Introductory material (continued 38)

Virgin Islands: none

Wake Island: claimed by Marshall Islands

Wallis and Futuna: none

West Bank: West Bank and Gaza Strip are Israeli-occupied with current status subject to the Israeli-Palestinian Interim Agreement - permanent status to be determined through further negotiation

Western Sahara: claimed and administered by Morocco, but sovereignty is unresolved and the UN is attempting to hold a referendum on the issue; the UN-administered cease-fire has been in effect since September 1991

Yemen: a June 2000 treaty delimited the boundary with Saudi Arabia, but final demarcation requires adjustments based on tribal considerations

Yugoslavia: Albanian majority in Kosovo seeks independence from Yugoslavia; Croatia and Yugoslavia are negotiating the status of the strategically important Prevlaka Peninsula, which is currently under a UN military observer mission (UNMOP); the February 2001 agreement with the Former Yugoslav Republic of Macedonia settled alignment of boundary, stipulating implementation within two years

Taiwan: involved in complex dispute over the Spratly Islands with China, Malaysia, Philippines, Vietnam, and possibly Brunei; Paracel Islands occupied by China, but claimed by Vietnam and Taiwan; claims Japanese-administered Senkaku-shoto (Senkaku Islands/Diaoyu Tai), as does China

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@Economic aid - donor

Australia: ODA, $1.43 billion (FY97/98)

Austria: ODA, $472 million (1999)

Belgium: ODA, $764 million (1997)

Canada: ODA, $1.3 billion (1999)

Denmark: ODA, $1.63 billion (1999)

Finland: ODA, $379 million (1997)

France: ODA, $6.3 billion (1997)

Germany: ODA, $5.6 billion (1998)

Iceland: $NA

Ireland: ODA, $245 million (2000)

Italy: ODA, $1.3 billion (1997)

Japan: ODA, $9.1 billion (1999)

Luxembourg: ODA, $160 million (1999)

Netherlands: ODA, $3.5 billion (2000 est.)

New Zealand: ODA, $123 million (1995)

Norway: ODA, $1.4 billion (1998)

Portugal: ODA, $271 million (1995)

Saudi Arabia: pledged $100 million in 1993 to fund reconstruction of Lebanon; since 1993, Saudi Arabia has committed $208 million for assistance to the Palestinians

Spain: ODA, $1.3 billion (1995)

Sweden: ODA, $1.7 billion (1997)

Switzerland: ODA, $1.1 billion (1995)

United Kingdom: ODA, $3.4 billion (1997)

United States: ODA, $6.9 billion (1997)

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@Economic aid - recipient

Afghanistan: US provided about $70 million in humanitarian assistance in 1997; US continues to contribute to multilateral assistance through the UN programs of food aid, immunization, land mine removal, and a wide range of aid to refugees and displaced persons

Albania: $NA; aid for energy from China, Germany, Norway (2000)

Algeria: $100 million (1999 est.)

American Samoa: important financial support from the US, more than $40 million in 1994

Andorra: none

Angola: $493.1 million (1995)

Anguilla: $3.5 million (1995)

Antigua and Barbuda: $2.3 million (1995)

Argentina: IMF offer of $13.7 billion (January 2001)

Armenia: $245.5 million (1995)

Aruba: $26 million (1995); note - the Netherlands provided a $127 million aid package to Aruba and Suriname in 1996

Azerbaijan: ODA, $113 million (1996)

Bahamas, The: $9.8 million (1995)

Bahrain: $48.4 million (1995)

Bangladesh: $1.575 billion (2000 est.)

Barbados: $9.1 million (1995)

Belarus: $194.3 million (1995)

Belize: $NA

Benin: $274.6 million (1997)

Bermuda: $27.9 million (1995)

Bhutan: $73.8 million (1995)

Bolivia: $588 million (1997)

Bosnia and Herzegovina: $1 billion (1999 est.)

Botswana: $73 million (1995)

Brazil: NA

British Virgin Islands: $2.6 million (1995)

Brunei: $4.3 million (1995)

Bulgaria: $1 billion (1999 est.)

Burkina Faso: $484.1 million (1995)

Burma: $99 million (FY98/99)

Burundi: $1.344 billion (1999 est.)

Cambodia: $548 million pledged in grants and concessional loans for 2001 by international donors

Cameroon: on 23 January 2001, the Paris Club agreed to reduce Cameroon's debt of $1.3 billion by $900 million; total debt relief now amounts to $1.26 billion

Cape Verde: $111.3 million (1995)

Cayman Islands: $NA

Central African Republic: $172.2 million (1995); note - traditional budget subsidies from France

Chad: $238.3 million (1995); note - $125 million committed by Taiwan (August 1997); $30 million committed by African Development Bank

Chile: ODA, $40 million (2001 est.)

China: $NA

Christmas Island: $NA

Cocos (Keeling) Islands: $NA

Colombia: $40.7 million (1995)

Comoros: $28.1 million (1997)

Congo, Democratic Republic of the: $195.3 million (1995)

Congo, Republic of the: $159.1 million (1995)

Cook Islands: $13.1 million (1995); note - New Zealand continues to furnish the greater part

Cote d'Ivoire: ODA, $1 billion (1996 est.)

Croatia: $NA

Cuba: $68.2 million (1997 est.)

Cyprus: Greek Cypriot area - $17 million (1998); Turkish Cypriot area - $700 million from Turkey in grants and loans (1990-97) that are usually forgiven

Czech Republic: $NA

Djibouti: $106.3 million (1995)

Dominica: $24.4 million (1995)

Dominican Republic: $239.6 million (1995)

Ecuador: $695.7 million (1995)

Egypt: ODA, $2.25 billion (1999)

El Salvador: total $252 million; $57 million from US (1999 est.)

Equatorial Guinea: $33.8 million (1995)

Eritrea: $77 million (1999)

Estonia: $137.3 million (1995)

Ethiopia: $367 million (FY95/96)

Falkland Islands (Islas Malvinas): $1.7 million (1995)

Faroe Islands: $135 million (annual subsidy from Denmark) (1999)

Fiji: $40.3 million (1995)

French Guiana: $NA

French Polynesia: $367 million (1997)

Gabon: $331 million (1995)

Gambia, The: $45.4 million (1995)

Gaza Strip: $121 million disbursed (2000) (includes West Bank)

Georgia: $212.7 million (1995)

Ghana: $477.3 million (1995)

Gibraltar: $NA

Greece: $5.4 billion from EU (1997 est.)

Greenland: $380 million subsidy from Denmark (1999)

Grenada: $8.3 million (1995)

Guadeloupe: $NA; note - substantial annual French subsidies

Guam: Guam receives large transfer payments from the US Federal Treasury ($143 million in 1997) into which Guamanians pay no income or excise taxes; under the provisions of a special law of Congress, the Guam Treasury, rather than the US Treasury, receives federal income taxes paid by military and civilian Federal employees stationed in Guam

Guatemala: $212 million (1995)

Guernsey: $NA

Guinea: $359.2 million (1998)

Guinea-Bissau: $115.4 million (1995)

Guyana: $84 million (1995), Heavily Indebted Poor Country Initiative (HIPC) $253 million (1997)

Haiti: $730.6 million (1995)

Holy See (Vatican City): none

Honduras: $557.8 million (1999)

Hungary: $122.7 million (1995)

India: $2.9 billion (FY98/99)

Indonesia: $43 billion from IMF program and other official external financing (1997-2000)

Iran: $116.5 million (1995)

Iraq: $327.5 million (1995)

Israel: $1.1 billion from the US (1999)

Jamaica: $102.7 million (1995)

Jersey: none

Jordan: ODA, $850 million (1996 est.)

Kazakhstan: $409.6 million (1995)

Kenya: $457 million (1997)

Kiribati: $15.5 million (1995), largely from UK and Japan

Korea, North: $NA; note - an estimated $200 million to $300 million in humanitarian aid from US, South Korea, Japan, and EU in 1997 plus much additional aid from the UN and non-governmental organizations; substantial continuing humanitarian aid, 1998-2000

Korea, South: $NA

Kuwait: $27.6 million (1995)

Kyrgyzstan: $329.4 million (1995)

Laos: $345 million (1999 est.)

Latvia: $96.2 million (1995)

Lebanon: $3.5 billion (pledges 1997-2001)

Lesotho: $123.7 million (1995)

Liberia: $200 million pledged (1998)

Libya: $8.4 million (1995)

Liechtenstein: none

Lithuania: $228.5 million (1995)

Macau: $NA

Macedonia, The Former Yugoslav Republic of: $100 million from the EU (2000)

Madagascar: $838 million (1997)

Malawi: $427 million (1999)

Maldives: $NA

Mali: $596.4 million (1995)

Malta: $NA

Man, Isle of: $NA

Marshall Islands: approximately $65 million annually from the US

Martinique: $NA; note - substantial annual aid from France

Mauritania: $300 million (1998)

Mauritius: $42 million (1997)

Mayotte: $107.7 million (1995); note - extensive French financial assistance

Mexico: $1.166 billion (1995)

Micronesia, Federated States of: under terms of the Compact of Free Association, the US will provide $1.3 billion in grant aid during the period 1986-2001

Moldova: $100.8 million (1995); note - $547 million from the IMF and World Bank (1992-99)

Monaco: $NA

Mongolia: $200 million (1998 est.)

Montserrat: $9.8 million (1995); note - about $100 million (1996-98) in reconstruction aid from the UK; Country Policy Plan (1999) is a three-year program for spending $122.8 million in British budgetary assistance

Morocco: $565.6 million (1995)

Mozambique: $1.04 billion (1998)

Namibia: $127 million (1998)

Nauru: $2.25 million from Australia (FY96/97 est.)

Nepal: $411 million (FY97/98)

Netherlands Antilles: IMF provided $61 million in 2000, and the Netherlands continued its support with $40 million

New Caledonia: $880 million annual subsidy from France

Nicaragua: NA

Niger: $341 million (1997)

note: the IMF approved a $73 million poverty reduction and growth facility for Niger in 2000 and announced $115 million in debt relief under the Heavily Indebted Poor Countries (HIPC) initiative

Nigeria: ODA $250 million (1998)

Niue: $8.3 million (1995)

Norfolk Island: $NA

Northern Mariana Islands: extensive funding from US

Oman: $76.4 million (1995)

Pakistan: $2 billion (FY99/00)

Palau: $155.8 million (1995); note - the Compact of Free Association with the US, entered into after the end of the UN trusteeship on 1 October 1994, will provide Palau with up to $700 million in US aid over 15 years in return for furnishing military facilities

Panama: $197.1 million (1995)

Papua New Guinea: $400 million (1999 est.)

