Solomon IslandsThe bulk of the population depends on agriculture,fishing, and forestry for at least part of its livelihood. Mostmanufactured goods and petroleum products must be imported. Theislands are rich in undeveloped mineral resources such as lead,zinc, nickel, and gold. Prior to the arrival of RAMSI, severe ethnicviolence, the closing of key businesses, and an empty governmenttreasury culminated in economic collapse. RAMSI's efforts to restorelaw and order and economic stability have led to modest growth asthe economy rebuilds.
SomaliaDespite the lack of effective national governance, Somaliahas maintained a healthy informal economy, largely based onlivestock, remittance/money transfer companies, andtelecommunications. Agriculture is the most important sector withlivestock normally accounting for about 40% of GDP and more than 50%of export earnings. Nomads and semi-pastoralists, who are dependentupon livestock for their livelihood, make up a large portion of thepopulation. Livestock, hides, fish, charcoal, and bananas areSomalia's principal exports, while sugar, sorghum, corn, qat, andmachined goods are the principal imports. Somalia's small industrialsector, based on the processing of agricultural products, haslargely been looted and the machinery sold as scrap metal. Somalia'sservice sector also has grown. Telecommunication firms providewireless services in most major cities and offer the lowestinternational call rates on the continent. In the absence of aformal banking sector, money transfer/remittance services havesprouted throughout the country, handling up to $1.6 billion inremittances annually. Mogadishu's main market offers a variety ofgoods from food to the newest electronic gadgets. Hotels continue tooperate and are supported with private-security militias. Due toarmed attacks on and threats to humanitarian aid workers, the WorldFood Programme partially suspended its operations in southernSomalia in early January 2010 pending improvement in the securitysituation. Somalia's arrears to the IMF have continued to grow.
South AfricaSouth Africa is a middle-income, emerging market withan abundant supply of natural resources; well-developed financial,legal, communications, energy, and transport sectors; a stockexchange that is the 18th largest in the world; and moderninfrastructure supporting a relatively efficient distribution ofgoods to major urban centers throughout the region. At the end of2007, South Africa began to experience an electricity crisis. Statepower supplier Eskom encountered problems with aged plants,necessitating "load-shedding" cuts to residents and businesses inthe major cities. Growth was robust from 2004 to 2007 as SouthAfrica reaped the benefits of macroeconomic stability and a globalcommodities boom, but began to slow in the second half of 2007 dueto the electricity crisis and the subsequent global financialcrisis' impact on commodity prices and demand. GDP fell nearly 2% in2009. Unemployment remains high and outdated infrastructure hasconstrained growth. Daunting economic problems remain from theapartheid era - especially poverty, lack of economic empowermentamong the disadvantaged groups, and a shortage of publictransportation. South Africa's former economic policy was fiscallyconservative, focusing on controlling inflation, and attaining abudget surplus. The current government largely follows the sameprudent policies, but must contend with the impact of the globalcrisis and is facing growing pressure from special interest groupsto use state-owned enterprises to deliver basic services tolow-income areas and to increase job growth. More than one-quarterof South Africa's population currently receives social grants.
South Georgia and South Sandwich Islands Some fishing takes place in adjacent waters. There is a potential source of income from harvesting finfish and krill. The islands receive income from postage stamps produced in the UK, sale of fishing licenses, and harbor and landing fees from tourist vessels. Tourism from specialized cruise ships is increasing rapidly.
Southern OceanFisheries in 2006-07 landed 126,976 metric tons, ofwhich 82% (104,586 tons) was krill (Euphausia superba) and 9.5%(12,027 tons) Patagonian toothfish (Dissostichus eleginoides - alsoknown as Chilean sea bass), compared to 127,910 tons in 2005-06 ofwhich 83% (106,591 tons) was krill and 9.7% (12,396 tons) Patagoniantoothfish (estimated fishing from the area covered by the Conventionof the Conservation of Antarctic Marine Living Resources (CCAMLR),which extends slightly beyond the Southern Ocean area).International agreements were adopted in late 1999 to reduceillegal, unreported, and unregulated fishing, which in the 2000-01season landed, by one estimate, 8,376 metric tons of Patagonian andAntarctic toothfish. In the 2007-08 Antarctic summer, 45,213tourists visited the Southern Ocean, compared to 35,552 in2006-2007, and 29,799 in 2005-2006 (estimates provided to theAntarctic Treaty by the International Association of Antarctica TourOperators (IAATO), and does not include passengers on overflightsand those flying directly in and out of Antarctica).
SpainSpain's mixed capitalist economy is the 12th largest in theworld, and its per capita income roughly matches that of Germany andFrance. However, after almost 15 years of above average GDP growth,the Spanish economy began to slow in late 2007 and entered into arecession in the second quarter of 2008. GDP contracted by 3.7% in2009, ending a 16-year growth trend, and by another 0.4% in 2010,making Spain the last major economy to emerge from the globalrecession. The reversal in Spain's economic growth reflects asignificant decline in the construction sector, an oversupply ofhousing, falling consumer spending, and slumping exports. Governmentefforts to boost the economy through stimulus spending, extendedunemployment benefits, and loan guarantees did not prevent a sharprise in the unemployment rate, which rose from a low of about 8% in2007 to 20% in 2010. The government budget deficit worsened from3.8% of GDP in 2008 to about 9.7% of GDP in 2010, more than threetimes the euro-zone limit. Spain's large budget deficit and pooreconomic growth prospects have made it vulnerable to financialcontagion from other highly-indebted euro zone members despite thegovernment's efforts to cut spending, privatize industries, andboost competitiveness through labor market reforms. Spanish banks'high exposure to the collapsed domestic construction and real estatemarket also poses a continued risk for the sector. The governmentintervened in one regional savings bank in 2009, and investorsremain concerned that Madrid may need to bail out more troubledbanks. The Bank of Spain, however, is seeking to boost confidence inthe financial sector by pressuring banks to come clean about theirlosses and consolidate into stronger groups.
Spratly IslandsEconomic activity is limited to commercial fishing.The proximity to nearby oil- and gas-producing sedimentary basinssuggests the potential for oil and gas deposits, but the region islargely unexplored. There are no reliable estimates of potentialreserves. Commercial exploitation has yet to be developed.
Sri LankaSri Lanka is engaging in large-scale reconstruction anddevelopment projects following the end of the 26-year conflict withthe LTTE, including increasing electricity access and rebuilding itsroad and rail network. Additionally, Sri Lanka seeks to reducepoverty by using a combination of state directed policies andprivate investment promotion to spur growth in disadvantaged areas,develop small and medium enterprises, and promote increasedagriculture, High levels of government funding may be difficult, asthe government already is faced with high debt interest payments, abloated civil service, and historically high budget deficits. The2008-09 global financial crisis and recession exposed Sri Lanka'seconomic vulnerabilities and nearly caused a balance of paymentscrisis, which was alleviated by a $2.6 billion IMF standby agreementin July 2009. The end of the civil war and the IMF loan, however,have largely restored investors' confidence, reflected in part bythe Sri Lankan stock market's recognition as one of the bestperforming markets in the world. Sri Lankan growth rates averagednearly 5% in during the war, but increased government spending ondevelopment and fighting the LTTE in the final years spurred GDPgrowth to around 6-7% per year in 2006-08. After experiencing 3.5%growth in 2009, Sri Lanka's economy is poised to achieve high growthrates in the postwar period.
