This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.

Country Comparison to the World

Afghanistan Afghanistan's economy is recovering from decades of conflict. The economy has improved significantly since the fall of the Taliban regime in 2001 largely because of the infusion of international assistance, the recovery of the agricultural sector, and service sector growth. Despite the progress of the past few years, Afghanistan is extremely poor, landlocked, and highly dependent on foreign aid. Much of the population continues to suffer from shortages of housing, clean water, electricity, medical care, and jobs. Criminality, insecurity, weak governance, lack of infrastructure, and the Afghan Government's difficulty in extending rule of law to all parts of the country pose challenges to future economic growth. Afghanistan's living standards are among the lowest in the world. The international community remains committed to Afghanistan's development, pledging over $67 billion at nine donors' conferences between 2003-10. In July 2012, the donors at the Tokyo conference pledged an additional $16 billion in civilian aid through 2015. Despite this help, the Government of Afghanistan will need to overcome a number of challenges, including low revenue collection, anemic job creation, high levels of corruption, weak government capacity, and poor public infrastructure. Afghanistan's growth rate slowed markedly in 2014. Newly elected President Ashraf GHANI is dedicated to instituting economic reforms. However, the drawdown of international security forces that occurred in 2014 will negatively effect economic growth, as a substantial portion of commerce, especially in the services sector, has catered to the ongoing international troop presence in the country.
Akrotiri Economic activity is limited to providing services to the military and their families located in Akrotiri. All food and manufactured goods must be imported.
Albania Albania, a formerly closed, centrally-planned state, is a developing country with a modern open-market economy. Albania managed to weather the first waves of the global financial crisis but, more recently, its negative effects have put some pressure on the Albanian economy, resulting in a significant economic slowdown. While the government is focused on establishing a favorable business climate through the simplification of licensing requirements and tax codes, it entered into a new arrangement with the IMF for additional financial and technical support. Remittances, a significant catalyst for economic growth, declined from 12-15% of GDP before the 2008 financial crisis to 5.7% of GDP in 2014, mostly from Albanians residing in Greece and Italy. The agricultural sector, which accounts for almost half of employment but only about one-fifth of GDP, is limited primarily to small family operations and subsistence farming, because of a lack of modern equipment, unclear property rights, and the prevalence of small, inefficient plots of land. Complex tax codes and licensing requirements, a weak judicial system, endemic corruption, poor enforcement of contracts and property issues, and antiquated infrastructure contribute to Albania's poor business environment and make attracting foreign investment difficult. Inward FDI has significantly increased in recent years as the government has embarked on an ambitious program to improve the business climate through fiscal and legislative reforms. Albania’s electricity supply is uneven despite upgraded transmission capacities with neighboring countries. Technical and non-technical losses in electricity - including theft and non-payment - continue to undermine the financial viability of the entire system, although the government has taken steps to stem non-technical losses and begin to upgrade the distribution grid. Also, with help from international donors, the government is taking steps to improve the poor national road and rail network, a long-standing barrier to sustained economic growth. The country will continue to face challenges from increasing public debt, having exceeded its former statutory limit of 60% of GDP in 2013 and reaching 72% in 2014. Strong trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of debt crises and weak growth in the euro zone. The government will face critical tests in 2015 as it works to implement IMF-mandated reforms, especially those aimed at improving the electricity sector.
Algeria Algeria's economy remains dominated by the state, a legacy of the country's socialist postindependence development model. In recent years the Algerian Government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy. Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world and is the sixth-largest gas exporter. It ranks 16th in oil reserves. Strong revenues from hydrocarbon exports have brought Algeria relative macroeconomic stability, with foreign currency reserves approaching $200 billion and a large budget stabilization fund available for tapping. In addition, Algeria's external debt is extremely low at about 2% of GDP. However, Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. The government's efforts have done little to reduce high youth unemployment rates or to address housing shortages. A wave of economic protests in February and March 2011 prompted the Algerian Government to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances. Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.
American Samoa American Samoa has 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 most of its commerce. Tuna fishing and tuna processing plants are the backbone of the private sector with canned tuna the primary export. The two tuna canneries accounted for 13.1% of employment in 2013. In late September 2009, an earthquake and the resulting tsunami devastated American Samoa and nearby Samoa, disrupting transportation and power generation, and resulting in about 200 deaths. The US Federal Emergency Management Agency oversaw a relief program of nearly $25 million. 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 is a promising developing sector. In 2015, a new fish processing company completed refurbishing the processing facilities left behind by one of the two canneries that closed in 2009 and opened a new cannery. With two operating canneries once again, fish processing and exports will rise in 2015 and beyond.
Andorra Tourism, retail sales, and finance are the mainstays of Andorra's tiny, well-to-do economy, accounting for more than three-quarters of GDP. Andorra's duty-free status for some products and its summer and winter resorts attract millions of visitors annually, although the economic downturn in neighboring countries has curtailed the number of tourists. Andorra's comparative advantage as a tax haven eroded when the borders of neighboring France and Spain opened; its bank secrecy laws have been relaxed under pressure from the EU and OECD. Agricultural production is limited - only 5% of the land is arable - and most food has to be imported, making the economy vulnerable to changes in fuel and food prices. The principal livestock is sheep. Manufacturing output and exports consist mainly of perfumes and cosmetic products, products of the printing industry, electrical machinery and equipment, clothing, tobacco products, 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. Andorra uses the euro and is effectively subject to the monetary policy of the European Central Bank. Slower growth in Spain and France has dimmed Andorra's economic prospects. Since 2010, a drop in tourism contributed to a contraction in GDP and a sharp deterioration of public finances, prompting the government to begin implementing several austerity measures to reduce the budget deficit, including levying a special corporate tax. The Government is also planning to institute an income tax at the behest of the Organization for Economic Cooperation and Development. The new tax will apply to anyone who lives in the principality for at least 183 days in a calendar year. The first $30,000 of income will be tax free, with the next $20,000 taxed at 5%. The balance of income exceeding the initial $50,000 will be taxed at 10%, which is still less than in most West European countries. Andorra’s Government also relaxed its residency and investment laws in 2012 to make the country more attractive to foreign investors. A person now must spend 90 days a year in the principality to qualify for residency, compared with the previous 180-day requirement. Foreigners now have the same property ownership rights as citizens. In addition, three new categories of residency permits were introduced. Anyone who is retired or at least not working in Andorra can obtain a permit in the first category by making a financial investment in the country of at least €400,000, which can include a property purchase.
Angola Angola’s economy is overwhelmingly driven by its oil sector. Oil production and its supporting activities contribute about 50% of GDP, more than 70% of government revenue, and more than 90% of the country’s exports. Diamonds contribute an additional 5% to exports. Subsistence agriculture provides the main livelihood for most of the people, but half of the country's food is still imported. Increased oil production supported growth averaging more than 17% per year from 2004 to 2008. A postwar reconstruction boom and resettlement of displaced persons has led to high rates of growth in construction and agriculture as well. Some of the country's infrastructure is still damaged or undeveloped from the 27-year-long civil war. However, the government since 2005 has used billions of dollars in credit lines from China, Brazil, Portugal, Germany, Spain, and the EU to help rebuild Angola's public infrastructure. Land mines left from the war still mar the countryside, and as a result, the national military, international partners, and private Angolan firms all continue to remove them. The global recession that started in 2008 stalled economic growth. In particular, lower prices for oil and diamonds during the global recession slowed GDP growth to 2.4% in 2009, and many construction projects stopped because Luanda accrued $9 billion in arrears to foreign construction companies when government revenue fell in 2008 and 2009. Angola formally abandoned its currency peg in 2009, and in November 2009 signed onto an IMF Stand-By Arrangement loan of $1.4 billion to rebuild international reserves. Consumer inflation declined from 325% in 2000 to less than 9% in 2014. Falling oil prices and slower than expected growth in non-oil GDP have reduced growth prospects for 2015. Angola has responded by reducing government subsidies and by proposing import quotas and a more restrictive licensing regime. Corruption, especially in the extractive sectors, is a major long-term challenge.
Anguilla Anguilla has few natural resources, and the economy depends heavily on luxury tourism, offshore banking, lobster fishing, and remittances from emigrants. Increased activity in the tourism industry has spurred the growth of the construction sector contributing to economic growth. Anguillan officials have put substantial effort into developing the offshore financial sector, which is small but growing. In the medium term, prospects for the economy will depend largely on the tourism sector and, therefore, on revived income growth in the industrialized nations as well as on favorable weather conditions.
Antarctica Scientific undertakings rather than commercial pursuits are the predominant human activity in Antarctica. Fishing off the coast and tourism, both based abroad, account for Antarctica's limited economic activity. Antarctic fisheries, targeting three main species - Patagonian and Antarctic toothfish (Dissostichus eleginoides and D. mawsoni), mackerel icefish (Champsocephalus gunnari), and krill (Euphausia superba) - reported landing 141,147 metric tons in 2008-09 (1 July - 30 June). (Estimated fishing is from the area covered by the Convention on the Conservation of Antarctic Marine Living Resources (CCAMLR), which extends slightly beyond the Antarctic Treaty area.) Unregulated fishing, particularly of Patagonian toothfish (also known as Chilean sea bass), is a serious problem. The CCAMLR determines the recommended catch limits for marine species. A total of 37,858 tourists visited the Antarctic Treaty area in the 2008-09 Antarctic summer, down from the 46,265 visitors in 2007-08 (estimates provided to the Antarctic Treaty by the International Association of Antarctica Tour Operators (IAATO); this does not include passengers on overflights). Nearly all of them were passengers on commercial (nongovernmental) ships and several yachts that make trips during the summer.
Antigua and Barbuda Tourism continues to dominate Antigua and Barbuda's economy, accounting for nearly 60% of GDP and 40% of investment. The dual-island nation's agricultural production is focused on the domestic market and constrained by a limited water supply and a labor shortage stemming from the lure 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 tourist arrivals from the US, Canada, and Europe and potential damages from natural disasters. After taking office in 2004, the SPENCER government adopted an ambitious fiscal reform program and was successful in reducing its public debt-to-GDP ratio from approximately 130% in 2010 to 89% in 2012. In 2009, Antigua's economy was severely hit by the global economic crisis and suffered from the collapse of its largest private sector employer, a steep decline in tourism, a rise in debt, and a sharp economic contraction between 2009 and 2011. Antigua has not yet returned to its pre-crisis growth levels.
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. Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight.
A severe depression, growing public and external indebtedness, and an unprecedented bank run culminated in 2001 in the most serious economic, social, and political crisis in the country's turbulent history. Interim President Adolfo RODRIGUEZ SAA declared a default - at the time the largest ever - on the government's foreign debt in December of that year, and abruptly resigned only a few days after taking office. His successor, Eduardo DUHALDE, announced an end to the peso's decade-long 1-to-1 peg to the US dollar in early 2002. The economy bottomed out that year, with real GDP 18% smaller than in 1998 and almost 60% of Argentines under the poverty line. Real GDP rebounded to grow by an average 8.5% annually over the subsequent six years, taking advantage of previously idled industrial capacity and labor, an audacious debt restructuring and reduced debt burden, excellent international financial conditions, and expansionary monetary and fiscal policies. Inflation also increased, however, during the administration of President Nestor KIRCHNER, which responded with price restraints on businesses, as well as export taxes and restraints, and beginning in 2007, with understating inflation data.
Cristina FERNANDEZ DE KIRCHNER succeeded her husband as President in late 2007, and the rapid economic growth of previous years began to slow sharply the following year as government policies held back exports and the world economy fell into recession. The economy in 2010 rebounded strongly from the 2009 recession, but has slowed since late 2011 even as the government continued to rely on expansionary fiscal and monetary policies, which have kept inflation in the double digits.
The government expanded state intervention in the economy throughout 2012. In May 2012 the Congress approved the nationalization of the oil company YPF from Spain's Repsol. The government expanded formal and informal measures to restrict imports during the year, including a requirement for pre-registration and pre-approval of all imports. In July 2012 the government also further tightened currency controls in an effort to bolster foreign reserves and stem capital flight. In October 2013, the government settled long-standing international arbitral disputes dating back to before and following the 2001 Argentine financial crisis. During 2014, the government continued with expansionary fiscal and monetary policies and foreign exchange and imports controls. Between 2011 and 2013, Central Bank foreign reserves had dropped $21.3 billion from a high of $52.7 billion. In July 2014, Argentina and China agreed on an $11 billion currency swap; the Argentine Central Bank has received the equivalent of $3.2 billion in Chinese yuan, which it counts as international reserves.
In 2014, the government also took some measures to mend ties with the international financial community, including engaging with the IMF to improve its economic data reporting, reaching a compensation agreement with Repsol for the expropriation of YPF, and agreeing to pay $9.7 billion in arrears to the Paris Club over five years, including $606 million owed to the United States. In July 2014, Argentina made its first payment to Paris Club creditors since the country’s 2001 financial crisis. At the same time, the Argentine government in July 2014 entered a technical default on its external debt after it failed to reach an agreement with holdout creditors in the US. The government’s delay in reaching a settlement and the continuation of interventionist and populist policies are contributing to high inflation and a prolonged recession, according to private analysts.
Armenia Under the old Soviet central planning system, Armenia developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics, in exchange for raw materials and energy. Armenia has since switched to small-scale agriculture and away from the large agroindustrial complexes of the Soviet era. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region. Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to the sharp deterioration in the global economy and the economic downturn in Russia. Armenia is particularly dependent on Russian commercial and governmental support and most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector, including electricity and natural gas. Remittances from expatriates working in Russia are equivalent to about 20% of GDP and partly offset the country's severe trade imbalance. Armenia joined Russia in the Eurasian Economic Union upon the bloc’s launch in January 2015, even though the ruble’s sharp depreciation in December 2014 led to currency instability, inflation, and significant decrease of export from Armenia to Russia. Armenia joined the WTO in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been ineffective. Armenia will need to pursue additional economic reforms and to strengthen the rule of law in order to regain economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from two of its nearest neighbors, Turkey and Azerbaijan.
Aruba Tourism, petroleum bunkering, hospitality, and financial and business services are the mainstays of the small open Aruban economy. Tourist arrivals have rebounded strongly following a dip after the 2008 global financial crisis. Tourism now accounts for over 80% of economic activity. Over 1.5 million tourists per year visit Aruba, with 75% of those from the US. The rapid growth of the tourism sector has resulted in a substantial expansion of other activities. Construction continues to boom with hotel capacity five times the 1985 level. Aruba is heavily dependent on imports and is making efforts to expand exports to achieve a more desirable trade balance. Almost all consumer and capital goods are imported, with the US, the Netherlands, and Panama being the major suppliers. Aruba weathered two major shocks in recent years: fallout from the global financial crisis, which had its largest impact on tourism, and the closure of its oil refinery in 2009. However, tourism and related industries have continued to grow, and the Aruban government is working to attract more diverse industries. Aruba’s banking sector withstood the recession well, and unemployment has significantly decreased.
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, dredging of aragonite sands (The Bahamas), and production of crude oil and natural gas (Caribbean Sea, Gulf of Mexico, and North Sea).
Australia Following two decades of continuous growth, low unemployment, contained inflation, very low public debt, and a strong and stable financial system, Australia enters 2015 facing a range of growth constraints, principally driven by a sharp fall in global prices of key export commodities. Although demand for resources and energy from Asia and especially China has grown rapidly, creating a channel for resources investments and growth in commodity exports, sharp drops in current prices have already impacted growth. The services sector is the largest part of the Australian economy, accounting for about 70% of GDP and 75% of jobs. Australia was comparatively unaffected by the global financial crisis as the banking system has remained strong and inflation is under control. Australia has benefited from a dramatic surge in its terms of trade in recent years, although this trend could reverse or slow due to falling global commodity prices. Australia is a significant exporter of natural resources, energy, and food. Australia's abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron, copper, gold, natural gas, uranium, and renewable energy sources. A series of major investments, such as the US$40 billion Gorgon Liquid Natural Gas project, will significantly expand the resources sector. Australia is an open market with minimal restrictions on imports of goods and services. The process of opening up has increased productivity, stimulated growth, and made the economy more flexible and dynamic. Australia plays an active role in the World Trade Organization, APEC, the G20, and other trade forums. Australia entered into free trade agreements (FTAs) with the Republic of Korea and Japan, and concluded an FTA with China, in 2014, adding to existing FTAs with Chile, Malaysia, New Zealand, Singapore, Thailand, and the US, and a regional FTA with ASEAN and New Zealand. Australia continues to negotiate bilateral agreements with India and Indonesia, as well as larger agreements with its Pacific neighbors and the Gulf Cooperation Council countries, and an Asia-wide Regional Comprehensive Economic Partnership that includes the ten ASEAN countries and China, Japan, Korea, New Zealand and India. Australia is also working on the Trans-Pacific Partnership Agreement with Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.
Austria Austria, with its well-developed market economy, skilled labor force, and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a relatively sound industrial sector, and a small, but highly developed agricultural sector. Economic growth was anemic at less than 0.5% in 2013 and 2014, and growth in 2015 is not expected to exceed 0.5%. Austria’s 5.6% unemployment rate, while low by European standards, is at an historic high for Austria. Without extensive vocational training programs and generous early retirement, the unemployment rate would be even higher. Public finances have not stabilized even after a 2012 austerity package of expenditure cuts and new revenues. On the contrary, in 2014, the government created a “bad bank” for the troubled nationalized “Hypo Alpe Adria” bank, pushing the budget deficit up by 0.9% of GDP to 2.4% and public debt to 84.5% of the GDP. Although Austria's fiscal position compares favorably with other euro-zone countries, it faces several external risks, such as Austrian banks' continued exposure to Central and Eastern Europe, repercussions from the Hypo Alpe Adria bank collapse, political and economic uncertainties caused by the European sovereign debt crisis, the current crisis in Russia/Ukraine, the recent appreciation of the Swiss Franc, and political developments in Hungary.
Azerbaijan Azerbaijan's high economic growth has been attributable to large and growing oil and gas exports, but some non-export sectors also featured double-digit growth, including construction, banking, and real estate. Oil exports through the Baku-Tbilisi-Ceyhan Pipeline, the Baku-Novorossiysk, and the Baku-Supsa pipelines remain the main economic driver, but efforts to boost Azerbaijan's gas production are underway. The eventual completion of the geopolitically important Southern Gas Corridor between Azerbaijan and Europe will open up another, albeit, smaller source of revenue from gas exports. Azerbaijan has made only limited progress on instituting market-based economic reforms. Pervasive public and private sector corruption and structural economic inefficiencies remain a drag on long-term growth, particularly in non-energy sectors. Several other obstacles impede Azerbaijan's economic progress, including the need for stepped up foreign investment in the non-energy sector and 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 with Turkey and the nations of Europe. Long-term prospects depend on world oil prices, Azerbaijan's ability to negotiate export routes for its growing gas production, and its ability to use its energy wealth to promote growth and spur employment in non-energy sectors of the economy.
Bahamas, The The Bahamas is one of the wealthiest Caribbean countries with an economy heavily dependent on tourism and offshore banking. Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago's labor force. Financial services constitute the second-most important sector of the Bahamian economy and, when combined with business services, account for about 35% of GDP. Manufacturing and agriculture combined contribute less than one 10th of GDP and show little growth, despite government incentives aimed at those sectors. The economy of The Bahamas shrank at an average pace of 0.8% annually between 2007 and 2011, and tourism, financial services, and construction - pillars of the national economy - remain subdued. Conditions are improving in the tourism sector, however, due to steady foreign investment led activity. New resort and marina developments are likely to provide sustained employment opportunities.
Bahrain Bahrain has made great efforts to diversify its economy; its highly developed communication and transport facilities make Bahrain home to numerous multinational firms with business in the Gulf. As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state. Bahrain's economy, however, continues to depend heavily on oil. In 2013, petroleum production and refining accounted for 73% of Bahrain's export receipts, 88% of government revenues, and 21% of GDP. Other major economic activities are production of aluminum - Bahrain's second biggest export after oil - finance, and construction. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries. In 2011 Bahrain experienced economic setbacks as a result of domestic unrest, however, the economy recovered in 2012-14, partly as a result of improved tourism. Lower oil prices in 2015 will likely exacerbate Bahrain’s budget deficit.
Bangladesh Bangladesh's economy has grown roughly 6% per year since 1996 despite political instability, poor infrastructure, corruption, insufficient power supplies, slow implementation of economic reforms, and the 2008-09 global financial crisis and recession. Although more than half of GDP is generated through the service sector, almost half of Bangladeshis are employed in the agriculture sector with rice as the single-most-important product. Garment exports, the backbone of Bangladesh’s industrial sector, accounted for more than 80% of total exports and surpassed $18 billion in 2014. The sector has remained resilient in recent years amidst a series of factory accidents that have killed over 1,000 workers and crippling strikes that shut down virtually all economic activity. Steady garment export growth combined with remittances from overseas Bangladeshis - which totaled $14 billion and 8% of GDP in 2014 - are the largest contributors to Bangladesh’s current account surplus and rising foreign exchange holdings.
Barbados Barbados is the wealthiest and most developed country in the Eastern Caribbean and enjoys one of the highest per capita incomes in the region. Historically, the Barbadian economy was dependent on sugarcane cultivation and related activities. However, in recent years the economy has diversified into light industry and tourism with about four-fifths of GDP and of exports being attributed to services. Offshore finance and information services are important foreign exchange earners and thrive from having the same time zone as eastern US financial centers and a relatively highly educated workforce. Barbados' tourism, financial services, and construction industries have been hard hit since the onset of the global economic crisis in 2008. Barbados' public debt-to-GDP ratio rose from 56% in 2008 to 90.5% in 2014. Growth prospects are limited because of a weak tourism outlook and planned austerity measures.
Belarus As part of the former Soviet Union, Belarus had a relatively well-developed, though aging industrial base; it retained this industrial base - which is now outdated, energy inefficient, and dependent on subsidized Russian energy and preferential access to Russian markets - following the breakup of the USSR. The country also has a broad agricultural base which is largely inefficient and dependent on government subsidies. After an initial burst of capitalist reform from 1991-94, including privatization of smaller state enterprises and some service sector businesses, creation of institutions of private property, and development of entrepreneurship, Belarus' economic development greatly slowed. About 80% of all industry remains in state hands, and foreign investment has been hindered by a climate hostile to business. A few banks, which had been privatized after independence, were renationalized. State banks account for 75% of the banking sector. Economic output, which had declined for several years following the collapse of the Soviet Union, revived in the mid-2000s thanks to the boom in oil prices. Belarus has only small reserves of crude oil, though it imports most of its crude oil and natural gas from Russia at prices substantially below the world market. Belarus exported refined oil products at market prices produced from Russian crude oil purchased at a steep discount. In late 2006, Russia began a process of rolling back its subsidies on oil and gas to Belarus. Tensions over Russian energy reached a peak in 2010, when Russia stopped the export of all subsidized oil to Belarus save for domestic needs. In December 2010, Russia and Belarus reached a deal to restart the export of discounted oil to Belarus. In 2015, Belarus continued to import Russian crude oil at a discounted price. However, the plunge in global oil prices heavily reduced revenues. Little new foreign investment has occurred in recent years. In 2011, a financial crisis began, triggered by government directed salary hikes unsupported by commensurate productivity increases. The crisis was compounded by an increased cost in Russian energy inputs and an overvalued Belarusian ruble, and eventually led to a near three-fold devaluation of the Belarusian ruble in 2011. In November 2011, Belarus agreed to sell to Russia its remaining shares in Beltransgaz, the Belarusian natural gas pipeline operator, in exchange for reduced prices for Russian natural gas. Receiving more than half of a $3 billion loan from the Russian-dominated Eurasian Economic Community (EurAsEC) Bail-out Fund, a $1 billion loan from the Russian state-owned bank Sberbank, and the $2.5 billion sale of Beltranzgas to Russian state-owned Gazprom helped stabilize the situation in 2012; nevertheless, the Belarusian currency lost more than 60% of its value, as the rate of inflation reached new highs in 2011 and 2012, before calming in 2013. As of January 2014, the final tranche of the EurAsEC loan has been delayed. In December 2013, Russia announced a new loan for Belarus of up to $2 billion for 2014. Notwithstanding foreign assistance, the Belarusian economy continued to struggle under the weight of high external debt servicing payments and trade deficit. In mid-December 2014, structural economic shortcomings were aggravated by the devaluation of the Russian ruble and triggered a near 40% devaluation of the Belarusian ruble. Belarus entered 2015 with stagnant economic growth and reduced hard currency reserves, with under one month of import cover.
