The government of Sri Lanka issues a discussion draft in November 2006, of its 10-year development framework, Mahinda Chintana: Vision for a New Sri Lanka. The framework along with an assessment of tsunami reconstruction and the country’s recent economic performance was the subject of the Sri Lanka Development Forum in January 2007. This report is intended to inform the discussions of the forum. Section I reviews recent economic performance, the status of macroeconomic management and the strategic directions outlined in Mahinda Chintana. Section II of the report addresses the regional disparities in growth and poverty reduction in Sri Lanka. Finally, Section III takes up the question of how Sri Lanka can accelerate growth further by taking advantage of its high levels of educational attainment and tapping global opportunities in the information technology (IT) and knowledge sectors.