Paraguay: $NA

Peru: $895.1 million (1995)

Philippines: ODA, $1.1 billion (1998)

Pitcairn Islands: $NA

Poland: $NA

Puerto Rico: $NA

Qatar: $NA

Reunion: $NA; note - substantial annual subsidies from France

Russia: $8.523 billion (1995)

Rwanda: $591.5 million (1997); note - in summer 1998, Rwanda presented its policy objectives and development priorities to donor governments resulting in multiyear pledges in the amount of $250 million

Saint Helena: $12.6 million (1995); note - $5.3 million from UK (1997)

Saint Kitts and Nevis: $5.5 million (1995)

Saint Lucia: $51.8 million (1995)

Saint Pierre and Miquelon: approximately $65 million in annual grants from France

Saint Vincent and the Grenadines: $47.5 million (1995); note - EU $34.5 million (1998)

Samoa: $42.9 million (1995)

San Marino: $NA

Sao Tome and Principe: $200 million in December 2000 under the HIPC program

Senegal: $647.5 million (1995)

Seychelles: $16.4 million (1995)

Sierra Leone: $203.7 million (1995)

Singapore: $NA

Slovakia: $421.9 million (1995)

Slovenia: ODA, $5 million (1993)

Solomon Islands: $47 million (1999 est.), mainly from Japan, Australia, China, and NZ

Somalia: $191.5 million (1995)

South Africa: $676.3 million

Sri Lanka: $577 million (1998)

Sudan: $187 million (1997)

Suriname: Netherlands provided $37 million for project and program assistance, European Development Fund $4 million, Belgium $2 million (1998)

Svalbard: $8.2 million from Norway (1998)

Swaziland: $55 million (1995)

Syria: $199 million (1997 est.)

Tajikistan: $64.7 million (1995)

Tanzania: $963 million (1997)

Thailand: $131.5 million (1998 est.)

Togo: $201.1 million (1995)

Tokelau: $3.8 million (1995)

Tonga: $38.8 million (1995)

Trinidad and Tobago: $121.4 million (1995)

Tunisia: $933.2 million (1995); note - ODA, $90 million (1998 est.)

Turkey: ODA, $195 million (1993)

Turkmenistan: $27.2 million (1995)

Turks and Caicos Islands: $4.1 million (1997)

Tuvalu: $13 million (1999 est.); note - major donors are Japan and Australia

Uganda: $1.4 billion (2000)

Ukraine: $637.7 million (1995); IMF Extended Funds Facility $2.2 billion (1998)

United Arab Emirates: $NA

Uruguay: $NA

Uzbekistan: $276.6 million (1995)

Vanuatu: $45.8 million (1995)

Venezuela: $35 million with more assistance likely as a result of flooding (1999)

Vietnam: $2.1 billion in credits and grants pledged by international donors for 2000

Virgin Islands: $NA

Wallis and Futuna: assistance from France

West Bank: $121 million disbursed (includes Gaza Strip) (2000)

Western Sahara: $NA

World: traditional worldwide foreign aid $50 billion (1997 est.)

Yemen: $176.1 million (1995)

Yugoslavia: $NA

Zambia: $1.99 billion (1995)

Zimbabwe: $200 million (2000 est.)

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@Economy - overview

Afghanistan: Afghanistan is an extremely poor, landlocked country, highly dependent on farming and livestock raising (sheep and goats). Economic considerations have played second fiddle to political and military upheavals during two decades of war, including the nearly 10-year Soviet military occupation (which ended 15 February 1989). During that conflict one-third of the population fled the country, with Pakistan and Iran sheltering a combined peak of more than 6 million refugees. In early 2000, 2 million Afghan refugees remained in Pakistan and about 1.4 million in Iran. Gross domestic product has fallen substantially over the past 20 years because of the loss of labor and capital and the disruption of trade and transport; severe drought added to the nation's difficulties in 1998-2000. The majority of the population continues to suffer from insufficient food, clothing, housing, and medical care. Inflation remains a serious problem throughout the country. International aid can deal with only a fraction of the humanitarian problem, let alone promote economic development. In 1999-2000, internal civil strife continued, hampering both domestic economic policies and international aid efforts. Numerical data are likely to be either unavailable or unreliable. Afghanistan was by far the largest producer of opium poppies in 2000, and narcotics trafficking is a major source of revenue.

Albania: Poor by European standards, Albania is making the difficult transition to a more open-market economy. The economy rebounded in 1993-95 after a severe depression accompanying the end of the previous centrally planned system in 1990 and 1991. However, a weakening of government resolve to maintain stabilization policies in the election year of 1996 contributed to renewal of inflationary pressures, spurred by the budget deficit which exceeded 12% of GDP. The collapse of financial pyramid schemes in early 1997 - which had attracted deposits from a substantial portion of Albania's population - triggered severe social unrest which led to more than 1,500 deaths, widespread destruction of property, and a 7% drop in GDP. The government has taken measures to curb violent crime and to revive economic activity and trade. The economy is bolstered by remittances from some 20% of the labor force that works abroad, mostly in Greece and Italy. These remittances supplement GDP and help offset the large foreign trade deficit. Most agricultural land was privatized in 1992, substantially improving peasant incomes. In 1998, Albania recovered the 7% drop in GDP of 1997 and pushed ahead by 8% in 1999 and by 7.5% in 2000. International aid helped defray the high costs of receiving and returning refugees from the Kosovo conflict. Privatization scored some successes in 2000, but other reforms lagged.

Algeria: The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the fifth-largest reserves of natural gas in the world and is the second largest gas exporter; it ranks fourteenth for oil reserves. Algiers' efforts to reform one of the most centrally planned economies in the Arab world stalled in 1992 as the country became embroiled in political turmoil. Algeria's financial and economic indicators improved during the mid-1990s, in part because of policy reforms supported by the IMF and debt rescheduling from the Paris Club. Algeria's finances in 2000 benefited from the spike in oil prices and the government's tight fiscal policy, leading to a large increase in the trade surplus, the near tripling of foreign exchange reserves, and reduction in foreign debt. The government continues efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, but has had little success in reducing high unemployment and improving living standards.

American Samoa: This is a traditional Polynesian economy in which more than 90% of the land is communally owned. Economic activity is strongly linked to the US, with which American Samoa conducts the great bulk of its foreign trade. Tuna fishing and tuna processing plants are the backbone of the private sector, with canned tuna the primary export. Transfers from the US Government add substantially to American Samoa's economic well-being. Attempts by the government to develop a larger and broader economy are restrained by Samoa's remote location, its limited transportation, and its devastating hurricanes. Tourism, a developing sector, has been held back by the recurring financial difficulties in East Asia.

Andorra: Tourism, the mainstay of Andorra's tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 9 million tourists visit annually, attracted by Andorra's duty-free status and by its summer and winter resorts. Andorra's comparative advantage has recently eroded as the economies of neighboring France and Spain have been opened up, providing broader availability of goods and lower tariffs. The banking sector, with its "tax haven" status, also contributes substantially to the economy. Agricultural production is limited by a scarcity of arable land, and most food has to be imported. The principal livestock activity is sheep raising. Manufacturing output consists mainly of cigarettes, cigars, and furniture. Andorra is a member of the EU Customs Union and is treated as an EU member for trade in manufactured goods (no tariffs) and as a non-EU member for agricultural products.

Angola: Angola is an economy in disarray because of a quarter century of nearly continuous warfare. Despite its abundant natural resources, output per capita is among the world's lowest. Subsistence agriculture provides the main livelihood for 85% of the population. Oil production and the supporting activities are vital to the economy, contributing about 45% to GDP and 90% of exports. Violence continues, millions of land mines remain, and many farmers are reluctant to return to their fields. As a result, much of the country's food must still be imported. To fully take advantage of its rich resources - gold, diamonds, extensive forests, Atlantic fisheries, and large oil deposits - Angola will need to end its conflict and continue reforming government policies. Despite the increase in the pace of civil warfare in late 1998, the economy grew by an estimated 5% in 2000. The government introduced new currency denominations in 1999, including 1 and 5 kwanza notes. Internal strife discourages investment outside of the petroleum sector, which is producing roughly 800,000 barrels of oil per day. Angola has entered into a Staff Monitored Program (SMP) with the IMF. Continued growth depends on sharp cuts in inflation, further economic reform, and a lessening of fighting.

Anguilla: Anguilla has few natural resources, and the economy depends heavily on luxury tourism, offshore banking, lobster fishing, and remittances from emigrants. The economy, and especially the tourism sector, suffered a setback in late 1995 due to the effects of Hurricane Luis in September but recovered in 1996. Increased activity in the tourism industry, which has spurred the growth of the construction sector, has contributed to economic growth. Anguillan officials have put substantial effort into developing the offshore financial sector. A comprehensive package of financial services legislation was enacted in late 1994. In the medium term, prospects for the economy will depend on the tourism sector and, therefore, on continuing income growth in the industrialized nations as well as favorable weather conditions.

Antarctica: Fishing off the coast and tourism, both based abroad, account for the limited economic activity. Antarctic fisheries in 1998-99 (1 July-30 June) reported landing 119,898 metric tons. Unregulated fishing landed five to six times more than the regulated fishery, and allegedly illegal fishing in antarctic waters in 1998 resulted in the seizure (by France and Australia) of at least eight fishing ships. Companies interested in commercial fishing activities in Antarctica have put forward proposals. The Convention on the Conservation of Antarctic Marine Living Resources determines the recommended catch limits for marine species. A total of 13,193 tourists visited in the 1999-2000 summer, up from the 10,013 who visited the previous year. Nearly all of them were passengers on 24 commercial (nongovernmental) ships and several yachts that made 143 trips during the summer. Most tourist trips lasted approximately two weeks.

Antigua and Barbuda: Tourism continues to be the dominant activity in the economy accounting directly or indirectly for more than half of GDP. The budding offshore financial sector has been seriously hurt by financial sanctions imposed by the US and UK as a result of the loosening of its money-laundering controls. The government has made efforts to comply with international demands in order to get the sanctions lifted. Antigua and Barbuda was listed as a tax haven by the OECD in 2000. The dual island nation's agricultural production is mainly directed to the domestic market; the sector is constrained by the limited water supply and labor shortages that reflect the pull of higher wages in tourism and construction. Manufacturing comprises enclave-type assembly for export with major products being bedding, handicrafts, and electronic components. Prospects for economic growth in the medium term will continue to depend on income growth in the industrialized world, especially in the US, which accounts for about one-third of all tourist arrivals.