Belgium This modern, open, and private-enterprise-based economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the more heavily-populated region of Flanders in the north. With few natural resources, Belgium imports substantial quantities of raw materials and exports a large volume of manufactures, making its economy vulnerable to shifts in foreign demand, particularly in Belgium’s EU trade partners. Roughly three-quarters of Belgium's trade is with other EU countries. In 2014 Belgian GDP grew by 0.9%, the unemployment rate stabilized at 8.5%, and the the budget deficit was 3.2% of GDP. Prime Minister Charles MICHEL’s center-right government has pledged to further reduce the deficit in response to EU pressure to reduce Belgium’s high public debt, which remains above 100% of GDP, but such efforts could also dampen economic growth. In addition to restrained public spending, low wage growth and high unemployment promise to curtail a more robust recovery in private consumption. The government has pledged to pursue an reform program to improve Belgium’s competitiveness, including changes to tax policy, labor market rules, and welfare benefits. These changes risk worsening tensions with trade unions and triggering extended strikes.
Belize Tourism is the number one foreign exchange earner in this small economy, followed by exports of crude oil, marine products, sugar, citrus, and bananas. The government's expansionary monetary and fiscal policies, initiated in September 1998, led to GDP growth averaging nearly 4% in 1999-2007. Oil discoveries in 2006 bolstered this growth and oil exploration continues, but production has fallen in recent years and future oil revenues remain uncertain. Growth slipped to 0% in 2009, due to the global economic slowdown, natural disasters, and a temporary drop in the price of oil, but growth grew to 2.5% in 2014. Although Belize has the third highest per capita income in Central America, the average income figure masks a huge income disparity between rich and poor, and a key government objective remains reducing poverty and inequality with the help of international donors. High unemployment, a growing trade deficit and heavy foreign debt burden continue to be major concerns.
Benin The economy of Benin remains underdeveloped and dependent on subsistence agriculture, cotton production, and regional trade. Growth in real output had averaged almost 4% before the global recession and it has exceeded that level in 2013-14. Inflation has subsided over the past several years. In order to raise growth, Benin plans to attract more foreign investment, place more emphasis on tourism, facilitate the development of new food processing systems and agricultural products, and encourage new information and communication technology. Specific projects to improve the business climate by reforms to the land tenure system, the commercial justice system, and the financial sector were included in Benin's $307 million Millennium Challenge Account grant signed in February 2006. The 2001 privatization policy continues in telecommunications, water, electricity, and agriculture. An insufficient electrical supply continues to hamper Benin's economic growth though the government recently has taken steps to increase domestic power production. Private foreign direct investment is small, and foreign aid accounts for the majority of investment in infrastructure projects. Cotton, a key export, suffered from flooding in 2010-11, but high prices supported export earnings. Benin has appealed for international assistance to mitigate piracy against commercial shipping in its territory. In 2012, Benin became eligible for a second Compact under the Millennium Challenge Corporation, which is expected to be signed in 2015.
Bermuda Bermuda’s economy entered its seventh straight year of recession in 2015. Unemployment is 9%, public debt is growing and exceeds $2.3 billion, the government pension fund faces a $2.4 billion shortfall, and the economy has not attracted significant amounts of new foreign investment. Bermuda’s FY 2015-16 budget proposal projects a 12% larger deficit than FY14/15. The government announced it would have to borrow $125 million in 2015 to meet current operating expenses. Still, Bermuda enjoys the fourth highest per capita income in the world, about 70% higher than that of the US. Tourism, which derives over 80% of its visitors from the US, accounts for 5.2% of GDP but a much larger share of employment. Tourism has struggled in the wake of the global recession of 2008. International business, which consists primarily of reinsurance and other financial services, is the real bedrock of Bermuda’s economy, consistently accounting for about 85% of the island’s GDP. Even this sector, however, has lost roughly 5000 high-paying expatriate jobs since 2008, weighing heavily on household consumption and retail sales. Bermuda must import almost everything. Agriculture and industry are limited due to the small size of the island.
Bhutan Bhutan's economy, small and less developed, is based largely on hydropower, agriculture, and forestry, which provide the main livelihood for more than half of the population. Because rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive, industrial production is primarily of the cottage industry type. The economy is closely aligned with India's through strong trade and monetary links and is dependent on India for financial assistance and migrant laborers for development projects, especially for road construction. Multilateral development organizations administer most educational, social, and environment programs, and take into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment. Bhutan’s largest export - hydropower to India - could spur sustainable growth in the coming years if Bhutan resolves chronic delays in construction. Bhutan currently taps only 5% of its 30,000-megawatt hydropower potential and is behind schedule in building 12 new hydropower dams with a combined capacity of 10,000 megawatts by 2020 in accordance with a deal signed in 2008 with India. The high volume of imported materials to build hydropower plants has expanded Bhutan's trade and current account deficits. However, Bhutan and India in April 2014 agreed to begin four additional hydropower projects, which would generate 2,120 megawatts in total. A declining GDP growth rate in each of the past three years in the absence of new hydropower facilities has constrained Bhutan’s ability to institute economic reforms. Bhutan inked a pact in December 2014 to expand duty-free trade with Bangladesh, the only trade partner with which Bhutan enjoys a surplus.
Bolivia Bolivia is a resource rich country with strong growth attributed to captive markets for natural gas exports – to Brazil and Argentina. Gas accounts for roughly 50% of Bolivia’s total exports and will fund more than half of its 2015 budget. However, the country remains one of the least developed countries in Latin America because of state-oriented policies that deter investment and growth. Following a disastrous economic crisis during the early 1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large Northern Hemisphere markets. In 2005, the government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company in exchange for a predetermined service fee. The global recession slowed growth, but Bolivia recorded the highest growth rate in South America during 2009 and has averaged 5.3% growth each year since 2009. High commodity prices since 2010 sustained rapid growth and large trade surpluses. However, a lack of foreign investment in the key sectors of mining and hydrocarbons, along with conflict among social groups pose challenges for the Bolivian economy. President Evo MORALES passed an investment law and promised not to nationalize additional industries in an effort to improve Bolivia’s investment climate. The global decline in oil prices in late 2014 exerted downward pressure on the price Bolivia receives for exported gas and may result in lower GDP growth rates and losses in government revenue in 2015.
Bosnia and Herzegovina Bosnia has a transitional economy with limited market reforms. The economy relies heavily on the export of metals, energy, textiles and furniture as well as on remittances and foreign aid. A highly decentralized government hampers economic policy coordination and reform, while excessive bureaucracy and a segmented market discourage foreign investment. Interethnic warfare in Bosnia and Herzegovina caused production to plummet by 80% from 1992 to 1995 and unemployment to soar, but the economy made progress until 2009, when the global economic crisis caused a downturn. Foreign banks, primarily from Austria and Italy, now control most of the banking sector. The konvertibilna marka (convertible mark or BAM) - the national currency introduced in 1998 - is pegged to the euro, and confidence in the currency and the banking sector has remained stable. Bosnia's private sector is growing slowly, but foreign investment has dropped sharply since 2007. Government spending - including transfer payments - remains high, at roughly 40% of GDP, because of redundant government offices at the national, sub-national, and municipal level. High unemployment remains the most serious macroeconomic problem. Successful implementation of a value-added tax in 2006 provided a steady source of revenue for the government and helped rein in gray-market activity. National-level statistics have also improved over time but a large share of economic activity remains unofficial and unrecorded. Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement in September 2007. Bosnia and Herzegovina's top economic priorities are: acceleration of integration into the EU; strengthening the fiscal system; public administration reform; World Trade Organization (WTO) membership; and securing economic growth by fostering a dynamic, competitive private sector. Flooding caused significant damage in the spring of 2014, and Bosnia will struggle to recover from it in 2015.
Botswana Botswana’s diamond dependent economy has maintained one of the world's highest economic growth rates since independence in 1966. However, economic growth was negative in 2009, with the industrial sector shrinking by 30%, after the global crisis reduced demand for Botswana's diamonds. Although the economy recovered in 2010-12, GDP growth slowed in 2012-14. Through fiscal discipline and sound management, Botswana transformed itself from one of the poorest countries in the world to a middle-income country with a per capita GDP of $16,600 in 2014. Two major investment services rank Botswana as the best credit risk in Africa. Diamond mining has fueled much of the expansion and currently accounts for more than one-third of GDP, 70-80% of export earnings, and about one-third of the government's revenues. Botswana's heavy reliance on a single luxury export was a critical factor in the sharp economic contraction of 2009. Tourism, financial services, subsistence farming, and cattle raising are other key sectors. According to official government statistics, unemployment reached 17.8% in 2009, but unofficial estimates run much higher. The prevalence of HIV/AIDS is second highest in the world and threatens Botswana's impressive economic gains. An expected leveling off in diamond production within the next 10-15 years overshadows long-term prospects. A major international diamond company signed a 10-year deal with Botswana in 2012 to move its rough stone sorting and trading division from London to Gaborone by the end of 2013. The move has supported the development of Botswana's nascent downstream diamond industry.
Bouvet Island no economic activity; declared a nature reserve
Brazil Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, and a rapidly expanding middle class, Brazil's economy outweighs that of all other South American countries, and Brazil is expanding its presence in world markets. Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments. Since 2008, Brazil became a net external creditor and all three of the major ratings agencies awarded investment grade status to its debt. After strong growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in 2008. Brazil experienced two quarters of recession, as global demand for Brazil's commodity-based exports dwindled and external credit dried up. However, Brazil was one of the first emerging markets to begin a recovery. In 2010, consumer and investor confidence revived and GDP growth reached 7.5%, the highest growth rate in the past 25 years. After reaching historic lows of 4.5% in early 2014, the unemployment rate remains low, but is rising. Brazil's traditionally high level of income inequality has declined for each of the last 15 years. GDP growth has slowed since 2011, due to several factors, including: overdependence on exports of raw commodities, low productivity, high operational costs, persistently high inflation, and low levels of investment. Brazil’s fiscal and current account balances have eroded during the past four years as the government attempted to boost economic growth through targeted tax cuts for industry and incentives to spur household consumption. After winning re-election in October 2014 by a historically narrow margin, President Dilma ROUSSEFF appointed a new economic team led by Finance Minister Joaquim LEVY, who introduced a fiscal austerity package intended to restore the primary account surplus to 1.2% of GDP and preserve the country’s investment-grade sovereign credit rating. Brazil seeks to strengthen its workforce and its economy over the long run by imposing local content and technology transfer requirements on foreign businesses, by investing in education through social programs such as Bolsa Familia and the Brazil Science Mobility Program, and by investing in research in the areas of space, nanotechnology, healthcare, and energy.
British Indian Ocean Territory All economic activity is concentrated on the largest island of Diego Garcia, where a joint UK-US military facility is located. Construction projects and various services needed to support the military installation are performed by military and contract employees from the UK, Mauritius, the Philippines, and the US. Some of the natural resources found in this territory include coconuts, fish, and sugarcane. Sugarcane is still a major export for this territory. There are no industrial or agricultural activities on the islands. The territory earns foreign exchange by selling fishing licenses and postage stamps.
British Virgin Islands The economy, one of the most stable and prosperous in the Caribbean, is highly dependent on tourism generating an estimated 45% of the national income. More than 934,000 tourists, mainly from the US, visited the islands in 2008. 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. Roughly 400,000 companies were on the offshore registry by yearend 2000. 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, made 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 US dollar as its currency since 1959.
Brunei Brunei has a small well-to-do economy that depends on revenue from natural resource extraction but is also characterized by a mixture of foreign and domestic entrepreneurship, government regulation, welfare measures, and village tradition. Crude oil and natural gas production account for 70% of GDP and more than 90% of exports, with Japan and Korea as the primary export markets. Per capita GDP is among the highest in the world, and substantial income from overseas investment supplements income from domestic hydrocarbon production. For Bruneian citizens, who pay no taxes, the government provides for all medical services and free education through the university level. The government of Brunei has been emphasizing through policy and resource investments its strong desire to diversify its economy both within the oil and gas sector and to new sectors. Brunei is a founding member of the 12-nation Trans-Pacific Partnership (TPP) free trade agreement negotiations as well as the Regional Comprehensive Economic Partnership (RCEP) and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.
Bulgaria Bulgaria, a former Communist country that entered the EU on 1 January 2007, averaged more than 6% annual growth from 2004 to 2008, driven by significant amounts of bank lending, consumption, and foreign direct investment. Successive governments have demonstrated a commitment to economic reforms and responsible fiscal planning, but the global downturn sharply reduced domestic demand, exports, capital inflows, and industrial production. GDP contracted by 5.5% in 2009, and has been slow to recover in the years since. Despite having a favorable investment regime, including low, flat corporate income taxes, significant challenges remain. Corruption in public administration, a weak judiciary, and the presence of organized crime continue to hamper the country's investment climate and economic prospects.
Burkina Faso Burkina Faso is a poor, landlocked country that depends on adequate rainfall. About 80% of the population is engaged in subsistence farming and cotton is the main cash crop. The country has few natural resources and a weak industrial base. Cotton and gold are Burkina Faso’s key exports and Burkina Faso’s economic growth and revenue depends on global prices for the two commodities. The Burkinabe economy experienced high levels of growth over the last few years and gold accounted for about three-quarters of the country’s total export revenues in 2013. The country has seen an upswing in gold exploration, production, and exports. Burkina Faso experienced a number of public protests over the high cost of living, corruption, and other socioeconomic issues in 2013 and the fall of the COMPAORE government in 2014 gave rise to laborers pushing for better pay and working conditions. A new three-year IMF program was approved in 2013 to focus on improving the quality of public investment and ensuring inclusive growth. Political insecurity in neighboring Mali, unreliable energy supplies, and poor transportation links pose long-term challenges.
Burma Since the transition to a civilian government in 2011, Burma has begun an economic overhaul aimed at attracting foreign investment and reintegrating into the global economy. Economic reforms have included establishing a managed float of the Burmese kyat in 2012, re-writing the Foreign Investment Law in 2012 to allow more foreign investment participation, granting the Central Bank operational independence in July 2013, enacting a new Anti-corruption Law in September 2013, and authorizing a small number of foreign banks to open branch offices for limited operations beginning in 2015. The government’s commitment to reform, and the subsequent easing of most Western sanctions, has begun to pay dividends as growth accelerated in 2013 and 2014. Burma’s abundant natural resources, young labor force, and proximity to Asia’s dynamic economies have attracted foreign investment in the energy sector, garment industry, information technology, and food and beverages. Pledged foreign direct investment grew from US$1.4 billion in FY 2012 to US$4.1 billion in FY 2013. Despite these improvements, living standards have not improved for the majority of the people residing in rural areas. Burma remains one of the poorest countries in Asia – nearly one-third of the country’s 51 million people live in poverty. The previous government’s isolationist policies and economic mismanagement have left Burma with poor infrastructure, endemic corruption, underdeveloped human resources, and inadequate access to capital, which will require a major commitment to reverse. The Burmese government has been slow to address impediments to economic development such as insecure land rights, a restrictive trade licensing system, an opaque revenue collection system, and an antiquated banking system. Key benchmarks of sustained economic progress would include modernizing and opening the financial sector, increasing budget allocations for social services, and accelerating agricultural and land reforms.
Burundi Burundi is a landlocked, resource-poor country with an underdeveloped manufacturing sector. The economy is predominantly agricultural; agriculture accounts for just over 40% of GDP and employs more than 90% of the population. Burundi's primary exports are coffee and tea, which account for 90% of foreign exchange earnings, though exports are a relatively small share of GDP. Therefore, Burundi's export earnings - and its ability to pay for imports - rests primarily on weather conditions and international coffee and tea prices. An ethnic-based war that lasted until 2005 resulted in more than 200,000 deaths, forced more than 48,000 refugees into Tanzania, and displaced 140,000 others internally. Food, medicine, and electricity remain in short supply. Burundi's GDP grew around 4% annually in 2006-14. Political stability and the end of the civil war have improved aid flows and economic activity has increased, but underlying weaknesses - a high poverty rate, poor education rates, a weak legal system, a poor transportation network, overburdened utilities, and low administrative capacity - risk undermining planned economic reforms. Government corruption is hindering the development of a healthy private sector as companies have to deal with ever changing rules. The purchasing power of most Burundians has decreased as wage increases have not kept up with inflation. Burundi will remain heavily dependent on aid from bilateral and multilateral donors - foreign aid represents 42% of Burundi's national income, the second highest rate in Sub-Saharan Africa. Burundi joined the East African Community (EAC) in 2009, and regional infrastructure improvements driven by the EAC and funded by the World Bank may help improve Burundi’s transport connections and lower transportation costs.
Cabo Verde Cabo Verde’s economy is vulnerable to external shocks and depends on development aid, foreign investment, remittances, and tourism. The economy is service-oriented with commerce, transport, tourism, and public services accounting for about three-fourths of GDP. Tourism is the mainstay of the economy and depends on conditions in the euro zone countries. Although about 40% of the population lives in rural areas, the share of food production in GDP is low. The island economy suffers from a poor natural resource base, including serious water shortages, exacerbated by cycles of long-term drought, and poor soil for growing food on several of the islands, requiring it to import most of what it consumes. The fishing potential, mostly lobster and tuna, is not fully exploited. Cabo Verde annually runs a high trade deficit financed by foreign aid and remittances from its large pool of emigrants; remittances as a share of GDP are one of the highest in sub-Saharan Africa. Economic reforms are aimed at developing the private sector and attracting foreign investment to diversify the economy and mitigate high unemployment. The government’s elevated debt levels have limited its capacity to finance any shortfalls.
Cambodia Cambodia has experienced strong economic growth over the last decade. Cambodian GDP grew at an average annual rate of over 8% between 2000 and 2010 and over 7% since 2011. The tourism, garment, construction and real estate, and agriculture sectors accounted for the bulk of growth. Around 600,000 people, the majority of whom are women, are employed in the garment and footwear sector. An additional 500,000 Cambodians are employed in the tourism sector, and a further 50,000 people in construction. In 2005, exploitable oil deposits were found beneath Cambodia's territorial waters, representing a potential revenue stream for the government, if commercial extraction becomes feasible. Some of the deposits are located within the so-called overlapping claimed areas with Thailand. However, an unresolved border dispute with Thailand has so far prevented development in those areas. Mining also is attracting some investor interest and the government has touted opportunities for mining bauxite, gold, iron and gems. The tourism industry has continued to grow rapidly with foreign arrivals exceeding 2 million per year since 2007 and reaching around 4.5 million visitors in 2014. Cambodia, nevertheless, remains one of the poorest countries in Asia and long-term economic development remains a daunting challenge, inhibited by endemic corruption, limited educational opportunities, high income inequality, and poor job prospects. As of 2012, approximately 2.66 million people live on less than $1.20 per day, and 37% of Cambodian children under the age of 5 suffer from chronic malnutrition. More than 50% of the population is less than 25 years old. The population lacks education and productive skills, particularly in the impoverished countryside, which also lacks basic infrastructure. The Cambodian Government has been working with bilateral and multilateral donors, including the Asian Development Bank, the World Bank and IMF, to address the country's many pressing needs; more than 30% of the government budget comes from donor assistance. A major economic challenge for Cambodia over the next decade will be fashioning an economic environment in which the private sector can create enough jobs to handle Cambodia's demographic imbalance. Following the 2013 national elections, the government announced a variety of economic and business reforms. The government is also moving forward with new legislation to meet the 2015 deadline for the Association of Southeast Asian Nations (ASEAN) Economic Community.
Cameroon Modest oil resources and favorable agricultural conditions provide Cameroon with one of the best-endowed primary commodity economies in sub-Saharan Africa. Cameroon’s economy suffers from political and economic factors that often impact underdeveloped countries, such as stagnant per capita income, a relatively inequitable distribution of income, a top-heavy civil service, endemic corruption, the continuing inefficiencies of a large parastatal system in key sectors, 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. The IMF continues to press for economic reforms, including increased budget transparency, privatization, and poverty reduction programs. The Government of Cameroon provides subsidies for electricity, food, and fuel that have strained the federal budget diverting funds from education, healthcare, and infrastructure projects. Cameroon devotes significant resources to several large infrastructure projects under construction, including a deep sea port in Kribi and the Lom Pangar Hydropower Project. Cameroon’s energy sector continues to diversify, recently opening a natural gas powered electricity generating plant. Oil remains Cameroon’s main export commodity accounting for nearly 40% of export earnings despite falling global oil prices. Cameroon continues to seek foreign investment to improve its inadequate infrastructure, create jobs and improve its economic footprint but its unfavorable business environment remains a significant deterrent to foreign investment.
Canada As a high-tech industrial society in the trillion-dollar class, Canada 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. The 1989 US-Canada Free Trade Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA) (which includes Mexico) touched off a dramatic increase in trade and economic integration with the US, its principal trading partner. Canada enjoys a substantial trade surplus with the US, which absorbs about three-fourths of Canadian merchandise exports each year. Canada is the US's largest foreign supplier of energy, including oil, gas, and electric power, and a top source of US uranium imports. Given its abundant natural resources, highly skilled labor force, and modern capital plant, Canada enjoyed solid economic growth from 1993 through 2007. Buffeted by the global economic crisis, the economy dropped into a sharp recession in the final months of 2008, and Ottawa posted its first fiscal deficit in 2009 after 12 years of surplus. Canada's major banks, however, emerged from the financial crisis of 2008-09 among the strongest in the world, owing to the early intervention by the Bank of Canada and the financial sector's tradition of conservative lending practices and strong capitalization. Canada achieved marginal growth in 2010-14 and plans to balance the budget by 2015 despite the recent drop in oil prices. In addition, the country's petroleum sector is rapidly expanding, because Alberta's oil sands significantly boosted Canada's proven oil reserves. Canada now ranks third in the world in proved oil reserves behind Saudi Arabia and Venezuela and is the world’s fifth-largest oil producer.
Cayman Islands With no direct taxation, the islands are a thriving offshore financial center. More than 93,000 companies were registered in the Cayman Islands as of 2008, including almost 300 banks, 800 insurers, and 10,000 mutual funds. 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 1.9 million in 2008, with about half from the US. Nearly 90% of the islands' food and consumer goods must be imported. The Caymanians enjoy a standard of living comparable to that of Switzerland.
