Privatisation has been acclaimed in the business sector but remained unpopular with the workforce. Sri Lanka is aiming at achieving newly industrialised country (NIC) status by the year 2000. However ethnic conflict has adversely affected the economy, notably in the areas of foreign investment and tourism. The economy of the north and east has been seriously damaged, with somewhat less effect on the country’s most productive industrial sectors. Indeed the economy was growing strongly through the first half of 1997. Harvests were good, tea production reaching a record, and prices for rubber and coconut high. Tourist numbers were rising and foreign investment grew with 14 new enterprises in manufacturing and infrastructure scheduled for opening through the year. On the negative side, defence spending was high – with 14 aircraft lost in 12 months.

By the end of the 13thC, the Sinhalese were forced to migrate to the south. Malaria set in when the irrigation and drainage systems were destroyed by continuing warfare. The Sinhalese population split into two separate kingdoms at the end of the 15thC, the up-country kingdom of Kandy and the low-country kingdom of Kotte.

In the 16thC the Kotte Kingdom sought protection from new arrivals, the Portuguese; and in 1597 Dharmapala, last of the Kotte kings, bequeathed his throne to the King of Portugal. The Portuguese soon subdued the north and so acquired most of the coastal belt of the country, leaving the central region to the Kingdom of Kandy. From the mid-1630s, the King of Kandy helped the Dutch to dispossess the Portuguese; by 1656 the whole island had become a Dutch possession except for the Kingdom of Kandy. Later the Dutch also seized Kandy’s coastal areas, cutting the Kandyans off from the outside world. British interests developed in the late 18thC when a British army invaded and forced the Dutch to accept its protection. In 1802 the Dutch colony became a British possession. The Kingdom of Kandy was invaded in 1815 and its monarchy was abolished.

Thus the whole island came under British rule.

Plantations growing rubber, coconut and coffee were established in the 19thC. After the coffee plantations were destroyed by a fungus in the 1870s, planters successfully switched to tea. The country soon became the second largest producer of black tea after India. During this period, Indian Tamils were brought into the country as indentured labour for the tea estates.

Constitutional development of Ceylon (as the country was then called) began relatively early, with Executive and Legislative Councils set up in 1833, and the first opening up of the colonial civil service to Ceylonese. Full self-government was achieved in 1946, under a new constitution, with a bicameral legislature (which became a single chamber in 1972) and Ceylon became fully independent and joined the Commonwealth in 1948. The first Prime Minister of independent Ceylon was one of the leaders of the independence movement, DS Senanayake. He was the head of the United National Party (UNP, the former Ceylon National Congress supported by the Tamil Congress). After a split in the UNP in 1951, SWRD Bandaranaike formed the Sri Lanka Freedom Party (SLFP).

In 1956 the SLFP won a decisive electoral victory. The new government, nationalist and non-aligned, immediately began talks with Britain which ended in the return to Ceylon of the Katunayake airfield and the Trincomalee naval base.

In September 1959, Bandaranaike was assassinated. After elections the following year, his widow, Sirimavo Bandaranaike, led the SLFP to victory and became the first woman Prime Minister in the world. In March 1965, the UNP was voted back to power with Dudley Senanayake (son of Sri Lanka’s first Prime Minister) as Prime Minister until 1970, when the elections returned the SLFP.

Sirimavo Bandaranaike’s new government introduced a new constitution in 1972. Sri Lanka, following the lead of India, became a Republic while remaining within the Commonwealth. Under the new constitution, the republic had a unicameral parliament, the National State Assembly, and a non-executive President. The first President was William Gopallawa, formerly Governor-General, and Sirimavo Bandaranaike remained Prime Minister.

Throughout this period, Ceylon’s government developed programmes of welfare and nationalisation. These led to marked improvements in health and literacy, but the economy began to decline. In 1971, there was a serious internal crisis with an uprising of Sinhalese youth, the Janatha Vimukti Peramuna (JVP), or People’s Liberation Front, in protest about widespread unemployment.

The government lost popularity and, at the general election in 1977, the UNP under JR Jayewardene won a sweeping victory. The UNP government encouraged the private sector and (under a new constitution in 1978) opted for a presidential form of government with proportional representation and renamed the country the Democratic Socialist Republic of Sri Lanka. The first Presidential election, held in 1982, was won by Jayewardene. In December 1982, the life of the 1977 Parliament was extended, by a national referendum, for six more years.

Some Indian-supported Tamil groups accepted the arrangement, and elections for the new councils proceeded. However, the Tamil Tigers refused to co-operate, and in 1988 the newly-elected President Ranasinghe Premadasa requested the Indian government to withdraw its troops. The Tigers took control of the vacated areas and fighting continued, government forces contending with the Tamil Tigers in the north and the JVP in the south.

Several political assassinations aggravated the situation. In 1993 the leader of one of the main opposition groups, Lalith Athulathmudali, was shot; a week later President Premadasa was killed by a Tiger suicide bomber. In 1994 UNP presidential candidate and opposition leader Gamini Dissanayake was killed, with over 50 others, by a suicide bomber.

Among the campaign promises of Kumaratunga’s People’s Alliance, was a peaceful settlement of the country’s ethnic problem (see ‘Communal conflict’ above), and a return to rapid economic and social development. However, after four rounds of talks, dialogue was aborted and the Tigers resumed violence. In December 1995, Sri Lankan government forces recaptured Jaffna, but the Tigers continued guerrilla war from the jungle. In January 1996 suicide bombers blew up the Central Bank in Colombo and, in July 1996, they succeeded in taking the Sri Lankan army’s Mullatavu base in the east.

The government has been unable to implement its proposals for a devolution package designed to give the north a measure of self-government, in the form of a quasi-federal structure made up of ‘an indissoluble union of regions’, by the PA’s majority of only one seat in Parliament. For a constitutional amendment of this magnitude, a majority of two-thirds in parliament is required as well as the agreement of the people through a national referendum. The opposition has also been critical of government delays in reducing the power of the presidency, as promised by Kumaratunga – Premadasa had invested the role with executive powers.

However, Kumaratunga regarded the local elections as a test of public support for her presidency and programme for the north. These elections were held in March 1997, and turnout was high. The UNP retained control of many urban centres, including Colombo, but the PA won over 80% of seats across the country.