Arctic Ocean: Economic activity is limited to the exploitation of natural resources, including petroleum, natural gas, fish, and seals.

Argentina: Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. However, when President Carlos MENEM took office in 1989, the country had piled up huge external debts, inflation had reached 200% per month, and output was plummeting. To combat the economic crisis, the government embarked on a path of trade liberalization, deregulation, and privatization. In 1991, it implemented radical monetary reforms which pegged the peso to the US dollar and limited the growth in the monetary base by law to the growth in reserves. Inflation fell sharply in subsequent years. In 1995, the Mexican peso crisis produced capital flight, the loss of banking system deposits, and a severe, but short-lived, recession; a series of reforms to bolster the domestic banking system followed. Real GDP growth recovered strongly, reaching 8% in 1997. In 1998, international financial turmoil caused by Russia's problems and increasing investor anxiety over Brazil produced the highest domestic interest rates in more than three years, halving the growth rate of the economy. Conditions worsened in 1999 with GDP falling by 3%. President Fernando DE LA RUA, who took office in December 1999, sponsored tax increases and spending cuts to reduce the deficit, which had ballooned to 2.5% of GDP in 1999. Growth in 2000 was a disappointing 0.8%, as both domestic and foreign investors remained skeptical of the government's ability to pay debts and maintain its fixed exchange rate with the US dollar. One bright spot at the start of 2001 was the IMF's offer of $13.7 billion in support.

Armenia: Under the old Soviet central planning system, Armenia had developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics in exchange for raw materials and energy. Since the implosion of the USSR in December 1991, Armenia has switched to small-scale agriculture away from the large agroindustrial complexes of the Soviet era. The agricultural sector has long-term needs for more investment and updated technology. The privatization of industry has been at a slower pace, but has been given renewed emphasis by the current administration. Armenia is a food importer, and its mineral deposits (gold, bauxite) are small. The ongoing conflict with Azerbaijan over the ethnic Armenian-dominated region of Nagorno-Karabakh and the breakup of the centrally directed economic system of the former Soviet Union contributed to a severe economic decline in the early 1990s. By 1994, however, the Armenian Government had launched an ambitious IMF-sponsored economic program that has resulted in positive growth rates in 1995-2000. Armenia also managed to slash inflation and to privatize most small- and medium-sized enterprises. The chronic energy shortages Armenia suffered in recent years have been largely offset by the energy supplied by one of its nuclear power plants at Metsamor. Armenia's severe trade imbalance, importing three times its exports, has been offset somewhat by international aid, domestic restructuring of the economy, and foreign direct investment.

Aruba: Tourism is the mainstay of the Aruban economy, although offshore banking and oil refining and storage are also important. The rapid growth of the tourism sector over the last decade has resulted in a substantial expansion of other activities. Construction has boomed, with hotel capacity five times the 1985 level. In addition, the reopening of the country's oil refinery in 1993, a major source of employment and foreign exchange earnings, has further spurred growth. Aruba's small labor force and less than 1% unemployment rate have led to a large number of unfilled job vacancies, despite sharp rises in wage rates in recent years.

Ashmore and Cartier Islands: no economic activity

Atlantic Ocean: The Atlantic Ocean provides some of the world's most heavily trafficked sea routes, between and within the Eastern and Western Hemispheres. Other economic activity includes the exploitation of natural resources, e.g., fishing, the dredging of aragonite sands (The Bahamas), and production of crude oil and natural gas (Caribbean Sea, Gulf of Mexico, and North Sea).

Australia: Australia has a prosperous Western-style capitalist economy, with a per capita GDP at the level of the four dominant West European economies. Rich in natural resources, Australia is a major exporter of agricultural products, minerals, metals, and fossil fuels. Commodities account for 57% of the value of total exports, so that a downturn in world commodity prices can have a big impact on the economy. The government is pushing for increased exports of manufactured goods, but competition in international markets continues to be severe. While Australia has suffered from the low growth and high unemployment characterizing the OECD countries in the early 1990s and during the recent financial problems in East Asia, the economy has expanded at a solid 4% annual growth pace in the last five years. Canberra's emphasis on reforms is a key factor behind the economy's resilience to the regional crisis and its stronger than expected growth rate. Growth in 2001 will depend on key international commodity prices, the extent of recovery in nearby Asian economies, and the strength of US and European markets.

Austria: Austria with its well-developed market economy and high standard of living is closely tied to other EU economies, especially Germany's. Membership in the EU has drawn an influx of foreign investors attracted by Austria's access to the single European market and proximity to EU aspirant economies. In 2000, Austria moved to further cut government spending and raise taxes to meet EMU deficit targets after facing unexpected difficulties in reducing the public deficit. To meet increased competition from both EU and Central European countries, Austria will need to emphasize knowledge-based sectors of the economy and continue to deregulate the service sector. Growth is expected to remain at about 3% in 2001.

Azerbaijan: Azerbaijan's most prominent products are oil, cotton, and natural gas. Azerbaijan's oil production declined through 1997 but has registered an increase every year since. Negotiation of 19 production-sharing arrangements (PSAs) with foreign firms, which have thus far committed $60 billion to oil field development, should generate the funds needed to spur future industrial development. Oil production under the first of these PSAs, with the Azerbaijan International Operating Company, began in November 1997. Azerbaijan shares all the formidable problems of the former Soviet republics in making the transition from a command to a market economy, but its considerable energy resources brighten its long-term prospects. Baku has only recently begun making progress on economic reform, and old economic ties and structures are slowly being replaced. An obstacle to economic progress, including stepped up foreign investment, is the continuing conflict with Armenia over the Nagorno-Karabakh region. Trade with Russia and the other former Soviet republics is declining in importance while trade is building up with Turkey, Iran, UAE, and the nations of Europe. Long-term prospects will depend on world oil prices, the location of new pipelines in the region, and Azerbaijan's ability to manage its oil wealth.

Bahamas, The: The Bahamas is a stable, developing nation with an economy heavily dependent on tourism and offshore banking. Tourism alone accounts for more than 60% of GDP and directly or indirectly employs 40% of the archipelago's labor force. Moderate growth in tourism receipts and a boom in construction of new hotels, resorts, and residences led to an increase of the country's GDP by an estimated 3% in 1998, 6% in 1999, and 4.5% in 2000. Manufacturing and agriculture together contribute only 10% of GDP and show little growth, despite government incentives aimed at those sectors. Overall growth prospects in the short run will depend heavily on the fortunes of the tourism sector and continued sturdy growth in the US, which accounts for the majority of tourist visitors.

Bahrain: In Bahrain, petroleum production and refining account for about 60% of export receipts, 60% of government revenues, and 30% of GDP. With its highly developed communication and transport facilities, Bahrain is home to numerous multinational firms with business in the Gulf. Bahrain is dependent on Saudi Arabia for oil revenue granted as aid. A large share of exports consists of petroleum products made from imported crude. Construction proceeds on several major industrial projects. Unemployment, especially among the young, and the depletion of both oil and underground water resources are major long-term economic problems.

Baker Island: no economic activity

Bangladesh: Despite sustained domestic and international efforts to improve economic and demographic prospects, Bangladesh remains one of the world's poorest, most densely populated, and least developed nations. Although more than half of GDP is generated through the service sector, nearly two-thirds of Bangladeshis are employed in the agriculture sector, with rice as the single most important product. Major impediments to growth include frequent cyclones and floods, inefficient state-owned enterprises, inadequate port facilities, a rapidly growing labor force that cannot be absorbed by agriculture, delays in exploiting energy resources (natural gas), insufficient power supplies, and slow implementation of economic reforms. Reform is stalled in many instances by political infighting and corruption at all levels of government. Even so, Prime Minister Sheikh HASINA's Awami League government has made some headway improving the climate for foreign investors and liberalizing the capital markets. Progress on other economic reforms has been halting because of opposition from the bureaucracy, public sector unions, and other vested interest groups.

Barbados: Historically, the Barbadian economy had been dependent on sugarcane cultivation and related activities, but production in recent years has diversified into manufacturing and tourism. The start of the Port Charles Marina project in Speightstown helped the tourism industry continue to expand in 1996-2000. Offshore finance and information services are important foreign exchange earners, and there is also a light manufacturing sector. The government continues its efforts to reduce unemployment, encourage direct foreign investment, and privatize remaining state-owned enterprises. Growth should remain steady in 2001, with new tourist facilities a plus factor.

Bassas da India: no economic activity

Belarus: Belarus has seen little structural reform since 1995, when President LUKASHENKO launched the country on the path of "market socialism." In keeping with this policy, LUKASHENKO reimposed administrative controls over prices and currency exchange rates and expanded the state's right to intervene in the management of private enterprise. In addition to the burdens imposed by extremely high inflation, businesses have been subject to pressure on the part of central and local governments, e.g., arbitrary changes in regulations, numerous rigorous inspections, and retroactive application of new business regulations prohibiting practices that had been legal. Further economic problems are two consecutive bad harvests, 1998-99, and persistent trade deficits. Close relations with Russia, possibly leading to reunion, color the pattern of economic developments. For the time being, Belarus remains self-isolated from the West and its open-market economies.

Belgium: This modern private enterprise economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the populous Flemish area in the north, although the government is encouraging investment in the southern region of Wallonia. With few natural resources, Belgium must import substantial quantities of raw materials and export a large volume of manufactures, making its economy unusually dependent on the state of world markets. About three-quarters of its trade is with other EU countries. Belgium's public debt is expected to fall below 100% of GDP in 2002, and the government has succeeded in balancing is budget. Belgium became a charter member of the European Monetary Union (EMU) in January 1999. Economic growth in 2000 was broad based, putting the government in a good position to pursue its energy market liberalization policies and planned tax cuts.

Belize: The small, essentially private enterprise economy is based primarily on agriculture, agro-based industry, and merchandising, with tourism and construction assuming greater importance. Sugar, the chief crop, accounts for nearly half of exports, while the banana industry is the country's largest employer. The government's tough austerity program in 1997 resulted in an economic slowdown that continued in 1998. The trade deficit has been growing, mostly as a result of low export prices for sugar and bananas. The tourist and construction sectors strengthened in early 1999, supporting growth of 6% in 1999 and 4% in 2000. Aided by international donors, the government's key short-term objective remains the reduction of poverty.

