Background: The first Sinhalese arrived in Sri Lanka late in the 6th century B.C. probably from northern India. Buddhism was introduced in about the mid-third century B.C., and a great civilization developed at the cities of Anuradhapura (kingdom from circa 200 B.C. to circa A.D. 1000) and Polonnaruwa (from about 1070 to 1200).

In the 14th century, a south Indian dynasty established a Tamil kingdom in northern Sri Lanka. The coastal areas of the island were controlled by the Portuguese in the 16th century and by the Dutch in the 17th century. The island was ceded to the British in 1796, became a crown colony in 1802, and was united under British rule by 1815. As Ceylon, it became independent in 1948; its name was changed to Sri Lanka in 1972.

Tensions between the Sinhalese majority and Tamil separatists erupted into war in 1983. After two decades of fighting, the government and Liberation Tigers of Tamil Eelam (LTTE) formalized a cease-fire in February 2002 with Norway brokering peace negotiations. Violence between the LTTE and government forces intensified in 2006 and the government regained control of the Eastern Province in 2007. In May 2009, the government announced that its military had finally defeated the remnants of the LTTE and that its leader, Velupillai Prabhakaran, had been killed.

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

Total area: 65,610 sq km

Climate: Tropical climate. Upland areas are cooler and more temperate, and coastal areas are cooled by sea breezes. There are two monsoons, which occur May to July and December to January.

Terrain: Mostly low, flat to rolling plain; mountains in south-central interior

Population: 21,283,913

Ethnic groups: Sinhalese 73.8%, Sri Lankan Moors 7.2%, Indian Tamil 4.6%, Sri Lankan Tamil 3.9%, other 0.5%, unspecified 10% (2001 census provisional data)

Religions: Buddhist 69.1%, Muslim 7.6%, Hindu 7.1%, Christian 6.2%, unspecified 10% (2001 census provisional data)

Languages: Sinhala (official and national language) 74%, Tamil (national language) 18%, other 8% Note: English is commonly used in government and is spoken competently by about 10% of the population

Government Type: Republic

Executive Branch:

Chief of State: President Mahinda Percy Rajapaksa (since 19 November 2005); note - the president is both the chief of state and head of government; Dissanayake Mudiyanselage Jayaratne holds the largely ceremonial title of prime minister (since 21 April 2010)

Head of Government: President Mahinda Percy Rajapaksa (since 19 November 2005)

Cabinet: Cabinet appointed by the president in consultation with the prime minister

Elections: President elected by popular vote for a six-year term (two-term limit); election last held on 26 January 2010 (next to be held in 2016)

Election results: Mahinda Rajapaksa reelected president for second term; percent of vote - Mahinda Rajapaksa 57.88%, Sarath Fonseka 40.15%, other 1.97%

Legislative Branch: Unicameral Parliament (225 seats; members elected by popular vote on the basis of an open-list, proportional representation system by electoral district to serve six-year terms)

Elections: Last held on 8 April 2010 with a repoll in two electorates held on 20 April 2010 (next to be held in April 2016)

Election results: Percent of vote by alliance or party - United People's Freedom Alliance 60.93%, United National Party 29.34%, Democratic National Alliance 5.49%, Tamil National Alliance 2.9%, other 1.94%; seats by alliance or party - United People's Freedom Alliance 144, United National Party 60, Tamil National Alliance 14, Democratic National Alliance 7

Judicial Branch: Supreme Court; Court of Appeals; judges for both courts are appointed by the president

Political Parties and Leaders: All Ceylon Tamil Congress or ACTC [G.PONNAMBALAM]; Ceylon Workers Congress or CWC [Arumugam THONDAMAN]; Communist Party or CP [D. GUNASEKERA]; Democratic People's Front [Mano GANESAN]; Eelam People's Democratic Party or EPDP [Douglas DEVANANDA]; Eelam People's Revolutionary Liberation Front or EPRLF [Suresh PREMACHANDRAN]; Janatha Vimukthi Peramuna or JVP [Somawansa AMARASINGHE]; Lanka Sama Samaja Party or LSSP [Tissa VITHARANA]; Mahajana Eksath Peramuna (People's United Front) or MEP [D. GUNAWARDENE]; National Freedom Front [Wimal WEERAWANSA]; National Heritage Party or JHU [Ellawala METHANANDA]; National Unity Alliance or NUA [Ferial ASHRAFF]; People's Liberation Organization of Tamil Eelam or PLOTE [D. SIDHARTHAN]; Sri Lanka Freedom Party or SLFP [Mahinda RAJAPAKSA]; Sri Lanka Muslim Congress or SLMC [Rauff HAKEEM]; Tamil Eelam Liberation Organization or TELO [Selvam ADAIKALANATHAN]); Tamil Makkal Viduthalai Pulikal or TMVP [Chandrakanthan SIVANESATHURAI, aka "PILLAIYAN"] (paramilitary breakaway from LTTE operating as a political party); Tamil National Alliance or TNA [R. SAMPANTHAN]; Tamil United Liberation Front or TULF [V. ANANDASANGAREE]; United National Party or UNP [Ranil WICKREMASINGHE]; Up-country People's Front or UPF

Economy | overview

In 1977, Colombo abandoned statist- and import substitution-policies for more market- and export-oriented policies, including encouragement of foreign investment. Sri Lanka suffered through a brutal civil war from 1983 to 2009. Despite the war, Sri Lanka saw GDP growth average nearly 5% in the last 10 years. Government spending on development and fighting the LTTE drove GDP growth to around 6-7% per year in 2006-08. Growth was 3.5% in 2009, still high despite the world recession. Sri Lanka's most dynamic sectors are now food processing, textiles and apparel, food and beverages, port construction, telecommunications, and insurance and banking. About 1.5 million Sri Lankans work abroad, 90% of them in the Middle East.

They send home more than $3 billion a year. President RAJAPAKSA's reelection in 2010 means that the Government of Sri Lanka will likely continue its more statist economic approach, that seeks to reduce poverty by steering investment to disadvantaged areas, developing small and medium enterprises, promoting agriculture, and expanding the already enormous civil service. The end of the 26-year conflict with the LTTE has opened the door for reconstruction and development projects in the north and east. Funding these projects will be difficult, as the government already is faced with high debt interest payments, a bloated civil service, and high budget deficits.

The 2008-09 global financial crisis and recession exposed Sri Lanka's economic vulnerabilities and nearly caused a balance of payments crisis, which was alleviated by a $2.6 billion IMF standby agreement in July 2009. But the end of the civil war and the IMF loan restored investors' confidence. The Sri Lankan stock market gained over 100% in 2009, one of the best performing markets in the world. Official foreign reserves improved to more than $5 billion by November 2009, providing over 6 months of imports cover.