Order Code RL31707
Sri Lanka:
Background and U.S. Relations
Updated January 22, 2008
K. Alan Kronstadt
Specialist in South Asian Affairs
Foreign Affairs, Trade, and Defense Division

Sri Lanka: Background and U.S. Relations
Summary
Sri Lanka is a constitutional democracy with relatively high educational and
social standards. Political, social, and economic development has, however, been
seriously constrained by ethnic conflict between the majority Sinhalese and minority
Tamil ethnic groups. Since 1983, a separatist war costing at least 70,000 lives has
been waged against government forces by the Liberation Tigers of Tamil Eelam
(LTTE), a rebel group that seeks to establish a separate state or internal self-rule in
the Tamil-dominated areas of the North and East. The United States designated the
LTTE as a Foreign Terrorist Organization in 1997 and demands the Tigers lay down
their arms and foreswear the use of force before that status can change.
A Norwegian-brokered peace process begun in the late 1990s produced a
February 2002 “permanent” ceasefire agreement. The Colombo government and the
LTTE held their first peace talks in seven years in 2002, with the rebels indicating
they were 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. Yet the period 2004-2005 witnessed increasing instability within the ranks
of both the Colombo government and the LTTE. This was exacerbated by wrangling
over administration of foreign aid in response to a massive December 2004 tidal
wave that killed up to 35,000 citizens in Sri Lanka’s worst-ever natural disaster.
Political rivalry between the Sri Lankan Freedom Party (SLFP) and the United
National Party (UNP) has long hindered peace efforts. The United People’s Freedom
Alliance, a coalition of the SLFP and the staunch Marxist People’s Liberation Front
(JVP), won a slim majority in 2004 parliamentary elections and defeated the UNP to
replace its then-Prime Minister Ranil Wickremesinghe with perceived hardliner
Mahinda Rajapaksa, who himself went on to win the presidency in a narrow 2005
electoral victory. Rajapaksa stabilized his position by enticing the defection of
several UNP and Muslim party parliamentarians in early 2007, but his government
has faced constant pressure from the JVP and from hardline Buddhist-nationalist
parties that are part of the ruling coalition. Meanwhile, the LTTE suffered a major
schism in 2004 when a top commander in the East known as Colonel Karuna broke
away with up to 6,000 cadres and began collaborating with government forces.
Ethnic violence spiked in mid-2006 and, with major government military
offensives in 2007 and Colombo’s formal withdrawal from the ceasefire agreement
in January 2008, full-scale civil war again appears to be at hand. U.S. policy
supports peaceful 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 more than $3.6 billion in
assistance funds, about two-thirds of this in the form of food aid. Direct non-food
aid for FY2007 is estimated at $9.4 million. Serious human rights problems in Sri
Lanka are blamed on all major parties to the ethnic conflict and have led to some
limited U.S. and international aid sanctions. This report will be updated periodically.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Historical Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Political Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2003 Political Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2004 Parliamentary Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2005 Presidential Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
LTTE Schism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Ethnic Conflict and Civil War . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Parties to the Military Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Sri Lankan Security Forces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Tamil Tigers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Peace Initiative Falters, Civil War Resumes . . . . . . . . . . . . . . . . . . . . . . . . 12
Peace Talks Progress, 2002-2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Peace Process Stalemated, 2004-2005 . . . . . . . . . . . . . . . . . . . . . . . . . 15
Civil War Resumes in 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Government Military Successes in 2007 . . . . . . . . . . . . . . . . . . . . . . . 18
Current Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Obstacles to Peace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
December 2004 Indian Ocean Tsunami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Economic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
U.S. Relations and Policy Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Trade, Investment, and Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
U.S. Trade and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
U.S. Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Security Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Human Rights Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Proposed Human Rights Commission . . . . . . . . . . . . . . . . . . . . . . . . . 34
Child Abductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Internally Displaced Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
“Disappeared” Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
List of Figures
Figure 1. Map of Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
List of Tables
Table 1. Selected 2004 Parliamentary Election Results . . . . . . . . . . . . . . . . . . . . 7
Table 2. Direct U.S. Assistance to Sri Lanka, FY2000-FY2008 . . . . . . . . . . . . 36

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 renewed and serious violent ethnic conflict in a quarter-
century-old civil war, an attendant humanitarian emergency, and efforts to revive a
moribund peace process. Terrorist activity, human rights, and U.S. appropriations
for food, economic, and military assistance are further congressional interests. A
Congressional Caucus on Sri Lanka and Sri Lankan Americans, established in 1998,
had two dozen members at the close of 2007.
U.S. attention to Sri Lanka in the late 20th century focused mainly on efforts to
resolve the country’s ethnonational conflict, which centers on an armed struggle
between majority Buddhist Sinhalese and a Hindu Tamil minority clustered in the
island’s north and east. During this time Washington largely deferred to India as the
major external actor in Colombo. The Cold War’s end served to reduce U.S. interest
in both Sri Lanka and in the region more generally. However, in the new century,
U.S. engagement with Sri Lanka deepened. As explained by Jeffrey Lunstead, who
served as U.S. Ambassador to Sri Lanka from 2003 to 2006,
The enhanced engagement that commenced in 2001 occurred despite the absence
of significant U.S. strategic interests in Sri Lanka. Political-military interests are
not high, and the U.S. has no interest in military bases in Sri Lanka. From an
economic and commercial standpoint, Sri Lanka is unlikely to be a major U.S.
trading partner in the near future. There is not a large enough Sri Lankan-origin
community in the U.S. to have an impact on U.S. domestic politics. The main
U.S. strategic interest in Sri Lanka is in ensuring that a terrorist organization does
not obtain its goals through the use of terror.1
Lunstead’s reference is to the Liberation Tigers of Tamil Eelam (LTTE), the militant
separatist group at war with the Colombo government and designated as a Foreign
Terrorist Organization under U.S. law since 1997.
Most Recent Developments
Renewed Civil War and Attendant Human Rights Abuses. Sri Lanka’s new
year opened with yet another political assassination when an ethnic Tamil member
of the opposition in Parliament was shot dead outside a Hindu temple in the capital
city of Colombo. On January 2, the government of President Mahinda Rajapaksa
1 Jeffrey Lunstead, “The United States’ Role in Sri Lanka’s Peace Process 2002-2006,”
Supplement to the Asia Foundation Sri Lanka Strategic Conflict Assessment 2005 Series,
2006, at [http://www.asiafoundation.org/pdf/SL_Supplementary_to_SCA.pdf].

CRS-2
announced its formal (and unsurprising) withdrawal from a February 2002 ceasefire
agreement (CFA). The president’s cabinet was unanimous in its decision to
withdraw; a spokesman insisted that the move did not mark a declaration of war
against the Tigers and came in response to more than 10,000 alleged ceasefire
violations by the LTTE. The country’s Defense Ministry claimed the withdrawal was
necessitated “to protect the territorial integrity and sovereignty of Sri Lanka” in the
backdrop of LTTE terrorism and the Tigers’ “unwavering intention” to “establish a
mono-ethnic, mono-political separate state” on the island’s north and east.2 Colombo
rejected subsequent Tiger offers to renew the ceasefire.
Despite a renewal of heavy fighting beginning in 2006, both sides to the conflict
had continued to claim adherence to the Norwegian-brokered ceasefire. Government
forces saw major success against rebel positions in the island’s eastern region in mid-
2007 and, by July, they had retaken and pacified areas previously under LTTE control
for many years. The Tigers — with a base now almost wholly limited to the Tamil-
majority northern region where they retain significant military assets and an
administrative structure — appear weakened, but unbowed. They continue to attack
the country’s economic infrastructure and to make efforts to bring the fight to the
country’s Sinhalese-majority South and the capital of Colombo. With President
Rajapaksa’s July vow to “restore democracy to the East and all Sri Lanka,” most
observers expected major combat and the associated humanitarian crisis to continue,
which it did in the latter half of 2007.
The four “Tokyo Donor” members (including the United States, the European
Union, Japan, and Norway) — each Co-Chairs of a 2003 donor conference held in
the Japanese capital — had in mid-2007 urged parties to the conflict to end violence
and re-engage negotiations. Upon Colombo’s abrogation of the CFA, the Co-Chairs
responded by expressing “strong concerns,” and reiterating their consensus view that
Sri Lanka’s ethnic conflict cannot be settled through military means and requires a
negotiated settlement. U.N. Secretary General Ban Ki-Moon expressed being
“deeply worried” about increasing violence in Sri Lanka and the need to protect
civilians there.3 The government of neighboring India has maintained a studied
distance from Sri Lanka’s internal difficulties after New Delhi’s armed 1987
intervention to assist in enforcing a peace accord resulted in the deaths of more than
1,200 Indian troops and led to the 1991 assassination of former Indian Prime Minister
Rajiv Gandhi by Tamil militants. New Delhi has stated that it is “acutely conscious”
of the need for a political-constitutional solution to Sri Lanka’s ethnic strife and has
echoed the widespread international belief that there can be no military solution.4
Almost immediately upon Colombo’s announcement, Norwegian ceasefire
monitors began leaving and Foreign Minister Rohitha Bogollagama said Oslo’s post-
CFA role would be “redefined.” International human rights groups warned that the
2 “Sri Lanka Ends Truce,” BBC News, January 2, 2008; [http://www.defence.lk/
new.asp?fname=20080117_01].
3 “Sri Lanka Donors Voice Concern as War Toll Climbs,” Reuters, January 12, 2008;
http://www.un.org/News/Press/docs/2008/sgsm11357.doc.htm].
4 See the January 4, 2008, External Affairs Ministry statement at [http://meaindia.nic.in].

CRS-3
CFA’s annulment would lead to increased hostilities and more serious human rights
abuses.5 Of particular concern to observers has been an upsurge in reported human
rights violations committed in the course of the civil war, along with unlawful
killings, “disappearances,” and the internal displacement of hundreds of thousands
of civilians victimized by the fighting. Independent observers hold all parties to the
fighting responsible for such abuses.
U.S. Policy. During a May 2007 visit to Colombo, the lead U.S. diplomat for
the region, Assistant Secretary of State for South and Central Asia Richard Boucher,
outlined key U.S. concerns about “the way things have been heading” in Sri Lanka,
concentrating especially on rampant human rights abuses there.6 In June 2007,
H.Res. 516, expressing serious concern regarding the worsening situation in Sri
Lanka, was introduced in the House (the resolution has not moved out of committee
to date). In August 2007 testimony before the House Foreign Affairs Committee, a
State Department official offered that Sri Lanka’s long-standing ethnic conflict,
fragile peace process, and deteriorating human rights conditions continued to cause
concern for the United States.7
The Bush Administration was “troubled” by the government’s decision to
withdraw from the CFA and reiterated its calls for a political solution:
The United States is troubled by the Sri Lankan Government’s January 2
decision to terminate the 2002 cease-fire agreement. Ending the cease-fire
agreement will make it more difficult to achieve a lasting, peaceful solution to
Sri Lanka’s conflict. We call on both the government and the Liberation Tigers
of Tamil Eelam to avoid an escalation of hostilities and further civilian
casualties. All parties to the conflict share the responsibility to protect the rights
of all of Sri Lanka’s people. We urge them to work toward the goal of a just,
political solution that ensures the rights of minority communities and benefits all
Sri Lankans. Only a peaceful political solution, not a military one, offers a way
out of the current cycle of escalating violence. 8
U.S. assistance to Sri Lanka, already modest in scale, has been conditioned in
response to reports of escalating human rights abuses there: An amendment to the
Consolidated Appropriations Act, 2008 (P.L. 110-161) halted Foreign Military
Financing funding, the issuance of defense export licenses, and the transfer of
military equipment or technology to Sri Lanka unless the Secretary of State certifies
to Congress that the Colombo government has undertaken a series of actions related
to human rights protection there. The provision does not apply to assistance for
maritime and air surveillance and communications, which has continued.
5 “Peace Group is Leaving Sri Lanka,” Reuters, January 5, 2008;
[http://www.amnesty.org/en/for-media/press-releases/sri-lanka-amnesty-international-urg
ent-protection-civilians-return-hostilities-20070116].
6 See [http://www.state.gov/p/sca/rls/rm/2007/84701.htm].
7 Statement of Steven Mann, Principal Deputy Assistant Secretary of State for South and
Central Asian Affairs, August 1, 2007, at [http://www.internationalrelations.house.gov/
110/man080107.htm].
8 Statement by Spokesman Sean McCormack, January 3, 2008.