SudanSince 1997, Sudan has been working with the IMF to implementmacroeconomic reforms including a managed float of the exchange rateand a large reserve of foreign exchange. A new currency, theSudanese Pound, was introduced in January 2007 at an initialexchange rate of $1.00 equals 2 Sudanese Pounds. Sudan beganexporting crude oil in the last quarter of 1999 and the economyboomed on the back of increases in oil production, high oil prices,and significant inflows of foreign direct investment until thesecond half of 2008. The Darfur conflict, the aftermath of twodecades of civil war in the south, the lack of basic infrastructurein large areas, and a reliance by much of the population onsubsistence agriculture ensure much of the population will remain ator below the poverty line for years to come despite rapid rises inaverage per capita income. Sudan's real GDP expanded by 5.2% during2010, an improvement over 2009's 4.2% growth but significantly belowthe more that 10% per year growth experienced prior to the globalfinancial crisis in 2006 and 2007. While the oil sector continues todrive growth, services and utilities play an increasingly importantrole in the economy with agriculture production remaining importantas it employs 80% of the work force and contributes a third of GDP.In the lead up to the referendum on southern secession, scheduled inJanuary 2011, Sudan saw its currency depreciate considerably on theblack market with the Central Bank's official rate also losing valueas the Sudanese people started to hoard foreign currency. TheCentral Bank of Sudan intervened heavily in the currency market todefend the value of the pound and the Sudanese government introduceda number of measures to restrain excess local demand for hardcurrency, but uncertainty ahead of the referendum has meant thatforeign exchange remained in heavy demand as 2010 came to a close.
SurinameThe economy is dominated by the mining industry, withexports of alumina, gold, and oil accounting for about 85% ofexports and 25% of government revenues, making the economy highlyvulnerable to mineral price volatility. In 2000, the government ofRonald VENETIAAN, returned to office and inherited an economy withinflation of over 100% and a growing fiscal deficit. He quicklyimplemented an austerity program, raised taxes, attempted to controlspending, and tamed inflation. Economic growth reached about 6% in2007 and 2008, owing to sizeable foreign investment in mining andoil. Suriname has received aid for projects in the bauxite and goldmining sectors from Netherlands, Belgium, and the EuropeanDevelopment Fund. The economy contracted in 2009, however, asinvestment waned and the country earned less from its commodityexports when global prices for most commodities fell. Trade pickedup, boosting Suriname's economic growth in 2010, but thegovernment's budget remained strained, with increased socialspending during last year's election. Suriname's economic prospectsfor the medium term will depend on continued commitment toresponsible monetary and fiscal policies and to the introduction ofstructural reforms to liberalize markets and promote competition.
SvalbardCoal mining, tourism, and international research are themajor revenue sources on Svalbard. Coal mining is the dominanteconomic activity and a treaty of 9 February 1920 gave the 41signatories equal rights to exploit mineral deposits, subject toNorwegian regulation. Although US, UK, Dutch, and Swedish coalcompanies have mined in the past, the only companies still engagingin this are Norwegian and Russian. The settlements on Svalbard areessentially company towns. The Norwegian state-owned coal companyemploys nearly 60% of the Norwegian population on the island, runsmany of the local services, and provides most of the localinfrastructure. There is also some hunting of seal, reindeer, andfox.
SwazilandIn this small, landlocked economy, subsistence agricultureoccupies approximately 70% of the population. The manufacturingsector has diversified since the mid-1980s. Sugar and wood pulpremain important foreign exchange earners. In 2007, the sugarindustry increased efficiency and diversification efforts, inresponse to a 17% decline in EU sugar prices. Mining has declined inimportance in recent years with only coal and quarry stone minesremaining active. Surrounded by South Africa, except for a shortborder with Mozambique, Swaziland is heavily dependent on SouthAfrica from which it receives more than nine-tenths of its importsand to which it sends 60% of its exports. Swaziland's currency ispegged to the South African rand, subsuming Swaziland's monetarypolicy to South Africa. Customs duties from the Southern AfricanCustoms Union (SACU) account for two-thirds of Swaziland'sgovernment revenues, and worker remittances from South Africasubstantially supplement domestically earned income. Customsrevenues plummeted during the global economic crisis and Swazilandhas appealed to SACU for assistance. With an estimated 40%unemployment rate, Swaziland's need to increase the number and sizeof small and medium enterprises and attract foreign directinvestment is acute. Overgrazing, soil depletion, drought, andsometimes floods persist as problems for the future. More thanone-fourth of the population needed emergency food aid in 2006-07because of drought, and more than one-quarter of the adultpopulation has been infected by HIV/AIDS.
SwedenAided by peace and neutrality for the whole of the 20thcentury, Sweden has achieved an enviable standard of living under amixed system of high-tech capitalism and extensive welfare benefits.It has a modern distribution system, excellent internal and externalcommunications, and a skilled labor force. In September 2003,Swedish voters turned down entry into the euro system concernedabout the impact on the economy and sovereignty. Timber, hydropower,and iron ore constitute the resource base of an economy heavilyoriented toward foreign trade. Privately owned firms account forabout 90% of industrial output, of which the engineering sectoraccounts for 50% of output and exports. Agriculture accounts forlittle more than 1% of GDP and of employment. Until 2008, Sweden wasin the midst of a sustained economic upswing, boosted by increaseddomestic demand and strong exports. This and robust finances offeredthe center-right government considerable scope to implement itsreform program aimed at increasing employment, reducing welfaredependence, and streamlining the state's role in the economy.Despite strong finances and underlying fundamentals, the Swedisheconomy slid into recession in the third quarter of 2008 and growthcontinued downward in 2009 as deteriorating global conditionsreduced export demand and consumption. Strong exports of commoditiesand a return to profitability by Sweden's banking sector drove thestrong rebound in 2010.
SwitzerlandSwitzerland is a peaceful, prosperous, and modern marketeconomy with low unemployment, a highly skilled labor force, and aper capita GDP among the highest in the world. Switzerland's economybenefits from a highly developed service sector, led by financialservices, and a manufacturing industry that specializes inhigh-technology, knowledge-based production. The Swiss have broughttheir economic practices largely into conformity with the EU's, inorder to enhance their international competitiveness, but some tradeprotectionism remains, particularly for its small agriculturalsector. The global financial crisis and resulting economic downturnput Switzerland in a recession in 2009 as global export demandstalled. The Swiss National Bank during this period effectivelyimplemented a zero-interest rate policy in a bid to boost theeconomy and prevent appreciation of the franc. Switzerland's economygrew 2.8% in 2010, when Bern implemented a third fiscal stimulusprogram, but its prized banking sector has recently facedsignificant challenges. The country's largest banks suffered sizablelosses in 2008-09, leading its largest bank to accept a governmentrescue deal in late 2008. Switzerland has also come under increasingpressure from individual neighboring countries, the EU, the US, andinternational institutions to reform its banking secrecy laws.Consequently, the government agreed to conform to OECD regulationson administrative assistance in tax matters, including tax evasion.The government has renegotiated its double taxation agreements withnumerous countries, including the US, to incorporate the OECDstandard, and it is working with Germany and the UK to resolveoutsanding issues, particularly the possibility of imposing taxes onbank deposits held by foreigners. Parliament passed the first fivedouble-taxation agreements, including that with the US, in March2010, but the agreements are subject to public referendum. In 2009,Swiss financial regulators ordered the country's largest bank toreveal at Washington's behest the names of US account-holderssuspected of using the bank to commit tax fraud. These steps willhave a lasting impact on Switzerland's long history of bank secrecy.