Central African Republic Subsistence agriculture, together with forestry and mining, remains the backbone of the economy of the Central African Republic (CAR), with about 60% of the population living in outlying areas. The agricultural sector generates more than half of GDP. Timber and diamonds account for most export earnings, followed by cotton. 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. Factional fighting between the government and its opponents remains a drag on economic revitalization. Since 2009 the IMF has worked closely with the government to institute reforms that have resulted in some improvement in budget transparency, but other problems remain. The government's additional spending in the run-up to the election in 2011 worsened CAR's fiscal situation. Distribution of income is extraordinarily unequal. Grants from France and the international community can only partially meet humanitarian needs. In 2012, the World Bank approved $125 million in funding for transport infrastructure and regional trade, focused on the route between CAR's capital and the port of Douala in Cameroon. After a two-year lag in donor support, the IMF's first review of CAR's extended credit facility for 2012-15 praised improvements in revenue collection but warned of weak management of spending.
Chad Chad’s landlocked location results in high transportation costs for imported goods and dependence on neighboring countries. Oil and agriculture are mainstays of Chad’s economy. Oil provides about 60% of export revenues, while cotton, cattle, livestock, and gum arabic provide the bulk of Chad's non-oil export earnings. Chad relies on foreign assistance and foreign capital for much public and private sector investment. The services sector contributes about one-third of GDP and has attracted foreign investment mostly through telecommunications and banking. Chad’s fiscal position is encumbered by declining oil prices, though high oil prices and strong local harvests supported the economy in recent years. Nearly all of Chad’s fuel is provided by one domestic refinery, and unanticipated shut-downs occasionally result in shortages. The country regulates the price of domestic fuel, providing an incentive for black market sales. Chad's investment climate remains challenging due to limited infrastructure, a lack of trained workers, extensive government bureaucracy, and corruption. Chad obtained a three-year extended credit facility from the IMF in 2014 and was granted debt relief under the Heavily Indebted Poor Countries Initiative in April 2015.
Chile Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports of goods and services account for approximately one-third of GDP, with commodities making up some three-quarters of total exports. Copper alone provides 19% of government revenue. From 2003 through 2013, real growth averaged almost 5% per year, despite the slight contraction in 2009 that resulted from the global financial crisis. Growth slowed to 4.2% in 2014. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004. Chile has 22 trade agreements covering 60 countries including agreements with the European Union, Mercosur, China, India, South Korea, and Mexico. Chile has joined the United States and 10 other countries in negotiating the Trans-Pacific Partnership trade agreement. The Chilean Government has generally followed a countercyclical fiscal policy, accumulating surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and generally allowing deficit spending only during periods of low copper prices and growth. As of 31 December 2012, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $20.9 billion. Chile used these funds to finance fiscal stimulus packages during the 2009 economic downturn. In May 2010 Chile signed the OECD Convention, becoming the first South American country to join the OECD. In 2014, President Michelle BACHELET introduced tax reforms aimed at delivering her campaign promise to fight inequality and to provide access to education and health care. The reforms are expected to generate additional tax revenues equal to 3% of Chile’s GDP, mostly by increasing corporate tax rates to OECD averages.
China Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, growth of the private sector, development of stock markets and a modern banking system, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors considered important to "economic security," explicitly looking to foster globally competitive industries. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2014 stood as the largest economy in the world, surpassing the US for the first time in modern history. Still, China's per capita income is below the world average.
After keeping its currency tightly linked to the US dollar for years, in July 2005 China moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate.
The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2014 more than 274 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development.
Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.
Christmas Island The main economic activities on Christmas Island are the mining of low grade phosphate, limited tourism, the provision of government services and more recently the construction and operation of the Immigration Detention Center. The government sector includes administration, health, education, policing, customs, quarantine and defense.
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 Coconuts, grown throughout the islands, are the sole cash crop. Small local gardens and fishing contribute to the food supply, but additional food and most other necessities must be imported from Australia. There is a small tourist industry.
Colombia Colombia's consistently sound economic policies and aggressive promotion of free trade agreements in recent years have bolstered its ability to weather external shocks. Real GDP has grown more than 4% per year for the past four years, continuing almost a decade of strong economic performance. All three major ratings agencies have upgraded Colombia's government debt to investment grade, which helped to attract record levels of investment in 2013 and 2014, mostly in the hydrocarbons sector. Colombia depends heavily on energy and mining exports, making it vulnerable to a drop in commodity prices. Colombia is the world's fourth largest coal exporter and Latin America's fourth largest oil producer. Economic development is stymied by inadequate infrastructure, inequality, poverty, narco-trafficking and an uncertain security situation. Moreover, the unemployment rate of 9.2% in 2014 is still one of Latin America's highest. The SANTOS Administration's foreign policy has focused on bolstering Colombia's commercial ties and boosting investment at home. Colombia has signed or is negotiating Free Trade Agreements (FTA) with more than a dozen countries; the US-Colombia FTA went into force on May 2012. Colombia is also a founding member of the Pacific Alliance - a regional grouping formed in 2012 by Chile, Colombia, Mexico, and Peru to promote regional trade and economic integration. In 2013, Colombia began its ascension process to the OECD. In 2014, Colombia passed a tax reform bill to offset the lost revenue from the global drop in oil prices. The SANTOS administration is also using tax reform to help finance implementation of a peace deal, in the event FARC and the government reach an agreement in 2015. Colombian officials estimate a peace deal may bolster economic growth by almost 2%.
Comoros One of the world's poorest countries, Comoros is made up of three islands that are hampered by 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. Currently, authorities are negotiating with the IMF for triennial program assistance. Agriculture, including fishing, hunting, and forestry, accounts for 50% of GDP, employs 80% of the labor force, and provides most of the exports. Export income is heavily reliant on the three main crops of vanilla, cloves, and ylang-ylang; and Comoros' export earnings are easily disrupted by disasters such as fires and extreme weather. Despite agriculture’s importance to the economy, the country imports roughly 70% of its food; rice, the main staple, accounts for the bulk of imports. The government - which is racked by internal political disputes - is struggling to provide basic services, upgrade education and technical training, privatize commercial and industrial enterprises, improve health services, diversify exports, promote tourism, and reduce the high population growth rate. Recurring political instability, sometimes initiated from outside the country, has inhibited growth. Remittances from about 200,000 Comoran diaspora contribute about 25% of the country’s GDP. In December 2012, IMF and the World Bank's International Development Association supported $176 million in debt relief for Comoros, resulting in a 59% reduction of its future external debt service over a period of 40 years. In late 2013, a US-based investment company invested $200 million in a project to explore for hydrocarbons in Comoran territorial waters, the largest financial investment in the country’s history.
Congo, Democratic Republic of the The economy of the Democratic Republic of the Congo - a nation endowed with vast natural resource wealth - is slowly recovering after decades of decline. Systemic corruption since independence in 1960, combined with countrywide instability and conflict that began in the mid-90s has dramatically reduced national output and government revenue and increased external debt. With the installation of a transitional government in 2003 after peace accords, economic conditions slowly began to improve as the transitional government reopened relations with international financial institutions and international donors, and President KABILA began implementing reforms. Progress has been slow to reach the interior of the country although clear changes are evident in Kinshasa and Lubumbashi. Renewed activity in the mining sector, the source of most export income, has boosted Kinshasa's fiscal position and GDP growth in recent years. An uncertain legal framework, corruption, and a lack of transparency in government policy are long-term problems for the large mining sector and for the economy as a whole. Much economic activity still occurs in the informal sector and is not reflected in GDP data. The DRC signed a Poverty Reduction and Growth Facility with the IMF in 2009 and received $12 billion in multilateral and bilateral debt relief in 2010, but the IMF at the end of 2012 suspended the last three payments under the loan facility - worth $240 million - because of concerns about the lack of transparency in mining contracts. In 2012, the DRC updated its business laws by adhering to OHADA, the Organization for the Harmonization of Business Law in Africa. The country marked its twelfth consecutive year of positive economic expansion in 2014.
Congo, Republic of the The economy is a mixture of subsistence farming and hunting, an industrial sector based largely on oil and support services, and government spending. Oil has supplanted forestry as the mainstay of the economy, providing a major share of government revenues and exports. Natural gas is increasingly being converted to electricity rather than being flared, greatly improving energy prospects. New mining projects, particularly iron ore, which entered production in late 2013 may add as much as $1 billion to annual government revenue. Economic reform efforts have been undertaken with the support of international organizations, notably the World Bank and the IMF, including recently concluded Article IV consultations. The current administration faces difficult economic challenges of stimulating recovery and reducing poverty. The recent drop in oil prices has constrained government spending; lower oil prices forced the government to cut more than $1 billion in planned spending. Officially the country became a net external creditor as of 2011, with external debt representing only about 16% of GDP and debt servicing less than 3% of government revenue.
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, employing more than one-quarter of the working population, provides the economic base with major exports of copra and citrus fruit. Black pearls are the Cook Islands' leading export. Manufacturing activities are limited to fruit processing, clothing, and handicrafts. Trade deficits are offset 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 Prior to the global economic crisis, Costa Rica enjoyed stable economic growth. The economy contracted 1.3% in 2009 but resumed growth at about 4% per year in 2010-14. While the traditional agricultural exports of bananas, coffee, sugar, and beef are still the backbone of commodity export trade, a variety of industrial and specialized agricultural products have broadened export trade in recent years. High value-added goods and services, including medical devices, have further bolstered exports. Tourism continues to bring in foreign exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism. Foreign investors remain attracted by the country's political stability and relatively high education levels, as well as the incentives offered in the free-trade zones; and Costa Rica has attracted one of the highest levels of foreign direct investment per capita in Latin America. However, poor infrastructure, high energy costs, bureaucracy, weak investor protection, and legal uncertainty due to difficulty of enforcing contracts and overlapping and at times conflicting responsibilities between agencies, remain impediments to greater competitiveness. Costa Rica’s economy also faces challenges due to a rising fiscal deficit, rising public debt, and relatively low levels of domestic revenue. Poverty has remained around 20-25% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Unlike the rest of Central America, Costa Rica is not highly dependent on remittances, which in 2013 represented 1.1% of GDP. Immigration from Nicaragua has increasingly become a concern for the government.
The estimated 300,000-500,000 Nicaraguans in Costa Rica, legally and illegally, are an important source of mostly unskilled labor, but also place heavy demands on the social welfare system. The US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) entered into force on 1 January 2009 after significant delays within the Costa Rican legislature. CAFTA-DR has increased foreign direct investment in key sectors of the economy, including the insurance and telecommunications sectors recently opened to private investors.
Cote d'Ivoire Cote d'Ivoire is heavily dependent on agriculture and related activities, which engage roughly two-thirds of the population. Cote d'Ivoire is the world's largest producer and exporter of cocoa beans and a significant producer and exporter of coffee and palm oil. Consequently, the economy is highly sensitive to fluctuations in international prices for these products and in climatic conditions. Cocoa, oil, and coffee are the country's top export revenue earners, but the country is also mining gold. The country boasted two offshore oil finds in 2012. Following the end of more than a decade of civil conflict in 2011, Cote d’Ivoire has experienced a boom in foreign investment and economic growth. In June 2012, the IMF and the World Bank announced $4.4 billion in debt relief for Cote d'Ivoire under the Highly Indebted Poor Countries Initiative.
Croatia Though still one of the wealthiest of the former Yugoslav republics, Croatia's economy suffered badly during the 1991-95 war. The country's output during that time collapsed, and Croatia missed the early waves of investment in Central and Eastern Europe that followed the fall of the Berlin Wall. Between 2000 and 2007, however, Croatia's economic fortunes began to improve with moderate but steady GDP growth between 4% and 6% led by a rebound in tourism and credit-driven consumer spending. Inflation over the same period remained tame and the currency, the kuna, stable. Croatia experienced an abrupt slowdown in the economy in 2008 and has yet to recover; economic growth was stagnant or negative in each year since 2009. Difficult problems still remain, including a stubbornly high unemployment rate, uneven regional development, and a challenging investment climate. Croatia continues to face reduced foreign investment. On 1 July 2013 Croatia joined the EU, following a decade-long application process. Croatia will be a member of the European Exchange Rate Mechanism until it meets the criteria for joining the Economic and Monetary Union and adopts the euro as its currency. EU accession has increased pressure on the government to reduce Croatia’s relatively high public debt, which triggered the EU’s excessive deficit procedure for fiscal consolidation. Zagreb has cut spending since 2012, and the government also raised additional revenues through more stringent tax collection and by raising the Value Added Tax. The government has also sought to accelerate privatization of non-strategic assets, with mixed success.
Cuba The government continues to balance the need for loosening its socialist economic system against a desire for firm political control. The government in April 2011 held the first Cuban Communist Party Congress in almost 13 years, during which leaders approved a plan for wide-ranging economic changes. Since then, the Cuban government has slowly and incrementally implemented limited economic reforms, including allowing Cubans to buy electronic appliances and cell phones, stay in hotels, and buy and sell used cars. As the Cuban government has cut state sector jobs as part of the reform process, it has opened up some retail services to "self-employment," leading to the rise of so-called "cuentapropistas" or entrepreneurs. Approximately 476,000 Cuban workers are currently registered as self-employed. Recent moves include permitting the private ownership and sale of real estate and new vehicles, allowing private farmers to sell agricultural goods directly to hotels, allowing the creation of non-agricultural cooperatives, adopting a new foreign investment law, and launching a “Special Development Zone” around the Mariel port. Despite these reforms, the average Cuban's standard of living remains at a lower level than before the collapse of the Soviet Union and the resulting downturn of the 1990s. Since late 2000, Venezuela has been providing oil on preferential terms, and it supplied nearly 160,000 barrels per day of petroleum products. Cuba has been paying for the oil, in part, with the services of Cuban personnel in Venezuela, including some 30,000 medical professionals. However, in 2013 Venezuela’s economic woes forced an estimated 24% reduction in oil exports to Cuba. This downward trend continued in 2014.
Curacao Tourism, petroleum refining and bunkering, offshore finance, and transportation and communications are the mainstays of this small island economy, which is closely tied to the outside world. Although GDP grew only slightly during the past decade, Curacao enjoys a high per capita income and a well-developed infrastructure compared with other countries in the region. Curacao has an excellent natural harbor that can accommodate large oil tankers, and the Port of Willemstad hosts a free trade zone and a dry dock. Venezuelan state oil company PdVSA, under a contract in effect until 2019, leases the single refinery on the island from the government, directly employing some 1,000 people; most of the oil for the refinery is imported from Venezuela; most of the refined products are exported to the US and Asia. Almost all consumer and capital goods are imported, with the US, the Netherlands and Venezuela being the major suppliers. The government is attempting to diversify its industry and trade and has signed an Association Agreement with the EU to expand business there. Most of Curacao’s GDP results from services. Curacao has limited natural resources, poor soil, and inadequate water supplies, and budgetary problems complicate reform of the health and education systems. In 2013, the government implemented changes to the sales tax and reformed the public pension and health care systems, including increasing the sales tax from 5% to as high as 9% on some products, raising the age for public pension withdrawals to 65, and requiring citizens to pay higher premiums.
Cyprus The area of the Republic of Cyprus under government control has a market economy dominated by the service sector, which accounts for four-fifths of GDP. Tourism, financial services, and real estate have traditionally been the most important sectors. Cyprus has been a member of the European Union (EU) since May 2004 and adopted the euro as its national currency in January 2008. During the first five years of EU membership, the Cyprus economy grew at an average rate of about 4%, with unemployment between 2004 and 2008 averaging about 4%. However, the economy tipped into recession in 2009 as the ongoing global financial crisis and resulting low demand hit the tourism and construction sectors. An overextended banking sector with excessive exposure to Greek debt added to the contraction. Cyprus’s biggest two banks were among the largest holders of Greek bonds in Europe and had a substantial presence in Greece through bank branches and subsidiaries. Following numerous downgrades of its credit rating, Cyprus lost access to international capital markets in May 2011. In July 2012, Cyprus became the fifth eurozone government to request an economic bailout program from the European Commission, European Central Bank and the International Monetary Fund - known collectively as the "Troika."
Shortly after the election of President Nikos ANASTASIADES in February 2013, Cyprus reached an agreement with the Troika on a $10 billion bailout that resulted in losses on uninsured bank deposits. The bailout triggered a two-week bank closure and the imposition of capital controls that were completely withdrawn in April 2015. Cyprus' two largest banks merged and the combined entity was recapitalized through conversion of some large bank deposits to shares and imposition of losses on bank bondholders. As with other EU countries, the Troika conditioned the bailout on passing financial and structural reforms and privatizing state-owned enterprises. Despite downsizing and restructuring, the Cypriot financial sector throughout 2014 remained burdened by the largest stock of non-performing loans (NPLs) in the euro-zone, equal to nearly half of all loans. Since the bailout, Cyprus has received positive appraisals by the Troika but met its first signs of resistance to passing bailout-mandated legislation in 2014. Political disagreements held up passage of contentious legislation required by the Troika to reform bankruptcy rules, delaying disbursal of bailout funds during the second half of the year. In October 2013, a US-Israeli consortium completed preliminary appraisals of hydrocarbon deposits in Cyprus’ exclusive economic zone (EEZ), which revealed an estimated gross mean reserve of about 140 billion cubic meters. Though exploration continues in Cyprus’ EEZ, no additional commercially exploitable reserves were identified during the exploratory drilling in 2014/2015. Nevertheless, developing its offshore hydrocarbon resources remains a critical component to the government’s economic recovery efforts. Industry experts say there may be exploratory and development drilling in 2016 and 2017.
Czech Republic The Czech Republic is a stable and prosperous market economy closely integrated with the EU, especially since the country's EU accession in 2004. The auto industry is the largest single industry, and, together with its upstream suppliers, accounts for nearly 24% of Czech manufacturing. The Czech Republic produced more than a million cars for the first time in 2010, over 80% of which were exported. While the conservative, inward-looking Czech financial system has remained relatively healthy, the small, open, export-driven Czech economy remains sensitive to changes in the economic performance of its main export markets, especially Germany. When Western Europe and Germany fell into recession in late 2008, demand for Czech goods plunged, leading to double digit drops in industrial production and exports. As a result, real GDP fell sharply in 2009. The economy slowly recovered in the second half of 2009 and registered weak growth in the next two years. In 2012 and 2013, however, the economy fell into a recession again, due both to a slump in external demand in the EU and to the government’s austerity measures, returning to weak growth in 2014. Foreign and domestic businesses alike voice concerns about corruption, especially in public procurement. Other long term challenges include dealing with a rapidly aging population, funding an unsustainable pension and health care system, and diversifying away from manufacturing and toward a more high-tech, services-based, knowledge economy.
Denmark This thoroughly modern market economy features a high-tech agricultural sector, state-of-the-art industry with world-leading firms in pharmaceuticals, maritime shipping and renewable energy, and a high dependence on foreign trade. Denmark is a member of the European Union (EU); Danish legislation and regulations conform to EU standards on almost all issues. Danes enjoy a high standard of living and the Danish economy is characterized by extensive government welfare measures and an equitable distribution of income. Denmark is a net exporter of food and energy and enjoys a comfortable balance of payments surplus, but depends on imports of raw materials for the manufacturing sector. Within the EU, Denmark is among the strongest supporters of trade liberalization. After a long consumption-driven upswing, Denmark's economy began slowing in 2007 with the end of a housing boom. Housing prices dropped markedly in 2008-09 and, following a short respite in 2010, have since continued to decline. Household indebtedness is still relatively high at more than 275% of gross disposable income in the first half of 2013. The global financial crisis has exacerbated this cyclical slowdown through increased borrowing costs and lower export demand, consumer confidence, and investment. Denmark made a modest recovery in 2010, in part because of increased government spending; however, the country experienced a technical recession in late 2010-early 2011 and has been slow to emerge from it in 2012-14 . Historically low levels of unemployment rose sharply with the recession and have remained at about 6% in 2010-13, based on the national measure, about two-thirds average EU unemployment. An impending decline in the ratio of workers to retirees will be a major long-term issue. Denmark maintained a healthy budget surplus for many years up to 2008, but the budget balance swung into deficit in 2009, where it remains. In spite of the deficits, the new coalition government delivered a modest stimulus to the economy in 2012. Despite previously meeting the criteria to join the European Economic and Monetary Union (EMU), Denmark has negotiated an opt-out with the EU and is not required to adopt the euro.
Dhekelia Economic activity is limited to providing services to the military and their families located in Dhekelia. All food and manufactured goods must be imported.
Djibouti Djibouti's economy is based on service activities connected with the country's strategic location as a deepwater port on the Red Sea. Three-fourths of Djibouti's inhabitants live in the capital city; the remainder are mostly nomadic herders. Scant rainfall limits crop production to small quantities of 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. Imports, exports, and reexports - primarily of coffee from landlocked neighbor Ethiopia - represent 70% of port activity at Djibouti's container terminal. Djibouti 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 nearly 60% continues to be a major problem. While inflation is not a concern, due to the fixed tie of the Djiboutian franc to the US dollar, the artificially high value of the Djiboutian franc adversely affects Djibouti's balance of payments. Djibouti’s reliance on diesel-generated electricity and imported food and water leave average consumers vulnerable to global price shocks. The government has emphasized infrastructure development for transportation and energy and Djibouti – with the help of foreign partners – has begun to increase and modernize its port capacity.
Dominica The Dominican economy has been dependent on agriculture - primarily bananas - in years past, but increasingly has been driven by tourism as the government seeks to promote Dominica as an "ecotourism" destination. Moreover, Dominica has an offshore medical education sector. In order to diversify the island's economy, the government is also attempting to foster an offshore financial industry and plans to sign agreements with the private sector to develop geothermal energy resources. In 2003, the government began a comprehensive restructuring of the economy - including the elimination of price controls, privatization of the state banana company, and tax increases - to address an economic and financial crisis and to meet IMF requirements. In 2009 and 2013, the economy contracted as a result of the global recession; growth remains anemic. Although public debt levels continue to exceed pre-recession levels, the debt burden declined from 78% of GDP in 2011 to approximately 70% in 2012.
Dominican Republic The Dominican Republic has long been viewed primarily as an exporter of sugar, coffee, and tobacco, but in recent years the service sector has overtaken agriculture as the economy's largest employer, due to growth in telecommunications, tourism, and free trade zones. The mining sector has also played a greater role in the export market since late 2012 with the commencement of the extraction phase of the Pueblo Viejo Gold and Silver mine. The economy is highly dependent upon the US, the destination for approximately half of exports. Remittances from the US amount to about 7% of GDP, equivalent to about a third of exports and two-thirds of tourism receipts. The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GDP, while the richest 10% enjoys nearly 40% of GDP. High unemployment and underemployment remains an important long-term challenge. The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) came into force in March 2007, boosting investment and exports and reducing losses to the Asian garment industry. The Dominican Republic's economy rebounded from the global recession in 2010-14, and the fiscal situation is improving. A tax reform package passed in November 2012 and a reduction in government spending helped to narrow the central government budget deficit from 6.6% of GDP in 2012 to 2.7% in 2014. A successful government bond placement in 2013 and 2014 helped finance the deficit. A liability management operation in January 2015, in which the government paid down over $4 billion of the country’s Petrocaribe debt, at a discount of 52% with proceeds from the sale of $2.5 billion in global bonds, reduced the country’s debt load by approximately by 3.3% of GDP.
