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Sri Lanka approves 2012 budget, ups defence spending

[AFP, Thursday, 22 December 2011 10:05 No Comment]

Sri Lanka’s parliament on Wednesday approved the country’s 2012 budget, officials said, boosting spending on defence despite the end of the island?s decades-long Tamil separatist war in May 2009.

The annual budget for 2012 unveiled last month by President Mahinda Rajapakse, who is also the finance minister, was passed with a two-thirds majority.

The budget increased defence spending to 230 billion rupees ($2.1 billion) from 215 billion rupees in 2011.

Officials said they need to keep defence spending high to settle loans on military hardware purchased to fight the Tamil Tigers during nearly four decades of ethnic conflict that ended in 2009.

Rajapakse devalued the currency by three percent during last month’s budget presentation and said he was keen to reduce imports of goods that could be easily manufactured on the island.

He offered tax breaks to small industries to make medical supplies and food supplements to save millions of dollars spent on imports.

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