numerous instances of political and military
operatives being killed by each side as they jockey for power in the East. The LTTE
has accused Col. Karuna and those loyal to him of cooperating with Sri Lankan Army
(SLA) paramilitaries and special forces in raids and targeted killings of forces under
their command, which the SLA denies. Karuna has since withdrawn to a fortified
base in the jungles of eastern Sri Lanka where they have repelled LTTE attacks.25
Between February and April of 2005 there were several recorded instances of serious
violations of the ceasefire. First was the death of a high level LTTE political officer,
E. Kousalyane, in early February which was followed by an increase in politically
motivated killings of individuals throughout the eastern provinces.26 In early April
there was also a much publicized incident when a Sea Tiger unit attacked a Sri
Lankan Navy vessel carrying a peace monitor, slightly wounding him. This led to a
formal censure of the LTTE by the ceasefire monitoring group, the Sri Lanka
Monitoring Mission (SLMM), and marked a particularly brazen attack as the Sri
Lankan Navy vessel was flying the SLMM flag indicating that monitors were
abroad.27
Obstacles
The fact that the ceasefire has held despite the stalled negotiations between the
Sri Lankan government and the LTTE has surprised many observers. Despite this,
negotiators face a difficult phase as they attempt to craft a political system that
maintains Sri Lanka’s unity while addressing the LTTE’s desire for substantive
autonomy.28 A variety of federal models are under consideration, including those that
24 , “JVP Threatens to Bring Down Lanka Govt. Over LTTE Tsunami Deal, The Hindu,
April 20, 2005
25 PTI News Agency, New Delhi, March 21, 2005.
26 V.S. Sambandan, “Batticaloa LTTE Leader Killed,” Hindu (Madras),February 7, 2005.
27 “Tamil Tiger ‘Breached Ceasefire’,” BBC News, April 08, 2005
28 A Tamil state is considered to be a fait accompli by many, given the LTTE’s
establishment of well-organized police, court, and prison systems, a law college, motor
vehicle registry, tax and customs departments, health clinics, and even a forestry division
(continued...)

CRS-10
have seen success in Switzerland and Canada, among others.29 In addition to
questions of power-sharing, numerous other highly contentious issues to be settled
include geographical boundaries, human rights protection, political and
administrative mechanisms, public finance, law and order, and LTTE accountability
for past actions.30
A key unresolved near-term issue is the decommissioning of LTTE weapons,
which the Tigers repeatedly have stated will not occur until a permanent settlement
is reached. The SLFP claims that the rebels are “armed to the teeth” and must disarm
as part of the negotiation process.31 Also, there are reported to be 35,000 government
troops controlling as much as one-third of the Jaffna Peninsula at the island’s
northern tip. The Tigers have refused to make peace while part of the country
remains under “army occupation,” but the Sri Lankan military is concerned that any
resettlement of civilians could be used as cover by the Tigers to better position
themselves should fighting resume.32 Colombo is refusing to open up the “high
security zones” until the rebels lay down their arms, an action the Tigers call “non-
negotiable” at this stage.33 Some analysts express certainty that the Tigers will be
unwilling to disarm in the foreseeable future, and even some Sinhalese intellectuals
are reported to sympathize with the rebels’ hesitation to disarm, given their perceived
need for “leverage” against a Sinhalese-dominated government that “has given no
reason to the LTTE to trust it.”34 Many believe that the Tigers are continuing
recruitment and arms procurement efforts in violation of the February 2002 cease-fire
agreement to maintain the military balance.35
There have been a number of incidents of concern since the cease fire was
declared. Reports indicate that since the beginning of the cease fire, the LTTE has
killed a number of rivals, informants, and intelligence officers.36 On August 6, 2003
the U.S. State Department “noted with concern” that the LTTE was “undermining
confidence in the peace process” by maintaining a military camp near Trincomalee
28 (...continued)
(John Lancaster, “In Some Ways, Rebels Without a Cause,” Washington Post, January 14,
2003).