Benin: The economy of Benin remains underdeveloped and dependent on subsistence agriculture, cotton production, and regional trade. Growth in real output averaged a sound 5% in 1996-99, but a rapid population rise offset much of this growth. Inflation has subsided over the past several years. Commercial and transport activities, which make up a large part of GDP, are vulnerable to developments in Nigeria, particularly fuel shortages. The Paris Club and bilateral creditors have eased the external debt situation in recent years. While high fuel prices constrained growth in 2000, increased cotton production - enabled by a major restructuring program - and an expansion of the Cotonou port, may lead to increased growth in 2001.

Bermuda: Bermuda enjoys one of the highest per capita incomes in the world, having successfully exploited its location by providing financial services for international firms and luxury tourist facilities for 360,000 visitors annually. The tourist industry, which accounts for an estimated 28% of GDP, attracts 84% of its business from North America. The industrial sector is small, and agriculture is severely limited by a lack of suitable land. About 80% of food needs are imported. International business contributes over 60% of Bermuda's economic output; a failed independence vote in late 1995 can be partially attributed to Bermudian fears of scaring away foreign firms. Government economic priorities are the further strengthening of the tourist and international financial sectors.

Bhutan: The economy, one of the world's smallest and least developed, is based on agriculture and forestry, which provide the main livelihood for more than 90% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. The economy is closely aligned with India's through strong trade and monetary links. The industrial sector is technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor. Bhutan's hydropower potential and its attraction for tourists are key resources. The Bhutanese Government has made some progress in expanding the nation's productive base and improving social welfare. Model education, social, and environment programs in Bhutan are underway with support from multilateral development organizations. Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. Detailed controls and uncertain policies in areas like industrial licensing, trade, labor, and finance continue to hamper foreign investment.

Bolivia: Bolivia, long one of the poorest and least developed Latin American countries, has made considerable progress toward the development of a market-oriented economy. Successes under President SANCHEZ DE LOZADA (1993-97) included the signing of a free trade agreement with Mexico and joining the Southern Cone Common Market (Mercosur), as well as the privatization of the state airline, telephone company, railroad, electric power company, and oil company. His successor, Hugo BANZER Suarez has tried to further improve the country's investment climate with an anticorruption campaign. Growth slowed in 1999, in part due to tight government budget policies, which limited needed appropriations for anti-poverty programs, and the fallout from the Asian financial crisis. In 2000, major civil disturbances in April, and again in September and October, held down overall growth to 2.5%.

Bosnia and Herzegovina: Bosnia and Herzegovina ranked next to The Former Yugoslav Republic of Macedonia as the poorest republic in the old Yugoslav federation. Although agriculture is almost all in private hands, farms are small and inefficient, and the republic traditionally is a net importer of food. Industry has been greatly overstaffed, one reflection of the socialist economic structure of Yugoslavia. TITO had pushed the development of military industries in the republic with the result that Bosnia hosted a large share of Yugoslavia's defense plants. The bitter interethnic warfare in Bosnia caused production to plummet by 80% from 1990 to 1995, unemployment to soar, and human misery to multiply. With an uneasy peace in place, output recovered in 1996-98 at high percentage rates from a low base; but output growth slowed appreciably in 1999 and 2000, and GDP remains far below the 1990 level. Economic data are of limited use because, although both entities issue figures, national-level statistics are not available. Moreover, official data do not capture the large share of activity that occurs on the black market. The marka - the national currency introduced in 1998 - has gained wide acceptance, and the Central Bank of Bosnia and Herzegovina has dramatically increased its reserve holdings. Implementation of privatization, however, has been slower than anticipated. Banking reform accelerated in early 2001 as all the communist-era payments bureaus were shut down. The country receives substantial amounts of reconstruction assistance and humanitarian aid from the international community but will have to prepare for an era of declining assistance.

Botswana: Botswana has maintained one of the world's highest growth rates since independence in 1966. Through fiscal discipline and sound management, Botswana has transformed itself from one of the poorest countries in the world to a middle-income country with a per capita GDP of $6,600 in 2000. Diamond mining has fueled much of Botswana's economic expansion and currently accounts for more than one-third of GDP and for three-fourths of export earnings. Tourism, subsistence farming, and cattle raising are other key sectors. The government must deal with high rates of unemployment and poverty. Unemployment officially is 19%, but unofficial estimates place it closer to 40%. HIV/AIDS infection rates are the highest in the world and threaten Botswana's impressive economic gains.

Bouvet Island: no economic activity; declared a nature reserve

Brazil: Possessing large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets. In the late eighties and early nineties, high inflation hindered economic activity and investment. "The Real Plan", instituted in the spring of 1994, sought to break inflationary expectations by pegging the real to the US dollar. Inflation was brought down to single digit annual figures, but not fast enough to avoid substantial real exchange rate appreciation during the transition phase of the "Real Plan". This appreciation meant that Brazilian goods were now more expensive relative to goods from other countries, which contributed to large current account deficits. However, no shortage of foreign currency ensued because of the financial community's renewed interest in Brazilian markets as inflation rates stabilized and the debt crisis of the eighties faded from memory. The maintenance of large current account deficits via capital account surpluses became problematic as investors became more risk averse to emerging market exposure as a consequence of the Asian financial crisis in 1997 and the Russian bond default in August 1998. After crafting a fiscal adjustment program and pledging progress on structural reform, Brazil received a $41.5 billion IMF-led international support program in November 1998. In January 1999, the Brazilian Central Bank announced that the real would no longer be pegged to the US dollar. This devaluation helped moderate the downturn in economic growth in 1999 that investors had expressed concerns about over the summer of 1998. Brazil's debt to GDP ratio for 1999 beat the IMF target and helped reassure investors that Brazil will maintain tight fiscal and monetary policy even with a floating currency. The economy continued to recover in 2000, with inflation remaining in the single digits and expected growth for 2001 of 4.5%. Foreign direct investment set a record of more than $30 billion in 2000.

British Indian Ocean Territory: All economic activity is concentrated on the largest island of Diego Garcia, where joint UK-US defense facilities are located. Construction projects and various services needed to support the military installations are done by military and contract employees from the UK, Mauritius, the Philippines, and the US. There are no industrial or agricultural activities on the islands. When the Ilois return, they plan to reestablish sugarcane production and fishing.

British Virgin Islands: The economy, one of the most stable and prosperous in the Caribbean, is highly dependent on tourism, which generates an estimated 45% of the national income. An estimated 350,000 tourists, mainly from the US, visited the islands in 1997. In the mid-1980s, the government began offering offshore registration to companies wishing to incorporate in the islands, and incorporation fees now generate substantial revenues. An estimated 250,000 companies were on the offshore registry by yearend 1997. The adoption of a comprehensive insurance law in late 1994, which provides a blanket of confidentiality with regulated statutory gateways for investigation of criminal offenses, is expected to make the British Virgin Islands even more attractive to international business. Livestock raising is the most important agricultural activity; poor soils limit the islands' ability to meet domestic food requirements. Because of traditionally close links with the US Virgin Islands, the British Virgin Islands has used the dollar as its currency since 1959.

Brunei: This small, wealthy economy is a mixture of foreign and domestic entrepreneurship, government regulation and welfare measures, and village tradition. Exports of crude oil and natural gas account for over half of GDP. Per capita GDP is far above most other Third World countries, and substantial income from overseas investment supplements income from domestic production. The government provides for all medical services and subsidizes rice and housing. Brunei's leaders are concerned that steadily increased integration in the world economy will undermine internal social cohesion although it became a more prominent player by serving as chairman for the 2000 APEC (Asian Pacific Economic Cooperation) forum. Plans for the future include upgrading the labor force, reducing unemployment, strengthening the banking and tourist sectors, and, in general, a further widening of the economic base beyond oil and gas.

Bulgaria: Bulgaria, a former communist country struggling to enter the European market economy, suffered a major economic downturn in 1996 and 1997, with triple digit inflation and GDP contraction of 10.6% and 6.9%. The current government - which took office in May 1997 after pre-term parliamentary elections - stabilized the economy and promoted growth by implementing a currency board, practicing sound financial policies, invigorating privatization, and pursuing structural reforms. Additionally, strong assistance from international financial institutions - most notably the IMF which approved a three-year Extended Fund Facility worth approximately $900 million in September 1998 - played a critical role in turning the economy around. After several years of tumult, Bulgaria's economy has stabilized. Its better-than-expected economic performance in 1999 - despite the impact of the Kosovo conflict, the 1998 Russian financial crisis, and structural reforms - and strong growth in 2000 portends solid growth over the next few years; this assumes continued fiscal restraint, additional structural reforms, aid from abroad, and prosperous times in the EU economy.

Burkina Faso: One of the poorest countries in the world, landlocked Burkina Faso has a high population density, few natural resources, and a fragile soil. About 90% of the population is engaged in (mainly subsistence) agriculture which is highly vulnerable to variations in rainfall. Industry remains dominated by unprofitable government-controlled corporations. Following the African franc currency devaluation in January 1994 the government updated its development program in conjunction with international agencies, and exports and economic growth have increased. Maintenance of its macroeconomic progress in 2001-02 depends on continued low inflation, reduction in the trade deficit, and reforms designed to encourage private investment.

Burma: Burma has a mixed economy with private activity dominant in agriculture, light industry, and transport, and with substantial state-controlled activity, mainly in energy, heavy industry, and the rice trade. Government policy in the 1990s has aimed at revitalizing the economy after three decades of tight central planning. Private activity markedly increased in the early to mid-1990s, but began to decline in the past several years due to frustrations with the unfriendly business environment and political pressure from western nations. Published estimates of Burma's foreign trade are greatly understated because of the volume of black-market, illicit, and border trade. A major ongoing problem is the failure to achieve monetary and fiscal stability. Burma remains a poor Asian country and living standards for the majority have not improved over the past decade. Short-term growth will continue to be restrained because of poor government planning and minimal foreign investment.

