Photo: a beach in Colombo, capital of Sri Lanka (Xinhua).
Sri Lanka, formerly Ceylon, island country lying in the Indian Ocean and separated from peninsular India by the Palk Strait.
Proximity to the Indian subcontinent has facilitated close cultural interaction between Sri Lanka and India from ancient times. At a crossroads of maritime routes traversing the Indian Ocean, Sri Lanka has also been exposed to cultural influences from other Asian civilizations. Ancient Greek geographers called it Taprobane. Arabs referred to it as Serendib. Later European mapmakers called it Ceylon, a name still used occasionally for trade purposes. It officially became Sri Lanka in 1972.
The distinctive civilization of Sri Lanka, with roots that can be traced back to the 6th century BCE, is characterized by two factors: the preservation of Theravada Buddhism (the orthodox school of Buddhism having its literary traditions in the Pali language) and the development over two millennia of a sophisticated system of irrigation in the drier parts of the country. This civilization was further enriched by the influences of Hinduism and Islam.
In 1948, after nearly 150 years of British rule, Sri Lanka became an independent country, and it was admitted to the United Nations seven years later. The country is a member of the Commonwealth and the South Asian Association for Regional Cooperation.
Colombo, which emerged as the main urban centre during British rule, remains the executive and judicial capital of Sri Lanka; Sri Jayewardenepura Kotte, a Colombo suburb, is the legislative capital. For administrative purposes, the country has been divided into nine provinces and subdivided into 25 districts.
Sri Lanka is densely populated. The majority of its people are poor, live in rural areas, and depend on agriculture for their livelihood. A physical environment of wide-ranging diversity makes Sri Lanka one of the world's most scenic countries. As the home of several ethnic groups, each with its own cultural heritage, Sri Lanka also has a highly varied cultural landscape.
Ethnic, religious, and linguistic distinctions in Sri Lanka are essentially the same. Three ethnic groups—Sinhalese, Tamil, and Muslim—make up more than 99 percent of the country's population, with the Sinhalese alone accounting for nearly three-fourths of the people. The Tamil segment comprises two groups—Sri Lankan Tamils (long-settled descendants from southeastern India) and Indian Tamils (recent immigrants from southeastern India, most of whom were migrant workers brought to Sri Lanka under British rule). Slightly more than one-eighth of the total population belongs to the former group. Muslims, who trace their origin back to Arab traders of the 8th century, account for about 7.5 percent of the population. Burghers (a community of mixed European descent), Parsis (immigrants from western India), and Veddas (regarded as the aboriginal inhabitants of the country) total less than 1 percent of the population.
The Sinhalese constitute the majority in the southern, western, central, and north-central parts of the country. In the rural areas of the Wet Zone lowlands, they account for more than 95 percent of the population. The foremost concentration of the Sri Lankan Tamils lies in the Jaffna Peninsula and in the adjacent districts of the northern lowlands. Smaller agglomerations of this group are also found along the eastern littoral where their settlements are juxtaposed with those of the Muslims. The main Muslim concentrations occur in the eastern lowlands. In other areas, such as Colombo, Kandy, Puttalam, and Gampaha, Muslims form a small but important segment of the urban and suburban population. The Indian Tamils, the vast majority of whom are plantation workers, live in large numbers in the higher areas of the Central Highlands.
Language and religion
Among the principal ethnic groups, language and religion determine identity. While the mother tongue of the Sinhalese is Sinhala—an Indo-Aryan language—the Tamils speak the Dravidian language of Tamil. Again, while more than 90 percent of the Sinhalese are Buddhists, both Sri Lankan and Indian Tamils are overwhelmingly Hindu. The Muslims—adherents of Islam—usually speak Tamil. Christianity draws its followers (about 7 percent of the population) from among the Sinhalese, Tamil, and Burgher communities.
The economy that evolved in Sri Lanka under British rule consisted of a modern sector, whose main component was plantation agriculture, and a traditional sector comprising subsistence agriculture. Manufacturing was an insignificant segment of the economy. Banking and commerce were, for the most part, ancillary to plantation agriculture. Nearly all foreign earnings were derived from the three staple plantation crops—tea, rubber, and coconut. The country depended on imports for nearly three-fourths of its food requirements and almost all of its manufactured goods.