SyriaSyrian economic growth slowed to 1.8% in 2009 as the globaleconomic crisis affected oil prices and the economies of Syria's keyexport partners and sources of investment. Damascus has implementedmodest economic reforms in the past few years, including cuttinglending interest rates, opening private banks, consolidating all ofthe multiple exchange rates, raising prices on some subsidizeditems, most notably gasoline and cement, and establishing theDamascus Stock Exchange - which began operations in 2009. Inaddition, President ASAD signed legislative decrees to encouragecorporate ownership reform, and to allow the Central Bank to issueTreasury bills and bonds for government debt. Nevertheless, theeconomy remains highly controlled by the government. Long-runeconomic constraints include declining oil production, highunemployment, rising budget deficits, and increasing pressure onwater supplies caused by heavy use in agriculture, rapid populationgrowth, industrial expansion, and water pollution.
Taiwan Taiwan has a dynamic capitalist economy with gradually decreasing government guidance of investment and foreign trade. In keeping with this trend, some large, state-owned banks and industrial firms have been privatized. Exports, led by electronics and machinery, generate about 70% of Taiwan's GDP growth, and have provided the primary impetus for economic development. This heavy dependence on exports makes the economy vulnerable to downturns in world demand. In 2009, Taiwan's GDP fell by 1.9%, due primarily to a 20% year-on-year decline in exports. GDP grew more than 8% in 2010, as exports returned to the level of previous years. Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are major long-term challenges. Free trade agreements have proliferated in East Asia over the past several years, but so far Taiwan has been excluded from this greater economic integration, largely for reasons of diplomacy. Taiwan's birth rate of only 1.2 child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 accounting for 10.8% of the island's total population as of the end of 2009. The island runs a large trade surplus, and its foreign reserves are the world's fourth largest, behind China, Japan, and Russia. Since President MA Ying-jeou took office in May 2008, cross-Strait economic ties have increased significantly. Since 2005 China has overtaken the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Taipei has focused much of its economic recovery effort on improving cross-Strait economic integration. Three financial memorandums of understanding, covering banking, securities, and insurance, took effect in mid-January 2010, opening the island to greater investments from the Mainland's financial firms and institutional investors, and providing new opportunities for Taiwan financial firms to operate in China. Taiwan and the mainland in June 2010 signed the landmark Economic Cooperation Framework Agreement (ECFA), an agreement similar to a free-trade agreement deal that will increase cross-Strait economic ties by lowering tariffs on a number of goods. Taiwan's goverment has said that the ECFA will serve as a stepping stone toward trade pacts with other regional partners and announced the beginning of negotiations on such an agreement with Singapore in August.
Tajikistan Tajikistan has one of the lowest per capita GDPs among the 15 former Soviet republics. Because of a lack of employment opportunities in Tajikistan, nearly half of the labor force works abroad, primarily in Russia and Kazakhstan, supporting families in Tajikistan through remittances. The exact number of labor migrants is unknown, but estimated at around 1 million. Less than 7% of the land area is arable. Cotton is the most important crop, but this sector is burdened with debt and obsolete infrastructure; moreover, government has encouraged a gradual transition away from cotton and towards food cultivation due to its concerns about feeding the population. Mineral resources include silver, gold, uranium, and tungsten. Industry consists only of a large aluminum plant, hydropower facilities, and small obsolete factories mostly in light industry and food processing. The civil war (1992-97) severely damaged the already weak economic infrastructure and caused a sharp decline in industrial and agricultural production. Tajikistan's economic situation remains fragile due to uneven implementation of structural reforms, corruption, weak governance, seasonal power shortages, and the external debt burden. A debt restructuring agreement was reached with Russia in December 2002, including a $250 million write-off of Tajikistan's $300 million debt. Completion of the Sangtuda I hydropower dam - finished in 2009 with Russian investment - and the Sangtuda II and Rogun dams will add substantially to electricity output. If finished according to Tajik plans, Rogun will be the world's tallest dam. The World Bank, in 2010, agreed to fund safety and feasibility studies for the Rogun Dam. Favorable reports from these studies could increase investor interest in the project, which has been stalled due to lack of funding. Tajikistan has also received substantial infrastructure development loans from the Chinese government to improve roads and an electricity transmission network. To help increase north-south trade, the US funded a $36 million bridge which opened in August 2007 and links Tajikistan and Afghanistan. While Tajikistan has experienced steady economic growth since 1997, more than half of the population continues to live in poverty. Economic growth reached 10.6% in 2004, but dropped below 8% in 2005-08, as the effects of higher oil prices and then the international financial crisis began to register - mainly in the form of lower prices for key export commodities and lower remittances from Tajiks working abroad, due to the global economic downturn. In 2009 GDP growth dropped to 3.4% as a result of the world recession.
TanzaniaTanzania is one of the world's poorest economies in termsof per capita income, however, Tanzania average 7% GDP growth peryear between 2000 and 2008 on strong gold production and tourism.The economy depends heavily on agriculture, which accounts for morethan one-fourth of GDP, provides 85% of exports, and employs about60% of the work force. The World Bank, the IMF, and bilateral donorshave provided funds to rehabilitate Tanzania's aging economicinfrastructure, including rail and port infrastructure that areimportant trade links for inland countries. Recent banking reformshave helped increase private-sector growth and investment, and thegovernment has increased spending on agriculture to 7% of itsbudget. Continued donor assistance and solid macroeconomic policiessupported a positive growth rate, despite the world recession. In2008, Tanzania received the world's largest Millennium ChallengeCompact grant, worth $698 million. Dar es Salaam used fiscalstimulus and loosened monitary policy to ease the impact of theglobal recession. GDP growth in 2009-10 was a respectable 6% peryear due to high gold prices and increased production.