Burundi: Burundi is a landlocked, resource-poor country with an underdeveloped manufacturing sector. The economy is predominantly agricultural with roughly 90% of the population dependent on subsistence agriculture. Its economic health depends on the coffee crop, which accounts for 80% of foreign exchange earnings. The ability to pay for imports therefore rests largely on the vagaries of the climate and the international coffee market. Since October 1993 the nation has suffered from massive ethnic-based violence which has resulted in the death of perhaps 250,000 persons and the displacement of about 800,000 others. Only one in four children go to school, and one in nine adults has HIV/AIDS. Foods, medicines, and electricity remain in short supply.

Cambodia: Cambodia's economy slowed dramatically in 1997-98 due to the regional economic crisis, civil violence, and political infighting. Foreign investment and tourism fell off. In 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 4%. GDP growth for 2000 had been projected to reach 5.5%, but the worst flooding in 70 years severely damaged agricultural crops, and high oil prices hurt industrial production, and growth for the year is estimated at only 4%. Tourism is Cambodia's fastest growing industry, with arrivals up 34% in 2000. The long-term development of the economy after decades of war remains a daunting challenge. The population lacks education and productive skills, particularly in the poverty-ridden countryside, which suffers from an almost total lack of basic infrastructure. Fear of renewed political instability and corruption within the government discourage foreign investment and delay foreign aid. On the brighter side, the government is addressing these issues with assistance from bilateral and multilateral donors.

Cameroon: Because of its oil resources and favorable agricultural conditions, Cameroon has one of the best-endowed primary commodity economies in sub-Saharan Africa. Still, it faces many of the serious problems facing other underdeveloped countries, such as a top-heavy civil service and a generally unfavorable climate for business enterprise. Since 1990, the government has embarked on various IMF and World Bank programs designed to spur business investment, increase efficiency in agriculture, improve trade, and recapitalize the nation's banks. In June 2000, the government completed an IMF-sponsored, three-year structural adjustment program; however, the IMF is pressing for more reforms, including increased budget transparency and privatization. Higher oil prices in 2000 helped to offset the country's lower cocoa export revenues. A rebound in the cocoa market should increase growth to over 5% in 2001.

Canada: As an affluent, high-tech industrial society, Canada today closely resembles the US in its market-oriented economic system, pattern of production, and high living standards. Since World War II, the impressive growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban. Real rates of growth have averaged nearly 3.0% since 1993. Unemployment is falling and government budget surpluses are being partially devoted to reducing the large public sector debt. The 1989 US-Canada Free Trade Agreement (FTA) and 1994 North American Free Trade Agreement (NAFTA) (which included Mexico) have touched off a dramatic increase in trade and economic integration with the US. With its great natural resources, skilled labor force, and modern capital plant Canada enjoys solid economic prospects. Two shadows loom, the first being the continuing constitutional impasse between English- and French-speaking areas, which has been raising the possibility of a split in the federation. Another long-term concern is the flow south to the US of professional persons lured by higher pay, lower taxes, and the immense high-tech infrastructure.

Cape Verde: Cape Verde's low per capita GDP reflects a poor natural resource base, including serious water shortages exacerbated by cycles of long-term drought. The economy is service-oriented, with commerce, transport, and public services accounting for almost 70% of GDP. Although nearly 70% of the population lives in rural areas, the share of agriculture in GDP in 1998 was only 13%, of which fishing accounts for 1.5%. About 90% of food must be imported. The fishing potential, mostly lobster and tuna, is not fully exploited. Cape Verde annually runs a high trade deficit, financed by foreign aid and remittances from emigrants; remittances constitute a supplement to GDP of more than 20%. Economic reforms, launched by the new democratic government in 1991, are aimed at developing the private sector and attracting foreign investment to diversify the economy. Prospects for 2001 depend heavily on the maintenance of aid flows, remittances, and the momentum of the government's development program.

Cayman Islands: With no direct taxation, the islands are a thriving offshore financial center. More than 40,000 companies were registered in the Cayman Islands as of 1997, including almost 600 banks and trust companies; banking assets exceed $500 billion. A stock exchange was opened in 1997. Tourism is also a mainstay, accounting for about 70% of GDP and 75% of foreign currency earnings. The tourist industry is aimed at the luxury market and caters mainly to visitors from North America. Total tourist arrivals exceeded 1.2 million visitors in 1997. About 90% of the islands' food and consumer goods must be imported. The Caymanians enjoy one of the highest outputs per capita and one of the highest standards of living in the world.

Central African Republic: Subsistence agriculture, together with forestry, remains the backbone of the economy of the Central African Republic (CAR), with more than 70% of the population living in outlying areas. The agricultural sector generates half of GDP. Timber has accounted for about 16% of export earnings and the diamond industry for nearly 54%. Important constraints to economic development include the CAR's landlocked position, a poor transportation system, a largely unskilled work force, and a legacy of misdirected macroeconomic policies. The 50% devaluation of the currencies of 14 Francophone African nations on 12 January 1994 had mixed effects on the CAR's economy. Diamond, timber, coffee, and cotton exports increased, leading an estimated rise of GDP of 7% in 1994 and nearly 5% in 1995. Military rebellions and social unrest in 1996 were accompanied by widespread destruction of property and a drop in GDP of 2%. The IMF approved an Extended Structure Adjustment Facility in 1998 and the World Bank extended further credits in 1999 and approved a $10 million loan in early 2001. The government has set targets of 3.5% GDP growth in 2001 and 2002. As of January 2001, many civil servants were owed as much as 30 months pay, leading them to go on strike and further damaging the economy.

Chad: Landlocked Chad's economic development suffers from its geographic remoteness, drought, lack of infrastructure, and political turmoil. About 85% of the population depends on agriculture, including the herding of livestock. Of Africa's Francophone countries, Chad benefited least from the 50% devaluation of their currencies in January 1994. Financial aid from the World Bank, the African Development Fund, and other sources is directed largely at the improvement of agriculture, especially livestock production. The World Bank's decision to back the Doba oil field development and the Chad-Cameroon pipeline will add Chad to the group of already booming West African oil exporters. However, the rank and file may not benefit much from the oil development projects.

Chile: Chile has a market-oriented economy characterized by a high level of foreign trade. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the recession in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. Despite the effects of the recession, Chile maintained its reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. By the end of 1999, exports and economic activity had begun to recover, and growth rebounded to 5.5% in 2000. Unemployment remains stubbornly high, however, putting pressure on President LAGOS to improve living standards. Meanwhile, Chile has launched free trade negotiations with the US.

China: In late 1978 the Chinese leadership began moving the economy from a sluggish Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state managers and enterprises has been steadily increasing. The authorities have switched to a system of household responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. In 2000, with its 1.26 billion people but a GDP of just $3,600 per capita, China stood as the second largest economy in the world after the US (measured on a purchasing power parity basis). Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods. On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and stepped-up inflation). Beijing thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) collect revenues due from provinces, businesses, and individuals; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises many of which had been shielded from competition by subsides and had been losing the ability to pay full wages and pensions. From 80 to 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining growth in living standards. Another long-term threat to continued rapid economic growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. Weakness in the global economy in 2001 could hamper growth in exports. Beijing will intensify efforts to stimulate growth through spending on infrastructure—such as water control and power grids—and poverty relief and through rural tax reform aimed at eliminating arbitrary local levies on farmers.

Christmas Island: Phosphate mining had been the only significant economic activity, but in December 1987 the Australian Government closed the mine. In 1991, the mine was reopened by union workers. With the support of the government, Australian-based Casinos Austria International Ltd. built a $34 million casino on Christmas Island, which opened in 1993. As of yearend 1999, gaming facilities at the casino were temporarily closed but were expected to reopen in early 2000. Another economic prospect is the possible location of a space-launching site on the island.

Clipperton Island: Although 115 species of fish have been identified in the territorial waters of Clipperton Island, the only economic activity is tuna fishing.

Cocos (Keeling) Islands: Grown throughout the islands, coconuts are the sole cash crop. Copra and fresh coconuts are the major export earners. Small local gardens and fishing contribute to the food supply, but additional food and most other necessities must be imported from Australia.

Colombia: Colombia is poised for muted growth in the next several years, marking continued recovery from the severe 1999 recession when GDP fell by about 4%. President PASTRANA's well-respected economic team is working to keep the economy on track, maintaining low interest rates, for example. In accordance with its IMF loan agreement, the administration also is taking steps to improve the public sector's fiscal health. However, many challenges to improved prosperity remain. Unemployment was stuck at a record 20% in 2000, contributing to the extreme inequality in income distribution. Two of Colombia's leading exports, oil and coffee, face an uncertain future; new exploration is needed to offset declining oil production, while coffee harvests and prices are depressed. The lack of public security is a key concern for investors, making progress in the government's peace negotiations with insurgent groups an important driver of economic performance. Colombia is looking for continued support from the international community to boost economic and peace prospects.

Comoros: One of the world's poorest countries, Comoros is made up of three islands that have inadequate transportation links, a young and rapidly increasing population, and few natural resources. The low educational level of the labor force contributes to a subsistence level of economic activity, high unemployment, and a heavy dependence on foreign grants and technical assistance. Agriculture, including fishing, hunting, and forestry, is the leading sector of the economy. It contributes 40% to GDP, employs 80% of the labor force, and provides most of the exports. The country is not self-sufficient in food production; rice, the main staple, accounts for the bulk of imports. The government is struggling to upgrade education and technical training, to privatize commercial and industrial enterprises, to improve health services, to diversify exports, to promote tourism, and to reduce the high population growth rate. Continued foreign support is essential if the goal of 4% annual GDP growth is to be met. Remittances from 150,000 Comorans abroad help supplement GDP.

Congo, Democratic Republic of the: The economy of the Democratic Republic of the Congo - a nation endowed with vast potential wealth - has declined drastically since the mid-1980s. The new government instituted a tight fiscal policy that initially curbed inflation and currency depreciation, but these small gains were quickly reversed when the foreign-backed rebellion in the eastern part of the country began in August 1998. The war has dramatically reduced national output and government revenue and has increased external debt. Foreign businesses have curtailed operations due to uncertainty about the outcome of the conflict and because of increased government harassment and restrictions. The war has intensified the impact of such basic problems as an uncertain legal framework, corruption, raging inflation, and lack of openness in government economic policy and financial operations. A number of IMF and World Bank missions have met with the government to help it develop a coherent economic plan but associated reforms are on hold.