Ecuador Ecuador is substantially dependent on its petroleum resources, which have accounted for more than half of the country's export earnings and approximately 25% of public sector revenues in recent years.
In 1999/2000, Ecuador's economy suffered from a banking crisis, with GDP contracting by 5.3% and poverty increasing significantly. In March 2000, the Congress approved a series of structural reforms that also provided for the adoption of the US dollar as legal tender. Dollarization stabilized the economy, and positive growth returned in the years that followed, helped by high oil prices, remittances, and increased non-traditional exports. From 2002-06 the economy grew an average of 4.3% per year, the highest five-year average in 25 years. After moderate growth in 2007, the economy reached a growth rate of 6.4% in 2008, buoyed by high global petroleum prices and increased public sector investment. President Rafael CORREA Delgado, who took office in January 2007, defaulted in December 2008 on Ecuador's sovereign debt, which, with a total face value of approximately US$3.2 billion, represented about 30% of Ecuador's public external debt. In May 2009, Ecuador bought back 91% of its "defaulted" bonds via an international reverse auction.
Economic policies under the CORREA administration - for example, an announcement in late 2009 of its intention to terminate 13 bilateral investment treaties, including one with the United States - have generated economic uncertainty and discouraged private investment. China has become Ecuador's largest foreign lender since Quito defaulted in 2008, allowing the government to maintain a high rate of social spending; Ecuador contracted with the Chinese government for more than $9.9 billion in forward oil sales, project financing, and budget support loans as of December 2013.
Foreign investment levels in Ecuador continue to be the lowest in the region as a result of an unstable regulatory environment, weak rule of law, and the crowding-out effect of public investments. In 2014, oil output increased slightly and production is expected to remain steady in 2015, although prices will likely remain lower than in previous years. Faced with a 2013 trade deficit of $1.1 billion, Ecuador erected technical barriers to trade in December 2013, causing tensions with its largest trading partners. Ecuador also decriminalized intellectual property rights violations in February 2014. In March, 2015 Ecuador imposed tariff surcharges from 5%-45% on an estimated 32% of imports for 15 months.
Egypt Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley, where most economic activity takes place. Egypt's economy was highly centralized during the rule of former President Gamal Abdel NASSER but opened up considerably under former Presidents Anwar EL-SADAT and Mohamed Hosni MUBARAK. Cairo from 2004 to 2008 pursued business climate reforms to attract foreign investment and facilitate growth. Poor living conditions and limited job opportunities for the average Egyptian contribute to public discontent, a major factor leading to the January 2011 revolution that ousted Mubarak. The uncertain political, security, and policy environment since 2011 caused economic growth to slow significantly, hurting tourism, manufacturing, and other sectors and pushing up unemployment. Weak growth and limited foreign exchange earnings have made public finances unsustainable, leaving authorities dependent on expensive borrowing for deficit finance and on Gulf allies to help cover the import bill. Egypt's current Constitution passed in a referendum that took place in January 2014.
El Salvador The smallest country in Central America geographically, El Salvador has the fourth largest economy in the region. With the global recession, real GDP contracted in 2009 and economic growth has since remained low, averaging less than 2% from 2010 to 2014. Remittances accounted for 17% of GDP in 2014 and were received by about a third of all households. In 2006, El Salvador was the first country to ratify the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR), which has bolstered the export of processed foods, sugar, and ethanol, and supported investment in the apparel sector amid increased Asian competition. The Salvadoran Government maintained fiscal discipline during post-war reconstruction and reconstruction following earthquakes in 2001 and hurricanes in 1998 and 2005, but El Salvador's public debt has been growing over the last several years, amounting to some 59% of GDP in 2014. External debt was below 30% of GDP in 2014. In September 2014, El Salvador signed a five-year $277 million second compact with the Millennium Challenge Corporation (MCC) - a United States Government agency aimed at stimulating economic growth and reducing poverty - to improve El Salvador's competitiveness and productivity in international markets. In November 2014 along with his counterparts from Guatemala and Honduras, President SANCHEZ CEREN announced the “Plan of the Alliance for Prosperity in the Northern Triangle.” This plan seeks to address the challenges facing the three Northern Triangle countries, including steps the governments will take to stimulate economic growth, increase transparency and fiscal responsibility, reduce violence, modernize the justice system, improve infrastructure, and promote educational opportunities over the next several years.
Equatorial Guinea Exploitation of oil and gas deposits, beginning in the 1990’s, has driven economic growth in Equatorial Guinea, allowing per capita GDP to rise to over $29,000 in 2014. Declining revenue from hydrocarbon production, high levels of infrastructure expenditures, lack of economic diversification, and corruption have led to limited improvements in the general population’s living conditions. Equatorial Guinea hosted two economic diversification symposia in 2014 that focused on attracting investment in five sectors: agriculture and animal ranching, fishing, mining and petrochemicals, tourism, and financial services. Undeveloped mineral resources include gold, zinc, diamonds, columbite-tantalite, and other base metals. Forestry and farming are also minor components of GDP. Subsistence farming is the dominant form of livelihood. Although pre-independence Equatorial Guinea counted on cocoa production for hard currency earnings, the neglect of the rural economy since independence has diminished potential for agriculture-led growth. Foreign assistance programs by the World Bank and the IMF have been cut since 1993 because of corruption and mismanagement and high GDP figures now make Equatorial Guinea ineligible for most donor assistance. The government has been widely criticized for its lack of transparency and misuse of oil revenues and has attempted to address this issue by working towards compliance with the Extractive Industries Transparency Initiative. US foreign assistance to Equatorial Guinea is limited in part because of US restrictions pursuant to the Trafficking Victims Protection Act.
Eritrea Since formal independence from Ethiopia in 1993, Eritrea has faced many economic problems, including lack of resources and chronic drought, which have been exacerbated by restrictive economic policies. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice (PFDJ). Like the economies of many African nations, a large share of the population - nearly 80% - is engaged in subsistence agriculture, but the sector only produces a small share of the country's total output. Since the conclusion of the Ethiopian-Eritrea war in 2000, the government has expanded use of military and party-owned businesses to complete President ISAIAS's development agenda. The government has strictly controlled the use of foreign currency by limiting access and availability; new regulations in 2013 aimed at relaxing currency controls have had little economic effect. Few large private enterprises exist in Eritrea and most operate in conjunction with government partners, including a number of large international mining ventures that have recently begun production. While reliable statistics on food security are difficult to obtain, erratic rainfall and the percentage of the labor force tied up in national service continue to interfere with agricultural production and economic development. Eritrea's harvests generally cannot meet the food needs of the country without supplemental grain purchases. Copper, potash, and gold production is likely to drive economic growth over the next few years, but military spending will continue to compete with development and investment plans. Eritrea's economic future will depend on market reform, international sanctions, global food prices, and success at addressing social problems such refugee emigration.
Estonia Estonia, a member of the European Union since 2004 and the euro zone since 2011, has a modern market-based economy and one of the higher per capita income levels in Central Europe and the Baltic region. Estonia's successive governments have pursued a free market, pro-business economic agenda and have wavered little in their commitment to pro-market reforms. The current government has followed sound fiscal policies that have resulted in balanced budgets and low public debt. The economy benefits from strong electronics and telecommunications sectors and strong trade ties with Finland, Sweden, and Germany. Estonia's economy fell into recession in mid-2008, as a result of an investment and consumption slump following the bursting of the real estate market bubble and a decrease in export demand as result of economic slowdown in the rest of Europe, but the economy recovered strongly in the five years up to 2014. Growth fell below 2% in 2014 as a consequence of weak EU and Russian growth. Estonia is challenged by a shortage of labor, both skilled and unskilled, and the government has amended its immigration law to allow easier hiring of highly qualified foreign workers.
Ethiopia Ethiopia's economy is based on agriculture, but the government is pushing to diversify into manufacturing, textiles, and energy generation. Coffee is a major export crop. The agricultural sector suffers from poor cultivation practices and frequent drought, but recent joint efforts by the Government of Ethiopia and donors have strengthened Ethiopia's agricultural resilience, contributing to a reduction in the number of Ethiopians threatened with starvation. The banking, insurance, telecommunications, and micro-credit industries are restricted to domestic investors, but Ethiopia has attracted significant foreign investment in textiles, leather, commercial agriculture and manufacturing. Under Ethiopia's constitution, the state owns all land and provides long-term leases to the tenants; land use certificates are now being issued in some areas so that tenants have more recognizable rights to continued occupancy and hence make more concerted efforts to improve their leaseholds. While GDP growth has remained high, per capita income is among the lowest in the world. Ethiopia's economy continues on its state-led Growth and Transformation Plan and is scheduled to issue another development plan in 2015. Ethiopia has achieved high single-digit growth rates through government-led infrastructure expansion and commercial agriculture development. Ethiopia in late 2014 issued its first sovereign bond, generating $1 billion in revenue for a 10 year note.
European Union Internally, the 28 EU member states have adopted the framework of a single market with free movement of goods, services and capital. Internationally, the EU aims to bolster Europe's trade position and its political and economic weight.
Despite great differences in per capita income among member states (from $13,000 to $82,000) and in national attitudes toward issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of monetary and fiscal policies. A common currency – the euro – circulates among 19 of the member states, under the auspices of the European Economic and Monetary Union (EMU). Eleven established EU states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later). Since 2004, 13 states acceded to the EU that are, in general, less advanced economically than the other member states. Of the 13, Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015) have adopted the euro; 7 other member states - not including the UK and Denmark, which have formal opt-outs - are required by EU treaties to adopt the common currency upon meeting fiscal and monetary convergence criteria.
Following the 2008-09 global economic crisis, the EU economy saw moderate GDP growth in 2010 and 2011 but has struggled since the sovereign debt crisis in the eurozone intensified in 2011. Despite EU/IMF rescue programs in Greece, Ireland, Portugal, Spain and Cyprus, significant drags on growth remain, including high public and private debt loads, low domestic demand that discourages investment, aging populations, onerous regulations, and high unemployment. In response, EU leaders plan to use $28 (€21) billion in public money as seed capital to attract private investors to fund $421 [€315] billion in infrastructure projects from 2015 to 2017, focusing on energy, broadband, transport, education, and research and innovation. The eurozone has implemented a banking union to increase financial stability and improve lending conditions, with the European Central Bank taking the lead in banking supervision in the region. The ECB has also expressed its intent to widen its asset-buying program - including government debt if necessary - to fend off deflation and improve borrowing conditions in the euro zone. In another effort to restore economic growth and create jobs, in 2013 the EU and the United States started negotiations on an ambitious and comprehensive free trade agreement with the goal of expanding already massive trade and investment flows.
Falkland Islands (Islas Malvinas) The economy was formerly based on agriculture, mainly sheep farming, but fishing and tourism currently comprise the bulk of economic activity. In 1987, the government began selling fishing licenses to foreign trawlers operating within the Falkland Islands' exclusive fishing zone. These license fees net more than $40 million per year, which help support the island's health, education, and welfare system. The waters around the Falkland Islands are known for their squid, which account for around 75% of the annual 200,000 ton fish catch. Dairy farming supports domestic consumption; crops furnish winter fodder. Foreign exchange earnings come from shipments of high-grade wool to the UK and from the sale of postage stamps and coins. In 2001, the government purchased 100 reindeer with the intent to increase the number to 10,000 over the following 20 years so that venison could be exported to Scandinavia and Chile. Tourism, especially eco-tourism, is increasing rapidly, with about 69,000 visitors in 2009. The British military presence also provides a sizable economic boost. The islands are now self-financing except for defense. In 1993 the British Geological Survey announced a 200-mile oil exploration zone around the islands, and early seismic surveys suggest substantial reserves capable of producing 500,000 barrels per day. Political tensions between the UK and Argentina remain high following the start of oil drilling activities in the waters. In September 2011, a British exploration firm announced that it plans to commence oil production in 2016.
Faroe Islands The Faroese economy is dependent on fishing, which makes the economy vulnerable to price fluctuations. The sector normally accounts for about 95% of exports and nearly half of GDP. In early 2008 the Faroese economy began to slow as a result of smaller catches and historically high oil prices. The slowdown in the Faroese economy followed a strong performance since the mid-1990s with annual growth rates averaging close to 6%, mostly a result of increased fish landings and salmon farming, and high export prices. Unemployment reached its lowest level in June 2008 at 1.1% but gradually increased to about 5.5% in 2012. Total dependence on fishing and salmon farming make the Faroese economy vulnerable to fluctuations in world demand. Initial discoveries of oil in the Faroese area give hope for eventual oil production, which may provide a foundation for a more diversified economy and less dependence on Danish economic assistance. Aided by an annual subsidy from Denmark amounting to about 3% of Faroese GDP, the Faroese have a standard of living almost equal to that of Denmark and Greenland. The Faroese Government ran relatively large deficits from 2008 to 2010 and budget deficits are forecast for several years ahead. At year-end 2010 gross external debt had reached approximately US$900 million.
Fiji Fiji, endowed with forest, mineral, and fish resources, is one of the most developed and connected of the Pacific island economies. Earnings from the tourism industry, with an estimated 692,630 tourists visiting in 2014, and remittances from Fijian’s working abroad are the country’s largest foreign exchange earners. Fiji's sugar remains a significant industry and a major export. The sugar industry reforms since 2010 have improved productivity and returns, but the industry faces the complete withdrawal of European Union preferential prices by 2017. Fiji’s trade imbalance continues to widen with increased imports and sluggish performance of domestic exports. The return to parliamentary democracy and successful elections in September 2014 have boosted investor confidence. Private sector investment in 2014 reached 15% of GDP, compared to 13% in 2013.
Finland Finland has a highly industrialized, largely free-market economy with per capita output almost as high as that of Austria, Belgium, the Netherlands, or Sweden. Trade is important, with exports accounting for over one-third of GDP in recent years. Finland is historically competitive in manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Finland excels in export of technology for mobile phones as well as promotion of startups in the ICT, gaming, cleantech, and biotechnology sectors. 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. Finland had been one of the best performing economies within the EU before 2009 and its banks and financial markets avoided the worst of global financial crisis. However, the world slowdown hit exports and domestic demand hard in that year, with Finland experiencing one of the deepest contractions in the euro zone. A recovery of exports, domestic trade, and household consumption stimulated economic growth in 2010-12, however, continued recession within the EU dampened the economy in 2012-14. The recession affected general government finances and the debt ratio, turning previously strong budget surpluses into deficits, losing its coveted triple-A credit rating, and on pace to breach EU debt limits in 2015. Finland's main challenge will be to stimulate growth while faced with weak export demand in the EU and its own government austerity measures. Longer-term, Finland must address a rapidly aging population and decreasing productivity in traditional industries that threaten competitiveness, fiscal sustainability, and economic growth. The depreciating ruble will retard exports to Russia.
France The French economy is diversified across all sectors. The government has partially or fully privatized many large companies, including Air France, France Telecom, Renault, and Thales. However, the government maintains a strong presence in some sectors, particularly power, public transport, and defense industries. With more than 84 million foreign tourists per year, France is the most visited country in the world and maintains the third largest income in the world from tourism. France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that mitigate economic inequality. France's real GDP increased by 0.4% in 2014. The unemployment rate (including overseas territories) increased from 7.8% in 2008 to 10.4% in the fourth quarter of 2014. Youth unemployment in metropolitan France decreased from a high of 25.4% in the fourth quarter of 2012 to 24.3% in the fourth quarter of 2014. Lower-than-expected growth and high spending have strained France's public finances. The budget deficit rose sharply from 3.3% of GDP in 2008 to 7.5% of GDP in 2009 before improving to 4% of GDP in 2014, while France's public debt rose from 68% of GDP to more than 95% in 2014, and may hit 100% by 2016. Elected on a conventionally leftist platform, President Francois HOLLANDE surprised and angered many supporters with a January 2014 speech announcing a sharp change in his economic policy, recasting himself as a liberalizing reformer. The government's budget for 2014 shifted the balance of fiscal consolidation from taxes to a total of $24 billion in spending cuts. In December 2014, HOLLANDE announced additional reforms, including a plan to extend commercial business hours, liberalize professional services, and sell off $6.2-12.4 billion in state owned assets. France’s tax burden remains well above the EU average and income tax cuts over the past decade are being partly reversed, particularly for higher earners. The top rate of income tax is 41%. The government is allowing a 75% payroll tax on salaries over $1.24 million to lapse.
French Polynesia Since 1962, when France stationed military personnel in the region, French Polynesia has changed from a subsistence agricultural economy to one in which a high proportion of the work force is either employed by the military or supports the tourist industry. With the halt of French nuclear testing in 1996, the military contribution to the economy fell sharply. After growing at an average yearly rate of 4.2% from 1997-2007, GDP stagnated in 2008 and fell by 4.2% in 2009, marking French Polynesia’s entry into recession. GDP growth was positive in 2010-12. Following steady employment level increases between 2002 and 2007 that averaged 2.4% yearly, the number of workers fell by an annual average of 2.2% between 2008 and 2013, due in part to decreased tourism (down an average of 4% per year) in that time period. French Polynesia’s tourism-dominated service sector accounted for 85% of total value added for the economy in 2009, employing 80% of the workforce. A small manufacturing sector predominantly processes products from French Polynesia’s primary sector - 3% of total economy - including agriculture, pearl farming, and fishing.
French Southern and Antarctic Lands Economic activity is limited to servicing meteorological and geophysical research stations, military bases, 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 sub-Saharan African nations, but 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 economy was reliant on oil for about 50% of its GDP, about 70% of revenues, and 87% of goods exports for 2010, although some fields have passed their peak production. A rebound of oil prices from 1999 to 2013 helped growth, but declining production has hampered Gabon from fully realizing potential gains. Gabon signed a 14-month Stand-By Arrangement with the IMF in May 2007, and later that year issued a $1 billion sovereign bond to buy back a sizable portion of its Paris Club debt. Gabon continues to face fluctuating prices for its oil, timber, and manganese exports. Despite the abundance of natural wealth, poor fiscal management has stifled the economy. However, President BONGO has made efforts to increase transparency and is taking steps to make Gabon a more attractive investment destination to diversify the economy. BONGO has attempted to boost growth by increasing government investment in human resources and infrastructure. GDP grew nearly 6% per year over the 2010-14 period.
Gambia, The The Gambia has sparse natural resource deposits and a limited agricultural base. It relies heavily on remittances from workers overseas and tourist receipts. Remittance inflows to The Gambia amount to about 20% of the country’s GDP. The government has invested strongly in the agriculture sector because three-quarters of the population depends on the sector for its livelihood and agriculture provides for about one-fifth of GDP. The agricultural sector has untapped potential - less than half of arable land is cultivated. Small-scale manufacturing activity features the processing of peanuts, fish, and hides. The Gambia's natural beauty and proximity to Europe has made it one of the larger tourist destinations in West Africa, boosted by government and private sector investments in eco-tourism and upscale facilities. Tourism normally brings in about one-fifth of GDP, but suffered in 2014 from tourists’ fears of Ebolavirus in neighboring West African countries. The Gambia's re-export trade accounts for almost 80% of goods exports and China was its largest trade partner for both exports and imports in 2013. In 2012 the IMF renewed an extended credit facility of $28.3 million for three years. Unemployment and underemployment remain high. Economic progress depends on sustained bilateral and multilateral aid, on responsible government economic management, and on continued technical assistance from multilateral and bilateral donors. International donors and lenders continue to be concerned about the quality of fiscal management. The Gambia's debt interest payments are projected to consume about 31% of government revenue in 2015. Relations with international donors have been tarnished by the country’s human rights record on homosexuality and human trafficking, perceptions of graft, and a declaration by the president in 2014 that the country would stop using English as the national language.
Gaza Strip Israeli security controls imposed since the end of the second intifada have degraded economic conditions in the Gaza Strip, the smaller of the two areas comprising the Palestinian territories. Israeli-imposed border closures, which became more restrictive after HAMAS seized control of the territory in June 2007, have resulted in high unemployment, elevated poverty rates, and a sharp contraction of the private sector that had relied primarily on export markets. Egyptian authorities began a crackdown on Gaza’s extensive tunnel-based smuggling network in 2013, creating fuel, construction material, and consumer goods shortages in the territory. Israel’s military operation in Gaza from July to August 2014 - the latest in a series of periodic conflicts between Israel and Gaza-based Palestinian militants -destroyed one-fifth of the territory’s industrial infrastructure, displaced more than 100,000 people, and left 30% of households without access to potable water. Since the conflict, Israel has allowed limited Gaza exports and relaxed some restrictions on construction material imports to assist reconstruction efforts, but the Palestinian Authority will depend on donor and humanitarian aid to finance the $4billion needed to rebuild.
Georgia Georgia's main economic activities include cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese, copper, and gold; and producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals in small-scale industries. The country imports nearly all of its needed supplies of natural gas and oil products. It has sizeable hydropower capacity that now provides most of its energy needs. Georgia has overcome the chronic energy shortages and gas supply interruptions of the past by renovating hydropower plants and by increasingly relying on natural gas imports from Azerbaijan instead of from Russia. Construction of the Baku-T'bilisi-Ceyhan oil pipeline, the South Caucasus gas pipeline, and the Kars-Akhalkalaki Railroad are part of a strategy to capitalize on Georgia's strategic location between Europe and Asia and develop its role as a transit point for gas, oil, and other goods. The expansion of the South Caucasus pipeline, as part of the Shah Deniz II Southern Gas Corridor project, will result in a $2 billion foreign investment in Georgia, the largest ever in the country. Gas from Shah Deniz II is expected to begin flowing in 2019. Georgia's economy sustained GDP growth of more than 10% in 2006-07, based on strong inflows of foreign investment and robust government spending. However, GDP growth slowed following the August 2008 conflict with Russia, and sunk to negative 4% in 2009 as foreign direct investment and workers' remittances declined in the wake of the global financial crisis. The economy rebounded in 2010-13, but FDI inflows, the engine of Georgian economic growth prior to the 2008 conflict, have not recovered fully. Unemployment has also remained high. Georgia has historically suffered from a chronic failure to collect tax revenues; however, since 2004 the government has simplified the tax code, improved tax administration, increased tax enforcement, and cracked down on petty corruption, leading to higher revenues. The country is pinning its hopes for renewed growth on a determined effort to continue to liberalize the economy by reducing regulation, taxes, and corruption in order to attract foreign investment, with a focus on hydropower, agriculture, tourism, and textiles production. The government has received high marks from the World Bank for its anti-corruption efforts. Since 2012, the Georgian Dream-led government has continued the previous administration's low-regulation, low-tax, free market policies, while modestly increasing social spending, strengthening anti-trust policy, and amending the labor code to comply with International Labor Standards. The government published its 2020 Economic Development Strategy in early 2014 and former Prime Minister Bidzina IVANISHVILI launched the Georgian Co-Investment Fund, a $6 billion private equity fund that will invest in tourism, agriculture, logistics, energy, infrastructure, and manufacturing. In mid-2014, Georgia signed an association agreement with the European Union, paving the way to free trade and visa-free travel.