29 See Teresita Schaffer and Nisala Rodrigo, “Sri Lanka: Finding the Start of a Long Road,”
South Asia Monitor 54, Center for Strategic and International Studies, January 1, 2003.
30 V.S. Sambandan, “Fashioning a Federal Sri Lanka,” Hindu (Madras), December 10, 2002.
31 “Tamil Tigers ‘Must Disarm,’” BBC News, December 13, 2002.
32 Amy Waldman, “Sri Lanka Faces the Divisions Within,” New York Times, January 8,
2003.
33 “Sri Lanka Talks Face Hurdle,” BBC News, January 4, 2003.
34 Rasheed Bhagat, “No to War Isn’t Yes to Peace,” Business Line (Madras), April 8, 2003.
35 V. Suryanarayan, “Paradigm Shift in Sri Lanka?,” Hindu (Madras), January 21, 2003;
Anthony Davis, “Sri Lanka Intercepts New Arms Purchases,” Jane’s Intelligence Review,
April 1, 2003.
36 Amal Jayasinghe, “Violence Against Muslims Adds to Sri Lanka Peace Bid Worries,”
Agence France Presse, August 19, 2003.

CRS-11
and by conducting “political assassinations.”37 The Sri Lankan Muslim Congress,
which is a constituent of the UNF, has also accused the LTTE of killing Muslims in
the east.38 The LTTE has defied the Norwegian-led Sri Lanka Monitoring Mission
(SLMM) by refusing to dismantle the Wan Ela camp near Trincomalee. The SLMM
had ruled that the LTTE had breached the cease fire agreement by setting up the new
camp.39 On June 14, 2003 a Sri Lankan naval patrol intercepted a vessel suspected
of running guns for the Tigers.40
From 2004 to early 2005 there has been an increase in the number of small-scale
violations of the ceasefire. These include the LTTE’s firing on SLMM personnel on
board a Sri Lankan naval vessel as well as the construction of an airfield for the
LTTE Air Tigers. These developments have been attributed to the continued
jockeying for position in the lead up to any resumption of anticipated talks.
However, the overall ceasefire has held and, apart from these isolated incidents, there
has been no large scale resumption of violence.
A potential obstacle to a peace deal in the near- and middle-term is the
continuing political division between the JVP and the SLFP in regards to any
settlement of autonomy or self-governing aspects of any eventual peace deal. The
JVP has threatened to withdraw from the UPFA coalition if any agreement is reached
which they allege might ‘impinge national sovereignty’.
The SLFP has expressed concerns that the Norwegian mediators are biased in
favor of the rebels, and that the United States and Britain are “planning to reward
terrorism.” In November 2002, the party vowed that it would no longer countenance
developments which “jeopardize the country’s sovereignty.”41 Kumaratunga also has
complained that Oslo’s role in assisting the LTTE’s December procurement of a
powerful FM radio transmitter raised serious questions about Norway’s impartiality.42
Press reports indicate that the Tigers will use the new equipment to extend their radio
broadcasts into government-controlled regions for the first time since the civil war
37 “U.S. Notes with Concern LTTE Camp and Political Assassinations,” State Department,
Press Release, August 7, 2003.
38 V.S. Sambandan, “Sri Lanka to Step up Security in the East,” The Hindu, August 22,
2003.
39 Amal Jayasinghe, “Tigers Defy Scandinavian Monitors,” Agence France Presse, August
8, 2003.
40 Amal Jayasinghe, “Double Blow to Sri Lanka Peace Bid,” Agence France Presse, June
14, 2003.
41 Frances Harrison, “Sri Lanka Peace Moves Attacked,” BBC News, November 15, 2002.
42 “Kumaratunga Angry at Norway,” BBC News, December 31, 2002. In a more positive
development, Kumaratunga in February 2003 offered that her country has “no other option”
but to continue with the peace process (“Country Cannot Afford to Go Back on War —
President,” Daily News (Colombo), February 26, 2003).