Congo, Republic of the: The economy is a mixture of village agriculture and handicrafts, an industrial sector based largely on oil, support services, and a government characterized by budget problems and overstaffing. Oil has supplanted forestry as the mainstay of the economy, providing a major share of government revenues and exports. In the early 1980s, rapidly rising oil revenues enabled the government to finance large-scale development projects with GDP growth averaging 5% annually, one of the highest rates in Africa. Moreover, the government has mortgaged a substantial portion of its oil earnings, contributing to the government's shortage of revenues. The 12 January 1994 devaluation of Franc Zone currencies by 50% resulted in inflation of 61% in 1994, but inflation has subsided since. Economic reform efforts continued with the support of international organizations, notably the World Bank and the IMF. The reform program came to a halt in June 1997 when civil war erupted. Denis SASSOU-NGUESSO, who returned to power when the war ended in October 1997, publicly expressed interest in moving forward on economic reforms and privatization and in renewing cooperation with international financial institutions. However, economic progress was badly hurt by slumping oil prices and the resumption of armed conflict in December 1998, which worsened the Republic of the Congo's budget deficit. Even with the IMF's renewed confidence and high world oil prices, Congo is unlikely to realize growth of more than 5% in 2001-02. With the return to fragile peace, the IMF approved a $14 million credit in November 2000 to aid post-conflict reconstruction.

Cook Islands: Like many other South Pacific island nations, the Cook Islands' economic development is hindered by the isolation of the country from foreign markets, the limited size of domestic markets, lack of natural resources, periodic devastation from natural disasters, and inadequate infrastructure. Agriculture provides the economic base with major exports made up of copra and citrus fruit. Manufacturing activities are limited to fruit processing, clothing, and handicrafts. Trade deficits are made up for by remittances from emigrants and by foreign aid, overwhelmingly from New Zealand. In the 1980s and 1990s, the country lived beyond its means, maintaining a bloated public service and accumulating a large foreign debt. Subsequent reforms, including the sale of state assets, the strengthening of economic management, the encouragement of tourism, and a debt restructuring agreement, have rekindled investment and growth.

Coral Sea Islands: no economic activity

Costa Rica: Costa Rica's basically stable economy depends on tourism, agriculture, and electronics exports. Poverty has been substantially reduced over the past 15 years, and a strong social safety net has been put into place. Foreign investors remain attracted by the country's political stability and high education levels, and tourism continues to bring in foreign exchange. However, traditional export sectors have not kept pace. Low coffee prices and an overabundance of bananas have hurt the agricultural sector. The government continues to grapple with its large deficit and massive internal debt and with the need to modernize the state-owned electricity and telecommunications sector.

Cote d'Ivoire: Cote d'Ivoire is among the world's largest producers and exporters of coffee, cocoa beans, and palm oil. Consequently, the economy is highly sensitive to fluctuations in international prices for these products and to weather conditions. Despite government attempts to diversify the economy, it is still largely dependent on agriculture and related activities, which engage roughly 68% of the population. After several years of lagging performance, the Ivorian economy began a comeback in 1994, due to the 50% devaluation of the CFA franc and improved prices for cocoa and coffee, growth in nontraditional primary exports such as pineapples and rubber, limited trade and banking liberalization, offshore oil and gas discoveries, and generous external financing and debt rescheduling by multilateral lenders and France. Moreover, government adherence to donor-mandated reforms led to a jump in growth to 5% annually in 1996-99. Growth was negative in 2000 because of the difficulty of meeting the conditions of international donors, continued low prices of key exports, and post-coup instability. In 2001-02, a moderate rebound in the cocoa market could boost growth back above 3%; however, political instability could impede growth again.

Croatia: Before the dissolution of Yugoslavia, the Republic of Croatia, after Slovenia, was the most prosperous and industrialized area, with a per capita output perhaps one-third above the Yugoslav average. Croatia faces considerable economic problems stemming from: the legacy of longtime communist mismanagement of the economy; damage during the internecine fighting to bridges, factories, power lines, buildings, and houses; the large refugee and displaced population, both Croatian and Bosnian; and the disruption of economic ties. Stepped-up Western aid and investment, especially in the tourist and oil industries, would help bolster the economy. The economy emerged from its mild recession in 2000 with tourism the main factor. Massive unemployment remains a key negative element. The government's failure to press the economic reforms needed to spur growth is largely the result of coalition politics and public resistance, particularly from the trade unions, to measures that would cut jobs, wages, or social benefits.

Cuba: The government, the primary player in the economy, has undertaken limited reforms in recent years to stem excess liquidity, increase enterprise efficiency, and alleviate serious shortages of food, consumer goods, and services, but prioritizing of political control makes extensive reforms unlikely. Living standards for the average Cuban, without access to dollars, remain at a depressed level compared with 1990. The liberalized farmers' markets introduced in 1994, sell above-quota production at market prices, expand legal consumption alternatives, and reduce black market prices. Income taxes and increased regulations introduced since 1996 have sharply reduced the number of legally self-employed from a high of 208,000 in January 1996. Havana announced in 1995 that GDP declined by 35% during 1989-93 as a result of lost Soviet aid and domestic inefficiencies. The slide in GDP came to a halt in 1994 when Cuba reported growth in GDP of 0.7%. Cuba reported that GDP increased by 2.5% in 1995 and 7.8% in 1996, before slowing down in 1997 and 1998 to 2.5% and 1.2% respectively. Growth recovered with a 6.2% increase in GDP in 1999 and a 5.6% increase in 2000. Much of Cuba's recovery can be attributed to tourism revenues and foreign investment. Growth in 2001 should continue at the same level as the government balances the need for economic loosening against its concern for firm political control.

Cyprus: Economic affairs are affected by the division of the country. The Greek Cypriot economy is prosperous but highly susceptible to external shocks. Erratic growth rates in the 1990s reflect the economy's vulnerability to swings in tourist arrivals, caused by political instability on the island and fluctuations in economic conditions in Western Europe. Economic policy is focused on meeting the criteria for admission to the EU. As in the Turkish sector, water shortage is a growing problem, and several desalination plants are planned. The Turkish Cypriot economy has about one-fifth the population and one-third the per capita GDP of the south. Because it is recognized only by Turkey, it has had much difficulty arranging foreign financing, and foreign firms have hesitated to invest there. It remains heavily dependent on agriculture and government service, which together employ about half of the work force. Moreover, the small, vulnerable economy has suffered because the Turkish lira is legal tender. To compensate for the economy's weakness, Turkey provides direct and indirect aid to tourism, education, industry, etc.

Czech Republic: Basically one of the most stable and prosperous of the post-Communist states, the Czech Republic has been recovering from recession since mid-1999. The economy grew about 2.5% in 2000 and should achieve somewhat higher growth in 2001. Growth is led by exports to the EU, especially Germany, and foreign investment, while domestic demand is reviving. Uncomfortably high fiscal and current account deficits could be future problems. Unemployment is down to 8.7% as job creation continues in the rebounding economy; inflation is up to 3.8% but still moderate. The EU put the Czech Republic just behind Poland and Hungary in preparations for accession, which will give further impetus and direction to structural reform. Moves to complete banking, telecommunications and energy privatization will add to foreign investment, while intensified restructuring among large enterprises and banks and improvements in the financial sector should strengthen output growth.

Denmark: This thoroughly modern market economy features high-tech agriculture, up-to-date small-scale and corporate industry, extensive government welfare measures, comfortable living standards, and high dependence on foreign trade. Denmark is a net exporter of food and energy and has a comfortable balance of payments surplus. The center-left coalition government has reduced the formerly high unemployment rate and attained a budget surplus as well as followed the previous government's policies of maintaining low inflation and a stable currency. The coalition has lowered marginal income tax rates and raised environmental taxes thus maintaining overall tax revenues. Problems of bottlenecks, and longer term demographic changes reducing the labor force, are being addressed through labor market reforms. The government has been successful in meeting, and even exceeding, the economic convergence criteria for participating in the third phase (a common European currency) of the European Monetary Union (EMU), but Denmark, in a September 2000 referendum, reconfirmed its decision not to join the 11 other EU members in the euro. Even so, the Danish currency remains pegged to the euro.

Djibouti: The economy is based on service activities connected with the country's strategic location and status as a free trade zone in northeast Africa. Two-thirds of the inhabitants live in the capital city, the remainder being mostly nomadic herders. Scanty rainfall limits crop production to fruits and vegetables, and most food must be imported. Djibouti provides services as both a transit port for the region and an international transshipment and refueling center. It has few natural resources and little industry. The nation is, therefore, heavily dependent on foreign assistance to help support its balance of payments and to finance development projects. An unemployment rate of 40% to 50% continues to be a major problem. Inflation is not a concern, however, because of the fixed tie of the franc to the US dollar. Per capita consumption dropped an estimated 35% over the last seven years because of recession, civil war, and a high population growth rate (including immigrants and refugees). Faced with a multitude of economic difficulties, the government has fallen in arrears on long-term external debt and has been struggling to meet the stipulations of foreign aid donors. The year 2001 will see only small growth as port activity should decrease now that Ethiopia has more trade route options.

Dominica: The economy depends on agriculture and is highly vulnerable to climatic conditions, notably tropical storms. Agriculture, primarily bananas, accounts for 21% of GDP and employs 40% of the labor force. Development of the tourist industry remains difficult because of the rugged coastline, lack of beaches, and the lack of an international airport. Hurricane Luis devastated the country's banana crop in September 1995; tropical storms had wiped out one-quarter of the crop in 1994 as well. The subsequent recovery has been fueled by increases in construction, soap production, and tourist arrivals. The government is attempting to develop an offshore financial industry in order to diversify the island's production base.

Dominican Republic: The Dominican economy experienced dramatic growth over the last decade, even though the economy was hit hard by Hurricane Georges in 1998. Although the country has long been viewed primarily as an exporter of sugar, coffee, and tobacco, in recent years the service sector has overtaken agriculture as the economy's largest employer, due to growth in tourism and free trade zones. The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GNP, while the richest ten percent enjoy 40% of national income. In December 2000, the new MEJIA administration passed broad new tax legislation which it hopes will provide enough revenue to offset rising oil prices and to service foreign debt.