ThailandWith a well-developed infrastructure, a free-enterpriseeconomy, generally pro-investment policies, and strong exportindustries, Thailand enjoyed solid growth from 2000 to 2008 -averaging more than 4% per year - as it recovered from the Asianfinancial crisis of 1997-98. Thai exports - mostly machinery andelectronic components, agricultural commodities, and jewelry -continue to drive the economy, accounting for more than half of GDP.The global financial crisis of 2008-09 severely cut Thailand'sexports, with most sectors experiencing double-digit drops. In 2009,the economy contracted 2.2%. In 2010, Thailand's economy expanded7.6%, its fastest pace since 1995, as exports rebounded from theirdepressed 2009 level. Antigovernment protests during March-May andthe country's polarized political situation had - at most - atemporary impact on business and consumer confidence. Althoughtourism was hit hard during the protests, its quick recovery helpedboost consumer confidence to new highs. Moreover, business andinvestor sentiment remained buoyant as Thailand's stock market grewalmost 5% during the three-month period. The economy probably willcontinue to experience high grow well into 2011.
Timor-LesteIn late 1999, about 70% of the economic infrastructureof Timor-Leste was laid waste by Indonesian troops andanti-independence militias. Three hundred thousand people fledwestward. Over the next three years a massive international program,manned by 5,000 peacekeepers (8,000 at peak) and 1,300 policeofficers, led to substantial reconstruction in both urban and ruralareas. By the end of 2005, refugees had returned or had settled inIndonesia. The country continues to face great challenges inrebuilding its infrastructure, strengthening the civiladministration, and generating jobs for young people entering thework force. The development of oil and gas resources in offshorewaters has greatly supplemented government revenues. Thistechnology-intensive industry, however, has done little to createjobs for the unemployed because there are no production facilitiesin Timor. Gas is piped to Australia. In June 2005, the NationalParliament unanimously approved the creation of a Petroleum Fund toserve as a repository for all petroleum revenues and to preserve thevalue of Timor-Leste's petroleum wealth for future generations. TheFund held assets of US$5.3 billion as of October 2009. The economyhas been little impacted by the global financial crisis andcontinues to recover strongly from the mid-2006 outbreak of violenceand civil unrest, which disrupted both private and public sectoreconomic activity. The government in 2008 resettled tens ofthousands of an estimated 100,000 internally displaced persons(IDPs); most IDPs returned home by early 2009. The underlyingeconomic policy challenge the country faces remains how best to useoil-and-gas wealth to lift the non-oil economy onto a higher growthpath and to reduce poverty.
TogoThis small, sub-Saharan economy suffers from anemic economicgrowth and depends heavily on both commercial and subsistenceagriculture, which provides employment for 65% of the labor force.Some basic foodstuffs must still be imported. Cocoa, coffee, andcotton generate about 40% of export earnings with cotton being themost important cash crop. Togo is the world's fourth-largestproducer of phosphate. The government's decade-long effort,supported by the World Bank and the IMF, to implement economicreform measures, encourage foreign investment, and bring revenues inline with expenditures has moved slowly. Progress depends on followthrough on privatization, increased openness in government financialoperations, progress toward legislative elections, and continuedsupport from foreign donors. Togo is on track with its IMF ExtendedCredit Facility and reached a HIPC debt relief completion point in2010 at which 95% of the country's debt was forgiven. Economicgrowth prospects remain marginal due to declining cotton productionand underinvestment in phosphate mining.
TokelauTokelau's small size (three villages), isolation, and lackof resources greatly restrain economic development and confineagriculture to the subsistence level. The people rely heavily on aidfrom New Zealand - about $10 million annually in 2008 and 2009 - tomaintain public services. New Zealand's support amounts to 80% ofTokelau's recurrent government budget. An international trust fund,currently worth nearly US$32 million, was established in 2004 toprovide Tokelau an independent source of revenue. The principalsources of revenue come from sales of copra, postage stamps,souvenir coins, and handicrafts. Money is also remitted to familiesfrom relatives in New Zealand.
TongaTonga has a small, open, South Pacific island economy. It hasa narrow export base in agricultural goods. Squash, vanilla beans,and yams are the main crops. Agricultural exports, including fish,make up two-thirds of total exports. The country must import a highproportion of its food, mainly from New Zealand. The country remainsdependent on external aid and remittances from Tongan communitiesoverseas to offset its trade deficit. Tourism is the second-largestsource of hard currency earnings following remittances. Tonga had39,000 visitors in 2006. The government is emphasizing thedevelopment of the private sector, especially the encouragement ofinvestment, and is committing increased funds for health andeducation. Tonga has a reasonably sound basic infrastructure andwell developed social services. High unemployment among the young, acontinuing upturn in inflation, pressures for democratic reform, andrising civil service expenditures are major issues facing thegovernment.
Trinidad and TobagoTrinidad and Tobago has earned a reputation asan excellent investment site for international businesses and hasone of the highest growth rates and per capita incomes in LatinAmerica. Economic growth between 2000 and 2007 averaged slightlyover 8%, significantly above the regional average of about 3.7% forthat same period; however, GDP has slowed down since then andcontracted about 3.5% in 2009, before rising more than 2% in 2010.Growth has been fueled by investments in liquefied natural gas(LNG), petrochemicals, and steel. Additional petrochemical,aluminum, and plastics projects are in various stages of planning.Trinidad and Tobago is the leading Caribbean producer of oil andgas, and its economy is heavily dependent upon these resources butit also supplies manufactured goods, notably food products andbeverages, as well as cement to the Caribbean region. Oil and gasaccount for about 40% of GDP and 80% of exports, but only 5% ofemployment. The country is also a regional financial center, andtourism is a growing sector, although it is not as importantdomestically as it is to many other Caribbean islands. The economybenefits from a growing trade surplus. The previous MANNINGadministration benefited from fiscal surpluses fueled by the dynamicexport sector; however, declines in oil and gas prices have reducedgovernment revenues which will challenge the new government'scommitment to maintaining high levels of public investment.
TunisiaTunisia has a diverse economy, with important agricultural,mining, tourism, and manufacturing sectors. Governmental control ofeconomic affairs while still heavy has gradually lessened over thepast decade with increasing privatization, simplification of the taxstructure, and a prudent approach to debt. Progressive socialpolicies also have helped raise living conditions in Tunisiarelative to the region. Real growth, which averaged almost 5% overthe past decade, declined to 4.6% in 2008 and to 3-4% in 2009-10because of economic contraction and slowing of import demand inEurope - Tunisia's largest export market. However, development ofnon-textile manufacturing, a recovery in agricultural production,and strong growth in the services sector somewhat mitigated theeconomic effect of slowing exports. Tunisia will need to reach evenhigher growth levels to create sufficient employment opportunitiesfor an already large number of unemployed as well as the growingpopulation of university graduates. The challenges ahead include:privatizing industry, liberalizing the investment code to increaseforeign investment, improving government efficiency, reducing thetrade deficit, and reducing socioeconomic disparities in theimpoverished south and west.