Germany The German economy - the fifth largest economy in the world in PPP terms and Europe's largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force. Like its Western European neighbors, Germany faces significant demographic challenges to sustained long-term growth. Low fertility rates and declining net immigration are increasing pressure on the country's social welfare system and necessitate structural reforms. Reforms launched by the government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to address chronically high unemployment and low average growth, contributed to strong growth and falling unemployment. These advances, as well as a government subsidized, reduced working hour scheme, help explain the relatively modest increase in unemployment during the 2008-09 recession - the deepest since World War II - and its decrease to 5.2% in 2014. The new German government introduced a minimum wage of about $11.60 (8.50 euros) per hour to take effect in 2015. Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela MERKEL's second term increased Germany's total budget deficit - including federal, state, and municipal - to 4.1% in 2010, but slower spending and higher tax revenues reduced the deficit to 0.8% in 2011 and in 2012 Germany reached a budget surplus of 0.1%. The budget was essentially in balance in 2014. A constitutional amendment approved in 2009 limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016 though the target was already reached in 2012. The German economy suffers from low levels of investment, and a government plan to invest 15 billion euros 2016-18, largely in infrastructure, is intended to spur needed private investment. Following the March 2011 Fukushima nuclear disaster, Chancellor Angela MERKEL announced in May 2011 that eight of the country's 17 nuclear reactors would be shut down immediately and the remaining plants would close by 2022. Germany plans to replace nuclear power with renewable energy, which accounted for 27.8% of gross electricity consumption in 2014, up from 9% in 2000. Before the shutdown of the eight reactors, Germany relied on nuclear power for 23% of its electricity generating capacity and 46% of its base-load electricity production. Extremely low inflation, caused largely by low global energy prices and a weak euro, are expected to boost German GDP growth in 2015.
Ghana Ghana's economy was strengthened by a quarter century of relatively sound management, a competitive business environment, and sustained reductions in poverty levels, but in recent years has suffered the consequences of loose fiscal policy, high budget and current account deficits, and a depreciating currency. Ghana has a market-based economy with relatively few policy barriers to trade and investment in comparison with other countries in the region. Ghana is well-endowed with natural resources. Agriculture accounts for nearly one-quarter of GDP and employs more than half of the workforce, mainly small landholders. The services sector accounts for about half of GDP. Gold and cocoa exports, and individual remittances, are major sources of foreign exchange. Expansion of Ghana’s nascent oil industry has boosted economic growth, but the recent oil price crash has reduced by half Ghana’s 2015 anticipated oil revenue. Production at Jubilee, Ghana's offshore oil field, began in mid-December 2010 and currently produces roughly 110,000 barrels per day. The country’s first gas processing plant at Atubao is also producing natural gas from the Jubilee field, providing power to several of Ghana’s thermal power plants. As of 2015, the biggest single economic issue is the lack of consistent electricity. While the MAHAMA administration is taking steps to improve the situation, it will be the third or fourth quarter of 2015 before any relief is visible. Ghana signed a $920 million extended credit facility with the IMF in April, 2015 to help it address its growing economic crisis. The IMF fiscal targets will require Ghana to reduce the fiscal deficit by cutting subsidies, decreasing the bloated public sector wage bill, strengthening revenue administration, and increasing revenues. The challenge for Ghana will come as the MAHAMA Administration approaches the 2016 election cycle facing public dissatisfaction in the midst of economic austerity.
Gibraltar Self-sufficient Gibraltar benefits from an extensive shipping trade, offshore banking, and its position as an international conference center. Tax rates are low to attract foreign investment. The British military presence has been sharply reduced and now contributes about 7% to the local economy, compared with 60% in 1984. The financial sector, tourism (over 11 million visitors in 2012), gaming revenues, shipping services fees, and duties on consumer goods also generate revenue. The financial sector, tourism, and the shipping sector contribute 30%, 30%, and 25%, respectively, of GDP. Telecommunications, e-commerce, and e-gaming account for the remaining 15%. 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.
Greece Greece has a capitalist economy with a public sector accounting for about 40% of GDP and with per capita GDP about two-thirds that of the leading euro-zone economies. Tourism provides 18% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy averaged growth of about 4% per year between 2003 and 2007, but the economy went into recession in 2009 as a result of the world financial crisis, tightening credit conditions, and Athens' failure to address a growing budget deficit. By 2013 the economy had contracted 26%, compared with the pre-crisis level of 2007. Greece met the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP in 2007-08, but violated it in 2009, with the deficit reaching 15% of GDP. Austerity measures reduced the deficit to about 4% in 2013, including government debt payments, but the deficit spiked to 12.7% of GDP in 2014. Deteriorating public finances, inaccurate and misreported statistics, and consistent underperformance on reforms prompted major credit rating agencies to downgrade Greece's international debt rating in late 2009, and led the country into a financial crisis. Under intense pressure from the EU and international market participants, the government adopted a medium-term austerity program that includes cutting government spending, decreasing tax evasion, overhauling the health-care and pension systems, and reforming the labor and product markets. Athens, however, faced long-term challenges to continue pushing through unpopular reforms in the face of widespread unrest from the country's powerful labor unions and the general public.
In April 2010, a leading credit agency assigned Greek debt its lowest possible credit rating, and in May 2010, the International Monetary Fund and Euro-Zone governments provided Greece emergency short- and medium-term loans worth $147 billion so that the country could make debt repayments to creditors. In exchange for the largest bailout ever assembled, the government announced combined spending cuts and tax increases totaling $40 billion over three years, on top of the tough austerity measures already taken. Greece, however, struggled to meet 2010 targets set by the EU and the IMF, especially after Eurostat - the EU's statistical office - revised upward Greece's deficit and debt numbers for 2009 and 2010. European leaders and the IMF agreed in October 2011 to provide Athens a second bailout package of $169 billion. The second deal however, called for holders of Greek government bonds to write down a significant portion of their holdings. As Greek banks held a significant portion of sovereign debt, the banking system was adversely affected by the write down and $60 billion of the second bailout package was set aside to ensure the banking system was adequately capitalized. In exchange for the second loan, Greece promised to introduce an additional $7.8 billion in austerity measures during 2013-15. However, the massive austerity cuts have prolonged Greece's economic recession and depressed tax revenues. Greece's lenders have continually called on Athens to step up efforts to increase tax collection, dismiss public servants, privatize public enterprises, and rein in health spending.
Investor confidence began to show signs of strengthening by the end of 2013, and the decline in GDP slowed to 3.9% that year, Greece’s best performance since 2009. Greece subsequently marked three significant milestones in 2014: balancing its 2013 budget - not including debt repayments; re-entering financial markets in April with the first issue of government debt since 2010; and posting its first quarter of positive growth since 2008. Buoyed by Greece’s success, Prime Minister Antonios SAMARAS in October announced plans to exit its bailout program early, provoking a plunge in the Greek stock and debt markets that pushed Greece back to the negotiating table with its creditors and ultimately resulted in an agreement to extend the EU portion of Greece’s bailout through February 2015. The Greek economy posted an annual economic growth rate of 0.8 percent in 2014, the first year of positive growth since 2008. However, widespread discontent with austerity measures resulted in a victory for the anti-austerity SYRIZA in the January 2015 parliamentary elections. In February, Greece reached a tentative agreement with its creditors that would provide emergency liquidity to Greece in exchange for significant economic reforms. Uncertainty regarding Greece’s future in the Eurozone has dampened investor confidence and lowered growth projections for 2015.
Greenland The economy remains critically dependent on exports of shrimp and fish, income from resource exploration and extraction, and on a substantial subsidy from the Danish Government. The subsidy was budgeted to be about $651 million in 2012, approximately 56% of government revenues that year.
The public sector, including publicly owned enterprises and the municipalities, plays the dominant role in Greenland's economy. Greenland's real GDP contracted about 1% in 2009 as a result of the global economic slowdown, but is estimated to have grown marginally in 2010-14.
During the last decade the Greenland Home Rule Government (GHRG) pursued conservative fiscal and monetary policies, but public pressure has increased for better schools, health care and retirement systems.
The Greenlandic economy has benefited from increasing catches and exports of shrimp, Greenland halibut and, more recently, crabs. Due to Greenland's continued dependence on exports of fish - which accounted for 89% of exports in 2010 - the economy remains very sensitive to external demand.
The relative ease with which Greenland has weathered the economic crisis is due to increased hydrocarbon and mineral exploration and extraction activities, a high level of construction activity in the Nuuk area and the increasing price of fish and shrimp. International consortia are increasingly active in exploring for hydrocarbon resources off Greenland's western coast, and international studies indicate the potential for oil and gas fields in northern and northeastern Greenland. In May 2007, a US aluminum producer concluded a memorandum of understanding with the Greenland Home Rule Government to build an aluminum smelter and a power generation facility, which takes advantage of Greenland's abundant hydropower potential. Within the area of mining, olivine sand continues to be produced and gold production has resumed in south Greenland, while rare-earth and iron ore mineral projects have been proposed or planned elsewhere on the island.
Tourism also offers another avenue of economic growth for Greenland, with increasing numbers of cruise lines now operating in Greenland's western and southern waters during the peak summer tourism season.
Grenada Grenada relies on tourism as its main source of foreign exchange especially since the construction of an international airport in 1985. Hurricanes Ivan (2004) and Emily (2005) severely damaged the agricultural sector - particularly nutmeg and cocoa cultivation - which had been a key driver of economic growth. Grenada has rebounded from the devastating effects of the hurricanes but is now saddled with the debt burden from the rebuilding process. Public debt-to-GDP is about 110%, leaving the MITCHELL administration limited room to engage in public investments and social spending. MITCHELL in 2013 announced a structural adjustment program that includes a plan to increase tax revenue. Strong performances in construction and manufacturing, together with the development of tourism and higher education - especially in medicine - have contributed to growth in national output; however, economic growth remained stagnant in 2010-14 after a sizable contraction in 2009, because of the global economic slowdown's effects on tourism and remittances. Gross national saving – and wealth – has been declining since 2010.
Guam US national defense spending is the main driver of Guam’s economy, followed by tourism and other services. Total federal spending (defense and non-defense) amounted to $1.973 billion in 2014, or 40.4% of GDP. Service exports, mainly spending by foreign tourists while on Guam, amounted to $651 million in 2013, or 13.3% of GDP. In 2013, Guam’s economy grew 0.6%. Despite slow growth, Guam’s economy has been stable over the last decade. National defense spending cushions the island’s economy against fluctuations in tourism, its other major income source. Guam serves as a forward US base for the Western Pacific and is home to thousands of American military personnel. Federal grants amounted to $373.3 million in 2013, or 32.6% of Guam’s total revenues for fiscal year.
Guatemala Guatemala is the most populous country in Central America with a GDP per capita roughly one-half that of the average for Latin America and the Caribbean. The agricultural sector accounts for 13.7% of GDP and 32% of the labor force; key agricultural exports include sugar, coffee, bananas, and vegetables. The 1996 peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and since then Guatemala has pursued important reforms and macroeconomic stabilization. The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) entered into force in July 2006, spurring increased investment and diversification of exports, with the largest increases in ethanol and non-traditional agricultural exports. While CAFTA-DR has helped improve the investment climate, concerns over security, the lack of skilled workers, and poor infrastructure continue to hamper foreign direct investment. The distribution of income remains highly unequal with the richest 20% of the population accounting for more than 51% of Guatemala's overall consumption. More than half of the population is below the national poverty line, and 13% of the population lives in extreme poverty. Poverty among indigenous groups, which make up more than 40% of the population, averages 73%, with 22% of the indigenous population living in extreme poverty. Nearly one-half of Guatemala's children under age five are chronically malnourished, one of the highest malnutrition rates in the world. Guatemala is the top remittance recipient in Central America as a result of Guatemala's large expatriate community in the United States. These inflows are a primary source of foreign income, equivalent to one-half of the country's exports or one-tenth of its GDP. In November 2014 along with his counterparts from El Salvador and Honduras, President PEREZ MOLINA announced the “Plan of the Alliance for Prosperity in the Northern Triangle.” This plan seeks to address the challenges facing the three Northern Triangle countries, including steps the governments will take to stimulate economic growth, increase transparency and fiscal responsibility, reduce violence, modernize the justice system, improve infrastructure, and promote educational opportunities over the next several years.
Guernsey Financial services account for about 40% of employment and about 55% of total income in this tiny, prosperous Channel Island economy. Tourism, manufacturing, and horticulture, mainly tomatoes and cut flowers, have been declining. Financial services, construction, retail, and the public sector have been growing. Light tax and death duties make Guernsey a popular tax haven. In October 2014, Guernsey signed an OECD agreement to automatically exchange some financial account information to limit tax avoidance and evasion.
Guinea-Bissau Guinea-Bissau is highly dependent on subsistence agriculture, cashew nut exports, and foreign assistance. The legal economy is based on farming and fishing, but illegal logging and trafficking in narcotics are also important economic activities. The combination of limited economic prospects, weak institutions, and favorable geography have made this West African country a way station for drugs bound for Europe while trade in illegal logging, food, and fishing is also significant. Two out of three Bissau-Guineans remain below the absolute poverty line. Guinea-Bissau has substantial potential for development of mineral resources including phosphates, bauxite, and mineral sands. The country’s climate and soil make it feasible to grow a wide range of cash crops, fruit, vegetables, and tubers; however, cashews generate more than 80% export receipts and are the main source of income for many rural communities. With renewed donor support following elections in April-May 2014 and a successful regional bond issuance, the new government of Guinea-Bissau has made progress paying salaries, settling domestic arrears, and gaining more control over revenues and expenditures. The IMF noted that the new government has taken the positive step of developing a long-term economic plan, while implementing sensitive economic reforms in the wake of the 2012 coup.
Guinea Guinea is a poor country of approximately 11.7 million people that possesses the world's largest reserves of bauxite and world’s largest untapped high-grade iron ore reserves (Simandou), as well as gold and diamonds. In addition, Guinea has fertile soil, ample rainfall, and is the source of several West African rivers, including the Senegal, Niger, and Gambia. Guinea's hydro potential is enormous and the country could be a major exporter of electricity. The country also has tremendous agriculture potential. Gold, bauxite, and diamonds are Guinea’s main mineral exports. Following the death of long-term President Lansana CONTE in 2008 and the coup that followed, international donors, including the G-8, the IMF, and the World Bank, significantly curtailed their development programs in Guinea. However, the IMF approved a new 3-year Extended Credit Facility (ECF) arrangement in 2012, following the December 2010 presidential elections. In September 2012, Guinea achieved Heavily Indebted Poor Countries (HIPC) completion point status. Future access to international assistance and investment will depend on the government’s ability to be transparent, combat corruption, reform its banking system, improve its business environment, and build infrastructure. In April 2013, the government amended its mining code to reduce taxes and royalties. In September 2013, legislative elections were held and the National Assembly was seated in January 2014. In 2014, Guinea also complied with requirements of the Extractive Industries Transparency Initiative by publishing its mining contracts and was found to be compliant. International investors have shown interest in Guinea's unexplored mineral reserves, which have the potential to propel Guinea's future growth.
The biggest threats to Guinea’s economy are political instability, the continuation of the Ebola epidemic, and low international commodity prices. Rising international donor support and reduced government investment spending will lessen fiscal strains created by the Ebola epidemic, but economic recovery will be a long process while the government continues to fight the disease. As of March 2015, Guinea had approximately 3,200 confirmed and suspected cases of Ebola with over 2,100 deaths (65.6% mortality rate). The economic toll of Ebola on the Guinean economy is considerable. Ebola stalled promising economic growth in 2014 and unless the epidemic ends in 2015, the economy will continue to stagnate. Normal economic growth has not returned and several projects have stalled, such as offshore oil exploration and the giant Simandou iron ore project. Promising reductions in Ebola cases in the first half of 2015 could see Guinea turn the corner on the disease and have Ebola eradicated later in the year. The 240 Megawatt Kaleta Dam is expected to be commissioned in late June or early July 2015 and President Alpha CONDE’s administration has stated that Conakry will have full time electricity once Kaleta comes online. Currently the capital only receives six to eight hours of electricity per day. Although the recent political stability has brought renewed interest in Guinea from the private sector, an enduring legacy of corruption, inefficiency, and lack of government transparency, combined with fears of Ebola, continue to undermine Guinea's economic viability.
Successive governments have failed to address the country's crumbling infrastructure, which is needed for economic development. Guinea suffers from chronic electricity shortages; poor roads, rail lines and bridges; and a lack of access to clean water continue to plague economic development. Presidential elections are scheduled for October 2015 and investors are cautiously awaiting the outcome. Guinea is a new democracy and past election violence as well as Ebola may keep investors on the sideline until 2016. The Guinean government, led by President CONDE, is working to create an economy to attract foreign investment and hopes to have greater participation from western countries/firms in Guinea's economic development.
Guyana The Guyanese economy exhibited moderate economic growth in recent years and is based largely on agriculture and extractive industries. The economy is heavily dependent upon the export of six commodities - sugar, gold, bauxite, shrimp, timber, and rice - which represent nearly 60% of the country's GDP and are highly susceptible to adverse weather conditions and fluctuations in commodity prices. Guyana's entrance into the Caricom Single Market and Economy (CSME) in January 2006 has broadened the country's export market, primarily in the raw materials sector. Guyana has experienced positive growth almost every year over the past decade. Inflation has been kept under control. Recent years have seen the government's stock of debt reduced significantly - with external debt now less than half of what it was in the early 1990s. Chronic problems include a shortage of skilled labor and a deficient infrastructure. Despite recent improvements, the government is still juggling a sizable external debt against the urgent need for expanded public investment. In March 2007, the Inter-American Development Bank, Guyana's principal donor, canceled Guyana's nearly $470 million debt, equivalent to 21% of GDP, which along with other Highly Indebted Poor Country (HIPC) debt forgiveness, brought the debt-to-GDP ratio down from 183% in 2006 to 58% in 2014. Guyana had become heavily indebted as a result of the inward-looking, state-led development model pursued in the 1970s and 1980s. Much of Guyana's growth in recent years has come from a surge in gold production in response to global prices, although downward trends in gold prices may threaten future growth. In 2014, production of sugar dropped to a 24-year low.
Haiti Haiti is a free market economy that enjoys the advantages of low labor costs and tariff-free access to the US for many of its exports. Poverty, corruption, vulnerability to natural disasters, and low levels of education for much of the population are among Haiti's most serious impediments to economic growth. Haiti's economy suffered a severe setback in January 2010 when a 7.0 magnitude earthquake destroyed much of its capital city, Port-au-Prince, and neighboring areas. Currently the poorest country in the Western Hemisphere with 80% of the population living under the poverty line and 54% in abject poverty, the earthquake further inflicted $7.8 billion in damage and caused the country's GDP to contract. In 2011, the Haitian economy began recovering from the earthquake. However, two hurricanes adversely affected agricultural output and the low public capital spending slowed the recovery in 2012. Two-fifths of all Haitians depend on the agricultural sector, mainly small-scale subsistence farming, and remain vulnerable to damage from frequent natural disasters, exacerbated by the country's widespread deforestation. US economic engagement under the Caribbean Basin Trade Preference Agreement (CBTPA) and the 2008 Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE II) Act helped increase apparel exports and investment by providing duty-free access to the US. Congress voted in 2010 to extend the CBTPA and HOPE II until 2020 under the Haiti Economic Lift Program (HELP) Act; the apparel sector accounts for about 90% of Haitian exports and nearly one-twentieth of GDP. Remittances are the primary source of foreign exchange, equaling one-fifth of GDP and representing more than five times the earnings from exports in 2012. Haiti suffers from a lack of investment, partly because of weak infrastructure such as access to electricity. Haiti's outstanding external debt was cancelled by donor countries following the 2010 earthquake, but has since risen to $1.43 billion as of December 2014. The government relies on formal international economic assistance for fiscal sustainability, with over half of its annual budget coming from outside sources.
Heard Island and McDonald Islands The islands have no indigenous economic activity, but the Australian Government allows limited fishing in the surrounding waters. Visits to Heard Island typically focus on terrestrial and marine research and infrequent private expeditions.
Holy See (Vatican City) The Holy See is supported financially by a variety of sources, including investments, real estate income, and donations from Catholic individuals, dioceses, and institutions; these help fund the Roman Curia (Vatican bureaucracy), diplomatic missions, and media outlets. Moreover, an annual collection taken up in dioceses and from direct donations go to a non-budgetary fund, known as Peter's Pence, which is used directly by the Pope for charity, disaster relief, and aid to churches in developing nations. Donations increased between 2010 and 2011. The separate Vatican City State budget includes the Vatican museums and post office and is supported financially by the sale of stamps, coins, medals, and tourist mementos; by fees for admission to museums; and by publication sales. Its revenues increased between 2010 and 2011 because of expanded opening hours and a growing number of visitors. However, the Holy See has not escaped the financial difficulties engulfing other European countries; in 2012 it started a spending review to determine where to cut costs to reverse its 2011 budget deficit of $20 million. The Holy See generated a modest surplus in 2012 before recording a $32 million deficit in 2013, driven primarily by the decreasing value of gold. Most public expenditures go to wages and other personnel costs; the incomes and living standards of lay workers are comparable to those of counterparts who work in the city of Rome. In February 2014, Pope FRANCIS created the Secretariat of the Economy to oversee financial and administrative operations of the Holy See, part of a broader campaign to reform the Holy See’s finances.
Honduras Honduras, the second poorest country in Central America, suffers from extraordinarily unequal distribution of income, as well as high underemployment. While historically dependent on the export of bananas and coffee, Honduras has diversified its export base to include apparel and automobile wire harnessing. Honduras’s economy depends heavily on US trade and remittances. The US-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) came into force in 2006 and has helped foster foreign direct investment, but physical and political insecurity, as well as crime and perceptions of corruption, may deter potential investors; about 15% of foreign direct investment is from US firms. The economy registered modest economic growth of 2.6%-4.0% from 2010 to 2014, insufficient to improve living standards for the nearly 65% of the population in poverty. Honduras signed a three-year IMF stand-by arrangement in December 2014 that will help ease its poor fiscal position. In November 2014 along with his counterparts from El Salvador and Guatemala, President HERNANDEZ announced the “Plan of the Alliance for Prosperity in the Northern Triangle.” This plan seeks to address the challenges facing the three Northern Triangle countries, including steps the governments will take to stimulate economic growth, increase transparency and fiscal responsibility, reduce violence, modernize the justice system, improve infrastructure, and promote educational opportunities over the next several years.
Hong Kong Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 12.5% of total system deposits in Hong Kong by the end of 2014. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 47.3 million in 2014, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2014 mainland Chinese companies constituted about 50% of the firms listed on the Hong Kong Stock Exchange and accounted for about 60.1% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4.4% in 2014. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983. In 2014, Hong Kong and China signed a new agreement on achieving basic liberalization of trade in services in Guangdong Province under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from March 2015, cover a negative list and a most-favored treatment provision, and will improve access to the mainland's service sector for Hong Kong-based companies.