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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 1815. 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
5% of Sri Lanka’s population and
are clustered in the south-central
SRI LANKA IN BRIEF
“tea country.” Descendants of
Population: 20.9 million; growth rate: 1.0%
earlier Tamil arrivals, known as Sri
(2007 est.)
Lankan or Ceylon Tamils, constitute
Area: 65,610 sq. km. (slightly larger than
up to 12% of the country’s
West Virginia)
Capital: Colombo
population and live predominantly
Head of Government: President Mahinda
in the North and East. Moorish and
Rajapaksa (Sri Lankan Freedom
Malay Muslims (largely Sunni)
Party)
account for another 8% of the
Ethnic Groups: Sinhalese 82%; Tamil 9.4%;
population. The majority of Sri
Moors 7.9%; other 0.7% (2001
government census)
Lankans (about three-quarters) are
Languages: Sinhala (official and national
ethnic Sinhalese, most of them
language) 74%; Tamil (national
Buddhist.9 In 1972, Ceylon was
language) 18%; English widely used
renamed Sri Lanka (“resplendent
Religions: Buddhist 69%; Muslim 8%; Hindu
7%; Christian 6%; unspecified 10%
land”), as it was known in Indian
(2001 census)
epic literature.
Life Expectancy at Birth: female 77 years;
male 73 years (2007 est.)
Although Ceylon gained its
Literacy: female 90%; male 95% (2003 est.)
independence from Britain
Gross Domestic Product (at PPP): $92.1
billion; per capita: $4,770; growth rate
peacefully in 1948, succeeding
6.1% (2007 est.)
decades have been marred by ethic
Currency: Rupee (100 = $0.93)
conflict between the country’s
Inflation: 17% (2007 est.)
Sinhalese majority clustered in the
Military Expenditures: $686 million (2.5%
densely populated South and West,
of GDP; 2006)
U.S. Trade: exports to U.S. $2.1 billion;
and a largely Hindu Tamil minority
imports from U.S. $228 million (2007
living in the northern and eastern
est.)
provinces. Following independence,
Sources: CIA World Factbook; U.S. Commerce
Department; Government of Sri Lanka,
the Tamils — who had attained
Economist Intelligence Unit; Global Insight,
educational and civil service
Military Balance
predominance under the British —
increasingly found themselves
discriminated against by the
9 U.S. Department of State, “Background Notes: Sri Lanka,” November 2007, at
[http://www.state.gov/r/pa/ei/bgn/5249.htm].

CRS-5
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
includes 60 million Tamils just across the Palk Strait in India’s southern state of
Tamil Nadu.
Political Setting
The Democratic Socialist Republic of Sri Lanka has a working multi-party
democratic system despite relatively high levels of political violence. The country’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. In the simplest terms, the SLFP may be viewed as
more Sinhala nationalist, statist, and social democratic, while the UNP may be
viewed as more Western-oriented, liberal, and open to free market economics.10
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. The Colombo government operates a
Secretariat for Co-ordinating the Peace Process.11 The LTTE maintains its own
Peace Secretariat.12
Chandrika Kumaratunga — longtime 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 people. Although Kumaratunga’s People’s Alliance (PA) coalition
went on to win a narrow victory in the 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 2001 parliamentary elections, the UNP won 109
seats (to 77 for the PA) and formed a majority coalition — called the United National
Front (UNF) — with the much smaller Tamil National Alliance and the Sri Lanka
Muslim Congress. UNP leader and new Prime Minister Ranil Wickremesinghe
pledged to open talks with the Tamil rebels and to resuscitate the ailing Sri Lankan
economy.13
2003 Political Crisis. A year-long political crisis began in November 2003,
when President Kumaratunga suspended Parliament, declared a state of emergency,
10 David Rampton and Asanga Weilikala, “The Politics of the South,” Asia Foundation Sri
Lanka Strategic Conflict Assessment 2005 Series, 2005, at [http://www.asiafoundation.org/
pdf/SL_Politics_of_the_South.pdf].
11 See [http://www.peaceinsrilanka.org].
12 See [http://www.ltteps.org].
13 “New Sri Lanka Premier Sworn In Pledging Peace,” Reuters, December 9, 2001.

CRS-6
and dismissed key ministers responsible for peace talks with the LTTE.
Kumaratunga’s ongoing feud with then-Prime Minister Wickremesinghe — she
believed his conciliatory approach toward the rebels was allowing them to
consolidate their positions and rearm — likely spurred her surprise move.14 The
shakeup undermined existing peace efforts by the prime minister and cast doubt on
his ability to follow through on peace negotiations with the LTTE. Kumaratunga’s
ensuing February 2004 dismissal of Parliament, and the LTTE’s claim that this was
a “grave setback” to negotiations, cast a further pall on the future of the peace
process.
2004 Parliamentary Elections. As UNP leader Wickremasinghe, who
served as prime minister from 2001 to 2004, was relatively more open to talks with
the Tamil rebels, his bitter personal rivalry with President Kumaratunga reportedly
hampered progress in peace negotiations. An April 2004 national election was held
to restore the Parliament dissolved by Kumaratunga. In those polls, the United
People’s Freedom Alliance (UPFA) coalition, composed of the populist SLFP and
the staunch Marxist-Leninist, Sinhalese nationalist People’s Liberation Front (JVP),
took a plurality of the seats in parliament and so ousted the UNP. The UPFA won
105 seats and nearly 46% of the vote as compared to the UNP, which won 82 seats
and about 38% of the vote. The UNP’s defeat was attributed in part to a perception
among voters that too many concessions were being made to the LTTE in peace
negotiations. An EU Election Observation Mission noted some problems with the
conduct of the 2004 polls, but called them a “vast improvement” in comparison to
past exercises.15
2005 Presidential Election. A November 2005 presidential poll saw SLFP
stalwart Mahinda Rajapaksa barely defeat Wickremasinghe in an election marked by
an LTTE-engineered boycott affecting much of the Tamil community (the LTTE was
accused of using intimidation tactics to enforce the boycott). The United States
expressed “regret” that many Tamil voters were deprived of the opportunity to make
their views known and it condemned LTTE “interference in the democratic
process.”16 Unlike Rajapaksa, Wickremasinghe was not beholden to Sinhala
nationalist parties, and many analysts believe he would have won the election with
the votes of a large majority of Tamils.17
14 “Woman Behind Sri Lanka’s Turmoil,” Christian Science Monitor, November 7, 2003.
15 See [http://ec.europa.eu/external_relations/human_rights/eu_election_ass_observ/
sri_lanka/final_%20report04.pdf].
16 Adam Ereli, “Sri Lanka - Presidential Election,” State Department Press Statement,
November 18, 2005.
17 Chandra de Silva, “Sri Lanka in 2005,” Asian Survey 46, 1, January 2006, p. 116.

CRS-7
Table 1. Selected 2004 Parliamentary Election Results
Percentage
Total
Percentage
Total
change
Party/Coalition
votes
of total
seats
from
won
vote
won
previous
Parliament
United People’s Freedom Alliance
(mainly the Sri Lankan Freedom Party
4,223,970
45.6
105
+12
and the Janatha Vimukthi Peramuna or
People’s Liberation Front)
United National Front (mainly the
3,504,200
37.8
82
-27
United National Party)
Tamil National Alliance (backed by
633,654
6.8
22
+22
Tamil separatists)
Jathika Hela Urumaya (JHU or
National Heritage Party, led by
552,724
6.0
9
+9
Buddhist monks)
Sri Lanka Muslim Congress
186,876
2.0
5

Other
136,353
1.5
2
-15
Total
9,262,732

225

Source: International Foundation for Election Systems
Separatist-related violence escalated during 2006 and, as the October date for
renewed peace negotiations approached, President Rajapaksa sought to find common
ground with the country’s main opposition UNP. A resulting three-page
memorandum of understanding signed by Rajapaksa and opposition leader
Wickremesinghe gave the peace process a boost with the two leaders agreeing to
adopt a bipartisan approach to conflict resolution. The pact represented a rare
expression of political unity, especially among the fractious Sinhalese of the
country’s Sinhala-dominated South.18 Rajapaksa also at this time constituted an All
Party Representative Committee (APRC) as part of an effort to create constitutional
proposals that would represent a political consensus on power-sharing between the
island’s majority and minority ethnic communities.
After the October peace talks with the rebels talks failed to make progress,
President Rajapaksa changed his political strategy and in January 2007 was able to
secure a simple (113-seat) parliamentary majority for his coalition by offering
ministerial positions to lure 19 parliamentarians from the UNP and another 6 from
the Muslim Congress into defection from the opposition benches. The cross-overs
put a damper on bipartisanship in Colombo by spurring the UNP’s withdrawal from
the APRC and served to further deepen the SLFP-UNP rift. The adjustment did,
however, ease Rajapaksa’s previous dependence on his hardline and oftentimes
unpredictable Marxist JVP and Buddhist JHU allies, potentially making a deal with
18 “S. Lanka Parties in Unity Pact Ahead of Peace Talks,” Reuters, October 23, 2006.

CRS-8
the rebels more attainable. The JHU, in particular, has been at the forefront of a
resurgent Sinhalese Buddhist nationalism that adamantly opposes Tamil autonomy
in the North and that has played a role in some recent human rights violations.19 By
the end of 2007, some senior members of Rajapaksa’s cabinet were openly calling
for a blanket ban on the LTTE and a formal end to the 2002 truce.20 JVP leaders,
convinced that a UNP administration would only deepen the country’s woes, have
rejected opposition efforts to bring down the SLFP-led coalition government.21
The Rajapaksa government vowed to hold local-level elections by the end of
2007 as part of a controversial devolution plan. However, the preference of President
Rajapaksa and his party is to devolve power at the district level only, not at a higher
level as demanded by the Tigers. In the absence of compromise by the ruling
coalition on this key point, a cross-party effort to forge consensus is unlikely to
succeed. Moreover, serious doubt has been cast on the ability of the APRC, which
has not included representatives of the Tamil National Alliance, to reach consensus
on any proposals that could win the requisite two-thirds parliamentary majority for
passage. An APRC report due in January 2008 is expected to call for a unitary Sri
Lanka state “in the sense ... it shall be deemed to be an undivided, integrated, and
interdependent state structure” with power shared between Colombo and the
provinces and among those provinces.22
LTTE Schism. Like the Colombo government, the separatist Liberation
Tigers of Tamil Eelam (LTTE) rebel group has experienced its own instability and
factional disagreements. In March 2004 there was a major rupture within the LTTE
ranks: Vinayagamoorthi Muralitharan, alias Colonel Karuna (who, as Special
Commander, Batticaloa-Amparai District, was in 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. Colonel 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, resulting in Prabhakaran’s reassertion of control
over the eastern areas where Karuna had previously operated. The Karuna faction’s
ongoing influence has done significant damage to the longstanding LTTE claim to
be the sole representative of Sri Lanka’s Tamil people.
Since the 2004 schism, Colonel Karuna and those loyal to him apparently have
fought in cooperation with government forces, although Colombo continues to deny
any link with the breakaway faction.23 Karuna himself was arrested in London in
November 2007 while traveling on a forged passport possibly supplied by the
19 “Buddhist Nationalism Behind Sri Lanka’s Violent Surge,” Christian Science Monitor,
June 18, 2007.
20 “Ban LTTE, End Truce,” Daily News (Colombo), December 29, 2007.
21 “JVP Won’t Support Govt Ouster,”Daily News (Colombo), August 31, 2007.
22 “Political Battles,” Frontline (Chennai), February 1, 2008.
23 See “Colonel’s Control,” Outlook (Delhi), March 27, 2007.