CRS-12
began; some critics say the move provides the rebels with an influential propaganda
tool.43
The shift in power from Wickremasinghe to Kumaratunga appears to some
analysts to indicate an increasingly hardline position by the government. At the same
time the recent split, and ensuing inter-factional fighting, within the LTTE appears
to indicate a weakened LTTE organization. For these reasons and potentially due to
the devastation wrought by the tsunami, the LTTE may not pursue a military solution
at present despite its frustration with the government for not acceding to its demand
for a Interim Self Governing Authority (ISGA) as a precondition to a resumption of
negotiations. That said, the LTTE may resort to violence in an attempt to get the
government to shift its position on the resumption of negotiations.44 It is also thought
that the government will likely have difficulty getting the JVP to support any
concessions it might make to the LTTE.45
Control of the Sri Lankan military also appears to be crucial to be able to
negotiate peace with the LTTE. Observers have noted that there is speculation over
increasing politicization within the military in Sri Lanka.
President Kumaratunga’s actions on November 4th and 5th, 2003, to remove
Defense Minister Tilak Marapone, Interior Minister John Amaratunga, and
Information Minister Imthiaz Bakeer Makar and declare a state of emergency, while
also deploying troops around the capital and dismissing parliament, undermined
developments in the peace process pursued by then-Prime Minister Wickremesinghe
with the LTTE in 2003.46 These actions followed the October 31, 2003 submission
by the LTTE of a power sharing proposal for an interim administration for the
northeast that reportedly would give the rebels significant authority over the territory
under their control.47 President Kumaratunga’s adviser, Lakshman Kadirgamar,
criticized the LTTE proposal for an Interim Self-Governing Authority as a “total
incursion into Sri Lanka’s sovereignty” and as a result, unacceptable.48 It has also
been reported that the president views the ISGA as a foundation for partition. While
in Washington to meet with President Bush, then-Prime Minister Wickremesinghe
stated that President Kumaratunga’s moves were calculated to hurt the peace process
and a United States State Department spokesman expressed concern that recent
events “could have a negative effect on the peace process.”49
43 “Tamil Tigers to Mount Radio Offensive,” BBC News, January 2, 2003; Frances Harrison,
“Tamil Tiger Radio Goes Legal,” BBC News, January 16, 2003.
44 V.S. Sambandan, “The Stalemate in Sri Lanka”, the Hindu, December 18, 2004.
45 “Sri Lanka Country Report,” The Economist, December 2004.
46 “Sri Lanka: Situation Report,” Stratfor, November 5, 2003.
47 “Sri Lankan President Seizes Control,” The Times, November 5, 2003.
48 “Sri Lankan Aid Says Tiger Proposal “Unacceptable,” BBC News, November 5, 2003.
49 “Sri Lankan President Seizes Control,” The Times, November 5, 2003.

CRS-13
The Indian Ocean Tsunami — December 26, 2004
The tsunami that devastated much of Asia hit Sri Lanka particularly hard. As
of April 20th, 2005, 31,147 persons were reportedly killed in Sri Lanka with 4,114
missing and 11 Americans killed50. According to the Sri Lankan government an
estimated 496,282 Sri Lankans have been displaced from their homes. The Sri
Lankan Ambassador to the United States, Devinda Subasinghe, stated up to 70% of
the Sri Lankan coast was damaged. The single most costly event in terms of human
lives was the complete destruction of a train traveling along a coastal railroad track.
Over 2,000 people died in this single incident.51 Fortunately, the feared outbreak of
disease that was projected to follow never materialized.