TurkeyTurkey's economy is increasingly driven by its industry andservice sectors, although its traditional agriculture sector stillaccounts for about 30% of employment. An aggressive privatizationprogram has reduced state involvement in basic industry, banking,transport, and communication, and an emerging cadre of middle-classentrepreneurs is adding a dynamism to the economy. Turkey'straditional textiles and clothing clothing sectors still account forone-third of industrial employment, despite stiff competition ininternational markets that resulted from the end of the global quotasystem. Other sectors, notably the automotive, construction, andelectronics industries, are rising in importance and have surpassedtextiles within Turkey's export mix. Oil began to flow through theBaku-Tbilisi-Ceyhan pipeline in May 2006, marking a major milestonethat will bring up to 1 million barrels per day from the Caspian tomarket. Several gas pipelines also are being planned to help moveCentral Asian gas to Europe via Turkey, which will help addressTurkey's dependence on energy imports over the long term. AfterTurkey experienced a severe financial crisis in 2001, Ankara adoptedfinancial and fiscal reforms as part of an IMF program. The reformsstrengthened the country's economic fundamentals and ushered in anera of strong growth - averaging more than 6% annually until 2009,when global economic conditions and tighter fiscal policy slowedgrowth to 4.7%, reduced inflation to 6.5% - a 34-year low - and cutthe public sector debt-to-GPD ratio below 50%. Turkey'swell-regulated financial markets and banking system weathered theglobal financial crisis and GDP rebounded strongly to 7.3% in 2010,as exports returned to normal levels following the recession. Theeconomy, however, continues to be burdened by a high current accountdeficit and remains dependent on often volatile, short-terminvestment to finance its trade deficit. The stock value of FDIstood at $174 billion at year-end 2010, but inflows have slowedconsiderably in light of continuing economic turmoil in Europe, thesource of much of Turkey's FDI. Further economic and judicialreforms and prospective EU membership are expected to boost Turkey'sattractiveness to foreign investors. However, Turkey's relativelyhigh current account deficit, uncertainty related to policy-making,and fiscal imbalances leave the economy vulnerable to destabilizingshifts in investor confidence.
TurkmenistanTurkmenistan is largely a desert country with intensiveagriculture in irrigated oases and sizeable gas and oil resources.The two largest crops are cotton, most of which is produced forexport, and wheat, which is domestically consumed. Althoughagriculture accounts for roughly 10% of GDP, it continues to employnearly half of the country's workforce. With an authoritarianex-Communist regime in power and a tribally based social structure,Turkmenistan has taken a cautious approach to economic reform,hoping to use gas and cotton export revenues to sustain itsinefficient economy. Privatization goals remain limited. From1998-2005, Turkmenistan suffered from the continued lack of adequateexport routes for natural gas and from obligations on extensiveshort-term external debt. At the same time, however, total exportsrose by an average of roughly 15% per year from 2003-08, largelybecause of higher international oil and gas prices. New pipelines toChina and Iran, that began operation in late 2009 and early 2010,have given Turkmenistan additional export routes for its gas,although these new routes have not offset the sharp drop in exportrevenue since early 2009 from decreased gas exports to Russia.Overall prospects in the near future are discouraging because ofwidespread internal poverty, endemic corruption, a poor educationalsystem, government misuse of oil and gas revenues, and Ashgabat'sreluctance to adopt market-oriented reforms. In the past,Turkmenistan's economic statistics were state secrets. The newgovernment has established a State Agency for Statistics, but GDPnumbers and other figures are subject to wide margins of error. Inparticular, the rate of GDP growth is uncertain. Since his election,President BERDIMUHAMEDOW unified the country's dual currencyexchange rate, ordered the redenomination of the manat, reducedstate subsidies for gasoline, and initiated development of a specialtourism zone on the Caspian Sea. Although foreign investment isencouraged, numerous bureaucratic obstacles impede internationalbusiness activity.
Turks and Caicos IslandsThe Turks and Caicos economy is based ontourism, offshore financial services, and fishing. Most capitalgoods and food for domestic consumption are imported. The US is theleading source of tourists, accounting for more than three-quartersof the 175,000 visitors that arrived in 2004. Major sources ofgovernment revenue also include fees from offshore financialactivities and customs receipts.
TuvaluTuvalu consists of a densely populated, scattered group ofnine coral atolls with poor soil. The country has no known mineralresources and few exports and is almost entirely dependent uponimported food and fuel. Subsistence farming and fishing are theprimary economic activities. Fewer than 1,000 tourists, on average,visit Tuvalu annually. Job opportunities are scarce and publicsector workers make up most of those employed. About 15% of theadult male population work as seamen on merchant ships abroad, andremittances are a vital source of income contributing around $2million in 2007. Substantial income is received annually from theTuvalu Trust Fund (TTF) an international trust fund established in1987 by Australia, NZ, and the UK and supported also by Japan andSouth Korea. Thanks to wise investments and conservativewithdrawals, this fund grew from an initial $17 million to anestimated value of $77 million in 2006. The TTF contributed nearly$9 million towards the government budget in 2006 and is an importantcushion for meeting shortfalls in the government's budget. The USGovernment is also a major revenue source for Tuvalu because ofpayments from a 1988 treaty on fisheries. In an effort to ensurefinancial stability and sustainability, the government is pursuingpublic sector reforms, including privatization of some governmentfunctions and personnel cuts. Tuvalu also derives royalties from thelease of its ".tv" Internet domain name with revenue of more than $2million in 2006. A minor source of government revenue comes from thesale of stamps and coins. With merchandise exports only a fractionof merchandise imports, continued reliance must be placed on fishingand telecommunications license fees, remittances from overseasworkers, official transfers, and income from overseas investments.Growing income disparities and the vulnerability of the country toclimatic change are among leading concerns for the nation.
UgandaUganda has substantial natural resources, including fertilesoils, regular rainfall, small deposits of copper, gold, and otherminerals, and recently discovered oil. Uganda has never conducted anational minerals survey. Agriculture is the most important sectorof the economy, employing over 80% of the work force. Coffeeaccounts for the bulk of export revenues. Since 1986, the government- with the support of foreign countries and international agencies -has acted to rehabilitate and stabilize the economy by undertakingcurrency reform, raising producer prices on export crops, increasingprices of petroleum products, and improving civil service wages. Thepolicy changes are especially aimed at dampening inflation andboosting production and export earnings. Since 1990 economic reformsushered in an era of solid economic growth based on continuedinvestment in infrastructure, improved incentives for production andexports, lower inflation, better domestic security, and the returnof exiled Indian-Ugandan entrepreneurs. Uganda has received about $2billion in multilateral and bilateral debt relief. In 2007 Ugandareceived $10 million for a Millennium Challenge Account ThresholdProgram. The global economic downturn has hurt Uganda's exports;however, Uganda's GDP growth is still relatively strong due to pastreforms and sound management of the downturn. Oil revenues and taxeswill become a larger source of government funding as oil comes online in the next few years. Instability in southern Sudan is thebiggest risk for the Ugandan economy in 2011 because Uganda's mainexport partner is Sudan and Uganda is a key destination for Sudaneserefugees.