Hungary Hungary has made the transition from a centrally planned to a market economy, with a per capita income nearly two-thirds that of the EU-28 average. In late 2008, Hungary's impending inability to service its short-term debt - brought on by the global financial crisis - led Budapest to obtain an IMF/EU/World Bank-arranged financial assistance package worth over $25 billion. The global economic downturn, declining exports, and low domestic consumption and investment, dampened by government austerity measures, resulted in a severe economic contraction in 2009. In 2010 the new government implemented a number of changes including cutting business and personal income taxes, but imposed "crisis taxes" on financial institutions, energy and telecom companies, and retailers. The IMF/EU bail-out program lapsed at the end of 2010 and was replaced by Post Program Monitoring and Article IV Consultations on overall economic and fiscal processes. At the end of 2011 the government turned to the IMF and the EU to obtain financial backstop to support its efforts to refinance foreign currency debt and bond obligations in 2012 and beyond, but Budapest's rejection of EU and IMF economic policy recommendations led to a breakdown in talks with the lenders in late 2012. Global demand for high yield has since helped Hungary to obtain funds on international markets. Hungary’s progress reducing its deficit to under 3% of GDP led the European Commission in 2013 to permit Hungary for the first time since joining the EU in 2004 to exit the Excessive Deficit Procedure.
Iceland Iceland's Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system. Prior to the 2008 crisis, Iceland had achieved high growth, low unemployment, and a remarkably even distribution of income. The economy depends heavily on the fishing industry, which provides 40% of export earnings, more than 12% of GDP, and employs nearly 5% of the work force. It remains sensitive to declining fish stocks as well as to fluctuations in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, particularly within the fields of software production, biotechnology, and tourism. In fall 2013, the Icelandic government approved a joint application by Icelandic, Chinese and Norwegian energy firms to conduct oil exploration off Iceland’s northeast coast. Abundant geothermal and hydropower sources have attracted substantial foreign investment in the aluminum sector, boosted economic growth, and sparked some interest from high-tech firms looking to establish data centers using cheap green energy, although the financial crisis has put several investment projects on hold. Much of Iceland's economic growth in recent years came as the result of a boom in domestic demand, following the rapid expansion of the country's financial sector. Domestic banks expanded aggressively in foreign markets, and consumers and businesses borrowed heavily in foreign currencies, following the privatization of the banking sector in the early 2000s. Worsening global financial conditions throughout 2008 resulted in a sharp depreciation of the krona vis-a-vis other major currencies. The foreign exposure of Icelandic banks, whose loans and other assets totaled more than 10 times the country's GDP, became unsustainable. Iceland's three largest banks collapsed in late 2008. The country secured over $10 billion in loans from the IMF and other countries to stabilize its currency and financial sector, and to back government guarantees for foreign deposits in Icelandic banks. GDP fell 6.8% in 2009, and unemployment peaked at 9.4% in February 2009. Since the collapse of Iceland's financial sector, government economic priorities have included: stabilizing the krona, implementing capital controls, reducing Iceland's high budget deficit, containing inflation, addressing high household debt, restructuring the financial sector, and diversifying the economy. Three new banks were established to take over the domestic assets of the collapsed banks. Two of them have foreign majority ownership, while the State holds a majority of the shares of the third. Iceland began making payments to the UK, the Netherlands, and other claimants in late 2011 following Iceland's Supreme Court ruling that upheld 2008 emergency legislation that gives priority to depositors for compensation from failed Icelandic banks. British and Dutch authorities claim Iceland owes approximately $6.5 billion for compensating British and Dutch citizens who lost deposits in Icesave savings accounts when parent bank Landsbanki failed in 2008. Iceland’s financial woes prompted an initial increase in public support to join the EU and the Eurozone, with accession negotiations beginning in July 2010. However, the election of a new center-right government and declining public support amidst the ongoing Eurozone crisis led to the suspension of negotiations in mid-2013.
India India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged under 7% per year from 1997 to 2011. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less than half of the work force is in agriculture, but, services are the major source of economic growth, accounting for nearly two-thirds of India's output with less than one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers. India's economic growth began slowing in 2011 because of a decline in investment caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about the global situation. The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. However, India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, high spending and poorly-targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration. Growth in 2014 fell to a decade low, as India's economic leaders struggled to improve the country's wide fiscal and current account deficits. Rising macroeconomic imbalances in India, and improving economic conditions in Western countries, led investors to shift capital away from India, prompting a sharp depreciation of the rupee. However, investors' perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee.
Indian Ocean The Indian Ocean provides major sea routes connecting the Middle East, Africa, and East Asia with Europe and the Americas. It carries a particularly heavy traffic of petroleum and petroleum products from the oilfields of the Persian Gulf and Indonesia. Its fish are of great and growing importance to the bordering countries for domestic consumption and export. Fishing fleets from Russia, Japan, South Korea, and Taiwan also exploit the Indian Ocean, mainly for shrimp and tuna. Large reserves of hydrocarbons are being tapped in the offshore areas of Saudi Arabia, Iran, India, and western Australia. An estimated 40% of the world's offshore oil production comes from the Indian Ocean. Beach sands rich in heavy minerals and offshore placer deposits are actively exploited by bordering countries, particularly India, South Africa, Indonesia, Sri Lanka, and Thailand.
Indonesia Indonesia has seen a slowdown in growth since 2012, mostly due to the end of the commodities export boom. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25% and historically low rates of inflation. Fitch and Moody's upgraded Indonesia's credit rating to investment grade in December 2011. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, a current account deficit, and unequal resource distribution among regions. President Joko WIDODO - elected in July 2014 - has emphasized maritime and other infrastructure development, and especially increased electric power capacity, since taking office. Fuel subsidies were almost completely removed in early 2015, a move which could help the government increase spending on its development priorities. Indonesia, with the nine other ASEAN members, will continue to move towards participation in the ASEAN Economic Community, though full implementation of economic integration will not be completed by the previously-set deadline of year-end 2015.
Iran Iran's economy is marked by statist policies, inefficiencies, and reliance on oil and gas exports, but Iran also possesses significant agricultural, industrial, and service sectors. The Iranian government directly owns and operates hundreds of state-owned enterprises and indirectly controls many companies affiliated with the country's security forces. Distortions - including inflation, price controls, subsidies, and a banking system holding billions of dollars of non-performing loans - weigh down the economy, undermining the potential for private-sector-led growth. Private sector activity includes small-scale workshops, farming, some manufacturing, and services, in addition to medium-scale construction, cement production, mining, and metalworking. Significant informal market activity flourishes and corruption is widespread. Fiscal and monetary constraints, following the expansion of international sanctions in 2012 on Iran's Central Bank and oil exports, significantly reduced Iran's oil revenue, forced government spending cuts, and sparked a sharp currency depreciation. Iran’s economy contracted for the first time in two decades during both 2012 and 2013, and grew only slightly 2014. Iran continues to suffer from high unemployment and underemployment. Lack of job opportunities has prompted many educated Iranian youth to seek employment overseas, resulting in a significant "brain drain." In June 2013, the election of President Hasan RUHANI generated widespread public expectations of economic improvement and greater international engagement. In connection with ongoing international negotiations over Iran’s nuclear program the limited sanctions relief for Iran provided under the Joint Plan of Action of November 2013, helped to forestall the decline in the economy in 2014.
Iraq During 2014, worsening security and financial stability throughout Iraq—driven by an ongoing insurgency, decreasing oil prices, and political upheaval—decreased the prospects for improving the country's economic environment and securing much-needed foreign investment. Long-term fiscal health, a strengthened investment climate, and sustained improvements in the overall standard of living still depend on the central government passing major policy reforms. Iraq's largely state-run economy is dominated by the oil sector, which provides more than 90% of government revenue and 80% of foreign exchange earnings. Oil exports in 2014 remained relatively flat at 2.4 million barrels per day on average, despite new production coming online at the West Qurna 2 and Badrah oilfields, because repeated attacks on the Iraq-Turkey pipeline reduced export capacity. During the second half of 2014, government revenues decreased as global oil prices fell by more than 30%. Iraq's contracts with major oil companies have the potential to further expand oil exports and revenues, but Iraq will need to make significant upgrades to its oil processing, pipeline, and export infrastructure to enable these deals to reach their economic potential. The Iraqi Kurdistan Region's (IKR) autonomous Kurdistan Regional Government (KRG) passed its own oil law in 2007, and has directly signed about 50 contracts to develop IKR energy reserves. The federal government has disputed the legal authority of the KRG to conclude most of these contracts, some of which are also in areas with unresolved administrative boundaries in dispute between the federal and regional government. In December, the federal government and the KRG agreed to sell oil exports from Kurdish-controlled oil fields under the federal oil ministry, in exchange for the central government paying $1 billion to the Kurdish Peshmerga forces and resuming budget transfers to the KRG that amount to 17% of Iraq's national budget. Iraq is making slow progress enacting laws and developing the institutions needed to implement economic policy, and political reforms are still needed to assuage investors' concerns regarding the uncertain business climate.. The government of Iraq is eager to attract additional foreign direct investment, but it faces a number of obstacles, including a tenuous political system and concerns about security and societal stability. Rampant corruption, outdated infrastructure, insufficient essential services, skilled labor shortages, and antiquated commercial laws stifle investment and continue to constrain growth of private, nonoil sectors. Under the Iraqi Constitution, some competencies relevant to the overall investment climate are either shared by the federal government and the regions or are devolved entirely to local governments. Investment in the IKR operates within the framework of the Kurdistan Region Investment Law (Law 4 of 2006) and the Kurdistan Board of Investment, which is designed to provide incentives to help economic development in areas under the authority of the KRG. Inflation has remained under control since 2006. However, Iraqi leaders remain hard pressed to translate macroeconomic gains into an improved standard of living for the Iraqi populace. Unemployment remains a problem throughout the country despite a bloated public sector. Encouraging private enterprise through deregulation would make it easier for Iraqi citizens and foreign investors to start new businesses. Rooting out corruption and implementing reforms - such as restructuring banks and developing the private sector - would be important steps in this direction.
Ireland Ireland is a small, modern, trade-dependent economy. Ireland was among the initial group of 12 EU nations that began circulating the euro on 1 January 2002. GDP growth averaged 6% in 1995-2007, but economic activity dropped sharply during the world financial crisis and the subsequent collapse of its domestic property market and construction industry. Faced with sharply reduced revenues and a burgeoning budget deficit from efforts to stabilize its fragile banking sector, the Irish Government introduced the first in a series of draconian budgets in 2009. These measures were not sufficient to stabilize Ireland’s public finances. In 2010, the budget deficit reached 32.4% of GDP - the world's largest deficit, as a percentage of GDP. In late 2010, the former COWEN government agreed to a $92 billion loan package from the EU and IMF to help Dublin recapitalize Ireland’s banking sector and avoid defaulting on its sovereign debt. In March 2011, the KENNY government intensified austerity measures to meet the deficit targets under Ireland's EU-IMF bailout program. In late 2013, Ireland formally exited its EU-IMF bailout program, benefiting from its strict adherence to deficit-reduction targets and success in refinancing a large amount of banking-related debt. In 2014, the economy rapidly picked up and GDP grew by 3.6%. The recovering economy assisted lowering the deficit to 4.2% of GDP. In late 2014, the government introduced a fiscally neutral budget, marking the end of the austerity program. In the wake of the collapse of the construction sector and the downturn in consumer spending and business investment, the export sector, dominated by foreign multinationals, has become an even more important component of Ireland's economy. Ireland’s low corporation tax of 12.5% has been central to encouraging business investment. Loose tax residency requirements made Ireland a common destination for international firms seeking to avoid taxation. Amid growing international pressure the government announced it would phase in more stringent tax laws, effectively closing a loophole.
Isle of Man Financial services, manufacturing, and tourism are key sectors of the economy. The government offers low taxes and other incentives to high-technology companies and financial institutions to locate on the island; this has paid off in expanding employment opportunities in high-income industries. As a result, agriculture and fishing, once the mainstays of the economy, have declined in their contributions to GDP. The Isle of Man also attracts online gambling sites and the film industry. The Isle of Man enjoys free access to EU markets and trade is mostly with the UK. In October 2014, the Isle of Man signed an OECD agreement to automatically exchange some financial account information to limit tax avoidance and evasion.
Israel Israel has a technologically advanced market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among the leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are covered by tourism and other service exports, as well as significant foreign investment inflows. Between 2004 and 2013, growth averaged nearly 5% per year, led by exports. The global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals, following years of prudent fiscal policy and a resilient banking sector. Israel's economy also has weathered the Arab Spring because strong trade ties outside the Middle East have insulated the economy from spillover effects. Slowing demand domestically and internationally and reduced investment due to uncertainties caused by the Gaza conflict in summer 2014 have reduced GDP growth to about 2% during 2014. Natural gas fields discovered off Israel's coast since 2009 have brightened Israel's energy security outlook. The Tamar and Leviathan fields were some of the world's largest offshore natural gas finds this past decade. The massive Leviathan field is expected to come online no sooner than 2017, but production from Tamar provided a one percentage point boost to Israel's GDP in 2013 and a 0.5% boost in 2014. In mid-2011, public protests arose around income inequality and rising housing and commodity prices. Israel's income inequality and poverty rates are among the highest of OECD countries and there is a broad perception among the public that a small number of "tycoons" have a cartel-like grip over the major parts of the economy. The government formed committees and has started splitting up the oligopolies to address some of the grievances but has maintained that it will not engage in deficit spending to satisfy populist demands. Over the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only 9% of the workforce, with the rest employed in manufacturing and services - sectors which face downward wage pressures from global competition.
Italy Italy has a diversified economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, highly subsidized, agricultural south, where unemployment is higher. The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family-owned. Italy also has a sizable underground economy, which by some estimates accounts for as much as 17% of GDP. These activities are most common within the agriculture, construction, and service sectors. Italy is the third-largest economy in the euro-zone, but its exceptionally high public debt and structural impediments to growth have rendered it vulnerable to scrutiny by financial markets. Public debt has increased steadily since 2007, topping 132% of GDP in 2014, but investor concerns about Italy and the broader euro-zone crisis eased in 2013, bringing down Italy's borrowing costs on sovereign government debt from euro-era records. The government still faces pressure from investors and European partners to sustain its efforts to address Italy's long-standing structural impediments to growth, such as labor market inefficiencies and tax evasion. In 2014 economic growth and labor market conditions continued to deteriorate, with overall unemployment rising to 12.2% and youth unemployment around 40%. Italy's GDP is now nearly 10% below its 2007 pre-crisis level.
Jamaica The Jamaican economy is heavily dependent on services, which accounts for more than 70% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. Remittances and tourism each account for 30% of GDP, while bauxite/alumina exports make up roughly 5% of GDP. The bauxite/alumina sector was most affected by the global downturn while the tourism industry and remittance flow remained resilient. Jamaica's economy faces many challenges to growth: high crime and corruption, large-scale unemployment and underemployment, and a debt-to-GDP ratio of about 130%. The attendant debt servicing cost consumes a large portion of the government's budget, limiting its ability to fund the critical infrastructure and social programs required to drive growth. Jamaica's economic growth rate in the recent past has been stagnant, averaging less than 1% per year for over 20 years. Jamaica's onerous public debt burden is largely the result of government bailouts to ailing sectors of the economy, most notably to the financial sector. In early 2010, the Jamaican Government initiated the Jamaica Debt Exchange to retire high-priced domestic bonds and reduce annual debt servicing. Despite these efforts, debt continued to be a serious concern, forcing the government to negotiate and sign a new IMF agreement in May 2013 to gain access to approximately $1 billion additional funds. As a precursor, the government instigated a second National Debt Exchange in 2012. The IMF deal requires the government to reform its tax system, eliminate discretionary tax exemptions and waivers, and achieve an annual surplus of 7.5%, excluding debt payments, to reduce its debt below 100% of GDP by 2020. The SIMPSON-MILLER administration now faces the difficult prospect of having to achieve fiscal discipline to maintain debt payments while simultaneously attacking a serious crime problem that is hampering economic growth. High unemployment exacerbates the crime problem, including gang violence that is fueled by the drug trade.
Jan Mayen Jan Mayen is a volcanic island with no exploitable natural resources, although surrounding waters contain substantial fish stocks and potential untapped petroleum resources. Economic activity is limited to providing services for employees of Norway's radio and meteorological stations on the island.
Japan In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop an advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.
Jersey Jersey's economy is based on international financial services, agriculture, and tourism. In 2010 the financial services sector accounted for about 50% of the island's output. Potatoes, cauliflower, tomatoes, and especially flowers are important export crops, shipped mostly to the UK. The Jersey breed of dairy cattle is known worldwide and represents an important export income earner. Tourism accounts for one-quarter of GDP. Living standards come close to those of the UK. In recent years, the government has encouraged light industry to locate in Jersey with the result that an electronics industry has developed, displacing more traditional industries. All raw material and energy requirements are imported as well as a large share of Jersey's food needs. Light taxes and death duties make the island a popular tax haven. In October 2014, Jersey signed an OECD agreement to automatically exchange some financial account information to limit tax avoidance and evasion.
Jordan Jordan's economy is among the smallest in the Middle East, with insufficient supplies of water, oil, and other natural resources underlying the government's heavy reliance on foreign assistance. Other economic challenges for the government include chronic high rates of poverty, unemployment, inflation, and a large budget deficit and resulting government debt. King ABDALLAH, during the first decade of the 2000s, implemented significant economic reforms, such as opening up foreign trade and privatizing state-owned companies, that attracted foreign investment and contributed to average annual economic growth of 8% for 2004 through 2008. The global economic slowdown and regional turmoil since, however, reduced the average annual growth rate to 2.6% for the 2010-2013 period and hurt export-oriented sectors, construction, and tourism. Jordan's finances have been strained by a series of natural gas pipeline attacks in Egypt, causing Jordan to substitute more expensive diesel imports, primarily from Saudi Arabia, to generate electricity. To diversify its energy mix, Jordan is currently exploring nuclear power generation, exploitation of abundant oil shale reserves and renewable technologies, as well as the import of Israeli offshore gas. In August 2012, to correct budgetary and balance of payments imbalances, Jordan entered into a $2.1 billion, three year International Monetary Fund Stand-By Arrangement. In 2014, fiscal reform measures enacted in the previous few years continued to boost government revenues and reduced the budget deficit even as an influx of over 620,000 Syrian refugees since 2011 put additional pressure on expenditures.
Kazakhstan Kazakhstan, geographically the largest of the former Soviet republics, excluding Russia, possesses substantial fossil fuel reserves and other minerals and metals, such as uranium, copper, and zinc. It also has a large agricultural sector featuring livestock and grain. In 2002 Kazakhstan became the first country in the former Soviet Union to receive an investment-grade credit rating. Extractive industries have been and will continue to be the engine of Kazakhstan's growth, although the country is seriously pursuing diversification strategies. Kazakhstan is landlocked, with restricted access to the high seas. Although its Caspian Sea ports, pipelines, and rail lines carrying oil have been upgraded, civil aviation and roadways continue to need attention. Supply and distribution of electricity can be erratic because of regional dependencies, but the country is moving forward with plans to improve reliability of electricity and gas supply to its population. The government realizes that its economy suffers from an overreliance on oil and extractive industries. Kazakhstan has embarked on an ambitious diversification program, aimed at developing targeted sectors like transport, pharmaceuticals, telecommunications, petrochemicals and food processing. In 2010 Kazakhstan joined the Belarus-Kazakhstan-Russia Customs Union in an effort to boost foreign investment and improve trade relationships. The Customs Union evolved into the Eurasian Economic Union in January 2015. During 2014, Kazakhstan’s economy was hampered by Russia’s slowing economy, the weakening ruble, falling oil prices, and problems at its Kashagan oil field. Kazakhstan devalued its currency, the tenge, by 19% in February and in November the government announced a stimulus package to cope with the economic challenges.
Kenya Kenya is the economic and transport hub of East Africa. Kenya’s real GDP growth has averaged around 5% for the past several years. According to recently rebased national statistics, Kenya’s GDP for 2013 was $55.3 billion, placing Kenya among the low middle income countries with per capita income of $1,300. Agriculture remains the backbone of the Kenyan economy, contributing 25% of GDP. About 80% of Kenya’s population of roughly 42 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production. While Kenya has a growing entrepreneurial middle class, faster growth and poverty reduction is hampered by corruption and by reliance upon several primary goods whose prices have remained low. Inadequate infrastructure threatens Kenya's long-term position as the largest East African economy, although the KENYATTA administration has prioritized infrastructure development. International financial lenders and donors remain important to Kenya's economic growth and development, but Kenya has also successfully raised capital in the global bond market. Kenya issued its first sovereign bond offering in mid-2014, generating $2 billion at 6% interest; the funds are slated to be used for infrastructure projects. Nairobi has contracted with a Chinese company to begin construction of a new standard gauge railway, but the project allegedly has been beset by corruption and fraud. Unemployment is high at around 40%. The country has chronic budget deficits and is in the process of devolving some state revenues and responsibilities to the counties. Inflationary pressures and sharp currency depreciation peaked in early 2012 but have since abated following low global food and fuel prices and monetary interventions by the Central Bank. Recent terrorism in Kenya and the surrounding region threatens Kenya's important tourism industry.
Kiribati A remote country of 33 scattered coral atolls, Kiribati has few natural resources and is one of the least developed Pacific Island countries. Commercially viable phosphate deposits were exhausted at the time of independence from the United Kingdom in 1979. Economic development is constrained by a shortage of skilled workers, weak infrastructure, and remoteness from international markets. The public sector dominates economic activity, with ongoing capital projects in infrastructure including the road rehabilitation, water and sanitation projects, and renovations to the international airport, spurring some growth. Earnings from fishing licenses and seafarer remittances are important sources of income. In 2013, the International Monetary Fund estimated that fishing licenses revenues contributed close to half of government’s total revenue and total remittances from seafarers were equivalent to 6% of GDP. However, remittances and the number of seafarers employed have declined since the global crisis. Kiribati is dependent on foreign aid, which was estimated to have contributed over 43% in 2013 to the government’s finances. The country’s sovereign fund, the Revenue Equalization Reserve Fund (RERF), which is held offshore, had an estimated balance of $668 million in 2013, equivalent to 381% of GDP. The RERF seeks to avoid exchange rate risk by holding investments in more than 20 currencies, including the Australian dollar, United States dollar, the Japanese yen and the Euro. Drawdowns from the RERF helped finance the government’s annual budget.
Korea, North North Korea, one of the world's most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment, shortages of spare parts, and poor maintenance. Large-scale military spending draws off resources needed for investment and civilian consumption. Industrial and power outputs have stagnated for years at a fraction of pre-1990 levels. Frequent weather-related crop failures aggravated chronic food shortages caused by on-going systemic problems, including a lack of arable land, collective farming practices, poor soil quality, insufficient fertilization, and persistent shortages of tractors and fuel. The mid 1990s were marked by severe famine and widespread starvation. Significant food aid was provided by the international community through 2009. Since that time, food assistance has declined significantly. In the last few years, domestic corn and rice production has been somewhat better, although domestic production does not fully satisfy demand. A large portion of the population continues to suffer from prolonged malnutrition and poor living conditions. Since 2002, the government has allowed informal markets to begin selling a wider range of goods. It also implemented changes in the management process of communal farms in an effort to boost agricultural output. In December 2009, North Korea carried out a redenomination of its currency, capping the amount of North Korean won that could be exchanged for the new notes, and limiting the exchange to a one-week window. A concurrent crackdown on markets and foreign currency use yielded severe shortages and inflation, forcing Pyongyang to ease the restrictions by February 2010. In response to the sinking of the South Korean warship Cheonan and the shelling of Yeonpyeong Island in 2010, South Korea’s government cut off most aid, trade, and bilateral cooperation activities, with the exception of operations at the Kaesong Industrial Complex. North Korea continued efforts to develop special economic zones and expressed willingness to permit construction of a trilateral gas pipeline that would carry Russian natural gas to South Korea. North Korea is also working with Russia to refurbish North Korea’s dilapidated rail network and jointly rebuilt a link between a North Korean port in the Rason Special Economic Zone and the Russian rail network. The North Korean government often highlights its goal of becoming a “strong and prosperous” nation and attracting foreign investment, a key factor for improving the overall standard of living. In 2013-2014, the regime rolled out 20 new economic development zones - now totaling 25 - set up for foreign investors, although the initiative remains in its infancy. Firm political control remains the government’s overriding concern, which likely will inhibit changes to North Korea’s current economic system.