During the first three decades after independence, development policy focused on two themes, equity through social welfare and substitution of imports with local products. Government price subsidies on food, statutory price controls on consumer goods, and the provision of free education and health services by the government were the principal measures guided by equity considerations. Stimulating local production to cater to an increasing share of domestic consumption and imposing diverse restrictions on imports were the main elements of the import substitution policy. The pursuance of these policies required increased government intervention in the economy.
The social welfare policies achieved a measure of success in lowering mortality rates and in increasing life expectancy and literacy rates to levels seldom matched by other developing countries. However, the restrictive impact that the policies had on domestic capital accumulation and investment retarded economic growth, leading not only to soaring unemployment but also to the persistence of low incomes. The achievements of the import substitution policies were even less tangible, except perhaps in the production of rice and subsidiary food crops. Industry, starved of imported inputs and domestic investment and often mismanaged under state control, failed either to grow or to achieve acceptable standards of product quality or to remain commercially viable. The policy focus on import substitution also meant the relative neglect of plantation agriculture, which, nevertheless, had to carry a heavy burden of taxation.
After the late 1970s there was a shift away from the earlier policies toward ones aimed at liberalizing the economy from excessive government controls. The new policies were designed to accelerate economic growth by stimulating private investment and to increase the country’s foreign earnings by promoting export-oriented economic activities.
The liberalization policies succeeded initially. Stimulated by a substantially enhanced level of foreign aid and investment, the economy became buoyant, recording, up to about 1984, real growth rates of about 6 percent per annum. Thereafter, however, there was a marked deceleration of growth, caused mainly by the disruptive effects of the ethnic conflict on economic activity.
In Sri Lanka the resource potential in minerals such as gemstones, graphite, ilmenite, iron ore, limestone, quartz, mica, industrial clays, and salt is large. Small but commercially extractable amounts of nonferrous metals and minerals like titanium, monazite, and zircon are contained in the beach sands of a few localities. Of fossil fuels, the only known resource is the low-grade peat found in a swampy stretch along the west coast.
Agriculture, forestry, and fishing
Rice production is the most important economic activity of Sri Lanka's peasantry. Since independence there has been an impressive increase of paddy production. The factors that contributed to this were, first, the opening of 248,000 acres for paddy in the colonization schemes of the Dry Zone (including those of the Mahaweli Development Program launched in the early 1970s) and, second, the adoption of yield-increasing technology. Other important changes in peasant agriculture during postindependence times included diversification of production as well as increased commercialization of production transactions.
In terms of product value, contribution to export earnings, and the size of the work force, plantation agriculture has continued to figure prominently in the economy of Sri Lanka; however, its long-term trend has been one of relative decline.
Tea, the preeminent crop of the plantation sector, grows in many parts of the Wet Zone. Crops that are concentrated at higher altitudes supply some of the best-quality black teas to the world market. The main rubber-growing area is the ridge-and-valley country of the Wet Zone interior. Coconut is grown mainly in the hinterland of the western seaboard.
Plantations represent a segment of the economy that has failed to make significant advances since the time of independence. This is largely attributable to the persistently low rates of investment in this sector. Sri Lanka’s land reforms of 1972–75, through which the government acquired the ownership of about 60 percent of the total tea acreage and 30 percent of the rubber acreage, also contributed to the decline in productivity and commercial viability of the plantation sector.
Forestry and fishing are relatively insignificant components of the economy. Forests had been cleared for settlement and agriculture at an estimated rate of 104,000 acres annually between 1956 and 1981. Extraction of timber and fuelwood from forests is constrained by environmental conservation. In fisheries, the resource potential is abundant, particularly on the north and northwest coasts. Constraints on development are largely technological. Fishing, however, is an important occupation for the people living along the coastal fringe.
Sri Lanka's mineral-extraction industries include mining of gemstones and graphite; excavation of beach sands containing ilmenite and monazite; and quarrying kaolin, apatite, quartz sand, clay, and salt. Among them, gem mining is the most important, producing high-value gemstones such as sapphire, ruby, and topaz, in addition to a variety of semiprecious stones, most of which reach foreign markets. Graphite, ilmenite, and monazite, exported in semiprocessed form, contribute on a small scale to Sri Lanka’s foreign earnings. The other minerals are used locally as raw materials in the manufacturing and construction industries.
Until the late 1970s, manufacturing in Sri Lanka was dominated by several large-scale enterprises developed within the state sector to produce goods such as cement, fabricated steel, ceramics, fuel and lubricant oils, paper, leather, tires, textiles, sugar, and liquor. Only a few factory-based industries, most of them producing light consumer goods, were in private hands.