Ukraine After Russia, the Ukrainian republic was far and away the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic. Its fertile black soil generated more than one-fourth of Soviet agricultural output, and its farms provided substantial quantities of meat, milk, grain, and vegetables to other republics. Likewise, its diversified heavy industry supplied the unique equipment (for example, large diameter pipes) and raw materials to industrial and mining sites (vertical drilling apparatus) in other regions of the former USSR. Shortly after independence in August 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output by 1999 had fallen to less than 40% of the 1991 level. Ukraine's dependence on Russia for energy supplies and the lack of significant structural reform have made the Ukrainian economy vulnerable to external shocks. Ukraine depends on imports to meet about three-fourths of its annual oil and natural gas requirements and 100% of its nuclear fuel needs. After a two-week dispute that saw gas supplies cutoff to Europe, Ukraine agreed to ten-year gas supply and transit contracts with Russia in January 2009 that brought gas prices to "world" levels. The strict terms of the contracts have further hobbled Ukraine's cash-strapped state gas company, Naftohaz. Outside institutions - particularly the IMF - have encouraged Ukraine to quicken the pace and scope of reforms. Ukrainian Government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine's large shadow economy, but more improvements are needed, including fighting corruption, developing capital markets, and improving the legislative framework. Ukraine's economy was buoyant despite political turmoil between the prime minister and president until mid-2008. Real GDP growth exceeded 7% in 2006-07, fueled by high global prices for steel - Ukraine's top export - and by strong domestic consumption, spurred by rising pensions and wages. Ukraine reached an agreement with the IMF for a $16.4 billion Stand-By Arrangement in November 2008 to deal with the economic crisis, but the Ukrainian Government's lack of progress in implementing reforms has twice delayed the release of IMF assistance funds. The drop in steel prices and Ukraine's exposure to the global financial crisis due to aggressive foreign borrowing lowered growth in 2008 and the economy contracted more than 15% in 2009, among the worst economic performances in the world; growth resumed in 2010, buoyed by exports. External conditions are likely to hamper efforts for economic recovery in 2011.
United Arab EmiratesThe UAE has an open economy with a high percapita income and a sizable annual trade surplus. Successful effortsat economic diversification have reduced the portion of GDP based onoil and gas output to 25%. Since the discovery of oil in the UAEmore than 30 years ago, the UAE has undergone a profoundtransformation from an impoverished region of small desertprincipalities to a modern state with a high standard of living. Thegovernment has increased spending on job creation and infrastructureexpansion and is opening up utilities to greater private sectorinvolvement. In April 2004, the UAE signed a Trade and InvestmentFramework Agreement with Washington and in November 2004 agreed toundertake negotiations toward a Free Trade Agreement with the US,however, those talks have not moved forward. The country's FreeTrade Zones - offering 100% foreign ownership and zero taxes - arehelping to attract foreign investors. The global financial crisis,tight international credit, and deflated asset prices slowed GDPgrowth in 2010. UAE authorities tried to blunt the crisis byincreasing spending and boosting liquidity in the banking sector.The crisis hit Dubai hardest, as it was heavily exposed to depressedreal estate prices. Dubai lacked sufficient cash to meet its debtobligations, prompting global concern about its solvency. The UAECentral Bank and Abu Dhabi-based banks bought the largest shares. InDecember 2009 Dubai received an additional $10 billion loan from theemirate of Abu Dhabi. The economy is expected to continue a slowrebound. Dependence on oil, a large expatriate workforce, andgrowing inflation pressures are significant long-term challenges.The UAE's strategic plan for the next few years focuses ondiversification and creating more opportunities for nationalsthrough improved education and increased private sector employment.
United KingdomThe UK, a leading trading power and financial center,is the third largest economy in Europe after Germany and France.Over the past two decades, the government has greatly reduced publicownership and contained the growth of social welfare programs.Agriculture is intensive, highly mechanized, and efficient byEuropean standards, producing about 60% of food needs with less than2% of the labor force. The UK has large coal, natural gas, and oilresources, but its oil and natural gas reserves are declining andthe UK became a net importer of energy in 2005. Services,particularly banking, insurance, and business services, account byfar for the largest proportion of GDP while industry continues todecline in importance. After emerging from recession in 1992,Britain's economy enjoyed the longest period of expansion on recordduring which time growth outpaced most of Western Europe. In 2008,however, the global financial crisis hit the economy particularlyhard, due to the importance of its financial sector. Sharplydeclining home prices, high consumer debt, and the global economicslowdown compounded Britain's economic problems, pushing the economyinto recession in the latter half of 2008 and prompting the thenBROWN government to implement a number of measures to stimulate theeconomy and stabilize the financial markets; these includenationalizing parts of the banking system, cutting taxes, suspendingpublic sector borrowing rules, and moving forward public spending oncapital projects. Facing burgeoning public deficits and debt levels,the CAMERON government in 2010 initiiated a five-year austerityprogram, which aims to lower London's budget deficit from over 11%of GDP in 2010 to nearly 1% by 2015. The Bank of Englandperiodically coordinates interest rate moves with the EuropeanCentral Bank, but Britain remains outside the European Economic andMonetary Union (EMU).
United States The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $47,400. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households. The war in March-April 2003 between a US-led coalition and Iraq, and the subsequent occupation of Iraq, required major shifts in national resources to the military. Soaring oil prices between 2005 and the first half of 2008 threatened inflation and unemployment, as higher gasoline prices ate into consumers' budgets. Imported oil accounts for about 60% of US consumption. Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups. The merchandise trade deficit reached a record $840 billion in 2008 before shrinking to $506 billion in 2009, and ramping back up to $630 billion in 2010. The global economic downturn, the sub-prime mortgage crisis, investment bank failures, falling home prices, and tight credit pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. The government used some of these funds to purchase equity in US banks and other industrial corporations, much of which had been returned to the government by early 2011. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. Approximately two-thirds of these funds were injected into the economy by the end of 2010. In March 2010, President OBAMA signed a health insurance reform bill into law that will extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a bill designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight. In late 2010, the US Federal Reserve Bank (The Fed) announced that it would purchase $600 billion worth of US Government bonds by June 2011, in an attempt to keep interest rates from rising and snuffing out the nascent recovery.
United States Pacific Island Wildlife Refugesno economic activity
UruguayUruguay's economy is characterized by an export-orientedagricultural sector, a well-educated work force, and high levels ofsocial spending. After averaging growth of 5% annually during1996-98, in 1999-2002 the economy suffered a major downturn,stemming largely from the spillover effects of the economic problemsof its large neighbors, Argentina and Brazil. In 2001-02, Argentinecitizens made massive withdrawals of dollars deposited in Uruguayanbanks after bank deposits in Argentina were frozen, which led to aplunge in the Uruguayan peso, a banking crisis, and a sharp economiccontraction. Real GDP fell in four years by nearly 20%, with 2002the worst year. The unemployment rate rose, inflation surged, andthe burden of external debt doubled. Financial assistance from theIMF helped stem the damage. Uruguay restructured its external debtin 2003 without asking creditors to accept a reduction on theprincipal. Economic growth for Uruguay resumed, and averaged 8%annually during the period 2004-08. The 2008-09 global financialcrisis put a brake on Uruguay's vigorous growth, which deceleratedto 2.9% in 2009. Nevertheless, the country managed to avoid arecession and keep positive growth rates, mainly through higherpublic expenditure and investment, and GDP growth exceeded 7% in2010.