CRS-9
Colombo government.24 The Karuna group (along with the LTTE and sometimes
government forces) is widely accused of abusing human rights in the course of its
struggle, especially through the recruitment of child soldiers. The United States has
called on Colombo to exert control over paramilitary groups such as Karuna’s that
are believed to commit human rights abuses against the Sri Lanka people.25
Ethnic Conflict and Civil War
A combination of communal politics (as practiced by both Sinhalese and Tamil
political leaders) and deteriorating economic conditions created deep schisms in Sri
Lankan society through the early decades of independence. By the 1970s, the
government was facing Tamil unrest in the North and East, while the Sinhalese
Marxist JVP waged a terrorist campaign against Tamils in the central and southern
regions. Periodic rioting against Tamils in the late 1970s and early 1980s,
culminating in the devastating communal riots of 1983, spawned the creation of
several militant Tamil groups that sought to establish by force a Tamil homeland to
include the Northern and Eastern provinces. The Liberation Tigers of Tamil Eelam,
led by its charismatic founder and chief strategist Velupillai Prabhakaran, was
established in 1976 and 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 separatist Tamil militants. More than two decades of ensuing
war have claimed some 70,000 lives and displaced between 800,000 and 1.6 million
people, most of whom remain in transit camps with little hope of returning to their
homes in the foreseeable future. Each of four major attempts at a peaceful settlement
has ended in failure and further violence. A ceasefire agreement (CFA) brokered by
the Norwegian government in February 2002 was formally abrogated by the
Colombo government in January 2008.
According to the Colombo government’s Secretariat for Coordinating the Peace
Process, nearly 4,200 ceasefire violations occurred from February 2002-April 2007
(when the list was most recently updated), the great majority of these (about 92%)
being committed by the LTTE. More than half of all reported LTTE violations
involve child recruitment and abduction of adults.26 However, international human
rights groups have criticized both the government and the Tigers for widespread
abuses and, in 2006, the Norwegian general overseeing the ceasefire asserted that he
could distinguish “no significant difference in the gravity” of truce and human rights
violations by either side.27 According to the Sri Lankan Ministry of Defense, the
period December 2005 to October 2007 saw a total of 5,888 Sri Lankans killed in the
country’s ethnic conflict, including 3,696 LTTE members, 1,322 security forces, and
24 “Tamil Warlord Entered UK on Forged Passport,” Guardian (London), December 21,
2007.
25 See [http://www.state.gov/p/sca/rls/rm/2007/84701.htm].
26 See [http://www.peaceinsrilanka.org/peace2005/Insidepage/AtaGlance/Ceasefire.asp].
27 “Sri Lanka, Rebels As Bad As Each Other - Monitor,” Reuters, September 26, 2006.

CRS-10
870 civilians.28 Determining the true situation on the ground in conflict zones is
difficult, given a fierce propaganda campaign being fought by both the government
and the rebels. Both sides routinely block ceasefire observers from inspecting battle
sites.29
Parties to the Military Conflict
Sri Lankan Security Forces. The Sri Lankan military, with a budget
believed to exceed $1 billion in 2007, is comprised of about 151,000 active
personnel. The quality of equipment (mostly outdated Soviet- and Chinese-made
weaponry) and training has generally been poor. Morale has suffered with an
inability to decisively defeat a long-running insurgency and with sometimes
embarrassing tactical level defeats at the hands of tenacious Tamil Tiger forces.
Since 2002, however, the Colombo government has focused on efforts to improve its
defense capabilities and levels of training have improved. Morale, too, has been
bolstered, likely contributing to battlefield successes in 2006 and 2007, which
themselves further burnished the military’s self-image. Over the decades of Sri
Lankan independence, the country’s military has become increasingly dominated by
ethnic Sinhalese, meaning that in much of the northern and eastern provinces it is
now widely regarded as a foreign force. This perception is reinforced by reported
human rights abuses against civilians in these Tamil-dominated areas, a problem that
the Colombo government has with only mixed success sought to address.30
A Sri Lankan army of nearly 118,000 active personnel is armed with 62 tanks,
217 armored personnel carriers, and 157 towed artillery tubes. The navy operates
123 patrol and coastal combatants, most of them inland and riverine, but also
possesses 2 missile boats, along with a very modest amphibious capability. The air
force flies 2 fighter/ground attack squadrons — one notable for its 4 MiG27s, another
made up of 10 Israeli-made Kfir jets — as well as 14 Russian-made Hind and attack
helicopters and 28 American-made Bell utility helicopters. Paramilitary forces
include a 30,000-person active police force and a 13,000-person home guard.31 Sri
Lanka’s 2008 defense budget is set to increase by nearly 20% over the previous year
to about $1.5 billion (overall government spending is to rise by 11%).32
The Tamil Tigers. LTTE forces have been estimated at up to 7,000-15,000
armed combatants, roughly half of them trained in combat. The actual number could
be considerably lower, especially given significant battlefield losses in 2007. Arms
include long-range artillery, mortars, antiaircraft weaponry, and captured armored
vehicles. A small but effective naval contingent, known as the Sea Tigers, includes
28 See [http://www.nationalsecurity.lk/statistics.php].
29 “Who’s Winning Sri Lanka’s War?,” BBC News, May 25, 2007.
30 “Executive Summary: Sri Lanka,” Jane’s Sentinel Security Assessment - South Asia, April
26, 2007; “Armed Forces: Sri Lanka,” Jane’s Sentinel Security Assessment - South Asia,
July 25, 2007.
31 The Military Balance 2007 (Institute for International and Strategic Studies, London,
2007).
32 “Sri Lanka Defense Budget to Soar,” BBC News, October 10, 2007.

CRS-11
speedboats, fishing vessels, mini-subs of indigenous construction, and underwater
demolition teams. The LTTE air wing also reportedly has 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.33
The LTTE’s 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 comes from the worldwide diaspora of
some 600,000-800,000 Tamil emigres (especially the Tamils in Canada and Western
Europe), as well as from smuggling and legitimate businesses. There are numerous
reports that the government of North Korea has provided arms and possibly training
to Tiger forces.34 The LTTE has been criticized for alleged campaigns to extort and
coerce funds from overseas Tamils, especially in Canada and Britain. International
efforts to restrict financial flows to terrorist groups have contributed to a reported
70% decline in overseas fund-raising by the LTTE. Still, current estimates have the
Tigers able to raise $200-300 million per year from various licit and illicit
businesses.35
The Bush Administration has continued efforts to restrict overseas funding
sources for the Tigers, including by banning contributions to and freezing the assets
of international charitable organizations determined to have links with the LTTE.36
Successful U.S. efforts to interdict aid to the LTTE have included the arrest and
conviction of Sri Lankan and Indonesian nationals who sought to transfer defense
supplies to the terrorist group. In April 2007, authorities in New York reported
having arrested a “senior U.S. representative” of the LTTE.37
The United States designated the LTTE as a Foreign Terrorist Organization
under U.S. law in 1997. The European Union followed suit in 2006, thus depriving
the rebels of funds collected from members and supporters in Europe. The move also
made untenable the position of Norwegian and Danish truce monitors who could no
longer maintain neutrality.
According to the U.S. State Department’s Counterterrorism Office,
LTTE has integrated a battlefield insurgent strategy with a terrorist program that
targets key personnel in the countryside and senior Sri Lankan political and
military leaders in Colombo and other urban centers. It also has conducted a
sustained campaign targeting rival Tamil groups and figures.... LTTE is most
33 “Kumaratunga’s Dilemma on Joint Mechanism,” Asian Tribune, April 23, 2005.
34 See CRS Report RL30613, North Korea: Terrorism List Removal?
35 “Expert Criticizes Canada for Not Banning LTTE,” Island (Colombo), September 15,
2003; Human Rights Watch, “Tamil Tigers Extort Diaspora for ‘Final War’ Funds,” March
15, 2006; “Feeding the Tiger,” Jane’s Intelligence Review, September 1, 2007; “LTTE
Crippled Financially, Fund Raising Activities on Decline,” Press Trust of India, October 22,
2007; “Sri Lanka rebel Arms - Buying Goes Global,” Associated Press, November 5, 2007.
36 See, for example, [http://srilanka.usembassy.gov/pr-15nov07.html].
37 See [http://newyork.fbi.gov/dojpressrel/pressrel07/terroristsupport042507.htm].

CRS-12
notorious for the Black Tigers, its cadre of suicide bombers. Political
assassinations and bombings were commonplace tactics prior to the cease-fire
and have increased again since mid-2005.38
The U.S. Federal Bureau of Investigation has listed the Tamil Tigers “among the
most dangerous and deadly extremists in the world,” crediting the rebels with
inventing the suicide belt and perfecting the use of suicide bombers, murdering some
4,000 people since 2006, and being the world’s only terrorist organization to
assassinate two world leaders.39
The LTTE has been a prolific employer of suicide bombing, with one report
calling it responsible for fully half of all suicide attacks worldwide in the early years
of this century.40 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 Colombo in enforcing a peace accord with the Tamils in 1987 ended
in the deaths of about 1,200 Indian troops — was assassinated in May 1991 by a
suspected LTTE suicide bomber. Many Indians insist that top LTTE leaders,
including Prabhakaran, be extradited to India to stand trial for Rajiv Gandhi’s death.
Peace Initiative Falters, Civil War Resumes
The Norwegian-brokered peace effort, which began in 1999, produced notable
success after then-Prime Minister Wickremasinghe revived the process upon taking
office in late 2001. A permanent ceasefire agreement (CFA) was reached in February
2002 and, despite incidents of alleged violations, was for several years generally
observed by both sides. In addition, confidence-building measures called for under
the ceasefire were implemented. A Sri Lanka Monitoring Mission (SLMM)
comprised of members from Nordic countries was created to investigate reported
violations of the CFA. In April 2002, LTTE leader Prabhakaran emerged from
hiding for his first press conference in 12 years and made the unprecedented
suggestion that the LTTE would be willing to settle for less than full Tamil
independence. Five months later, Sri Lanka lifted its 1998 ban on the LTTE, a move
which the Tigers had demanded as a pre-condition for peace talks. However,
Buddhist clerics and their political party, the JHU, have staunchly and consistently
opposed negotiating with the LTTE.41
Peace Talks Progress, 2002-2003. In September 2002, at a naval base in
Thailand, the Colombo government and the LTTE held their first peace talks in seven
38 See [http://www.state.gov/s/ct/rls/crt/2006/82738.htm].
39 “Taming the Tamil Tigers,” January 10, 2008, at [http://www.fbi.gov/page2/jan08/
tamil_tigers011008.html].
40 Cited in “Suicide Bombing Masters: Sri Lankan Rebels,” New York Times, January 14,
2003.
41 “Sri Lanka Lifts Ban on Tigers Ahead of Thai Talks,” Agence France Presse, September
4, 2002.

CRS-13
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, 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 brought another breakthrough when the two sides agreed on a framework for
seeking foreign aid to rebuild the country (officials estimated that repairing the war-
damaged infrastructure in the island’s northeast could cost as much as $500
million).42 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.43
In what appeared to be yet another meaningful breakthrough, talks in the final
month of 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 within a united Sri Lanka.”44 This language marked 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, appeared 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. Renewed armed conflict had the potential to disrupt the
engagement: the meetings began only hours after three LTTE rebels incinerated
themselves at sea when Norwegian truce monitors boarded their weapons-laden craft.
Although an apparent violation of the ceasefire, the incident did not derail the peace
process; it did, however, serve to erode 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.”45
Talks in Japan in March 2003 produced no major breakthroughs on political or
human rights issues. A Japanese participant suggested that the promise of major
external assistance — anticipated at some $3 billion over three years — is all that
kept the disputing parties at the negotiating table.46 As with earlier talks, violence
42 “Sri Lankans in Reconstruction Talks,” BBC News, November 18, 2002. Large numbers
of Tamil refugees began returning to the war-torn region after the 2002 ceasefire (“100,000
Refugees Return to Sri Lanka,” Associated Press, September 20, 2002).
43 “Transcript: U.S. Prepared to ‘Play Its Part’ to Further Peace in Sri Lanka,” U.S.
Department of State Washington File, November 25, 2002.
44 “Sri Lanka to Explore a New Government,” New York Times, December 6, 2002.
45 “Sri Lankan Peace Talks Start in Berlin,” Reuters, February 7, 2003; “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.
46 “Sri Lanka Negotiators Leave Japan With Little Progress, But Cash Hopes Alive,” Agence
(continued...)

