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Some countries are not supported because of the high rates of fraud. PayPal are just being selective so they don't have lots of fraud problems, there may be some now, but including other countries not currently supported would open can of worms.
I think that they are trying to expand into other countries though, it will take some time until they can find ways to stop certain events from happening a lot though.
As Andreas Bard said, it supports my country and that's all that really matters too me.
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