President Bush expressed his condolences to the Sri Lankan people over the
“terrible loss of life and suffering.” A statement issued by the State Department
stated that the United States stood ready to provide assistance to those nations most
affected, including Sri Lanka.52 The State Department also issued a travel advisory
warning Americans to avoid Sri Lanka which it has now rescinded. It has been
reported that the Pacific Tsunami Warning Center tried to warn the region of the
incoming tsunami but that it was unable to do so because the region does not have
an alert system. It took one and a half hours for the tsunami to reach Sri Lanka from
its epicenter west of Sumatra, Indonesia.
Economy
Formerly a colonial economy based on plantation crops (tea, rubber, coconut,
sugar, and rice), modern Sri Lanka’s manufactured products account for nearly 80%
of the country’s exports, including garments, textiles, gems, as well as agricultural
products. Tourism and repatriated earnings of Sri Lankans employed abroad are
other important foreign exchange earners. The first country in South Asia to
liberalize its economy, Sri Lanka began an ongoing process of market reform and
privatization of state-owned industries in 1977. Privatization efforts have slowed in
recent years, however. In 2001, both tourism and investor confidence, on the
rebound in 1999, were seriously affected by major LTTE terrorist attacks and
political instability. Sri Lanka’s entire economy also suffered as a result of prolonged
drought (the worst in two decades), related hydroelectric power shortages, and the
worldwide economic downturn.
Despite the existence of such obstacles, current estimates show Sri Lanka’s
economy is doing relatively well. The economy grew by 5.5% in the first three
50 “Indian Ocean-Earthquakes and Tsunami”, Fact Sheet #37, USAID, April 1, 2005. The
Seattle Times
, Seattle, Washington, February 9, 2005.
51 Shimali Senanayake, “Sri Lanka: Railroad Line Closed by Tsunami Reopened” Associated
Press
, Feb. 21, 2005.
52 Deb Riechman, “Bush Sends Condolences to Asia, Offers Aid,” Associated Press,
December 27, 2004.

CRS-14
quarters of 2004.53 Annual growth for 2005 is estimated to slow to 4.3% due to the
tsunami and its after effects.54 It is estimated that in 2006 that economic growth will
accelerate to 6% based upon a broad-based recovery55. Possible success with
renewed privatization efforts and further progress in the current peace process would
do much to spur greater economic growth in Sri Lanka. Another important future
variable will be levels of U.S. and European demand for textiles. Despite earlier and
possible future government-LTTE negotiations, the civil war continues to place a
heavy burden on the country’s economy, as well as to hinder its economic potential.
Many analysts believe that annual growth rates would have been as much as three
percentage points higher in the absence of protracted ethnic conflict.56
The uncertainty caused by the ongoing conflict was particularly unfortunate for
Sri Lanka as the economy was rebounding with new-found confidence that an
agreement would be reached between the government and the LTTE. In 2005, foreign
investment was expected to reach $300 million, and the economy was expected to
expand by 5.5% to 6%.57 The president’s call for snap elections, years before they
had to be called, caused a 15% drop in the Colombo stock market in early February
2004. The Sri Lankan rupee at the time also dropped to close to its all time low
before the central bank intervened to support it at 98.25 to the U.S. dollar.58 Actual
growth for 2004 was an estimated 5.3%, and the budget deficit was an estimated
8.6% of GDP.59
With its location on major sea-lanes, excellent harbors, and high educational
standards, Sri Lanka has long been viewed as a potential regional center for financial
and export-oriented services. In recent years, however, defense expenditures have
risen from 1.3% of GDP in 1980 to 4-6% of GDP. Aside from defense spending,
other costs of the war include damage to infrastructure, expenditures for
humanitarian relief, and impact on tourism and foreign investment. For decades, Sri
Lanka has invested heavily in education, health, and social welfare, maintaining high
living standards compared to much of South Asia.