CRS-14
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. Norwegian truce monitors criticized both sides while refraining from
ruling who was at fault.47
In the spring of 2003 the Colombo government said 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 84% of all Sri Lankans believed peace
could be achieved through dialogue, including more than 95% of Tamils.48 Yet the
LTTE pulled out of the peace negotiations in April, just days before a seventh round
of peace talks was set to begin in Thailand. The Tigers issued a statement protesting
their exclusion from a scheduled June 2003 donor conference in Japan and
expressing unhappiness with slow progress in efforts to improve the quality of life
for the country’s Tamil minority.49
In September 2003, Norway and Japan led an effort to revitalize the peace
process and prevent its devolution back into further conflict. These initiatives
followed a meeting of the Tigers with constitutional experts in Paris, a meeting that
was part of the Tigers’ effort to respond to a Sri Lankan government proposal for an
interim administration in the northeast of Sri Lanka (a major concession by the
government to Tiger demands which were a prerequisite for further talks).50 For their
part, the LTTE had previously made the key concession that it would settle for an
autonomy agreement rather than its previous goal of a separate state. Despite such
concessions by both sides, a peace agreement was not guaranteed. The LTTE
indicated that it would once again seek secession and an independent state if
substantial autonomy was not achieved through the negotiation process.51
The Colombo government was at that time split between a more conciliatory
faction represented by President Chandrika Kumaratunga and a more hardline faction
represented by the JVP. The UNP opposition was regarded as the major party most
willing to negotiate with the LTTE in order to end the conflict. Many observers
believed this was due to the fact that a large portion of UNP political support comes
from Sri Lanka’s business classes, whose success in turn depends on limiting the
impact of uncertainty and instability which the conflict creates.

46 (...continued)
France Presse, March 22, 2003.
47 “Sri Lanka Monitors Chide Both Sides Over Sea Clash,” Reuters, March 17, 2003.
48 “Sri Lanka Ponders Peace Vote,” BBC News, April 4, 2003; “Overwhelming Support for
Peace Talks - Poll,” Daily News (Colombo), March 24, 2003.
49 “Sri Lanka’s Tamil Tigers Pull Out of Peace Talks,” Reuters, April 23, 2003.
50 “Norway to Make Fresh Bid to Revive Sri Lanka Peace Process,” Agence France Presse,
September 3, 2003.
51 “Sri Lanka to Explore a New Government,” New York Times, December 6, 2003.

CRS-15
It was hoped that the LTTE would respond to the government’s offer and rejoin
peace negotiations by the end of September 2003. An earlier proposal for an interim
administration was rejected by the LTTE. The government continued having
difficulty making offers as some observers noted that a constitutionally viable
solution would require the consent of the more hardline faction in the government led
by the JVP, which was on record as opposed to further concessions to the LTTE.52
The international community made an effort to support the dialogue process by
offering inducements for peace. The international donors conference held in Tokyo
in June 2003 obtained aid pledges for Sri Lanka totaling $4.5 billion (nearly one-
quarter of the package was pledged by Japan). Some 51 nations and 20 international
institutions participated in the conference, though it was boycotted by the LTTE.53
At the same time, the World Bank approved a loan of $125 million to assist Sri
Lankan poverty reduction and reconstruction in the northeast, and to support the
peace process.54 Then-U.S. Deputy Secretary of State Armitage expressed support
for the peace process at the Tokyo conference by asking the LTTE to end its boycott
of the talks and offering $54 million in U.S. aid.55 Yet both the government and the
rebels remained intransigent in their positions, and the LTTE refused to rejoin
Norwegian-sponsored peace negotiations.
Peace Process Stalemated, 2004-2005. Despite international
inducements, the peace process remained deadlocked for more than two years, with
the LTTE continuing to insist on interim self-rule in the Tamil northeast as the basis
of resumption of negotiations. The government expressed a desire that the LTTE
restate its willingness to explore a federal solution to the conflict, and Colombo also
requested that discussion of an Interim Self Governing Authority (ISGA) be part of
a comprehensive peace discussion and not a precondition of such negotiations.
Moreover, divisions within both the government and the LTTE cast pervasive doubt
on the eventual outcome of the peace talks.
The crisis continued beyond the April 2004 elections and was exacerbated in
2005 by a number of factors, including tensions between the SLFP and its JVP
coalition partners over the privatization of the university educational system and the
petroleum sector; the possibility of a joint government-LTTE distribution mechanism
for foreign aid (to LTTE controlled areas) in response to the December 2004 Indian
Ocean tsunami; and the prospect of a peace agreement that would grant greater
autonomy to the Tamil-controlled North and East. The JVP strongly opposes each
of these options and has made numerous threats to withdraw from the United
52 “Sri Lanka Peace,” Voice of America Federal News Dispatch, June 20, 2003.
53 See the Tokyo Conference Declaration at [http://www.mofa.go.jp/region/asia-paci/
srilanka/conf0306/declaration.html].
54 “World Bank Gives $125 Million,” Agence France Presse, June 18, 2003.
55 “U.S. Asks Tamil Tigers to Resume Talks with Sri Lankan Government,” BBC
Monitoring South Asia
, June 13, 2003.

CRS-16
People’s Freedom Alliance, a move that would deprive the ruling coalition of its
parliamentary majority.56
Following the mid-2004 LTTE schism there were numerous instances of
political and military operatives being killed by each side as they jockey for power
in the East. The LTTE accuses Colonel 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 later
withdrew to a fortified base in the jungles of eastern Sri Lanka where his forces were
able to repel LTTE attacks.57 During the first half of 2005 there were several
reported instances of serious ceasefire violations. First was the February death of a
high-level LTTE political officer, followed by an increase in targeted, politically-
motivated killings throughout the eastern provinces.58
April 2005 saw 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 to indicate that monitors were
aboard.59 By the middle of 2005, politically-motivated killings reportedly were
taking one life per day and, following the LTTE’s August 2005 assassination of
Foreign Minister Lakshman Kadirgamar, an ethnic Tamil, Parliament passed a state
of emergency regulation that has been renewed every month since.60
Civil War Resumes in 2006. The narrow November 2005 election victory
of perceived hardliner President Rajapaksa led to a further escalation of violence
between government security forces and LTTE cadres. One month later, a pro-LTTE
Tamil National Alliance parliamentarian was assassinated inside a government high
security zone in the eastern town of Batticaloa. In February 2006, Colombo and the
LTTE voiced renewed commitment to the CFA and violence waned until April, when
an explosion at a Sinhalese market in Trincomalee led to a limited backlash against
Tamils. Shortly after, an LTTE suicide bomber attacked a major army compound in
Colombo, killing eight soldiers and seriously wounding the army’s top general. The
government retaliated with air strikes on Tiger positions. In June 2006, an LTTE
suicide bomber succeeded in killing the army’s third highest-ranking general in a
suburb of Colombo. Mutual animosities intensified.
A dramatic surge in violence in early August 2006 was sparked by a water
dispute: the Sri Lankan military had moved to reopen a sluice gate in Tiger-
controlled territory after negotiations failed to resolve the quarrel (in closing the gate,
LTTE forces had cut water supplies to thousands of mostly Sinhalese farmers south
56 “JVP Threatens to Bring Down Lanka Govt. Over LTTE Tsunami Deal,” Hindu
(Chennai), April 20, 2005.
57 Press Trust of India, March 21, 2005.
58 “Batticaloa LTTE Leader Killed,” Hindu (Chennai),February 7, 2005.
59 “Tamil Tiger ‘Breached Ceasefire,’” BBC News, April 8, 2005.
60 “Sri Lanka: Political Killings Escalate,” Human Rights Watch, August 16, 2005.

CRS-17
of Trincomalee). Rather than employ a small force for the operation, the government
launched large-scale airstrikes on nearby Tiger positions in tandem with a ground
offensive. The LTTE’s political wing called the attacks a “declaration of war.”61 The
four Tokyo Donor countries (including the United States) issued a statement calling
on both sides to immediately end hostilities and re-engage negotiations, but the LTTE
said that Colombo’s military operations made further talks impossible.
By the late summer of 2006, the Sri Lankan army was pressing a major
offensive in the area around the Tiger stronghold of Trincomalee, the LTTE was
declaring that the ceasefire appeared to have ended, and human rights groups were
demanding that both sides allow humanitarian supplies to reach civilians who had
been trapped in the crossfire and who were unable to obtain food and other basic
commodities. Hundreds of thousands of these civilians were displaced by the
fighting. Battles in August became so fierce that more than 800 rebels and security
personnel were reported killed in one week alone. Under heavy air bombardment,
the Tigers retreated from their positions near the strategic Trincomalee harbor in
September, while their naval forces lost a series of fierce battles off the northern
Jaffna Peninsula.62 In displacing the Tigers from Trincomalee’s environs, the
government carried out the first major seizure of enemy territory by either side since
the 2002 ceasefire.
In a now weakened position, the LTTE changed course and agreed to engage in
new and unconditional negotiations with Colombo. Some observers opined that, as
in the past, dwindling financial resources were a primary motive for the
government’s decision to re-engage the peace process as called for by international
aid providers.63 A new round of talks was set for October 2006 in Oslo, Norway,
even as the government’s ongoing military offensives brought fierce battles in the
both the North and East. Possible overconfidence in the army ranks may have led to
serious reversals during the course of the month as their units were repulsed around
Jaffna at considerable cost.64 The Tigers also retaliated with a series of suicide
attacks, including a truck bombing that left 99 Sri Lankan sailors and civilians dead
in the north-central city of Harbrane; and the detonation of “suicide boats” that left
a sailor and 15 rebels dead near the Sri Lankan Navy Headquarters in Galle, a major
tourist destination some 70 miles south of Colombo.
In the lead up to October peace talks, President Rajapaksa moved to establish
a common negotiating position that would include the country’s main opposition
UNP. A resulting pact was widely hailed as a rare expression of political unity,
61 “Strategic Questions in Sri Lanka,” BBC News, August 4, 2006.
62 “Fighting Escalates in Northern Sri Lanka,” Associated Press, August 17, 2006; “Sri
Lanka Battles a Weakened Tamil Tigers,” Christian Science Monitor, September 5, 2006.
63 “Lack of Cash Pushes Sri Lanka to Peace Talks: Analysts,” Agence France Presse,
September 13, 2006.
64 “Tigers Strike Back,” Outlook (Delhi), October 14, 2006; “Sri Lanka Clashes Kill 129
Troops,” BBC News, October 12, 2006.