Ecuador: Ecuador has substantial oil resources and rich agricultural areas. Because the country exports primary products such as oil, bananas, and shrimp, fluctuations in world market prices can have a substantial domestic impact. Ecuador joined the World Trade Organization in 1996, but has failed to comply with many of its accession commitments. In recent years, growth has been uneven due to ill-conceived fiscal stabilization measures. The aftermath of El Nino and depressed oil market of 1997-98 drove Ecuador's economy into a free-fall in 1999. The beginning of 1999 saw the banking sector collapse, which helped precipitate an unprecedented default on external loans later that year. Continued economic instability drove a 70% depreciation of the currency throughout 1999, which eventually forced a desperate government to "dollarize" the currency regime in 2000. The move stabilized the currency, but did not stave off the ouster of the government. The new president, Gustavo NOBOA has yet to complete negotiations for a long sought IMF accord. He will find it difficult to push through the reforms necessary to make "dollarization" work in the long run.

Egypt: A series of IMF arrangements - along with massive external debt relief resulting from Egypt's participation in the Gulf war coalition - helped Egypt improve its macroeconomic performance during the 1990s. Sound fiscal and monetary policies through the mid-1990s helped to tame inflation, slash budget deficits, and build up foreign reserves, while structural reforms such as privatization and new business legislation prompted increased foreign investment. By mid-1998, however, the pace of structural reform slackened, and lower combined hard currency earnings resulted in pressure on the Egyptian pound and sporadic US dollar shortages. External payments were not in crisis, but Cairo's attempts to curb demand for foreign exchange convinced some investors and currency traders that government financial operations lacked transparency and coordination. Monetary pressures have since eased, however, with the 1999-2000 higher oil prices, a rebound in tourism, and a series of mini-devaluations of the pound. The development of a gas export market is a major plus factor in future growth.

El Salvador: El Salvador is a struggling Central American economy which has been suffering from a weak tax collection system, factory closings, the aftermaths of Hurricane Mitch of 1998 and the devastating earthquakes of early 2001, and weak world coffee prices. On the bright side, in recent years inflation has fallen to single digit levels, and total exports have grown substantially. The trade deficit has been offset by remittances (an estimated $1.6 billion in 2000) from Salvadorans living abroad and by external aid. As of 1 January 2001, the US dollar was made legal tender alongside the colon.

Equatorial Guinea: The discovery and exploitation of large oil reserves have contributed to dramatic economic growth in recent years. Forestry, farming, and fishing are also major components of GDP. Subsistence farming predominates. Although pre-independence Equatorial Guinea counted on cocoa production for hard currency earnings, the deterioration of the rural economy under successive brutal regimes has diminished potential for agriculture-led growth. A number of aid programs sponsored by the World Bank and the IMF have been cut off since 1993 because of the government's gross corruption and mismanagement. Businesses, for the most part, are owned by government officials and their family members. Undeveloped natural resources include titanium, iron ore, manganese, uranium, and alluvial gold. The country responded favorably to the devaluation of the CFA franc in January 1994. Boosts in production and high world oil prices stimulated growth in 2000, with oil accounting for 90% of greatly increased exports.

Eritrea: With independence from Ethiopia on 24 May 1993, Eritrea faced the economic problems of a small, desperately poor country. The economy is largely based on subsistence agriculture, with 80% of the population involved in farming and herding. The small industrial sector consists mainly of light industries with outmoded technologies. Domestic output (GDP) is substantially augmented by worker remittances from abroad. Government revenues come from custom duties and taxes on income and sales. Road construction is a top domestic priority. In the long term, Eritrea may benefit from the development of offshore oil, offshore fishing, and tourism. Eritrea's economic future depends on its ability to master fundamental social and economic problems, e.g., by reducing illiteracy, promoting job creation, expanding technical training, attracting foreign investment, and streamlining the bureaucracy. Eritrea's agriculture over the last two years was severely weakened by war and drought, and many farmlands must wait to be demined. Another major difficulty is the ports, which prior to the war were Ethiopia's preferred outlets but since have seen trade dry up.

Estonia: In 2000, Estonia rebounded from the Russian financial crisis by scaling back its budget and reorienting trade away from Russian markets into EU member states. After GDP shrank 1.1% in 1999, the economy made a strong recovery in 2000, with growth estimated at 6.4% - the highest in Central and Eastern Europe. Estonia joined the World Trade Organization in November 1999 - the second Baltic state to join - and continues its EU accession talks. For 2001, Estonians predict GDP to grow around 6%, inflation of between 4.2%-5.3%, and a balanced budget. Substantial gains were made in completing privatization of Estonia's few remaining large, state-owned companies in 2000, and this momentum is expected to continue in 2001. Estonia hopes to join the EU during the next round of enlargement tentatively set for 2004.

Ethiopia: Ethiopia's economy is based on agriculture, which accounts for half of GDP, 90% of exports, and 80% of total employment. The agricultural sector suffers from frequent periods of drought and poor cultivation practices, and as many as 4.6 million people need food assistance annually. Coffee is critical to the Ethiopian economy, and Ethiopia earned $267 million in 1999 by exporting 105,000 metric tons. According to current estimates, coffee contributes 10% of Ethiopia's GDP. More than 15 million people (25% of the population) derive their livelihood from the coffee sector. Other exports include live animals, hides, gold, and qat. In December 1999, Ethiopia signed a $1.4 billion joint venture deal to develop a huge natural gas field in the Somali Regional State. The war with Eritrea forced the government to spend scarce resources on the military and to scale back ambitious development plans. Foreign investment has declined significantly. Government taxes imposed in late 1999 to raise money for the war depressed an already weak economy. The war forced the government to improve roads and other parts of the previously neglected infrastructure, but only certain regions of the nation benefited. Recovery from the war is mostly contingent on natural factors. A drought has continued into the end of 2000 and food relief is expected to be needed through mid-2001 at least. Ethiopia may receive Highly Indebted Poor Countries (HIPC) debt relief by the end of the year.

Europa Island: no economic activity

Falkland Islands (Islas Malvinas): The economy was formerly based on agriculture, mainly sheep farming, but today fishing contributes the bulk of economic activity. In 1987 the government began selling fishing licenses to foreign trawlers operating within the Falklands exclusive fishing zone. These license fees total more than $40 million per year, which goes to support the island's health, education, and welfare system. Squid accounts for 75% of the fish taken. Dairy farming supports domestic consumption; crops furnish winter fodder. Exports feature shipments of high-grade wool to the UK and the sale of postage stamps and coins. To encourage tourism, the Falkland Islands Development Corporation has built three lodges for visitors attracted by the abundant wildlife and trout fishing. The islands are now self-financing except for defense. The British Geological Survey announced a 200-mile oil exploration zone around the islands in 1993, and early seismic surveys suggest substantial reserves capable of producing 500,000 barrels per day; to date no exploitable site has been identified. An agreement between Argentina and the UK in 1995 seeks to defuse licensing and sovereignty conflicts that would dampen foreign interest in exploiting potential oil reserves.

Faroe Islands: The Faroese economy has had a strong performance since 1994, mostly as a result of increasing fish landings and high and stable export prices. Unemployment is falling and there are signs of labor shortages in several sectors. The positive economic development has helped the Faroese Home Rule Government produce increasing budget surpluses which in turn help to reduce the large public debt, most of it owed to Denmark. However, the total dependence on fishing makes the Faroese economy extremely vulnerable, and the present fishing efforts appear in excess of what is required to ensure a sustainable level of fishing in the long term. Oil finds close to the Faroese area give hope for deposits in the immediate Faroese area, which may eventually lay the basis for a more diversified economy and thus less dependence on Denmark and Danish economic assistance. Aided by a substantial annual subsidy (15% of GDP) from Denmark, the Faroese have a standard of living not far below the Danes and other Scandinavians.

Fiji: Fiji, endowed with forest, mineral, and fish resources, is one of the most developed of the Pacific island economies, though still with a large subsistence sector. Sugar exports and a growing tourist industry are the major sources of foreign exchange. Sugar processing makes up one-third of industrial activity. Roughly 300,000 tourists visit each year, including thousands of Americans following the start of regularly scheduled non-stop air service from Los Angeles. Fiji's growth slowed in 1997 because the sugar industry suffered from low world prices and rent disputes between farmers and landowners. Drought in 1998 further damaged the sugar industry, but its recovery in 1999 contributed to robust GDP growth. Long-term problems include low investment and uncertain property rights. The political turmoil in Fiji has had a severe impact with the economy shrinking by 8% in 1999 and over 7,000 people losing their jobs. The interim government's 2001 budget is an attempt to attract foreign investment and restart economic activity. The government's ability to manage the budget and fulfill predictions of 4% growth for 2001 will depend on a return to stability, a regaining of investor confidence, and the absence of international sanctions (which could cripple Fiji's sugar and textile industry).

Finland: Finland has a highly industrialized, largely free-market economy, with per capita output roughly that of the UK, France, Germany, and Italy. Its key economic sector is manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Trade is important, with exports equaling more than one-third of GDP. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population. Rapidly increasing integration with Western Europe - Finland was one of the 11 countries joining the euro monetary system (EMU) on 1 January 1999 - will dominate the economic picture over the next several years. Growth in 2001 will be bolstered by strong private consumption, yet may be 1 or 2 points lower than in 2000, largely because of a weakening in export demand.

France: France is in the midst of transition, from an economy that featured extensive government ownership and intervention to one that relies more on market mechanisms. The government remains dominant in some sectors, particularly power, public transport, and defense industries, but it has been relaxing its control since the mid-1980s. The Socialist-led government has sold off part of its holdings in France Telecom, Air France, Thales, Thomson Multimedia, and the European Aerospace and Defense Company (EADS). The telecommunications sector is gradually being opened to competition. France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare. The government has done little to cut generous unemployment and retirement benefits which impose a heavy tax burden and discourage hiring. It has also shied from measures that would dramatically increase the use of stock options and retirement investment plans; such measures would boost the stock market and fast-growing IT firms as well as ease the burden on the pension system, but would disproportionately benefit the rich. In addition to the tax burden, the reduction of the work week to 35-hours has drawn criticism for lowering the competitiveness of French companies.

French Guiana: The economy is tied closely to that of France through subsidies and imports. Besides the French space center at Kourou, fishing and forestry are the most important economic activities. The large reserves of tropical hardwoods, not fully exploited, support an expanding sawmill industry which provides sawn logs for export. Cultivation of crops is limited to the coastal area, where the population is largely concentrated; rice and manioc are the major crops. French Guiana is heavily dependent on imports of food and energy. Unemployment is a serious problem, particularly among younger workers.