U.S. Relations and Policy Concerns
U.S. policy supports efforts to reform Sri Lanka’s democratic political system
in a way that provides for full political participation of all communities; it does not
endorse the establishment of another independent state on the island. The Bush
Administration has vowed to play a role in multilateral efforts to settle the conflict
53 Economist Intelligence Unit Viewswire, New York, March 1, 2005.
54 Sri Lanka Country Report, Economist Intelligence Unit, February 2005.
55 Sri Lanka Country Report, Economist Intelligence Unit, February 2005.
56 “Sri Lanka: Executive Summary,” Global Insight, May 14, 2003.
57 Sri Lanka Country Report, The Economist Intelligence Unit, February 2005.
58 “Sri Lankan Central Bank Intervenes,” Reuters, February 9, 2004.
59 Sri Lanka Country Report, The Economist Intelligence Unit, February 2005.

CRS-15
and to assist in the rebuilding of war-torn areas. The United States and Sri Lanka
signed a new Trade and Investment Framework Agreement (TIFA) in 2002.
However, the political instability of 2004 has setback the time frame for any possible
Free Trade Agreement (FTA), and negotiations have been temporarily put on hold
pending positive developments in peace negotiations.60 The two countries also
maintain military-to-military relations.
Bilateral Relations
In July 2002, President Bush met with then-Sri Lankan PM Wickremesinghe
at the White House and pledged U.S. support for peace and economic development
in Sri Lanka. It was the first visit to Washington by a Sri Lankan leader since 1984.
In September 2002, a U.S. defense assessment team was sent to examine the training
needs of the Sri Lankan military, and State Department Coordinator for Counter
terrorism Taylor went to Colombo to discuss ways to integrate “intelligence, law
enforcement, legal and diplomatic efforts against terrorism.” The United States and
Sri Lanka held their ninth consecutive joint military exercises from January-March
2003, with training focused on combined arms operations and medical techniques.61
The United States and Sri Lanka signed an agreement that would provide demining
training to the Sri Lankan military. The training was estimated to cost $2.2 million
and ran from August 2003 to February 2004.62 Ship visits continued with the visit
of the USS Blue Ridge to Colombo in February 2005.63 The U.S. and Sri Lankan
navies also participated in a multilateral search and rescue exercise off the coast of
Chennai (Madras) in July of 2003.64 In June 2004, the U.S. Coast Guard transferred
the donated USCG Cutter ‘Courageous’ offshore patrol vessel to the Sri Lankan
Navy which renamed it the SNLS P-621 Samadura and retrofitted it at Newport
News facility in Virginia.65 This was an important moment in U.S.-Sri Lankan
military relations as it marked the first transfer of significant military hardware
between these two nations.
The U.S. State Department first designated the LTTE as a Foreign Terrorist
Organization in 1997.66 In February 2003, Former Deputy Secretary of State
60 Economist Intelligence Unit Viewswire, New York, Feb. 25, 2004
61 “United States Help to Modernize Sri Lanka Military,” Agence France-Presse, August
30, 2002; “U.S. Counterterrorism Official to Visit Sri Lanka,” Reuters News, September 24,
2002; “U.S., Sri Lankan Militaries Cooperate in ‘Balance Style,’” U.S. Embassy — Sri
Lanka, Office of Public Affairs Press Release, January 14, 2003.
62 “U.S. Government Provides Sri Lankan Army with Demining Training,” State Department
Press Release, August 22, 2003.
63 “USS Blue Ridge, Seventh Fleet explore Sri Lanka”, Seventh Fleet Website, U.S. Navy,
at [www.c7f.navy.mil].
64 “U.S. Naval Ship to Take Part in Rescue Exercise,” The Hindu, July 9, 2003.
65 “Admiral Sandagiri Accepts Transfer of Former U.S. Coast Guard Vessel “Courageous”,
Press Release, Embassy of Sri Lanka, Washington D.C., June 24, 2004.
66 “Foreign Terrorist Organizations” are overseas groups designated by the Secretary of
(continued...)