CRS-18
especially in the country’s Sinhala-dominated South.65 However, and despite low
expectations, the talks were a conclusive failure: The government rejected a key
rebel demand to reopen the strategically vital A-9 highway that crosses LTTE-
controlled territory leading to Jaffna, and the two sides failed even to agree on a
timetable for future meetings. Renewed exchanges of artillery fire began hours after
the talks adjourned.66
Fighting continued during the final months of 2006. LTTE leader Prabhakaran
blamed President Rajapaksa for the conflict’s resurgence and he called the CFA
“defunct.” The U.S. State Department expressed being “disturbed” by such claims,
and it condemned the Tigers for “fueling violence and hostility,” and urged both sides
to honor the CFA and return to negotiation.67 The LTTE disregarded the admonition
and declared a renewed struggle for independence. Tiger cadres subsequently
attempted to assassinate the defense secretary — who is also President Rajapaksa’s
brother — by bombing his motorcade, but he escaped unharmed.
Government Military Successes in 2007. Government forces took
control of the LTTE’s eastern stronghold of Vakarai in January 2007, resulting in up
to 20,000 more internally displaced persons (another 15,000 Tamil civilians were
described as being “trapped” by the fighting). From Colombo’s perspective, the
“liberation” of Vakarai saved these civilians from being used as “human shields” by
the rebels.68 Although the Norwegian government insisted that its effort to end the
civil war had not failed — and the British government offered to play a greater role
in the peace process, including a willingness to talk directly with the terrorist-
designated LTTE — there developed a growing consensus among independent
observers that full-scale civil war had returned to the island.
By March 2007, the government was claiming to have completely cleared LTTE
forces from the island’s east coast. Later that month, Tiger rebels launched an
unprecedented air attack, using two crude planes to bomb an air force base adjacent
to Colombo’s main airport. While damage reportedly was light, the ability of the
Tigers to penetrate Sri Lankan air defenses and return safely to their base 250 miles
away was a major embarrassment to the Colombo government. Further Tiger air
raids in April — one killing at least six soldiers at the main army base in Jaffna,
another destroying fuel facilities in Colombo — spurred acute security concerns
among commercial airline companies serving the island, and caused analysts to
identify an even greater threat perception among residents of the southern
provinces.69
65 “S. Lanka Parties in Unity Pact Ahead of Peace Talks,” Reuters, October 23, 2006.
66 “Heavy Shelling In North Sri Lanka After Talks Fail,” Reuters, October 30, 2006.
67 Daily Press Briefing, November 28, 2006.
68 “Sri Lanka Says Captures Tiger Lines, Kills 30 Rebels,” Reuters, January 16, 2007;
“Forces Liberate Vakarai Civilians,” Daily News (Colombo), January 20, 2007.
69 “Sri Lankan Separatists Take Fight to the Air,” Christian Science Monitor, March 28,
2007; “Airlines Cancel Sri Lanka Flights,” BBC News, April 30, 2007.

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The Tigers appeared to have been evicted from their last major bastion in the
Eastern Province in July 2007 and the Colombo government claimed to be in full
control of the region for the first time in 13 years. Following its military victories in
the East, the government vowed to devote more than $50 million toward
infrastructure programs designed to win hearts and minds in the region and to
establish a credible civil administration there by holding local elections before
2008.70 The LTTE responded to government declarations with threats to cripple the
country’s economy with attacks on military and economic targets. The Rajapaksa
government asserted openness to resuming negotiations with the rebels even as it
pressed ahead with military operations in the North.
An October 2007 attack by 21 rebel “suicide commandos” caused serious
damage to the Anuradhapura air force base in the Northwest province and was a
major embarrassment for government and military officials. Eight Sri Lanka air force
planes were reported destroyed, including an expensive surveillance platform.
Fourteen soldiers died battling the rebel force. Retaliatory government air strikes on
LTTE training camps reportedly killed dozens of rebels in the country’s north. Still,
the Anuradhapura attack was viewed as a stunning short-term psychological victory
for the rebels which served to boost their morale following debilitating military
losses of the previous summer.71
Colombo was not deterred, however, and pressed ahead with offensive military
operations. Among those killed in November 2007 government airstrikes was S.P.
Tamilselvan, the leader of the Tigers’ political wing widely believed to be
Prabhakaran’s topmost deputy. This was followed by the violent death of the
purported chief of the Tigers’ intelligence wing, alias “Colonel Charles,” in a January
2008 government military ambush on his vehicle at the island’s far northern tip.
Some observers view these apparent targeted killings as further evidence of a new
government intent to decisively defeat the rebels through use of force.72 Sri Lankan
military officials claim that their operations in the latter months of 2007 destroyed
about half of the Tigers’ forces and that the “remaining 3,000” were in complete
disarray and near to final defeat.73
Current Status. During a March 2007 visit to Washington, Sri Lankan
Foreign Minister Rohitha Bogollagama told Secretary of State Condoleezza Rice that
Colombo was committed to a negotiated solution to the conflict and to constitutional
reforms that would enable an enduring settlement and address the “concerns of the
minorities.”74 President Rajapaksa himself repeatedly insists that ongoing military
operations are aimed only at combating terrorism. His government claims to seek
70 “With Tanks, Jets, Sri Lanka Fetes Fall of Rebel East,” Reuters, July 19, 2007.
71 “Sri Lanka Rebel Attack Further Detailed,”Associated Press, October 24, 2007; “Despair
in the Air,” Frontline (Chennai), November 3, 2007.
72 See, for example, Ajai Sahni, “Shattered Haven,” Outlook (Delhi), November 8, 2007.
73 “Sri Lanka Army Chief Says Rebel Force Halved, Bases Surrounded,” Daily News
(Colombo), December 31, 2007.
74 See Embassy of Sri Lanka Press Release, March 16, 2007, at
[http://www.slembassyusa.org/press_releases/spring_2007/fm_says_sl_16mar07.html].

CRS-20
only a “negotiated and sustainable” settlement through the All Party Representative
Committee. Yet, in late December 2007, the Sri Lankan president reportedly stated
that military victories “will surely pave the way to push the LTTE to seek a political
solution to the problem.”75
Faced with a choice between scaling back army operations and resuming peace
negotiations or pressing ahead with military offensives, President Rajapaksa appears
to have concluded the Tigers could be decisively defeated on the battlefield. The risk
of alienating key hardline coalition supporters likely has played a central role in this
calculation.76 Thus, despite heavy material and political costs — including the
alienation of more negotiation-minded political allies, severe economic damage, cuts
in foreign aid, and censure from foreign governments and international human rights
groups — Rajapaksa appears to be pursuing an all-out effort to defeat the LTTE by
use of force.77
Increased strife has been costly for Sri Lanka on the world stage. In May 2007,
the British government cited human rights concerns in suspending about $3 million
in debt relief aid to Colombo. In the same month, a U.S. official cited like concerns
in explaining why Millennium Challenge Corporation (MCC) funding has not been
forthcoming, saying the island’s security circumstances continued to preclude
finalizing a compact under that program (Sri Lanka subsequently was “deselected”
for MCC eligibility). The United States and other international donors suspended aid
or withheld new commitments for similar reasons in 2007. President Rajapaksa has
responded with defiance, saying his country is not dependent on foreign aid and can
go it alone, if necessary. Defense Secretary Gotabaya Rajapaksa, the president’s
brother, has decried the “international bullying” on human rights.78
Obstacles to Peace
Even during a period of relative peace from 2002 to 2005, peace negotiators
have faced great difficulty as they attempt to craft a political system that maintains
Sri Lanka’s unity while addressing the LTTE’s desire for substantive autonomy.79
A variety of federal models has been put under consideration, including those that
75 “Negotiated End to Conflict Govt’s Aim,” Daily News (Colombo), September 27, 2007;
“Sri Lanka Open to ‘Negotiated’ Solution to Conflict,” Agence France Presse, October 13,
2007; “Military Victories Will Pave the Way to Political Solution - President,” Daily News
(Colombo), December 27, 2007.
76 “Sri Lanka’s President Poised Between War and Peace,” Financial Times (London),
January 9, 2007.
77 “Back to the Gun,” India Today (Delhi), May 28, 2007.
78 “Sri Lanka President Shuns Aid Suspension by UK, US,” Reuters, May 16, 2007; “Aid
Weapon Used Against Sri Lanka,” Financial Times (London), May 22, 2007; “Sri Lanka
Accuses ‘Bullying’ West,” BBC News, June 12, 2007.
79 A Tamil state in the northern areas 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 (“In Some Ways, Rebels Without a Cause,” Washington Post, January 14, 2003).

CRS-21
have seen success in Switzerland and Canada, among others.80 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. Sinhala nationalism, rooted in the British colonial period, is seen to
be a major, overarching obstacle to resolution of the ethnic conflict.81 While sizeable
majorities of Sri Lanka’s Tamil and Muslim communities appear to favor a
negotiated settlement to the civil war, perhaps half of the country’s Sinhalese citizens
are reported to favor the pursuit of the LTTE’s military defeat.82
A key unresolved shorter-term issue under the CFA had been the
decommissioning of LTTE weapons, which the Tigers repeatedly stated will not
occur until a permanent settlement is reached. The SLFP had long claimed that the
rebels must disarm as part of the negotiation process.83 Also, there are reported to be
many thousands of government troops controlling parts 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 would be used as cover by the Tigers to better
position themselves should fighting resume. Colombo has refused to open up these
“high security zones” until the rebels lay down their arms, an action the Tigers have
called “non-negotiable.”84 Some analysts express certainty that the Tigers will be
unwilling to disarm in the foreseeable future, and even some Sinhalese intellectuals
reportedly have sympathized 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.”85
Former Prime Minister Ranil Wickremesinghe, leader of the opposition UNP,
views the government’s January 2008 abrogation of the CFA as part of a politically
expeditious decision to placate hardline Marxist and Buddhist parties in return for
their continued support of the ruling coalition.86 A potential obstacle to any peace
deal in the near- and middle-term is the continuing political division between the JVP
and the SLFP as regards any settlement of autonomy or self-governing aspects of any
eventual peace deal. The JVP has threatened to withdraw from the current ruling
coalition if any agreement is reached which they allege might impinge national
80 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.
81 See International Crisis Group Asia Report No. 141, “Sri Lanka: Sinhala Nationalism and
the Elusive Southern Consensus,” November 7, 2007, at [http://www.crisisgroup.org/home/
index.cfm?id=5144&l=1].
82 See, for example, public opinion survey findings at [http://www.cpalanka.org/
research_papers/PCI_November_2007_PR.pdf].
83 “Tamil Tigers ‘Must Disarm,’” BBC News, December 13, 2002.
84 “Sri Lanka Talks Face Hurdle,” BBC News, January 4, 2003.
85 “No to War Isn’t Yes to Peace,” Business Line (Chennai), April 8, 2003.
86 “All-Out War,” Frontline (Chennai), February 1, 2008.

CRS-22
sovereignty, and the JHU represents an virulent and influential form of Sinhalese
majoritarianism:
The capacity of these nationalist actors to mobilize Sinhala nationalist sentiments
poses deep problems for the future of the peace process as it threatens to draw
mainstream political actors back into more nationalist strategies for political
survival. It also serves to challenge the legitimacy of governing coalitions or,
through the use of a coalitional veto, bring about governmental collapse for those
attempting to move the peace process forward.87
Moreover, the SLFP has expressed concerns that the Norwegian mediators have
exhibited bias in favor of the rebels.
In seeking to explain the apparent collapse of the most recent peace process,
many analyses are critical of an allegedly narrow focus on two parties — the
Colombo government and the LTTE — to the exclusion and at the expense of other
key stakeholders such as non-LTTE-affiliated Tamils and the country’s sizeable
Muslim minority. President Rajapaksa has been faulted by many for his apparent
belief that the LTTE is the chief source of the country’s ethnic strife and that only
their military defeat would open the space in which to effectively address Tamil
grievances. Rather, many analysts contend, the Tigers are only one manifest aspect
of a greater ethnic problem.88 Moreover, a process too heavily reliant on economic
incentives may have been undermined by political opposition to Colombo’s reform
program.89
The LTTE, for its part, has stated that peace is not possible so long as President
Rajapaksa is in power, and there are ongoing fears that the rebels will be successful
in their efforts could again seek to bring the war to the country’s capital.90 The Tigers
reject new negotiations in the absence of Colombo’s adherence to the terms of the
now-defunct CFA. Yet the government is unlikely to agree to such terms as doing
so would require ceding control of territories taken from the LTTE in 2007.
Excluded from international political fora due to their designation as a terrorist
group, the Tigers have sought creation of a formal venue in which to argue their case
that the Colombo government engages in ethnic cleansing and serious human rights
violations and must be pressured to accept a resolution based on the Tamils’ claimed
right to self-determination.91
87 David Rampton and Asanga Weilikala, “The Politics of the South,” Asia Foundation Sri
Lanka Strategic Conflict Assessment 2005 Series, 2005, at [http://www.asiafoundation.org/
pdf/SL_Politics_of_the_South.pdf].
88 See, for example, “Resting on Laurels,” Frontline (Chennai), November 3, 2007.
89 International Crisis Group, “Sri Lanka: The Failure of the Peace Process,” November 28,
2006, at [http://www.crisisgroup.org/home/index.cfm?id=4523]. See also reports from the
Asia Foundation Sri Lanka Strategic Conflict Assessment 2005 Series at
[http://www.asiafoundation.org/Locations/srilanka_publications.html].
90 “Target Colombo,” Outlook (Delhi), July 19, 2007.
91 “Sri Lanka Rebels Decry ‘Genocide’ Before U.N. Address,” Reuters, September 25, 2007.