The liberalization policies adopted in 1977 brought significant changes. Some state-owned industrial enterprises were privatized. Fiscal and other concessions were offered to prospective private investors, particularly to attract foreign investments. These included a package of incentives provided at several investment promotion zones. The low wage rates prevalent in the country were an added attraction to the industrial ventures that responded to these incentives. By the early 1990s new industries employed a work force of more than 70,000 and had nearly equaled tea in gross export earnings. Many of them, however, depend on imported inputs and involve considerable repatriation of profits. Hence, they generate relatively low net returns to the economy.
Among the industries that flourished under the liberalization policies was tourism, which, however, remains highly sensitive to political instability. The expansion of tourism, along with the massive irrigation and housing projects undertaken since 1978, have contributed substantially to the growth of the construction industry.
Banking and the issue of currency are controlled by the Central Bank of Sri Lanka. Until the late 1970s, commercial banking was the near-exclusive monopoly of two state-run banks, the Bank of Ceylon and the People’s Bank. The postliberalization period allowed the establishment of several private commercial banks and an overall expansion in banking, particularly with the government’s decision in 1979 to allow foreign banks to open branches in Sri Lanka. These same trends were replicated in other spheres of commerce such as insurance and wholesale trade in imported goods. The increased participation of the private sector in industry and commerce led to the emergence of a small but vibrant stock market in Colombo.
Changes in agriculture and industry brought about a decline in the relative importance of plantation products among the exports and of food commodities among the imports. This, however, has not reduced the adverse balance in foreign trade from which the economy continues to suffer. Much of the trade deficit results from transactions with the industrialized countries of Asia, including India, China, and Japan, from which imported manufactured goods originate. Singapore and the United Arab Emirates are also major sources of imports. The United States, the United Kingdom, Italy, and Germany are all important export destinations.
Road and rail transport accounts for an overwhelmingly large share of the movement of people and commodities within Sri Lanka. In rail transport the government holds a monopoly. Passenger transport by road is shared by the government and the private sector. The private automobile remains a luxury that only the affluent can afford. The bicycle and the bullock cart are important modes of conveyance, especially in rual areas.
SriLankan Airlines (formerly Air Lanka), the national airline, operates regularly between its base at Colombo and dozens of major cities in Asia, Europe, and North America. The seaport of Colombo handles the bulk of Sri Lanka’s shipping, including some transshipments of the Indian ports. International cargo is also handled by the ports at Trincomalee and Galle.
The government controls the educational system and offers free education from primary schools through university levels and in certain professional and technical fields. The country has a relatively well-developed system of primary and secondary education with high rates of student enrollment in most parts of the country. More than 85 percent of the population is literate, giving Sir Lanka one of the highest literacy rates among developing countries. Tertiary education (including universities), however, caters to only the small proportion that completed secondary education. Formal higher education in the country has a strong academic bias, making the large majority of university graduates suitable for only a limited number of white-collar jobs; this has caused widespread frustration, especially among the educated unemployed youth. Major universities include the University of Ruhuna (1978); the University of Jaffna (1974); and the University of Kelaniya and the University of Sri Jayewardenepura, both of which were centres of Buddhist learning until they were elevated to university status in 1959.
Health and welfare
In Sri Lanka, government-sponsored health services are free and are delivered through an extensive network of hospitals and dispensaries. Several special campaigns in preventive health care, and a program of family planning—all based on Western medical technology—have significantly improved health conditions in Sri Lanka. These services coexist with a smaller private sector in Western medicine. Several indigenous traditions of curative health care, some of which receive government sponsorship, remain largely in the private sector but play an important role in Sri Lankan medical practices. Practitioners of traditional medicine (ayurveda) outnumber Western-trained physicians. Major health problems include malnutrition and various gastrointestinal infectious diseases.
Sri Lanka is a land of great cultural diversity. Religion pervades many aspects of life and constitutes a basic element of this diversity. Buddhist and Hindu temples, as well as mosques and churches, with their own colourful rituals, are the most readily visible features of the cultural landscape. Varying degrees of colonial impact, modernizing influences, and wealth and income add other shades to the cultural mosaic.
Many internationally recognized sports have found participants in Sri Lanka. The most popular among them are volleyball, cricket, football (soccer), bicycle racing, and various water sports.
The sites of ancient cities and other religiocultural centres such as Anuradhapura, Sigiriya, Polonnaruwa, Kandy, Kataragama, and Adam’s Peak attract thousands of tourists and pilgrims.