CRS-16
Armitage reiterated that “if the LTTE can move beyond the terror tactics of the past
and make a convincing case through its conduct and its actual actions that it is
committed to a political solution and to peace, the United States will certainly
consider removing the LTTE from the list of Foreign Terrorist Organizations, as well
as any other terrorism-related designations.” The LTTE continues to reject all calls
that it renounce violence, saying it will do so only when “the aspirations of [the
Tamil] people are met by a political settlement.”67 The global anti-terrorism
campaign, which reportedly has resulted in the international withholding of roughly
$4 billion from the LTTE and made it more difficult for the group to acquire
weapons, has been cited as a likely factor in the rebel’s decision to enter into peace
negotiations.68 On June 25, 2003 Sri Lanka joined the U.S. Customs Container
Security Initiative aimed at preventing shipping from being used to transport
weapons of mass destruction.69
Trade, Investment, and Aid
The United States is Sri Lanka’s largest export market — the destination for
about 34.6% of its total exports.70 In 2003, Sri Lankan exports were valued at $1.8
billion and in 2004, Sri Lankan exports to the United States were valued at $1.95
billion, an increase of over 8.24%71. Sri Lanakan exports to the U.S. were led by
apparel and textiles, leather products, and rubber. U.S. exports to Sri Lanka in 2004
were valued at $163 million, and included wheat, electrical machinery, fabrics, and
medical equipment72. The Sri Lankan Board of Investment indicates that some 90
U.S.-based companies operate in Sri Lanka with an estimated investment of more
than $500 million.
During then Sri Lankan Prime Minister Wickremesinghe’s visit to Washington
in July 2002, the United States and Sri Lanka signed a new Trade and Investment
Framework Agreement (TIFA) to establish “a forum for Sri Lanka and the United
States to examine ways to expand bilateral trade and investment.” The agreement
66 (...continued)
State as meeting the criteria specified in Section 219 of the Immigration and Nationality Act,
as amended (U.S. Department of State Fact Sheet, Office of Counterterrorism, August 9,
2002).
67 “Transcript: Armitage Says U.S., Other Nations Have Role in Ending Sri Lankan
Conflict,” U.S.IS Washington File, February 14, 2003 (Assistant Secretary of State for
South Asia Rocca set similar criteria in March 2003); Alister Doyle, “Tamil Rebels Reject
U.S. Call to Renounce Violence,” Reuters News, November 25, 2002.
68 “U.S. Seeks to Allay Sri Lanka Fears on Rebel Ban,” Reuters News, April 19, 2002;
“Smiles That Conceal the Worries — Sri Lanka’s Civil War,” Economist (London), July 20,
2002.
69 “Terrorism Notebook,” Seattle Times, June 26, 2003.
70 CIA World Fact Book, 2004.
71 U.S. Trade Imports from Sri Lanka: 2004, Global Trade Atlas Navigator.
72 U.S. Trade Exports from Sri Lanka: 2004, Global Trade Atlas Navigator.

CRS-17
“creates a Joint Council to enable officials to consider a wide range of
commercial issues, and sets out basic principles underlying the two nations’ trade
and investments relationship.” The Council also will “establish a permanent
dialogue with the expectation of expanding trade and investment between the
United States and Sri Lanka.”73
In 2002, several teams of U.S. officials traveled to Sri Lanka to explore avenues
for cooperation. During a November 2002 trip to Colombo, U.S. Deputy Trade
Representative Jon Huntsman asserted that the island must make its investment
regime more transparent and predictable if it was to attract greater U.S. private
investment. In December 2002, Assistant Secretary of Commerce for Trade
Development William Lash was in Colombo to encourage increased bilateral ties in
the areas of information technology, education, and infrastructure. In February 2003,
then Deputy Secretary of State Richard Armitage asserted that “Sri Lanka is already
a solid exporter to the United States and has the potential with peace and the right
reforms to become a significant trade partner.”74 In March 2003, the second round
of TIFA Joint Council meetings were held in Washington, where Deputy U.S. Trade
Representative Huntsman and Sri Lankan Commerce Minister Karunanayake led
their respective delegations. The tenor of these meetings was reportedly positive and
“progress was made on issues of concern to both countries.”75 In May 2003, U.S.