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December 2004 Indian Ocean Tsunami92
The tsunami (tidal wave) that devastated much of coastal South and
Southeastern Asia on December 26, 2004, hit Sri Lanka particularly hard some 90
minutes after its launch by an earthquake centered west of Sumatra, Indonesia. The
massive wave caused some 35,000 deaths, fully or partially destroyed at least
100,000 homes, and displaced nearly 600,000 Sri Lankans in the country’s worst-
ever natural disaster. The island’s east coast was most affected and there was some
evidence that the tsunami weakened the LTTE through the destruction of many of its
naval assets and the loss of at least 1,000 of its cadres.93 The Sri Lankan navy also
saw significant damage to some of its southern coastal facilities. The single most
costly event in terms of human lives was the complete destruction of a train traveling
along a coastal railroad track. More than 2,000 people died in this single incident.94
Fortunately, a projected outbreak of disease following the tsunami never
materialized.
President Bush expressed condolences to the Sri Lankan people over the
“terrible loss of life and suffering,” and the U.S. government moved quickly to
provide assistance to those nations most affected.95 USAID oversaw a total of about
$135 million in relief and reconstruction aid for Sri Lanka, devoted especially to the
provision of emergency relief supplies, transitional housing, livelihoods restoration,
and psychological and social support.96
There were hopes that the human costs of the disaster would bring about an
opportunity to reinvigorate the stalemated peace process, but negotiations on how to
disburse relief aid reflected existing political obstacles. After much wrangling, in
June 2005 the Colombo government and the LTTE reached an agreement to share
some $3 billion in international tsunami aid under a Post-Tsunami Operational
Management Structure (PTOMS). However, the agreement was challenged in court
and was never implemented, leaving both parties more distrustful than before. In the
words of one analysis, “Protracted negotiations about the institutional arrangements
for delivering tsunami assistance to the North-East mirrored earlier peace talks and
exposed the deep underlying problems of flawed governance, entrenched positions,
and patronage politics.”97
92 See also CRS Report RL32715, Indian Ocean Earthquake and Tsunami.
93 Chandra de Silva, “Sri Lanka in 2005,” Asian Survey 46, 1, January 2006, p. 116.
94 “Sri Lanka: Railroad Line Closed by Tsunami Reopened” Associated Press, February 21,
2005.
95 “Bush Sends Condolences to Asia, Offers Aid,” Associated Press, December 27, 2004.
96 See [http://www.usaid.gov/press/releases/2008/pr080118.html].
97 Jonathan Goodhand and Bart Klem, “Aid, Conflict, and Peacebuilding in Sri Lanka 2000-
2005,” Asia Foundation Sri Lanka Strategic Conflict Assessment 2005 Series, 2005, at
[http://www.asiafoundation.org/pdf/full_sr_report.pdf].

CRS-24
Economic Issues
Formerly a colonial economy based on plantation crops (tea, rubber, coconut,
sugar, and rice), modern Sri Lanka’s manufactured products now account for about
four-fifths of the country’s exports, including garments, textiles, gems, as well as
agricultural goods. Tourism and repatriated earnings of Sri Lankans employed
abroad are 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. Many observers attribute the ability
of the national economy to thrive even in the midst of civil war to these successful
reforms. Privatization efforts have slowed in recent years, however. Since 2001,
both tourism and investor confidence, previously on the rebound, have been
negatively affected by major LTTE terrorist attacks and renewed political instability.
Sri Lanka’s entire economy has also suffered as a result of a recent prolonged
drought (the worst in two decades), related hydroelectric power shortages, and the
worldwide economic downturn around the turn of the century. The country
experienced its first ever recorded recession in 2001, with a negative GDP growth
rate of -1.4%.
The UNP-led coalition government that came to power under then-Prime
Minister Wickremesinghe in late 2001 sought to institute a program of sweeping
economic reforms and liberalization. Stabilization efforts were based on reduced
government expenditures, while structural reforms included downsizing the
bureaucracy, selling off state-owned businesses, and reforming labor and land laws
to encourage the freer operation of market mechanisms. The United States and other
external donor countries sought to support this reform effort with greatly increased
aid: according to one source, external aid rose more than four-fold from 2002 to
2003. However, this same analysis is among those that fault the Wickremesinghe
government for pursuing this tack while failing to link it to the ongoing peace
process. From this perspective, the stalemating of that process — and the UNP’s
2004 election defeat — could be traced to an economic reform program that
“alienated many social classes within a short period of time, without offering any
benefits in return.”98
Despite the existence of considerable obstacles, not least being renewed civil
war, current statistics show Sri Lanka’s economy to be performing relatively well.
The economy grew by an estimated 6.1% in 2007, led by a services sector that
accounts for more than half of GDP. Short-term projections are generally positive,
but still mixed: optimistic analyses foresee further expansion above 5% in 2008,
with a rebounding agricultural sector and rapid growth in India (one of Sri Lanka’s
main trading partners) buoying the economy. Others stress that a winding down of
tsunami-related base effects, fragile export performance, and inflationary pressures
will keep annual GDP growth rates well below 5%, even as the middle- and longer-
term potential is seen to be considerable. Another important future variable will be
levels of U.S. and European demand for textiles. Consumer price inflation has been
98 Sunil Bastian, “The Economic Agenda and the Peace Process,” Asia Foundation Sri Lanka
Strategic Conflict Assessment 2005 Series, 2005, at [http://www.asiafoundation.org/
pdf/SL_Economics_of_Peace.pdf].

CRS-25
a major burden at an estimated 17% for 2007. Near-term inflation is likely to remain
high, but is expected to ease somewhat in 2008. Sri Lanka is highly dependent on
foreign assistance, with the World Bank, the Asian Development Bank, Japan, and
other donors disbursing loans totaling $912 million in 2006. Foreign grants
amounted to another $301 million during that year.99
In November 2006, the Colombo government issued a discussion draft of its 10-
year development framework, Mahinda Chintana [Mahinda’s Thoughts]: Vision for
a New Sri Lanka
. According to a January 2007 World Bank report,
The vision sets out ambitious growth targets (over 8% by 2010) aimed at
reducing poverty incidence to 12% of the population by 2015 (from 23% in
2002). The rapid growth scenario assumes the continuation of a favorable
external environment and implies improved security conditions. A key target is
to raise total investment from 28-30% of GDP in 2006 to 34% in 2010, with the
largest contribution coming from the public sector. Public sector savings
(currently negative) are expected to contribute 5 percentage points of GDP to
gross domestic savings by 2010. FDI is projected at around 2% of GDP
(compared to less than1% in the past decade).100
Nearly all commentators agree that continued escalation in ethnic violence will
negatively impact the economy, especially by reducing investor confidence and by
further damaging the vital tourism sector. The civil war continues to place a heavy
burden on the country’s economy, as well as to hinder its future potential. Defense
expenditures as a percentage of GDP have doubled since 1980. Aside from defense
spending, other costs of the war include damage to infrastructure and expenditures
for humanitarian relief. Several analyses have asserted that annual growth rates over
the past 24 years could have been 2-3 percentage points higher in the absence of
protracted ethnic conflict. International donors say the Mahinda plan for poverty
reduction is dependent upon peace.101
Tourist arrivals in Sri Lanka plummeted by 24% during the first half of 2007.
The tourism sector, which accounts for about 3% of Sri Lanka’s total GNP, had been
recovering from the December 2004 tsunami and its attendant massive infrastructural
damage, but optimism was dashed following October 2007 government military
operations inside the country’s most popular wildlife sanctuary — in a relatively
pacific area of the island’s southeast — and a subsequent U.S. State Department
travel warning.102
99 U.S. State Department Bureau of South and Central Asian Affairs, “Background Notes:
Sri Lanka,” May 2007, at [http://www.state.gov/r/pa/ei/bgn/5249.htm].
1 0 0 See [http://siteresources.worldbank.org/SRILANKAEXTN/Resources/
SLDFReport2007Final.pdf].
101 “Sri Lanka: Executive Summary,” Global Insight, May 14, 2003; “Sri Lanka
Development Hostage to War, Say Donors,” Reuters, January 29, 2007.
102 “Sri Lanka Tourism a Casualty of Tamil Tiger War,” Christian Science Monitor, October
24, 2007; travel warning at [http://travel.state.gov/travel/cis_pa_tw/tw/tw_3011.html].

CRS-26
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. For decades, Sri Lanka has invested heavily in
education, health, and social welfare, maintaining high living standards compared to
much of South Asia. The U.N. Development Program ranked Sri Lanka 99th out of
177 countries on its 2007/2008 human development index (between Azerbaijan and
Maldives), down from 93rd the previous year, but still higher than any other South
Asian country.
U.S. Relations and Policy Concerns
According to the U.S. State Department, a history of cordial U.S.-Sri Lanka
relations has been based in large part on shared democratic traditions. 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 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 subsequent years set back the time frame for any possible Free Trade
Agreement (FTA), and relevant negotiations were put on hold pending positive
developments in peace negotiations. The United States also maintains a limited
military-to-military relationship with the Sri Lanka defense establishment.
In July 2002, President Bush met with then-Sri Lankan Prime Minister
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.
During a May 2007 visit to Colombo, the lead U.S. diplomat for the region,
Assistant Secretary of State for South and Central Asia Richard Boucher, outlined
key U.S. concerns about “the way things have been heading” in Sri Lanka. First
among these was the negative impact that armed ethnic conflict was having on the
people, both directly through terrorism and human rights abuses, and indirectly by
harming the country’s economy. In the area of human rights, Secretary Boucher
placed special emphasis on the increased incidence of abductions and unlawful
killings, as well as on widespread reports of government attempts to intimidate the
press. He acknowledged that the government of President Rajapaksa had voiced a
commitment to upholding human rights, but said “a lot more needs to be done” both
in dealing with the behavior of government security forces and in controlling
“paramilitaries” (often a euphemism for the Karuna faction, which broke away from
the LTTE in 2004). He conveyed to Sri Lankan political leaders of all stripes the
U.S. position that consensus through the All Parties Representative Committee —
“a consensus that identifies for the Tamil community their role in the island, their

CRS-27
place, their control over various levels of government and their own lives” —
represented the best basis for future progress toward conflict resolution.103
In August 2007 testimony before the House Foreign Affairs Committee, a State
Department official offered that
Sri Lanka’s long-standing ethnic conflict, fragile peace process, and deteriorating
human rights conditions continue to cause concern for the United States and the
international community.... Our top policy priorities for Sri Lanka remain
restoration of good governance and respect for human rights leading to an
eventual negotiated settlement. We believe that finalizing a credible devolution
of power proposal, together with ending human rights violations and improving
government accountability, are essential steps toward a lasting peace.104
He went on to review the ways in which the United States is supporting peace efforts,
including through the four-member Tokyo Conference mechanism, through USAID
projects to promote inter-ethnic dialogue, and by helping to fund humanitarian relief
programs overseen by Save the Children, the U.N. Children’s Fund, the World Food
Program, and the International Committee of the Red Cross.
The U.S. State Department first designated the LTTE as a Foreign Terrorist
Organization in 1997.105 In 2003, then-Deputy Secretary of State 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.106
The LTTE has rejected calls that it renounce violence, saying it will do so only when
the aspirations of the Tamil people are met by a political settlement. The U.S.-led
global anti-terrorism campaign, which reportedly has resulted in the international
withholding of several billion dollars from the LTTE and made it more difficult for
the group to acquire weapons, was a likely factor in the rebels’ decision to enter into
peace negotiations in late 2001.107
103 See [http://www.state.gov/p/sca/rls/rm/2007/84701.htm].
104 Statement of Steven Mann, Principal Deputy Assistant Secretary of State for South and
Central Asian Affairs, August 1, 2007, at [http://www.internationalrelations.house.gov/
110/man080107.htm].
105 See the FTO list at [http://www.state.gov/s/ct/rls/crt/2006/82738.htm].
106 “Transcript: Armitage Says U.S., Other Nations Have Role in Ending Sri Lankan
Conflict,” U.S. Department of State Washington File, February 14, 2003.
107 “U.S. Seeks to Allay Sri Lanka Fears on Rebel Ban,” Reuters, April 19, 2002; “Smiles
That Conceal the Worries - Sri Lanka’s Civil War,” Economist (London), July 20, 2002.

