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Sri Lanka The Defense Budget
The intervention of the Indian Peacekeeping Force in 1987
permitted the Sri Lankan government to decrease its defense
outlays for the first time in ten years. Since the United
National Party came to power in 1977, Colombo's efforts to quell
the Tamil insurgency and the radical Sinhalese movement in the
south had demanded an increasing share of the nation's resources;
in the early 1980s, defense expenditures represented only 1
percent of the gross domestic product
(GDP see Glossary). By 1986
this figure had risen to 3.5 percent, and by 1987 it was
estimated at over 5 percent. After a number of supplemental
appropriations, 1987 defense costs were estimated at Rs10.6
billion (for value of the
rupee--see Glossary),
including Rs3.5
billion for the army, Rs1.3 billion for the navy, Rs1.9 billion
for the air force, and Rs1.7 billion for the police
(see Sri Lanka - National Police and Paramilitary Forces
, this ch.). The dramatic growth in
defense outlays took place at a time when Sri Lanka's major
exports were realizing significantly lower prices on the
international market and in 1986, for the first time, the
government was forced to resort to large-scale commercial
borrowing. A continuation of this trend promised to undermine the
government's development efforts and aggravate an already sizable
trade deficit
(see Sri Lanka - Trade
, ch. 3). After the arrival of Indian
troops in July 1987, the Sri Lankan government withdrew most of
its forces from Northern and Eastern provinces, saving
significantly on operational costs. As a result, Sri Lanka
projected a 37 percent cut in army expenditures and a total
military budget of Rs9.2 billion, 13 percent below 1987 levels.
Data as of October 1988
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