Trade Representative Zoellick reportedly stated that Sri Lanka showed potential as
a future free trade partner of the United States.76
U.S. foreign assistance to Sri Lanka focuses on increasing the country’s
economic competitiveness in the global marketplace; creating and enhancing
economic and social opportunities for disadvantaged groups; promoting peace, good
governance, and human rights awareness and enforcement; providing psychological
counseling to communities in the conflict zones; tsunami recovery efforts, and
demining. U.S. foreign assistance to Sri Lanka in FY2004 (excluding loans) totaled
$9.7 million.77 U.S.AID currently is running a two-year (2003-2005) program aimed
at generating greater support for a negotiated peace settlement to end the long-
standing conflict. Then-Deputy Secretary of State Armitage pledged an additional
$54 million in assistance to Sri Lanka at the donors meeting in Japan on June 10,
2003.78
73 “Trade and Investment Framework Agreement Between the U.S. and Sri Lanka,” at
[http://www.slembassyusa.org/investment/tifa.html].
74 Office of the U.S. Trade Representative, “United States and Sri Lanka Sign Trade and
Investment Framework Agreement,” July 25, 2002; “U.S. Encourages Peacetime Sri Lanka
to Diversify,” Reuters News, November 21, 2002; “U.S., Sri Lanka to Work on Economic
Ties,” Reuters News, December 20, 2002.
75 Telephonic interview with U.S. Trade Representative official, April 9, 2003.
76 “Thailand Near Top of U.S. List for Next Free Trade Pact,” The Bangkok Post, May 10,
2003.
77 USAID website, www.usaid.gov, accessed on 4/25/05
78 “Armitage Pledges $54 million at Sri Lanka Donors Conference,” State Department Press
Release, June 10, 2003.

CRS-18
Human Rights Concerns
The U.S. State Department, in its Sri Lanka Country Report on Human Rights
Practices, 2004, determined that the Colombo government “generally respected the
human rights of its citizens; however, there were serious problems in some areas.
Some members of the security forces committed serious human rights abuses.”79
Major problems included torture of detainees and poor prison conditions; violence
and discrimination against women; child prostitution and child labor; and human
trafficking, among others. There were extensive reports of torture and custodial
deaths as a result of police torture. To address the issue of government accountability
for past abuses committed during the war, the Sri Lankan government investigated
some past abuses by security and armed forces personnel. The government of Sri
Lanka continued to hold Tamils under the Prevention of Terrorism Act (PTA), which
permitted arrests without warrants and non-accountable detention. The United States
also finds that the LTTE “continued to commit serious human rights abuses” in 2004-
2005, including “unlawful” killings, disappearances, arbitrary arrests and detentions,
extortion, child recruitment into their armed forces, and torture.80
79 U.S. Department of State, “Supporting Human Rights and Democracy: The U.S. Record
2004 - 2005,” 2005.
80 U.S. Department of State, “Supporting Human Rights and Democracy: The U.S. Record
2004 - 2005,” 2005.

CRS-19
Figure 1. Map of Sri Lanka
i t
t r a
S
l k
a
P
Delft
Island
P a l k
B a y
B a y
o f
NORTHERN
B e n g a l
G u l f
o f
M a n n a r
NORTH
CENTRAL
NORTH
WESTERN
EASTERN
CENTRAL
UVA
Sri Lanka
WESTERN
(Ceylon)
SABARAGAMU WA
Province Boundary
(non-administrative)
District Boundary
National Capital
District Capital
SOUTHERN
District names are the
same as their capitals.
0
20
40 Kilometers
0
20
40 Miles
I N D I A N O C E A N
Source: Map Resources. Adapted by CRS. (K.Yancey 6/18/04)