Korea, South South Korea over the past four decades has demonstrated incredible economic growth and global integration to become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion-dollar club of world economies. A system of close government and business ties, including directed credit and import restrictions, initially made this success possible. The government promoted the import of raw materials and technology at the expense of consumer goods, and encouraged savings and investment over consumption. The Asian financial crisis of 1997-98 exposed longstanding weaknesses in South Korea's development model, including high debt/equity ratios and massive short-term foreign borrowing. GDP plunged by 7% in 1998, and then recovered by 9% in 1999-2000. South Korea adopted numerous economic reforms following the crisis, including greater openness to foreign investment and imports. Growth moderated to about 4% annually between 2003 and 2007. South Korea's export focused economy was hit hard by the 2008 global economic downturn, but quickly rebounded in subsequent years, reaching over 6% growth in 2010. The US-Korea Free Trade Agreement was ratified by both governments in 2011 and went into effect in March 2012. Between 2012 and 2014, the economy experienced slow growth due to sluggish domestic consumption and investment. The administration in 2015 is likely to face the challenge of balancing heavy reliance on exports with developing domestic-oriented sectors, such as services. The South Korean economy's long-term challenges include a rapidly aging population, inflexible labor market, dominance of large conglomerates (chaebols), and the heavy reliance on exports, which comprise about half of GDP. In an effort to address the long term challenges and sustain economic growth, the current government has prioritized structural reforms, deregulation, promotion of entrepreneurship and creative industries, and the competitiveness of small and medium enterprises.
Kosovo Kosovo's economy has shown progress in transitioning to a market-based system and maintaining macroeconomic stability, but it is still highly dependent on the international community and the diaspora for financial and technical assistance. Kosovo's citizens are the poorest in Europe with a per capita GDP (PPP) of $8,000 in 2014. An unemployment rate of 31% encourages emigration and fuels a significant informal, unreported economy. Remittances from the diaspora - located mainly in Germany, Switzerland, and the Nordic countries - are estimated to account for about 15% of GDP. International donor assistance accounts for approximately 10% of Kosovo’s GDP. Most of Kosovo's population lives in rural towns outside of the capital, Pristina. Inefficient, near-subsistence farming is common - the result of small plots, limited mechanization, and a lack of technical expertise. Kosovo enjoys lower labor costs than the rest of the region. However, high levels of corruption and little contract enforcement have discouraged potential investors. With international assistance, Kosovo has been able to privatize a majority of its state-owned-enterprises. Minerals and metals production - including lignite, lead, zinc, nickel, chrome, aluminum, magnesium, and a wide variety of construction materials - once the backbone of industry, has declined because of ageing equipment and insufficient investment. A limited and unreliable electricity supply is a major impediment to economic development, but Kosovo has received technical assistance to help improve the sector’s performance. In 2012, Kosovo privatized its electricity supply and distribution network. The US Government is cooperating with the Ministry of Economic Development (MED) and the World Bank to conclude a commercial tender for the construction of a new power plant. MED also has plans for the rehabilitation of an older coal power plant, and the development of a coal mine that could supply both plants. In June 2009, Kosovo joined the World Bank and International Monetary Fund, and began servicing its share of the former Yugoslavia's debt. In order to help integrate Kosovo into regional economic structures, UNMIK signed (on behalf of Kosovo) its accession to the Central Europe Free Trade Area (CEFTA) in 2006. Serbia and Bosnia previously had refused to recognize Kosovo's customs stamp or extend reduced tariff privileges for Kosovo products under CEFTA, but both countries resumed trade with Kosovo in 2011. Kosovo joined the European Bank for Reconstruction and Development in 2012 and the Council of Europe Development Bank in 2013. In 2014, Kosovo concluded the Stabilization and Association Agreement negotiations (SAA) with the EU, focused on trade liberalization. The SAA is expected to be signed by end of 2015. The official currency of Kosovo is the euro, but the Serbian dinar is also used illegally in Serb majority communities. Kosovo's tie to the euro has helped keep core inflation low. Kosovo experienced its first federal budget deficit in 2012, when government expenditures climbed sharply. In May 2014, the government introduced a 25% salary increase for public sector employees and an equal increase in certain social benefits. Central revenues could not sustain these increases, and the Government was forced to reduce its planned capital investments. The government recently made changes to its fiscal policy that extended the list of duty-free imports, decreased the Value Added Tax (VAT) for basic food items and public utilities, and increased the VAT for all other goods.
Kuwait Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of about 102 billion barrels - more than 6% of world reserves. Kuwaiti officials plan to increase oil production to 4 million barrels per day by 2020. Petroleum accounts for over half of GDP, 94% of export revenues, and 89% of government income. For the last decade, high oil prices have generated budget surpluses despite increasing budget expenditures, particularly on wage hikes for public sector employees. Despite Kuwait’s dependence on oil, the government has cushioned itself against the impact of lower oil prices by continuous saving of at least 10% of government revenue in the Fund for Future Generations. Kuwait has done little to diversify its economy, in part, due to a poor business climate and an acrimonious relationship between the National Assembly and the executive branch that has stymied most economic reforms. In 2010, Kuwait passed its first long-term economic development plan in almost twenty-five years. While the government planned to spend up $104 billion over four years to diversify the economy away from oil, attract more investment, and boost private sector participation in the economy, many of the projects did not materialize because of the uncertain political situation.
Kyrgyzstan Kyrgyzstan is a poor, mountainous country with an economy dominated by agriculture and minerals extraction. Cotton, tobacco, wool, and meat are the main agricultural products, although only tobacco and cotton are exported in any quantity. Other exports include gold, mercury, uranium, natural gas, and—in some years—electricity. Bishkek remains embroiled in a legal battle with Canadian investors in the Kumtor gold mine, the nation’s largest. Kyrgyzstan has sought foreign investment to develop hydroelectric potential as a source of export revenue. The economy also depends heavily on remittances from Kyrgyzstani migrant workers, primarily in Russia. Following independence, Kyrgyzstan rapidly carried out market reforms, such as improving the regulatory system and instituting land reform. Kyrgyzstan was the first Commonwealth of Independent States (CIS) country to be accepted into the World Trade Organization. The government has sold much of its ownership shares in enterprises. Drops in production had been severe after the breakup of the Soviet Union in December 1991, but by mid-1995, production began to recover and exports began to increase. The overthrow of President BAKIEV in April 2010 and subsequent ethnic clashes left hundreds dead and damaged infrastructure. Under President ATAMBAEV, Kyrgyzstan has developed a plan for economic development in coordination with international donors. In December 2014 Kyrgyzstan agreed to join the Eurasian Economic Union in early 2015. The keys to future growth include progress in fighting corruption, improving administrative transparency, restructuring domestic industry, and attracting foreign aid and investment.
Laos The government of Laos, one of the few remaining one-party communist states, began decentralizing control and encouraging private enterprise in 1986. The results, starting from an extremely low base, were striking - growth averaged 6% per year from 1988-2008 except during the short-lived drop caused by the Asian financial crisis that began in 1997. Laos' growth has more recently been amongst the fastest in Asia and averaged nearly 8% per year for the last decade. Despite this high growth rate, Laos remains a country with an underdeveloped infrastructure, particularly in rural areas. It has a basic, but improving, road system, and limited external and internal land-line telecommunications. Electricity is available to 83% of the population. Laos' economy is heavily dependent on capital-intensive natural resource exports. The labor force, however, still relies on agriculture, dominated by rice cultivation in lowland areas, which accounts for about 25% of GDP and 73% of total employment. Economic growth has reduced official poverty rates from 46% in 1992 to 26% in 2010. The economy also has benefited from high-profile foreign direct investment in hydropower dams along the Mekong river, copper and gold mining, logging, and construction though some projects in these industries have drawn criticism for their environmental impacts. The strength of the natural resources and hydropower sectors have masked ongoing problems with the business environment that would have otherwise constrained growth. These problems include onerous registration requirements, a gap between legislation and implementation, and unclear or conflicting business regulations. Laos gained Normal Trade Relations status with the US in 2004 and applied for Generalized System of Preferences trade benefits in 2013 after being admitted to the World Trade Organization earlier in the year. Laos is in the process of implementing a value-added tax system. Simplified investment procedures and expanded bank credits for small farmers and small entrepreneurs will improve Laos' economic prospects. The government appears committed to raising the country's profile among foreign investors and has developed special economic zones replete with generous tax incentives, but a small labor pool of both skilled and unskilled workers remains an impediment to investment. Laos broadly appears to be on target to graduate from the UN Development Program's list of least-developed countries by 2020, and the country is preparing for implementation of the ASEAN Economic Community at the end of 2015 and for the rotating ASEAN chairmanship in 2016.
Latvia Latvia is a small, open economy with exports contributing nearly a third of GDP. Due to its geographical location, transit services are highly-developed, along with timber and wood-processing, agriculture and food products, and manufacturing of machinery and electronics industries. Corruption continues to be an impediment to attracting foreign direct investment and Latvia's low birth rate and decreasing population are major challenges to its long-term economic vitality. Latvia's economy experienced GDP growth of more than 10% per year during 2006-07, but entered a severe recession in 2008 as a result of an unsustainable current account deficit and large debt exposure amid the softening world economy. Triggered by the collapse of the second largest bank, GDP plunged 18% in 2009. The economy has not returned to pre-crisis levels despite strong growth, especially in the export sector in 2011-14. The IMF, EU, and other international donors provided substantial financial assistance to Latvia as part of an agreement to defend the currency's peg to the euro in exchange for the government's commitment to stringent austerity measures. The IMF/EU program successfully concluded in December 2011. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises, including 99.8% ownership of the Latvian national airline. Latvia officially joined the World Trade Organization in February 1999 and the EU in May 2004. Latvia joined the euro zone in 2014.
Lebanon Lebanon has a free-market economy and a strong laissez-faire commercial tradition. The government does not restrict foreign investment; however, the investment climate suffers from red tape, corruption, arbitrary licensing decisions, complex customs procedures, high taxes, tariffs, and fees, archaic legislation, and weak intellectual property rights. The Lebanese economy is service-oriented; main growth sectors include banking and tourism. The 1975-90 civil war seriously damaged Lebanon's economic infrastructure, cut national output by half, and derailed Lebanon's position as a Middle Eastern entrepot and banking hub. Following the civil war, Lebanon rebuilt much of its war-torn physical and financial infrastructure by borrowing heavily, mostly from domestic banks, which saddled the government with a huge debt burden. Pledges of economic and financial reforms made at separate international donor conferences during the 2000s have mostly gone unfulfilled, including those made during the Paris III Donor Conference in 2007, following the July 2006 war. Spillover from the Syrian conflict, including the influx of more than 1 million Syrian refugees, has increased internal tension and slowed economic growth to the 1-2% range in 2011-13, after four years of averaging 8% growth. Syrian refugees have increased the labor supply, but pushed more Lebanese into unemployment. Chronic fiscal deficits have made Lebanon’s debt-to-GDP ratio the third highest in the world; most of the debt is held internally by Lebanese banks. Weak economic growth limits tax revenues, while the largest government expenditures remain debt servicing and transfers to the electricity sector. These limitations constrain other government spending and limit the government’s ability to invest in necessary infrastructure improvements, such as water, electricity, and transportation.
Lesotho Small, mountainous, and completely landlocked by South Africa, Lesotho depends on a narrow economic base of textile manufacturing, agriculture, remittances, and regional customs revenue. About three-fourths of the people live in rural areas and engage in animal herding and subsistence agriculture, although Lesotho produces less than 20% of the nation's demand for food. Rain-fed agriculture is vulnerable to weather and climate variability. Lesotho relies on South Africa for much of its economic activity; Lesotho imports 90% of the goods it consumes from South Africa, including most agricultural inputs. Households depend heavily on remittances from family members working in South Africa, in mines, on farms and as domestic workers, though mining employment has declined substantially since the 1990s. Lesotho is a member of the Southern Africa Customs Union (SACU), and revenues from SACU accounted for roughly 44% of total government revenue in 2014. The South African Government also pays royalties for water transferred to South Africa from a dam and reservoir system in Lesotho. However, the government continues to strengthen its tax system to reduce dependency on customs duties and other transfers. Access to credit remains a problem for the private sector. The government maintains a large presence in the economy - government consumption accounted for 37% of GDP in 2014 and the government remains Lesotho's largest employer. Lesotho's largest private employer is the textile and garment industry - approximately 36,000 Basotho, mainly women, work in factories producing garments for export to South Africa and the US. Diamond mining in Lesotho has grown in recent years and may contribute 8.5% to GDP by 2015, according to current forecasts.
Liberia Liberia is a low income country that relies heavily on foreign assistance. It is richly endowed with water, mineral resources, forests, and a climate favorable to agriculture. It’s principal exports are iron ore, rubber, gold and timber. The Government has attempted to revive raw timber extraction and is encouraging oil exploration. In the 1990s and early 2000s, civil war and government mismanagement destroyed much of Liberia's economy, especially infrastructure in and around the capital. With the conclusion of fighting and the installation of a democratically elected government in 2006, businesses that had fled the country began to return. The country achieved high growth during 2010-13 due to favorable world prices for its commodities. However, in 2014 as the Ebolavirus began to spread, the economy declined and many businesses departed, taking capital and expertise with them. The epidemic forced the government to divert scarce resources to combat the spread of the virus, reducing funds available for needed public investment. Revitalizing the economy in the future will depend on increasing investment and trade, higher global commodity prices, sustained foreign aid and remittances, development of infrastructure and institutions, and maintaining political stability and security. The cost of addressing the Ebola epidemic will weigh heavily on public finances at the same time decreased economic activity reduces government revenue, although higher donor support will partly offset this loss.
Libya Libya's economy is almost entirely dependent on the nation's energy sector, which generates about 65% of GDP and 96% of government revenue. Income from the sale of crude oil and natural gas, coupled with a small population, give Libya one of the highest nominal per capita GDPs in Africa, but Libya’s leaders have hindered economic development by, for the most part, failing to use these financial resources to invest in national infrastructure. Libyan sales of oil and natural gas collapsed during the Revolution of 2011, rebounded in 2012 and 2013, but then fell sharply in late 2013 and throughout 2014 due to major protest disruptions at Libyan oil ports and around the country. The state sector is large and growing, with the majority of the Libyan workforce receiving a government salary in 2014. Sharply decreased revenues and increased payments for state salaries and for subsidies on fuel and food resulted in an estimated budget deficit about 50% of GDP in 2014, up from about 4% in 2013. Libya’s economic transition away from Qadhafi’s notionally socialist model toward a market-based economy stalled as revenues shrank, political uncertainty grew, and security deteriorated. Rival political factions in late 2014 were competing for control of the central bank and the national oil company, while funding for economic reform and infrastructure projects has stopped.
Liechtenstein Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and the third highest per capita income in the world, after Qatar and Luxembourg. The Liechtenstein economy is widely diversified with a large number of small businesses. Low business taxes - the maximum tax rate is 20% - and easy incorporation rules have induced many holding companies to establish nominal offices in Liechtenstein, providing 30% of state revenues. The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the EU) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe. Since 2008, Liechtenstein has faced renewed international pressure - particularly from Germany and the United States - to improve transparency in its banking and tax systems. In December 2008, Liechtenstein signed a Tax Information Exchange Agreement with the US. Upon Liechtenstein's conclusion of 12 bilateral information-sharing agreements, the OECD in October 2009 removed the principality from its "grey list" of countries that had yet to implement the organization's Model Tax Convention. By the end of 2010, Liechtenstein had signed 25 Tax Information Exchange Agreements or Double Tax Agreements. In 2011 Liechtenstein joined the Schengen area, which allows passport-free travel across 26 European countries.
Lithuania Lithuania gained membership in the World Trade Organization in May 2001 and joined the EU in May 2004. Lithuania's trade with the EU and CIS countries accounts for approximately 87.3% of total trade. Foreign investment and EU funding have aided in the transition from the former planned economy to a market economy. The three former Soviet Baltic republics were severely hit by the 2008-09 financial crisis, but Lithuania has rebounded and become one of the fastest growing economies in the EU. Lithuania’s ongoing recovery hinges on export growth, which is being hampered by economic slowdowns in the EU and Russia. Lithuania joined the euro zone on 1 January 2015.
Luxembourg This small, stable, high-income economy has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, machinery and equipment, rubber, automotive components, and other products. The financial sector, which accounts for about 36% of GDP, is the leading sector in the economy. The economy depends on foreign and cross-border workers for about 39% of its labor force. Luxembourg experienced uneven economic growth in the aftermath of the global economic crisis that began in late 2008. Luxembourg's GDP contracted 3.6% in 2009, rebounded in 2010-12, fell again in 2013, but recovered in 2014. Unemployment has remained below the EU average despite having increased from a historically-low rate of 4% in the 2000s to 7% in 2014. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks among the highest in the world and is the highest in the euro zone. Luxembourg has one of the highest current account surpluses as a share of GDP in the euro zone, and it maintains a healthy budgetary position and the lowest public debt levels in the region. Luxembourg has lost some of its advantage as a favorable tax location because of OECD and EU pressure. In 2015 the government’s compliance with EU requirements to implement automatic exchange of tax information on savings accounts - thus ending banking secrecy - has depressed banking activity and dampened GDP growth. Likewise, changes to the way EU members collect taxes from e-Commerce has cut Luxembourg’s tax revenues, requiring the government to raise additional levies and to reduce some direct social benefits.
Macau Since opening up its locally-controlled casino industry to foreign competition in 2001, Macau has attracted tens of billions of dollars in foreign investment, transforming the territory into one of the world's largest gaming centers. Macau's gaming and tourism businesses were fueled by China's decision to relax travel restrictions on Chinese citizens wishing to visit Macau. In 2014, Macau's gaming-related taxes accounted for more than 83% of total government revenue. Macau's economy slowed dramatically in 2009 as a result of the global economic slowdown, but strong growth resumed in 2010-13, largely on the back of tourism from mainland China and the gaming sectors. In 2014, this city of 636,200 hosted nearly 31.5 million visitors. Almost 67% came from mainland China. Macau's traditional manufacturing industry has slowed greatly since the termination of the Multi-Fiber Agreement in 2005. Services export—primarily gaming—increasingly has driven Macau’s economic performance. Mainland China’s ongoing anti-corruption campaign has brought Macau’s gambling boom to a halt, with spending in casinos contracting 2.6% in 2014. As a result, Macau's inflation-adjusted GDP contracted 0.4% from 2013, down from double-digit expansion rates in 2010-13. Non-inflation adjusted exports of goods and services dropped 0.4% from 2013, reflecting the slowdown in gaming exports. Macau continues to face the challenges of managing its growing casino industry, risks from money-laundering activities, and the need to diversify the economy away from heavy dependence on gaming revenues. Macau's currency, the pataca, is closely tied to the Hong Kong dollar, which is also freely accepted in the territory.
Macedonia Since its independence in 1991, Macedonia has made progress in liberalizing its economy and improving its business environment, but has lagged the Balkan region in attracting foreign investment. Corruption and weak rule of law remain significant problems. Some businesses complain of opaque regulations and unequal enforcement of the law. Unemployment has remained consistently high at more than 30% since 2008, but may be overstated based on the existence of an extensive gray market, estimated to be between 20% and 45% of GDP, which is not captured by official statistics. Macedonia’s economy is closely linked to Europe as a customer for exports and source of investment, and has suffered as a result of prolonged weakness in the euro zone. Macedonia maintained macroeconomic stability through the global financial crisis by conducting prudent monetary policy, which keeps the domestic currency pegged against the euro, and by limiting fiscal deficits. The government has been loosening fiscal policy, however, and the budget deficit was 4.2% of GDP in both 2013 and 2014. Public debt at the end of 2014 was 45.8%, which although low by regional comparison, is significant for a small economy.
Madagascar After discarding socialist economic policies in the mid-1990s, Madagascar followed a World Bank- and IMF-led policy of privatization and liberalization until the onset of a political crisis , which lasted from 2009-2013 . The free market strategy had previously placed the country on a slow and steady growth path from an extremely low starting point. Exports of apparel boomed after gaining duty-free access to the US in 2000; however, Madagascar's failure to comply with the requirements of the African Growth and Opportunity Act (AGOA) led to the termination of the country's duty-free access in January 2010, a sharp fall in textile production, and a loss of more than 100,000 jobs; Madagascar regained AGOA access in January 2015 following the democratic election of a new President the previous year. Agriculture, including fishing and forestry, is a mainstay of the economy, accounting for more than one-fourth of GDP and employing roughly 80% of the population. Deforestation and erosion, aggravated by the use of firewood as the primary source of fuel, are serious concerns. Many investors remain wary of investing for fear of a return to political instability in the country and because of weaknesses in the business environment. Expansion in mining and agricultural sectors contributed to growth in 2014. International organizations and foreign donors resumed development aid to Madagascar after RAJAONARIMAMPIANINA appointed a new government in mid-2014, however full-scale assistance will require further policy reforms, particularly on addressing rampant corruption.
Malawi Landlocked Malawi ranks among the world's most densely populated and least developed countries. The country’s economic performance has historically been constrained by policy inconsistency, macroeconomic instability, limited connectivity to the region and the world, and poor health and education outcomes that limit labor productivity. The economy is predominately agricultural with about 80% of the population living in rural areas. Agriculture accounts for about one-third of GDP and 90% of export revenues. The performance of the tobacco sector is key to short-term growth as tobacco accounts for more than half of exports.

The economy depends on substantial inflows of economic assistance from the IMF, the World Bank, and individual donor nations. In 2006, Malawi was approved for relief under the Heavily Indebted Poor Countries program. Between 2005 and 2009 Malawi’s government exhibited improved financial discipline under the guidance of Finance Minister Goodall GONDWE and signed a three year IMF Poverty Reduction and Growth Facility worth $56 million. The government announced infrastructure projects that could yield improvements, such as a new oil pipeline for better fuel access, and the potential for a waterway link through Mozambican rivers to the ocean for better transportation options.

Since 2009, however, Malawi has experienced some setbacks, including a general shortage of foreign exchange, which has damaged its ability to pay for imports, and fuel shortages that hinder transportation and productivity. In October 2013, the African Development Bank, the IMF, several European countries, and the US indefinitely froze $150 million in direct budgetary support in response to a high level corruption scandal, called “Cashgate,” citing a lack of trust in the government’s financial management system and civil service. Most of the frozen donor funds—which accounted for 40% of the budget—have been channeled through non-governmental organizations in the country. The government has failed to address barriers to investment such as unreliable power, water shortages, poor telecommunications infrastructure, and the high costs of services. Investment had fallen continuously for several years, but rose 4 percentage points in 2014 to 17% of GDP.