CRS-28
Trade, Investment, and Aid
U.S. Trade and Investment. The United States is by far Sri Lanka’s most
important trade partner, accounting for more than one-quarter of the country’s total
exports. In 2007, U.S. imports from Sri Lanka were valued at an estimated $2.1
billion (virtually unchanged from 2006). About two-thirds of this value came from
imports of apparel and household goods, most of them cotton. U.S. exports to Sri
Lanka in 2007 were valued at an estimated $228 million (also roughly equal to the
2006 figure), led by drilling and oil field equipment, which accounted for about one-
third of the 2007 export value.108 Sri Lanka’s Board of Investment reports that some
90 U.S.-based companies operate in Sri Lanka with a total estimated investment of
more than $500 million.109
During Prime Minister Wickremasinghe’s 2002 visit to Washington, 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
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.110
That year, several teams of U.S. officials traveled to Sri Lanka to explore avenues for
cooperation. During a November 2002 trip to Colombo, then-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. One month later, then-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 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.”111 In March 2003, the second round of TIFA
Joint Council meetings were held in Washington. The tenor of these meetings was
reportedly positive and “progress was made on issues of concern to both
108 U.S. Census Bureau, Foreign Trade Statistics.
109 See [http://www.boi.lk/InvestorSite/content.asp?content=us&SubMenuID=54].
110 “Trade and Investment Framework Agreement Between the U.S. and Sri Lanka,” at
[http://www.slembassyusa.org/investment/tifa.html].
111 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, November 21, 2002; “U.S., Sri Lanka to Work on Economic Ties,”
Reuters, December 20, 2002.

CRS-29
countries.”112 In May 2003, then-U.S. Trade Representative Zoellick stated that Sri
Lanka showed potential as a future free trade partner of the United States.113
The U.S. government continues to urge Colombo to curb its large budget deficit,
simplify the tax code, and expand the tax base. It further urges the removal of non-
tariff barriers and restrictive, even discriminatory, import fees and levies to facilitate
greater trade.114 A resurgence of violent ethnonational conflict has precluded most
major U.S.-Sri Lanka economic initiatives since 2006.
U.S. Assistance. A total of nearly $3.7 billion in U.S. economic and military
assistance went to Sri Lanka from 1947 through 2006, about two-thirds of this in the
form of food aid. Direct U.S. non-food aid included more than $14.5 million for
FY2006 and an estimated $9.4 million in FY2007 (see Table 2). About half of this
was aimed at supporting the peace process through democracy and governance
programs. When funding for disaster relief, Food for Peace, and U.S. disbursements
to the International Committee of the Red Cross and the U.N. High Commissioner
for Refugees are included, total U.S. humanitarian assistance to Sri Lanka exceeded
$26 million in FY2007. Other U.S. aid to Sri Lanka has focused on increasing the
country’s economic competitiveness in the global marketplace; creating and
enhancing economic and social opportunities for disadvantaged groups; promoting
human rights awareness and enforcement; providing psychological counseling to
communities in the conflict zones; tsunami recovery efforts, and demining (the
FY2006 total included a significantly boosted demining fund).
From 2003 to 2005, USAID ran a two-year program intended to generate greater
support for a negotiated peace settlement to end the long-standing ethnic conflict.
About three-quarters of the FY2007 aid is to be used to support democracy,
economic growth, and humanitarian assistance in Sri Lanka. USAID works to “foster
political reconciliation” and participates in “joint reconstruction programs [with the
Colombo government] that foster economic reintegration as well as social
reconciliation.”115 The Administration’s FY2008 request also included a modest, but
unprecedented INCLE program that would use $350,000 in U.S. aid to support law
enforcement reforms in Sri Lanka.
The Millennium Challenge Corporation (MCC, authorized by Congress in 2004)
designated Sri Lanka as an eligible country, and the country’s Finance Ministry has
posted a $590 million, multi-year proposal for poverty reduction and economic
growth initiatives, but no compact was signed.116 MCC eligibility largely is based on
a country’s record measured by 17 performance indicators related to the three
categories of good governance, economic freedom, and investing in people. Sri
Lanka presently “passes” on 13 of the 17 indicators, with fiscal policy and education
112 Author interview with U.S. Trade Representative official, April 9, 2003.
113 “Thailand Near Top of U.S. List for Next Free Trade Pact,” Bangkok Post, May 10, 2003.
114 Richard Boucher, “Remarks to the American Chamber of Commerce Colombo, Sri
Lanka,” U.S. Department of State, June 1, 2006.
115 See [http://www.state.gov/documents/organization/60655.pdf].
116 Proposal at [http://www.treasury.gov.lk/FPPFM/ddf/programs.htm].

CRS-30
expenditures being notable weak areas.117 The MCC previously reported an
expectation that a compact with Colombo could be signed for FY2008, but Sri
Lanka’s deteriorating security circumstances led to the country’s “de-selection” in
2007 and have thus far precluded U.S. aid under this program.118 (See also CRS
Report RL32427, Millennium Challenge Account).
Security Relations
The United States and Sri Lanka have maintained friendly military-to-military
and defense relations. According to the U.S. State Department, senior Sri Lankan
military officers continue to strongly support U.S. strategic goals and programs, and
Sri Lanka continues to grant blanket overflight and landing clearance to U.S. military
aircraft, and routinely grants access to ports by U.S. vessels. Modestly funded U.S.
military training and defense assistance programs have in recent years assisted in
professionalizing the Sri Lankan military and provided the country with basic
infantry supplies such as boots, helmets, radios, flack vests, and night vision goggles,
along with maritime surveillance and interdiction equipment for the navy and
communications and mobility equipment to improve the army’s humanitarian and
U.N. peacekeeping missions.119 The Bush Administration insists that U.S. military
assistance to Sri Lanka does not support Colombo’s efforts to expand the country’s
ethnic conflict, but rather is focused on bolstering the country’s ability to defend
itself against terrorism.120
In 2002, a U.S. defense assessment team was sent to examine the training needs
of the Sri Lankan military, and then-State Department Coordinator for
Counterterrorism Francis Taylor went to Colombo to discuss ways to integrate
“intelligence, law enforcement, legal and diplomatic efforts against terrorism.”121
The two countries later signed an agreement to provide demining training to the Sri
Lankan military. The program cost roughly $2.2 million and ran for six months in
2003-2004.122
The United States and Sri Lanka held their ninth consecutive joint military
exercises in early 2003, with training focused on combined arms operations and
medical techniques. The U.S. and Sri Lankan navies also participated in a
117 See [http://www.mcc.gov/documents/score-fy08-srilanka.pdf].
118 See [http://www.mcc.gov/documents/csr-srilanka.pdf]. During a May 2007 visit to Sri
Lanka, Assistant Secretary of State for South and Central Asia Boucher said that “the
security situation and the human rights situation” had cast doubt on the ability to carry out
planned road building projects, which remain on hold given “the current circumstances” (see
[http://www.state.gov/p/sca/rls/rm/2007/84701.htm]).
119 See annual Congressional Budget Justifications at [http://www.state.gov/s/d/rm/rls/cbj].
120 See [http://www.internationalrelations.house.gov/110/man080107.htm].
121 “United States Help to Modernize Sri Lanka Military,” Agence France Presse, August
30, 2002; “U.S. Counterterrorism Official to Visit Sri Lanka,” Reuters, September 24, 2002
122 “U.S. Government Provides Sri Lankan Army with Demining Training,” U.S. Department
of State Press Release, August 22, 2003.

CRS-31
multilateral search and rescue exercise off the coast of Madras.123 Also in 2003, Sri
Lanka joined the U.S. Customs Container Security Initiative aimed at preventing
shipping from being used to transport weapons of mass destruction.
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 had it retrofitted at the Newport News facility in
Virginia.124 This was an important moment in U.S.-Sri Lankan military relations, as
it marked the first significant military hardware transfer between the two nations.
The ship has bolstered Sri Lanka’s ability to perform sea-borne interdictions.
The United States and Sri Lanka inked an Acquisition and Cross-Services
Agreement in March 2007. The pact, which creates a framework for increased
military interoperability, allows for the transfer and exchange of numerous logistics,
support, and re-fueling services during joint operations or exercises. A U.S. official
visiting Sri Lanka during that month called it a “very routine” and “fairly modest”
barter arrangement that the United States has with 89 other countries, and he
emphasized that it has no wider applications beyond logistics.125
In November 2007, the United States provided Sri Lanka with a radar-based
maritime surveillance system and several advanced inflatable boats under Section
1206 of the National Defense Authorization. The Commander of the U.S. Pacific
Command, Adm. Robert Willard, visited Sri Lanka in mid-January to meet with his
naval counterparts there and review ongoing maritime cooperation. Adm. Willard
noted for Sri Lankan officials that improvements in human rights protection could
lead to enhanced U.S.-Sri Lanka cooperation.126
Human Rights Concerns
Human rights abuses in Sri Lanka largely have been associated with ethnic
conflict and civil war; they thus have increased in both number and severity since
mid-2006. A June 2007 “donors’ conference” focused on the island’s increasingly
dire human rights situation. Later that month, H.Res. 516, expressing serious
concern regarding the worsening situation in Sri Lanka, was introduced in the House,
but has not moved out of committee to date. In the summer of 2007, tens of
thousands of Sri Lankans took to the streets of Colombo in anti-government protests
organized by the opposition UNP. The demonstrators called for new national
123 “U.S., Sri Lankan Militaries Cooperate in ‘Balance Style,’” U.S. Embassy Sri Lanka
Press Release, January 14, 2003; “U.S. Naval Ship to Take Part in Rescue Exercise,” Hindu
(Chennai), July 9, 2003.
124 “Admiral Sandagiri Accepts Transfer of Former U.S. Coast Guard Vessel ‘Courageous,’”
Embassy of Sri Lanka Press Release, June 24, 2004.
125 “U.S. & Sri Lanka Sign Mutual Services Pact,” U.S. Embassy Colombo Press Release,
March 5, 2007; “Sri Lanka: Development and Domestic Prosperity,” March 9, 2007, at
[http://www.state.gov/p/sca/rls/rm/2007/82035.htm].
126 See [http://srilanka.usembassy.gov].

