Sri Lanka: May 23, 2002

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The government has been spending 5-6 percent of GDP on defense for the last few years, and borrowed nearly $10 billion in the late 1990s to buy weapons and munitions. Despite the ceasefire, defense spending will stay at about five percent of GDP. Despite the war, the economy only contracted (by 1.4 percent) last year, the first economic recession since the British colonial

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