UzbekistanUzbekistan is a dry, landlocked country; 11% of the landis intensely cultivated, in irrigated river valleys. More than 60%of the population lives in densely populated rural communities.Export of hydrocarbons, including natural gas and petroleum,provided about 40% of foreign exchange earnings in 2009. Other majorexport earners include gold and cotton. Uzbekistan is now theworld's second-largest cotton exporter and fifth largest producer;it has come under increasing international criticism for the use ofchild labor in its annual cotton harvest. Nevertheless, Uzbekistanenjoyed a bumper cotton crop in 2010 amidst record high prices.Following independence in September 1991, the government sought toprop up its Soviet-style command economy with subsidies and tightcontrols on production and prices. While aware of the need toimprove the investment climate, the government still sponsorsmeasures that often increase, not decrease, its control overbusiness decisions. A sharp increase in the inequality of incomedistribution has hurt the lower ranks of society since independence.In 2003, the government accepted Article VIII obligations under theIMF, providing for full currency convertibility. However, strictcurrency controls and tightening of borders have lessened theeffects of convertibility and have also led to some shortages thathave further stifled economic activity. The Central Bank oftendelays or restricts convertibility, especially for consumer goods.Potential investment by Russia and China in Uzbekistan's gas and oilindustry, as well as increased cooperation with South Korea in therealm of civil aviation, may boost growth prospects. However,decreased demand for natural gas in Europe and Russia in the wake ofthe global financial crisis could reduce energy-related revenues inthe near term. In November 2005, Russian President Vladimir PUTINand Uzbekistan President KARIMOV signed an "alliance," whichincluded provisions for economic and business cooperation. Russianbusinesses have shown increased interest in Uzbekistan, especiallyin mining, telecom, and oil and gas. In 2006, Uzbekistan took stepsto rejoin the Collective Security Treaty Organization (CSTO) and theEurasian Economic Community (EurASEC), which it subsequently left in2008, both organizations dominated by Russia. In the past Uzbekauthorities had accused US and other foreign companies operating inUzbekistan of violating Uzbek tax laws and have frozen their assets,but no new expropriations occurred in 2008-09. Instead, the UzbekGovernment has actively courted several major U.S. and internationalcorporations, offering attractive financing and tax advantages, andhas landed a significant US investment in the automotive industry.Although growth slowed in 2009-10, Uzbekistan has seen few othereffects from the global economic downturn, primarily due to itsrelative isolation from the global financial markets.
VanuatuThis South Pacific island economy is based primarily onsmall-scale agriculture, which provides a living for abouttwo-thirds of the population. Fishing, offshore financial services,and tourism, with nearly 197,000 visitors in 2008, are othermainstays of the economy. Mineral deposits are negligible; thecountry has no known petroleum deposits. A small light industrysector caters to the local market. Tax revenues come mainly fromimport duties. Economic development is hindered by dependence onrelatively few commodity exports, vulnerability to naturaldisasters, and long distances from main markets and betweenconstituent islands. In response to foreign concerns, the governmenthas promised to tighten regulation of its offshore financial center.In mid-2002, the government stepped up efforts to boost tourismthrough improved air connections, resort development, and cruiseship facilities. Agriculture, especially livestock farming, is asecond target for growth. Australia and New Zealand are the mainsuppliers of tourists and foreign aid.
VenezuelaVenezuela remains highly dependent on oil revenues, whichaccount for roughly 95% of export earnings, about 55% of the federalbudget revenues, and around 30% of GDP. A nationwide strike betweenDecember 2002 and February 2003 had far-reaching economicconsequences - real GDP declined by around 9% in 2002 and 8% in 2003- but economic output since then has recovered strongly. Fueled byhigh oil prices, record government spending helped to boost GDP byabout 10% in 2006, 8% in 2007, and nearly 5% in 2008, before a sharpdrop in oil prices caused a contraction in 2009-10. This spending,combined with recent minimum wage hikes and improved access todomestic credit, has created a consumption boom but has come at thecost of higher inflation - roughly 32% in 2008, and slowing onlyslightly to 30% in 2010, despite the lengthy downturn. Imports alsojumped significantly before the recession of 2009. President HugoCHAVEZ's continued efforts to increase the government's control ofthe economy by nationalizing firms in the agribusiness, financial,construction, oil, and steel sectors have hurt the privateinvestment environment, reduced productive capacity, and slowednon-petroleum exports. In the first half of 2010 Venezuela faced theprospect of lengthy nationwide blackouts when its main hydroelectricpower plant - which provides more than 35% of the country'selectricity - nearly shut down. In January, 2010, CHAVEZ announced adual exchange rate system for the bolivar and closed the unofficialforeign exchange market - the "parallel" market - in an effort tostem inflation and slow the currency's depreciation. The foreignexchange system offers a 2.6 bolivar per dollar rate for imports ofessentials, including food, medicine, and industrial machinery, anda 4.3 bolivar per dollar rate for imports of other products,including cars and telephones.
VietnamVietnam is a densely-populated developing country that inthe last 30 years has had to recover from the ravages of war, theloss of financial support from the old Soviet Bloc, and therigidities of a centrally-planned economy. Vietnamese authoritieshave reaffirmed their commitment to economic liberalization andinternational integration. They have moved to implement thestructural reforms needed to modernize the economy and to producemore competitive export-driven industries. Vietnam joined the WTO inJanuary 2007 following more than a decade-long negotiation process.WTO membership has provided Vietnam an anchor to the global marketand reinforced the domestic economic reform process. Agriculture'sshare of economic output has continued to shrink from about 25% in2000 to about 21% in 2009. Deep poverty has declined significantlyand Vietnam is working to create jobs to meet the challenge of alabor force that is growing by more than one million people everyyear. The global recession has hurt Vietnam's export-orientedeconomy with GDP growing less than the 7% per annum average achievedduring the last decade. In 2009 exports fell nearly 10%year-on-year, prompting the government to consider adjustments totariffs to limit the trade deficit. The government has used stimulusspending, including a subsidized lending program, to help theeconomy through the global financial crisis. Vietnam's managedcurrency, the dong, faced downward pressure during the recession andthe government devalued it by nearly 7% in December 2009. Foreigndonors pledged $8 billion in new development assistance for 2010.Export growth resumed in 2010, driving GDP upward. However, Hanoihas struggled to control one of the region's highest inflationrates, which stands at 11.1% with interest hikes and multipledevaluations of the dong. Vietnam's economy faces higher lendingrates, additional IMF scrutiny, domestic inflationary pressures, andan underperforming stock market.
Virgin IslandsTourism is the primary economic activity, accountingfor 80% of GDP and employment. The islands hosted 2.4 millionvisitors in 2008. The manufacturing sector consists of petroleumrefining, rum distilling, textiles, electronics, pharmaceuticals,and watch assembly. One of the world's largest petroleum refineriesis at Saint Croix. The agricultural sector is small, with most foodbeing imported. International business and financial services aresmall but growing components of the economy. The islands arevulnerable to substantial damage from storms. The government isworking to improve fiscal discipline, to support constructionprojects in the private sector, to expand tourist facilities, toreduce crime, and to protect the environment.