CRS-32
elections, an end to rife corruption, and swift action against human rights violators.127
Some analysts see occasional large-scale and apparently arbitrary Sri Lankan
government detentions — including a December 2007 sweep in and near the capital
during which more than 2,500 Tamils were rounded up and questioned for links to
the LTTE — doing great damage to its credibility.128 Nongovernmental Sri Lankan
organizations regularly document the scope of the country’s humanitarian crisis.129
The U.S. State Department, in its Sri Lanka Country Report on Human Rights
Practices, 2006 (issued in March 2007), determined that the Colombo government’s
respect for the human rights of its citizens “declined” in 2006 due in part to the
breakdown of the ceasefire agreement.130 State’s Supporting Human Rights and
Democracy: The U.S. Record 2006
(issued in April 2007) provided an overview of
the major human rights concerns:
As a result of the escalating hostilities between the government and LTTE and
numerous violations of the cease-fire agreement by both sides, overall respect for
human rights declined in the affected areas. There were numerous, credible
reports that armed paramilitary groups, suspected of being linked to the
government and security forces, participated in armed attacks during the year.
Human rights monitors also reported arbitrary arrests and detention by security
forces, poor prison conditions, denial of fair and public trials, corruption and lack
of transparency, infringement of religious freedom and freedom of movement,
and discrimination against minorities. Trafficking in persons also remained a
serious issue affecting women, children and men for the purposes of commercial
sexual exploitation and forced labor. The LTTE engaged in politically motivated
killings, suicide attacks, disappearances, torture, arbitrary arrest and detention,
interference with privacy, denial of freedoms of speech, press, assembly, and
association, and recruitment of child soldiers. Since the August 2005 killing of
Foreign Minister Lakshman Kadirgamar, the government has regularly renewed
emergency regulations that permitted arrests without warrants and unaccountable
detentions.131
International human rights groups have issued numerous reports echoing these
concerns.132 On the issue of religious freedom in Sri Lanka, the State Department
again reported in September 2007 that,
The constitution accords Buddhism the “foremost place,” but Buddhism is not
recognized as the state religion. The constitution also provides for the right of
127 “Thousands Protest in Sri Lanka,” Associated Press, July 26, 2007.
128 See, for example, B. Muralidhar Reddy, “Colombo Crackdown,” Frontline (Chennai),
January 4, 2008.
129 See, for example, Center for Policy Alternatives, “Policy Brief on Humanitarian Issues,”
D e c e m b e r 2 0 0 7 , a t [ h t t p : / / w w w . c p a l a n k a . o r g / P o l i c y _ B r i e f /
Brief_on_Humanitarian_Issues.pdf].
130 See [http://www.state.gov/g/drl/rls/hrrpt/2006/78875.htm].
131 See [http://www.state.gov/g/drl/rls/shrd/2006/80590.htm].
132 See [http://www.amnesty.org/en/region/asia-and-pacific/south-asia/sri-lanka] and
[http://hrw.org/englishwr2k7/docs/2007/01/11/slanka14837.htm].

CRS-33
members of other faiths to freely practice their religion. While the Government
publicly endorses this right, in practice there were problems in some areas.133
Such perceived problems included proposed anti-conversion laws, and legal
restrictions and sporadic attacks on Christian churches. The U.S. government found
no change in the status of respect for religious freedom in Sri Lanka in 2007. With
regard to human trafficking, the State Department’s latest annual report (issued in
June 2007) determined that Colombo “does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making significant efforts
to do so,” and it placed Sri Lanka on the “Tier 2 Watch List” for its “failure to
provide evidence of increasing efforts to address trafficking over the previous year,
especially in its efforts to punish trafficking for involuntary servitude.”134
During his August 2007 visit to Sri Lanka, a top U.N. humanitarian official
noted that dozens of aid agency staff had been reported killed on the island since
January 2006, and he identified Sri Lanka as one of the most dangerous countries in
the world for humanitarian workers. Colombo condemned the remarks, calling them
a contribution to forces devoted to discrediting the Sri Lankan government.135 The
worst such attack in recent years involved the August 2006 murder of 17 local aid
workers employed by a French nongovernmental organization operating near
Trincomalee. Colombo vowed to pursue a full investigation of the massacre, but
much suspicion fell upon government security forces themselves as being complicit,
given that such an attack was seen to serve no tactical purpose for the Tigers. One
year later, with no arrests made in the case and rights groups demanding swifter
government action, a top Colombo official appeared to lay blame on the French
NGO, itself, for sending its employees into a known combat zone.136
In August 2007, New York-based Human Rights Watch issued a sharp critique
of Sri Lanka’s worsening human rights situation, focusing particular attention on a
“dramatic increase” in abuses by government forces since 2006 and on Colombo’s
alleged responsibility for “unlawful killings, enforced disappearances, and other
serious human rights violations,” most of them affecting members of the country’s
Tamil and Muslim minorities. The Sri Lankan government rejected most of the
allegations as baseless and unsubstantiated, saying that its largely successful efforts
to resolve issues such as disappearances and internal displacement had been
ignored.137 London-based Amnesty International has called on the U.N. Human
Rights Council (UNHRC) to address a growing number of reported human rights
violations by all parties to the conflict, including failures to protect civilians, attacks
133 See [http://www.state.gov/g/drl/rls/irf/2006/71444.htm].
134 See [http://www.state.gov/g/tip/rls/tiprpt/2007/82807.htm].
135 “Sri Lanka Anger at UN Aid Claims,” BBC News, August 10, 2007.
136 “Sri Lanka Slides Back Into Civil War,” Jane’s Terrorism and Security Monitor, January
17, 2007; “Sri Lanka Blames Aid Group in Killings,” Reuters, August 13, 2007.
137 Human Rights Watch, “Return to War: Human rights Under Siege,” August 6, 2007, at
[http://hrw.org/reports/2007/srilanka0807]; “HRW Report Based On Unsubstantiated,
Outdated Information,” Daily News (Colombo), August 8, 2007.

CRS-34
on journalists, and a “persistent climate of impunity” that it said required systematic
monitoring and urgent investigations.138
Proposed Human Rights Commission. In 2006, a U.N. Special
Rapporteur recommended establishing an International Human Rights Monitoring
Mission for Sri Lanka. The European Union subsequently took the lead in pushing
for creation of such a body and human rights advocates argue forcefully that it could
“make it harder for those who commit serious human rights abuses to deny
responsibility.”139 Sri Lankan officials have resisted the initiative, viewing it as a
threat to the country’s sovereignty. Some have accused the LTTE of playing a human
rights card when they are under particularly strong military pressure.140 The
Rajapaksa government reportedly mounted an energetic campaign to stall any
UNHCR support for establishment of a monitoring office in Sri Lanka.141
In June 2007, an international panel of experts issued a scathing criticism of a
human rights investigatory commission created by President Rajapaksa in late 2006.
The so-called President’s Commission of Inquiry — faulted for both inaction and for
an appearance of bias given the involvement of the country’s attorney general — was
seen to be conducted in a way “inconsistent with international norms and standards.”
A team of international observers later warned that the body had made “no significant
progress” and was failing to comply with basic international norms and standards.
In October, four of the body’s ten members resigned, claiming the government was
not serious about human rights protection and that violations had only increased since
the committee’s inception.142
Child Abductions. Over the course of Sri Lanka’s decades-long civil war,
thousands of children have been abducted and forcefully recruited as soldiers. The
U.N. Children’s Fund had confirmed more than 6,400 child abductions in Sri Lanka’s
North and East provinces as of early 2007, the great majority of these perpetrated by
the LTTE.143 The Karuna faction has come under especially harsh criticism for
involvement in child abductions and forced recruitments. Elements of Sri Lankan
military and police forces are accused of assisting in such abductions. Colombo has
responded to criticisms from international human rights groups by flatly denying any
government complicity or “willful blindness” toward forced recruitments.144
138 Amnesty International Public Statement, September 4, 2007.
139 “EU Committee Criticizes Sri Lanka for Human Rights ‘Abuses,’” BBC Monitoring
South Asia
, June 8, 2007; “Why a United Nations Monitoring Mission Will Benefit Sri
Lanka,” Daily Mirror (Colombo), March 22, 2007.
140 “Cornered Tigers Clinging to HR Lifeline,” Daily News (Colombo), October 16, 2007.
141 “International Sanctions in Sri Lanka,” NoticiasFinancieras, September 21, 2007.
142 “Sri Lanka Human Rights Panel Is Criticized,” New York Times, June 15, 2007; “Lanka
Abuse Probe ‘Set to Fail,’” BBC News, September 21, 2007; “Sri Lankan Human Rights
Advisors Quit,” Associated Press, October 15, 2007.
143 See [http://www.unicef.org/infobycountry/files/Sri_Lanka_DU_7Mar07.pdf].
144 Human Rights Watch press releases at [http://hrw.org/english/docs/2006/11/28/
(continued...)

CRS-35
Internally Displaced Persons. As fighting in the Sri Lanka’s East and
North intensified in 2006 and throughout 2007, several hundred thousand civilians
were displaced from their homes. The great majority of these are Tamils and
Muslims. One report had intense March 2007 battles in Batticaloa creating about
95,000 new internally displaced persons (IDPs) in just one week. Another report had
fighting between government forces and the rebels forcing more than 20,000 Sri
Lankans to flee their homes in the latter months of 2007.145 International human
rights groups have urged all parties to the conflict to protect civilians and allow
access by humanitarian aid agencies, which are often blocked from entering conflict
zones.146 The United Nations counts more than 300,000 people as having remained
in a state of “protracted displacement” for two decades.147
“Disappeared” Persons. As in many ethnic conflicts, Sri Lanka’s civil war
has led to the “disappearance” of many thousands of people. According to one
report, more than 1,000 people are believed to have been “disappeared” during the
year ending June 2007.148 One nongovernmental report acknowledged severe abuses
by the LTTE while also accusing the Colombo government of “using extra-judicial
killings and enforced disappearances as part of a brutal counter-insurgency
campaign” and predicted that such tactics would lead to “further embitterment of the
Tamil population and a further cycle of war, terrorism, and repression.”149
144 (...continued)
slanka14678.htm] and [http://hrw.org/english/docs/2007/01/24/slanka15141.htm]. “HRW
Allegations Baseless - Peace Secretariat,” Daily News (Colombo), January 27, 2007.
145 “UN Warns of Sri Lanka Food Crisis,” BBC News, March 20, 2007;
[http://hrw.org/english/docs/2007/12/07/slanka17509.htm]. At the end of 2007, the United
Nations reported that most of the more than 200,000 refugees from spring fighting around
Batticaloa had been able to return to their homes.
146 See, for example, an Amnesty International press release at [http://web.amnesty.org/
library/print/ENGASA370092007].
147 UNHCR press release at [http://www.unhcr.org/news/NEWS/469789cd4.html].
148 Amnesty International press release at [http://web.amnesty.org/library/print/
ENGASA370132007].
149 International Crisis Group, “Sri Lanka’s Human Rights Crisis,” June 14, 2007, at
[http://www.crisisgroup.org/home/index.cfm?id=4896].

CRS-36
Table 2. Direct U.S. Assistance to Sri Lanka, FY2000-FY2008
(in millions of dollars)
Program
FY
FY
FY
FY
FY
FY
FY
FY
FY
or
2007
2008
2000
2001
2002
2003
2004
2005
2006
Account
(est.)
(req.)
CSH
0.7
0.3
0.3
0.3
0.3
0.3



DA
3.7
3.4
5.2
6.2
4.8
6.8
3.7
3.5
4.0
ESF


3.0
4.0
12.0
9.9
4.0
3.0

FMF




2.5
0.5
1.0
1.0a
0.9a
IMET
0.2
0.3
0.3
0.3
0.6
0.5
0.5
0.5
0.6
INCLE








0.4
NADR



2.4
1.8
2.7
3.6
1.4
1.2
TI






1.7


Subtotal
4.6
4.0
8.7
13.1
21.8
20.7
14.5
9.4
7.0
Food Aidb

13.9
8.7
3.1
3.6
10.8
8.9
14.0

Total
4.6
17.9
17.4
16.2
25.4
31.5
23.4
23.4
7.0
Sources: U.S. Departments of State and Agriculture; U.S. Agency for International Development.
FY2007 amounts are estimates; FY2008 amounts are requested. Columns may not add up due
to rounding.
Abbreviations:
CSH:
Child Survival and Health
DA:
Development Assistance
ESF:
Economic Support Fund
FMF:
Foreign Military Financing
IMET:
International Military Education and Training
INCLE:
International Narcotics Control and Law Enforcement
NADR:
Nonproliferation, Anti-Terrorism, Demining, and Related (mainly humanitarian demining
assistance, but includes modest anti-terrorism assistance to be increased in FY2008)
TI:
Transition Initiatives (temporary development programs for post-conflict states)
a. An amendment to the Consolidated Appropriations Act, 2008 (P.L. 110-161) halted FMF funding,
the issuance of defense export licenses, and the transfer of military equipment or technology to
Sri Lanka unless the Secretary of State certifies to Congress that the Colombo government has
undertaken a series of actions related to human rights protection in Sri Lanka. The provision
does not apply to assistance for maritime and air surveillance and communications.
b. P.L. 480 Title II (grants), Section 416(b) of the Agricultural Act of 1949, as amended (surplus
donations), and Food for Progress. Food aid totals do not include freight costs.

CRS-37
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)