French Polynesia: Since 1962, when France stationed military personnel in the region, French Polynesia has changed from a subsistence economy to one in which a high proportion of the work force is either employed by the military or supports the tourist industry. Tourism accounts for about one-fourth of GDP and is a primary source of hard currency earnings. The small manufacturing sector primarily processes agricultural products. The territory benefited from a five-year (1994-98) development agreement with France aimed principally at creating new jobs.

French Southern and Antarctic Lands: Economic activity is limited to servicing meteorological and geophysical research stations and French and other fishing fleets. The fish catches landed on Iles Kerguelen by foreign ships are exported to France and Reunion.

Gabon: Gabon enjoys a per capita income four times that of most nations of sub-Saharan Africa. This has supported a sharp decline in extreme poverty; yet because of high income inequality a large proportion of the population remains poor. Gabon depended on timber and manganese until oil was discovered offshore in the early 1970s. The oil sector now accounts for 50% of GDP. Gabon continues to face fluctuating prices for its oil, timber, manganese, and uranium exports. Despite the abundance of natural wealth, the economy is hobbled by poor fiscal management. In 1992, the fiscal deficit widened to 2.4% of GDP, and Gabon failed to settle arrears on its bilateral debt, leading to a cancellation of rescheduling agreements with official and private creditors. Devaluation of its Francophone currency by 50% on 12 January 1994 sparked a one-time inflationary surge, to 35%; the rate dropped to 6% in 1996. The IMF provided a one-year standby arrangement in 1994-95, a three-year Enhanced Financing Facility (EFF) at near commercial rates beginning in late 1995, and stand-by credit of $119 million in October 2000. Those agreements mandate progress in privatization and fiscal discipline. France provided additional financial support in January 1997 after Gabon had met IMF targets for mid-1996. In 1997, an IMF mission to Gabon criticized the government for overspending on off-budget items, overborrowing from the central bank, and slipping on its schedule for privatization and administrative reform. The rebound of oil prices in 1999-2000 helped growth, but drops in production hampered Gabon from fully realizing potential gains. An expected decline in oil output may lead to contraction in GDP in 2001-02.

Gambia, The: The Gambia has no important mineral or other natural resources and has a limited agricultural base. About 75% of the population depends on crops and livestock for its livelihood. Small-scale manufacturing activity features the processing of peanuts, fish, and hides. Reexport trade normally constitutes a major segment of economic activity, but a 1999 government-imposed preshipment inspection plan, instability of the Gambian dalasi, and the stable political situation in Senegal have drawn some of the reexport trade away from Banjul. The government's 1998 seizure of the private peanut firm Alimenta eliminated the largest purchaser of Gambian groundnuts; the following two marketing seasons have seen significantly lower prices and sales. A decline in tourism from 1999 to 2000 has also held back growth. Unemployment and underemployment rates are extremely high. Shortrun economic progress remains highly dependent on sustained bilateral and multilateral aid, on responsible government economic management as forwarded by IMF technical help and advice, and on expected growth in the construction sector.

Gaza Strip: Economic output in the Gaza Strip - which comes under the responsibility of the Palestinian Authority since the Cairo Agreement of May 1994 - declined perhaps one-third between 1992 and 1996. The downturn was largely the result of Israeli closure policies - the imposition of generalized border closures in response to security incidents in Israel - which disrupted previously established labor and commodity market relationships between Israel and the WBGS (West Bank and Gaza Strip). The most serious negative social effect of this downturn was the emergence of high unemployment; unemployment in the WBGS during the 1980s was generally under 5%; by 1995 it had risen to over 20%. Since 1997 Israel's use of comprehensive closures has decreased and, in 1998, Israel implemented new policies to reduce the impact of closures and other security procedures on the movement of Palestinian goods and labor. These changes fueled an almost three-year long economic recovery in the West Bank and Gaza Strip; real GDP grew by 5% in 1998 and 6% in 1999. Recovery was upended in the last quarter of 2000 with the outbreak of Palestinian violence, which triggered tight Israeli closures of Palestinian self-rule areas and a severe disruption of trade and labor movements.

Georgia: Georgia's economy has traditionally revolved around Black Sea tourism; cultivation of citrus fruits, tea, and grapes; mining of manganese and copper; and output of a small industrial sector producing wine, metals, machinery, chemicals, and textiles. The country imports the bulk of its energy needs, including natural gas and oil products. Its only sizable internal energy resource is hydropower. Despite the severe damage the economy has suffered due to civil strife, Georgia, with the help of the IMF and World Bank, has made substantial economic gains since 1995, increasing GDP growth and slashing inflation. The Georgian economy continues to experience large budget deficits due to a failure to collect tax revenues. Georgia also still suffers from energy shortages; it privatized the distribution network in 1998, and deliveries are steadily improving. The country is pinning its hopes for long-term recovery on the development of an international transportation corridor through the key Black Sea ports of P'ot'i and Bat'umi. The growing trade deficit, continuing problems with tax evasion and corruption, and political uncertainties cloud the short-term economic picture.

Germany: Germany possesses the world's third most technologically powerful economy after the US and Japan, but structural market rigidities - including the substantial non-wage costs of hiring new workers - have made unemployment a long-term, not just a cyclical, problem. Germany's aging population, combined with high unemployment, has pushed social security outlays to a level exceeding contributions from workers. The modernization and integration of the eastern German economy remains a costly long-term problem, with annual transfers from western Germany amounting to roughly $70 billion. Growth picked up to 3% in 2000, largely due to recovering global demand; newly passed business and income tax cuts are expected to keep growth strong in 2001. Corporate restructuring and growing capital markets are transforming the German economy to meet the challenges of European economic integration and globalization in general.

Ghana: Well endowed with natural resources, Ghana has twice the per capita output of the poorer countries in West Africa. Even so, Ghana remains heavily dependent on international financial and technical assistance. Gold, timber, and cocoa production are major sources of foreign exchange. The domestic economy continues to revolve around subsistence agriculture, which accounts for 36% of GDP and employs 60% of the work force, mainly small landholders. In 1995-97, Ghana made mixed progress under a three-year structural adjustment program in cooperation with the IMF. On the minus side, public sector wage increases and regional peacekeeping commitments have led to continued inflationary deficit financing, depreciation of the cedi, and rising public discontent with Ghana's austerity measures. Political uncertainty and a depressed cocoa market led to disappointing growth in 2000. A rebound in the cocoa market should push growth over 4% in 2001-02.

Gibraltar: Gibraltar benefits from an extensive shipping trade, offshore banking, and its position as an international conference center. The British military presence has been sharply reduced and now contributes about 11% to the local economy. The financial sector accounts for 20% of GDP; tourism (almost 6 million visitors in 1998), shipping services fees, and duties on consumer goods also generate revenue. In recent years, Gibraltar has seen major structural change from a public to a private sector economy, but changes in government spending still have a major impact on the level of employment.

Glorioso Islands: no economic activity

Greece: Greece has a mixed capitalist economy with the public sector accounting for about half of GDP. Tourism is a key industry, providing a large portion of GDP and foreign exchange earnings. Greece is a major beneficiary of EU aid, equal to about 4% of GDP. The economy has improved steadily over the last few years, as the government has tightened policy in the run-up to Greece's entry into the EU's Economic and Monetary Union (EMU) on 1 January 2001. In particular, Greece has cut its budget deficit to below 1% of GDP and tightened monetary policy, with the result that inflation fell from 20% in 1990 to 3.1% in 2000. Major challenges remaining include the reduction of unemployment and further restructuring of the economy, including the privatization of some leading state enterprises. Growth, 3.8% in 2000, may fall off to 3%-3.5% in 2001.

Greenland: The economy remains critically dependent on exports of fish and substantial support from the Danish Government, which supplies about half of government revenues. The public sector, including publicly owned enterprises and the municipalities, plays the dominant role in the economy. Despite several interesting hydrocarbon and minerals exploration activities, it will take several years before production can materialize. Tourism is the only sector offering any near-term potential, and even this is limited due to a short season and high costs.

Grenada: In this island economy progress in fiscal reforms and prudent macroeconomic management have kept annual growth steady since 1998. The increase in economic activity has been led by construction and trade. Tourist facilities are being expanded; tourism is the leading foreign exchange earner. Major short-term concerns are the rising fiscal deficit and the deterioration in the external account balance. Grenada shares a common central bank and a common currency with seven other members of the Organization of Eastern Caribbean States (OECS).

Guadeloupe: The economy depends on agriculture, tourism, light industry, and services. It also depends on France for large subsidies and imports. Tourism is a key industry, with most tourists from the US; an increasingly large number of cruise ships visit the islands. The traditional sugarcane crop is slowly being replaced by other crops, such as bananas (which now supply about 50% of export earnings), eggplant, and flowers. Other vegetables and root crops are cultivated for local consumption, although Guadeloupe is still dependent on imported food, mainly from France. Light industry features sugar and rum production. Most manufactured goods and fuel are imported. Unemployment is especially high among the young. Hurricanes periodically devastate the economy.

Guam: The economy depends on US military spending, tourism, and the export of fish and handicrafts. Total US grants, wage payments, and procurement outlays amounted to $1 billion in 1998. Over the past 20 years, the tourist industry has grown rapidly, creating a construction boom for new hotels and the expansion of older ones. More than 1 million tourists visit Guam each year. The industry has recently suffered setbacks because of the continuing Japanese slowdown; the Japanese normally make up almost 90% of the tourists. Most food and industrial goods are imported. Guam faces the problem of building up the civilian economic sector to offset the impact of military downsizing.

Guatemala: The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. Former President ARZU (1996-2000) worked to implement a program of economic liberalization and political modernization. The 1996 signing of the peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment. In 1998, Hurricane Mitch caused relatively little damage to Guatemala compared to its neighbors. Ongoing challenges include increasing government revenues, negotiating further assistance from international donors, and increasing the efficiency and openness of both government and private financial operations. Despite low international prices for Guatemala's main commodities, the economy grew by 3% in 2000 and is forecast to grow by 4% in 2001. Guatemala, along with Honduras and El Salvador, recently concluded a free trade agreement with Mexico and has moved to protect international property rights. However, the PORTILLO administration has undertaken a review of privatizations under the previous administration, thereby creating some uncertainty among investors.

Guernsey: Financial services - banking, fund management, insurance, etc. - account for about 55% of total income in this tiny Channel Island economy. Tourism, manufacturing, and horticulture, mainly tomatoes and cut flowers, have been declining. Light tax and death duties make Guernsey a popular tax haven. The evolving economic integration of the EU nations is changing the rules of the game under which Guernsey operates.