Wake IslandEconomic activity is limited to providing services tomilitary personnel and contractors located on the island. All foodand manufactured goods must be imported.
Wallis and FutunaThe economy is limited to traditional subsistenceagriculture, with about 80% of labor force earnings from agriculture(coconuts and vegetables), livestock (mostly pigs), and fishing.About 4% of the population is employed in government. Revenues comefrom French Government subsidies, licensing of fishing rights toJapan and South Korea, import taxes, and remittances from expatriateworkers in New Caledonia.
West BankThe West Bank - the larger of the two areas comprising thePalestinian territories - experienced a high single-digit economicgrowth rate in 2010 as a result of inflows of donor aid, thePalestinian Authority's (PA) implementation of economic and securityreforms, and the easing of some movement and access restrictions bythe Israeli Government. Nevertheless, overall standard-of-livingmeasures remain near levels seen prior to the start of the secondintifada in 2000. The almost decade-long downturn largely has been aresult of Israeli closure policies - a steady increase in movementand access restrictions across the West Bank in response to Israelisecurity concerns which have disrupted labor and trade flows,industrial capacity, and basic commerce, both external and internal.Since 2008, the PA under President Mahmoud ABBAS and Prime MinisterSalam FAYYAD has implemented a largely successful campaign ofinstitutional reforms that has contributed to increased security andeconomic performance, supported by more than $3 billion in directforeign donor assistance to the PA's budget since 2007. An easing ofsome Israeli restrictions on West Bank movement and access since2008 also has contributed to an uptick in retail activity in largercities. The biggest impediments to economic improvements in the WestBank remain Palestinians' lack of access to land and resources inIsraeli-controlled areas, import and export restrictions, and ahigh-cost capital structure. Absent robust private sector growth,the PA will continue to rely heavily on donor aid for its budgetaryneeds.
Western SaharaWestern Sahara has a small market-based economy whosemain indutries are fishing, phosphate mining, and pastoral nomadism.The territory's arid desert climate makes sedentary agriculturedifficult, and Wstern Sahara imports much of its food. The MoroccanGovernment administers Western Sahara's economy and is a source ofemployment, infrstructure development, and social spending in theterritory. Western Sahara's unresolved legal status makes theexploitation of its natural resources a contentious issue betweenMorocco and the Polisario. Morocco and the EU in July 2006 signed afour-year agreement allowing European vessels to fish off the coastof Morocco, including the disputed waters off the coast of WesternSahara. Oil has never been found in Western Sahara in commerciallysignificant quantities, but Morocco and the Polisario have quarreledover who has the right to authorize and benefit from oil explorationin the territory. Western Sahara's main long-term economic challengeis the development of a more diverse set of industries capable ofproviding greater employment and income to the territory.
World In 2010, world output - and per capita income - began to recover from the 2008-09 recession, the first global downturn since 1946. Gross World Product (GWP) grew 4.6%, largely on the strength of rebounding exports, which rose about 20% from the level of 2009. Growth was not evenly distributed across countries, however. Lower income countries - those with per capita incomes below $30,000 per year - averaged 6.3% growth, while higher income countries - with per capita incomes above $30,000 - averaged just 2.8% growth. And countries with current account surpluses averaged 6.0% growth, while those with current account deficits averaged just 3.4% growth. Among large economies, China (+10.1%), Taiwan (+8.3%), India (+8.3%), Brazil (+7.5%), and South Korea (+6.1%) recorded the biggest GDP gains - China also became the world's largest exporter. Continuing uncertainties in mortgage and financial markets resulted in slower growth in Japan (+3.0%), the US (+2.8%), and the European Union (+1.7%). In 2010, global unemployment continued to creep upwards, reaching 8.8% - underemployment, especially in the developing world, remained much higher. Global gross fixed investment stabilized at about 23% of GWP, after a significant drop in 2009. World trade appears to be returning to pre-2009 patterns, with current account surpluses or deficits rising for a majority of countries. World external debt, however, dropped again in 2010 - about 5% from the 2009 level, as many countries reduced borrowing. Many, if not most, countries pursued expansionary monetary and fiscal policies. The global money supply, both narrowly and broadly defined, increased roughly 10%, as countries tried to keep interest rates low; the global budget deficit stablilized at roughly $3.5 trillion, as countries tried to rein in spending and slow the rise of public debt. The international financial crisis of 2008-09 presents the world economy with a major new challenge, together with several long-standing ones. The fiscal stimulus packages put in place in 2009-10 required most countries to run budget deficits - government balances have deteriorated for 14 out of every 15 countries. Treasuries issued new public debt - totaling $5.5 trillion since 2008 - to pay for the additional expenditures. To keep interest rates low, many central banks monetized that debt, injecting large sums of money into the economies. As economic activity picks up, central banks will face the difficult task of containing inflation without raising interest rates so high they snuff out further growth. At the same time, governments will face the difficult task of spurring current growth and employment without saddling their economies with so much debt that they sacrifice long-term growth and financial stability. Long-standing challenges the world faces are several. The addition of 80 million people each year to an already overcrowded globe is exacerbating the problems of underemployment, pollution, waste-disposal, epidemics, water-shortages, famine, over-fishing of oceans, deforestation, desertification, and depletion of non-renewable resources. The nation-state, as a bedrock economic-political institution, is steadily losing control over international flows of people, goods, funds, and technology. Internally, central governments often find their control over resources slipping as separatist regional movements - typically based on ethnicity - gain momentum, e.g., in many of the successor states of the former Soviet Union, in the former Yugoslavia, in India, in Iraq, in Indonesia, and in Canada. Externally, central governments are losing decisionmaking powers to international bodies, most notably the EU. The introduction of the euro as the common currency of much of Western Europe in January 1999, while paving the way for an integrated economic powerhouse, poses economic risks because the participating nations are culturally and politically diverse and have varying levels and rates of growth of income, and hence, differing needs for monetary and fiscal policies. In Western Europe, governments face the difficult political problem of channeling resources away from welfare programs in order to increase investment and strengthen incentives to seek employment. Because of their own internal problems and priorities, the industrialized countries devote insufficient resources to deal effectively with the poorer areas of the world, which, at least from an economic point of view, are becoming further marginalized. The terrorist attacks on the US on 11 September 2001 accentuated a growing risk to global prosperity, illustrated, for example, by the reallocation of resources away from investment to anti-terrorist programs. Wars in Iraq and Afghanistan added new uncertainties to global economic prospects. Despite these challenges, the world economy also shows great promise. Technology has made possible further advances in all fields, from agriculture, to medicine, alternative energy, metallurgy, and transportation. Improved global communications have greatly reduced the costs of international trade, helping the world gain from the international division of labor, raise living standards, and reduce income disparities among nations. Much of the resilience of the world economy in the aftermath of the financial crisis resulted from government leaders around the globe working in concert to stem the financial onslaught, knowing well the lessons of past economic failures.