The government faces many challenges, including developing a market economy, improving educational facilities, addressing environmental problems, dealing with HIV/AIDS, and satisfying foreign donors on anti-corruption efforts.
Malaysia Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.

The NAJIB administration is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. Gross exports of goods and services constitute more than 80% of GDP. The oil and gas sector supplied about 29% of government revenue in 2014. As an oil and gas exporter, Malaysia has previously profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is trying to lessen its dependence on state oil producer Petronas.

Bank Negara Malaysia (the central bank) maintains healthy foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. In order to attract increased investment, NAJIB raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.
Maldives Tourism, Maldives' largest economic activity, accounts for nearly 30% of GDP and more than 60% of foreign exchange receipts. Fishing is the second leading sector, but the fish catch has dropped sharply in recent years. Agriculture and manufacturing continue to play a lesser role in the economy, constrained by the limited availability of cultivable land and the shortage of domestic labor.

Lower than expected tourist arrivals and fish exports, combined with high government spending on social needs, subsidies, and civil servant salaries contributed to a balance of payments crisis, which was temporarily eased with a $79.3 million IMF Stand-By agreement. However, after the first two disbursements, the IMF withheld subsequent disbursements due to concerns over Maldives' growing budget deficit, and the government has been seeking other sources of budgetary support ever since. A new Goods and Services Tax (GST) on tourism introduced in January 2011, on general goods and services in October 2011, and a new Business Profit Tax introduced in July 2011 have provided a boost to revenue. In recent years, gross foreign exchange reserves have hovered around $300 million, sufficient to finance about two to three months of imports.

In August 2014 the Maldives’ Parliament passed a bill to create special economic zones, a step aimed at attracting investment and diversifying the economy away from tourism and fishing. The Maldives’ also took some steps to reduce the fiscal deficit in 2015, such as imposing a green tax on tourist establishments and raising import duties, but the deficit will grow because of increasing public expenditures.

Diversifying the economy beyond tourism and fishing, reforming public finance, increasing employment opportunities, and combating corruption, cronyism, and a growing drug problem are other near-term challenges facing the government. Over the longer term Maldivian authorities worry about the impact of erosion and possible global warming on their low-lying country; 80% of the area is 1 meter or less above sea level.
Mali Among the 25 poorest countries in the world, Mali is a landlocked country that depends on gold mining and agricultural exports for revenue. The country's fiscal status fluctuates with gold and agricultural commodity prices and the harvest; cotton and gold exports make up around 80% of export earnings. Economic activity is largely confined to the riverine area irrigated by the Niger River and about 65% of its land area is desert or semidesert. About 10% of the population is nomadic and about 80% of the labor force is engaged in farming and fishing. Mali remains dependent on foreign aid. Industrial activity is concentrated on processing farm commodities. Mali is developing its iron ore extraction industry to diversify foreign exchange earnings away from gold, but the pace will largely depend on global price trends. The government is subsidizing the production of cereals to decrease the country’s dependence on imported foodstuffs and to reduce its vulnerability to food price shocks. The main threat to Mali’s economy is a return to physical insecurity. Other long term threats to the economy include high population growth, corruption, a weak infrastructure, and low levels of human capital. The administration’s purchase of a presidential jet for $40 million and inflated defense contracts damaged it’s credibility and led the IMF to temporarily suspend aid in 2014.
Malta Malta - the smallest economy in the euro zone - produces only about 20% of its food needs, has limited fresh water supplies, and has few domestic energy sources. Malta's geographic position between Europe and North Africa makes it a target for irregular migration, which has strained Malta's political and economic resources. Malta's fertility rate is below the EU average, and population growth in recent years has largely been from immigration, putting increasing pressure on the pension system. Malta adopted the euro on 1 January 2008. Malta's economy is dependent on foreign trade, manufacturing, and tourism. Malta has weathered the Eurozone crisis better than most EU member states due to a low debt-to-GDP ratio and financially sound banking sector. It has low unemployment relative to other European countries, and growth has recovered since the 2009 recession. In 2014, Malta led the Eurozone in growth, expanding by nearly 3.5%. Also in 2014, the government began promoting public-private partnerships in the healthcare sector to establish Malta as a Mediterranean health hub for medical tourism, reduced residential and commercial energy tariffs by 25%, and implemented a citizenship purchase program to increase government revenue and attract foreign investors. The government has implemented new programs, including free child care, to encourage increased labor participation. The high cost of borrowing and small labor market present potential constraints to future economic growth.
Marshall Islands US assistance and lease payments for the use of Kwajalein Atoll as a US military base are the mainstay of this small island country. The Marshall Islands received roughly $1 billion in aid from the US during 1986-2001 under the original Compact of Free Association (Compact). In 2002 and 2003, the US and the Marshall Islands renegotiated the Compact's financial package for a 20-year period, from 2004 to 2024. Under the amended Compact, the Marshall Islands will receive roughly $1.5 billion in direct US assistance. Agricultural production, primarily subsistence, is concentrated on small farms; the most important commercial crops are coconuts and breadfruit. Industry is limited to handicrafts, tuna processing, and copra. Tourism holds some potential. The islands and atolls have few natural resources, and imports exceed exports. Under the amended Compact, the US is also funding, jointly with the Marshall Islands, a Trust Fund for the people of the Marshall Islands that will provide an income stream beyond 2024 when direct Compact aid is to end.
Mauritania Mauritania's economy is dominated by natural resources and agriculture. Half the population still depends on agriculture and livestock for a livelihood, even though many of the nomads and subsistence farmers were forced into the cities by recurrent droughts in the 1970s and 1980s. Recently, GDP growth has been driven by foreign investment in the mining and oil sectors. Mauritania's extensive mineral resources include iron ore, gold, copper, gypsum, and phosphate rock, and exploration is ongoing for uranium, crude oil, and natural gas. Extractive commodities make up about three-quarters of Mauritania's total exports, subjecting the economy to price swings in world commodity markets. Mining is also a growing source of government revenue, rising from 13% to 29% of total revenue between 2006 and 2013. China was Mauritania’s main export and import partner 2013. The nation's coastal waters are among the richest fishing areas in the world, and fishing accounts for about 25% of budget revenues, but overexploitation by foreigners threatens this key source of revenue. Risks to Mauritania's economy include its recurring droughts, dependence on foreign aid and investment, and insecurity in neighboring Mali, as well as significant shortages of infrastructure, institutional capacity, and human capital. Mauritania has sought additional IMF support by focusing efforts on poverty reduction. Investment in agriculture and infrastructure are the largest components of the country’s public expenditures.
Mauritius Since independence in 1968, Mauritius has undergone a remarkable economic transformation from a low-income, agriculturally based economy to a diversified, upper middle-income economy with growing industrial, financial, and tourist sectors. Mauritius has achieved steady growth over the last several decades, resulting in more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure. The economy rests on sugar, tourism, textiles and apparel, and financial services, and is expanding into fish processing, information and communications technology, and hospitality and property development. Sugarcane is grown on about 90% of the cultivated land area and accounts for 15% of export earnings. The government's development strategy centers on creating vertical and horizontal clusters of development in these sectors. Mauritius has attracted more than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Investment in the banking sector alone has reached over $1 billion. Mauritius’ textile sector has taken advantage of the Africa Growth and Opportunity Act, with Mauritian exports to the US growing by 400% from 2001-2012. Mauritius' sound economic policies and prudent banking practices helped to mitigate negative effects of the global financial crisis in 2008-09. GDP grew in the 3-4% per year range in 2010-14, and the country continues to expand its trade and investment outreach around the globe.
Mexico Mexico's $1.3 trillion economy has become increasingly oriented toward manufacturing in the 21 years since the North American Free Trade Agreement (NAFTA) entered into force. Per capita income is roughly one-third that of the US; income distribution remains highly unequal. Mexico has become the United States' second-largest export market and third-largest source of imports. In 2014, two-way trade in goods and services exceeded $550 billion. Mexico has free trade agreements with 46 countries, putting more than 90% of trade under free trade agreements. In 2012, Mexico formally joined the Trans-Pacific Partnership negotiations and formed the Pacific Alliance with Peru, Colombia and Chile. Mexico's current government, led by President Enrique PENA NIETO, emphasized economic reforms during its first two years in office, passing and implementing sweeping education, energy, financial, fiscal and telecommunications reform legislation, among others, with the long-term aim to improve competitiveness and economic growth across the Mexican economy. Although the economy is expected to experience stronger growth in 2015 as a result of increased investment and stronger demand for Mexican exports, growth is predicted to remain below potential for reasons of inefficiencies, with a large portion of the economy and workforce in the informal sector, and corruption. Over the medium-term, the economy is vulnerable to global economic pressures, such as lower external demand, rising interest rates, and low oil prices - approximately 30% of government revenue comes from the state-owned oil company, PEMEX. The increasing integration of supply chains, development of the energy sector, and government-to-government focus on trade facilitation will continue to make the North American region increasingly competitive and contribute to Mexican economic development and strength.
Micronesia, Federated States of Economic activity consists largely of subsistence farming and fishing, and government, which employs two-thirds of the adult working population and receives funding largely - 58% in 2013 – from Compact of Free Association assistance provided by the US. The islands have few commercially valuable mineral deposits. The potential for tourism is limited by isolation, lack of adequate facilities, and limited internal air and water transportation. Under the terms of the original Compact, the US provided $1.3 billion in grants and aid from 1986 to 2001. The US and the Federated States of Micronesia (FSM) negotiated a second (amended) Compact agreement in 2002-2003 that took effect in 2004. The amended Compact runs for a 20-year period to 2023; during which the US will provide roughly $2.1 billion to the FSM. The amended Compact also develops a Trust Fund for the FSM that will provide a comparable income stream beyond 2024 when Compact grants end. The country's medium-term economic outlook appears fragile because of dependence on US assistance and lackluster performance of its small and stagnant private sector.
Moldova Despite recent progress, Moldova remains one of the poorest countries in Europe. With a moderate climate and good farmland, Moldova's economy relies heavily on its agriculture sector, featuring fruits, vegetables, wine, and tobacco. Moldova also depends on annual remittances of about $1.6 billion from the roughly one million Moldovans working in Europe, Russia, and other former Soviet Bloc countries. With few natural energy resources, Moldova imports almost all of its energy supplies from Russia and Ukraine. Moldova's dependence on Russian energy is underscored by a growing $5 billion debt to Russian natural gas supplier Gazprom, largely the result of unreimbursed natural gas consumption in the separatist Transnistria region. In August 2013, work began on a new pipeline between Moldova and Romania that may eventually break Russia's monopoly on Moldova's gas supplies. The government's goal of EU integration has resulted in some market-oriented progress. Moldova experienced better than expected economic growth in 2014 due to increased agriculture production, to economic policies adopted by the Moldovan government since 2009, and to the receipt of EU trade preferences. Moldova signed an Association Agreement and a Deep and Comprehensive Free Trade Agreement with the EU during fall 2014, connecting Moldovan products to the world’s largest market. Still, growth has been hampered by high prices for Russian natural gas, a Russian import ban on Moldovan wine, increased foreign scrutiny of Moldovan agricultural products, and by Moldova’s large external debt. Over the longer term, Moldova's economy remains vulnerable to political uncertainty, weak administrative capacity, vested bureaucratic interests, corruption, higher fuel prices, Russian pressure, and the illegal separatist regime in Moldova's Transnistria region.
Monaco Monaco, bordering France on the Mediterranean coast, is a popular resort, attracting tourists to its casino and pleasant climate. The principality also is a banking center and has successfully sought to diversify into services and small, high-value-added, nonpolluting industries. The state has no income tax and low business taxes and thrives as a tax haven both for individuals who have established residence and for foreign companies that have set up businesses and offices. Monaco, however, is not a tax-free shelter; it charges nearly 20% value-added tax, collects stamp duties, and companies face a 33% tax on profits unless they can show that three-quarters of profits are generated within the principality. Monaco's reliance on tourism and banking for its economic growth has left it vulnerable to a downturn in France and other European economies which are the principality's main trade partners. In 2009, Monaco's GDP fell by 11.5% as the euro-zone crisis precipitated a sharp drop in tourism and retail activity and home sales. A modest recovery ensued in 2010 and intensified in 2013, with GDP growth of more than 9%, but Monaco's economic prospects remain uncertain, and tied to future euro-zone growth. Monaco was formally removed from the OECD's "grey list" of uncooperative tax jurisdictions in late 2009, but continues to face international pressure to abandon its banking secrecy laws and help combat tax evasion. In October 2014, Monaco officially became the 84th jurisdiction participating in the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters—an effort to combat offshore tax avoidance and evasion. The state retains monopolies in a number of sectors, including tobacco, the telephone network, and the postal service. Living standards are high, roughly comparable to those in prosperous French metropolitan areas.
Mongolia Mongolia's extensive mineral deposits and attendant growth in mining-sector activities have transformed Mongolia's economy, which traditionally has been dependent on herding and agriculture. Mongolia's copper, gold, coal, molybdenum, fluorspar, uranium, tin, and tungsten deposits, among others, have attracted foreign direct investment (FDI). Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990 and 1991 at the time of the dismantlement of the USSR. The following decade saw Mongolia endure both deep recession because of political inaction and natural disasters, as well as strong economic growth because of market reforms and extensive privatization of the formerly state-run economy. The country opened a fledgling stock exchange in 1991. Mongolia joined the World Trade Organization in 1997 and seeks to expand its participation in regional economic and trade regimes. Growth averaged nearly 9% per year in 2004-08 largely because of high copper prices globally and new gold production. By late 2008, Mongolia was hit hard by the global financial crisis. Slower global economic growth hurt the country's exports, notably copper, and slashed government revenues. As a result, Mongolia's real economy contracted 1.3% in 2009. In early 2009, the International Monetary Fund reached a $236 million Stand-by Arrangement with Mongolia and the country emerged from the crisis with a stronger banking sector and needed reforms to the government’s fiscal management. In October 2009, Mongolia passed long-awaited legislation on an investment agreement to develop the Oyu Tolgoi (OT) mine, considered to be among the world's largest untapped copper-gold deposits. However, Mongolia's ongoing dispute with foreign investors developing Oyu Tolgoi has called into question the attractiveness of Mongolia as a destination for foreign investment. This caused a loss of investor confidence, a severe drop in FDI, and a slowing economy, leading to the dismissal of Prime Minister ALTANKHUYAG in November. The new government has made restoring investor trust and reviving the economy its top priority, but it will be challenged to unwind the monetary and fiscal stimulus programs in use since 2013 to counteract the fall in foreign investment. In December 2014 the government awarded a deal to develop the massive Tavan Tolgoi (TT) coal field to a consortium comprising Energy Resources/MCS (Mongolia), Shenhua (China), and Sumitomo (Japan); talks continue to hammer out the financing and the operating details. The economy grew more than 10% per year since 2010, largely on the strength of commodity exports to nearby countries and high government spending domestically, before slowing to 7.8% in 2014. Mongolia's economy faces near-term economic risks from the government's loose fiscal and monetary policies, which are contributing to high inflation, and from uncertainties in foreign demand for Mongolian exports. Trade with China represents nearly 62% of Mongolia's total external trade - China receives some 90% of Mongolia's exports and supplies Mongolia with more than one-third of its imports. Mongolia has relied on Russia for energy supplies, leaving it vulnerable to price increases; in 2014, Mongolia purchased nearly 90% of its gasoline and diesel fuel from Russia. A drop in FDI has put pressure on Mongolia's external finances. Remittances from Mongolians working abroad, particularly in South Korea, are significant.
Montenegro Montenegro's economy is transitioning to a market system. From the beginning of the privatization process in 1999 through to 2015, around 85% of Montenegrin state-owned companies have been privatized, including 100% of banking, telecommunications, and oil distribution. The government recognizes the need to remove impediments in order to remain competitive and open the economy to foreign investors. The biggest foreign investors in Montenegro are Italy, Norway, Austria, Russia, Hungary and Great Britain. Net foreign direct investment in 2014 reached $483 million and investment per capita is one of the highest in Europe. Montenegro uses the Euro as its domestic currency, though it is not an official member of the Euro-zone. In January 2007, Montenegro joined the World Bank and IMF, and in December 2011, the World Trade Organization. Montenegro began negotiations to join the EC in June, 2012, having met the conditions set down by the European Council, which called on Montenegro to take steps to fight corruption and organized crime. Tourism brings in twice as many visitors as Montenegro’s total population every year. Several new luxury tourism complexes are in various states of development along the coast, and a number are being offered in connection with nearby boating and yachting facilities. Montenegro is currently planning major overhauls of its road, rail networks, and possible expansions of its air transportation system. In 2014, the Government of Montenegro selected two Chinese companies to construct a 41 km-long section of the country’s highway system. Construction will cost around $1.1 billion. Montenegro first instituted value added tax (VAT) in April 2003, and introduced differentiated VAT rates of 17% and 7% (for tourism) in January 2006. In May 2013, the Montenegrin Government raised the higher level VAT rate to 19%.
Montserrat Severe volcanic activity, which began in July 1995, has put a damper on this small, open economy. A catastrophic eruption in June 1997 closed the airport and seaports, causing further economic and social dislocation. Two-thirds of the 12,000 inhabitants fled the island. Some began to return in 1998 but lack of housing limited the number. The agriculture sector continued to be affected by the lack of suitable land for farming and the destruction of crops. Prospects for the economy depend largely on developments in relation to the volcanic activity and on public sector construction activity. Half of the island remains uninhabitable. In January 2013, the EU announced the disbursement of a $55.2 million aid package to Montserrat in order to boost the country's economic recovery, with a specific focus on public finance management, public sector reform, and prudent economic management.
Morocco Morocco has capitalized on its proximity to Europe and relatively low labor costs to build a diverse, open, market-oriented economy. In the 1980s Morocco was a heavily indebted country before pursuing austerity measures and pro-market reforms, overseen by the IMF. Since taking the throne in 1999, King MOHAMMED VI has presided over a stable economy marked by steady growth, low inflation, and gradually falling unemployment, although poor harvests and economic difficulties in Europe contributed to an economic slowdown. Industrial development strategies and infrastructure improvements - most visibly illustrated by a new port and free trade zone near Tangier - are improving Morocco's competitiveness. Morocco also seeks to expand its renewable energy capacity with a goal of making renewable more than 40% of electricity output by 2020. Key sectors of the economy include agriculture, tourism, aerospace, phosphates, textiles, apparel, and subcomponents. To boost exports, Morocco entered into a bilateral Free Trade Agreement with the United States in 2006 and an Advanced Status agreement with the European Union in 2008. Despite Morocco's economic progress, the country suffers from high unemployment, poverty, and illiteracy, particularly in rural areas. In 2011 and 2012, high prices on fuel - which is subsidized and almost entirely imported - strained the government's budget and widened the country's current account deficit. In 2014, Morocco ended subsidies on diesel, gasoline, and fuel oil which have improved its budget deficit. Subsidies on sugar, butane gas, and flour remain. Morocco’s current account deficit has also benefit from the fall in oil prices. Key economic challenges for Morocco include reforming the education system and the judiciary, while increasing the competitiveness of the private sector.
Mozambique At independence in 1975, Mozambique was one of the world's poorest countries. Socialist mismanagement and a brutal civil war from 1977-92 exacerbated the situation. In 1987, the government embarked on a series of macroeconomic reforms designed to stabilize the economy. These steps, combined with donor assistance and with political stability since the multi-party elections in 1994, propelled the country’s GDP from $4 billion in 1993, following the war, to about $30.9 billion in 2014. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities. In spite of these gains, more than half the population remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force. A substantial trade imbalance persists although aluminum production from the Mozal smelter has significantly boosted export earnings in recent years. In 2012, The Mozambican government took over Portugal's last remaining share in the Cahora Bassa Hydroelectricity Company (HCB), a significant contributor to the Southern African Power Pool. The government has plans to expand the Cahora Bassa Dam and build additional dams to increase its electricity exports and fulfill the needs of its burgeoning domestic industries. Mozambique's once substantial foreign debt has been reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level. In July 2007, the US government's Millennium Challenge Corporation (MCC) signed a $506.9 million Compact with Mozambique that ended in 2013. The Compact focused on improving sanitation, roads, agriculture, and the business regulation environment in an effort to spur economic growth in the four northern provinces of the country. Citizens rioted in September 2010 after fuel, water, electricity, and bread price increases were announced. In an attempt to lessen the negative impact on the population, the government implemented subsidies, decreased taxes and tariffs, and instituted other fiscal measures. Mozambique grew at an average annual rate of 6%-8% in the decade up to 2014, one of Africa's strongest performances. Mozambique's ability to attract large investment projects in natural resources is expected to extend high growth rates in coming years. Revenues from these vast resources, including natural gas, coal, titanium and hydroelectric capacity, could overtake donor assistance within five years.
Namibia The economy is heavily dependent on the extraction and processing of minerals for export. Mining accounts for 11.5% of GDP, but provides more than 50% of foreign exchange earnings. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Marine diamond mining is becoming increasingly important as the terrestrial diamond supply has dwindled. Namibia is the world's fifth-largest producer of uranium. It also produces large quantities of zinc and is a smaller producer of gold and copper. The mining and quarrying sectors employ less than 2% of the population. Namibia normally imports about 50% of its cereal requirements; in drought years food shortages are a major problem in rural areas. A high per capita GDP, relative to the region, hides one of the world's most unequal income distributions. A five-year, Millennium Challenge Corporation Compact ended in September 2014. As an upper middle income country, Namibia is ineligible for a second Compact. The Namibian economy is closely linked to South Africa with the Namibian dollar pegged one-to-one to the South African rand. Namibia receives 30%-40% of its revenues from the Southern African Customs Union (SACU). Volatility in the size of Namibia's annual SACU allotment complicates budget planning. Namibia's economy remains vulnerable to world commodity price fluctuations, and drought. The rising cost of mining diamonds, increasingly from the sea, has reduced profit margins. Namibian authorities recognize these issues and have emphasized the need to increase higher value raw materials, manufacturing, and services, especially in the logistics and transportation sectors.
Nauru Revenues of this tiny island - a coral atoll with a land area of 21 square kilometers - traditionally have come from exports of phosphates. Few other resources exist, with most necessities being imported, mainly from Australia, its former occupier and later major source of support. Primary reserves of phosphates were exhausted and mining ceased in 2006, but mining of a deeper layer of "secondary phosphate" in the interior of the island began the following year. The secondary phosphate deposits may last another 30 years. Earnings from Nauru’s export of phosphate remains an important source of income. The rehabilitation of mined land and the replacement of income from phosphates are serious long-term problems. In anticipation of the exhaustion of Nauru's phosphate deposits, substantial amounts of phosphate income were invested in trust funds to help cushion the transition and provide for Nauru's economic future. Although revenue sources for government are limited, the opening of the Australian Regional Processing Center for asylum seekers since 2012 has sparked growth in the economy. Revenue derived from fishing licenses under the vessel day scheme has also boosted government income. Housing, hospitals, and other capital plant are deteriorating. The cost to Australia of keeping the government and economy afloat continues to climb. Few comprehensive statistics on the Nauru economy exist with estimates of Nauru's GDP varying widely.
Navassa Island Subsistence fishing and commercial trawling occur within refuge waters.
Nepal Nepal is among the poorest and least developed countries in the world, with about one-quarter of its population living below the poverty line. Nepal is heavily dependent on remittances, which amount to as much as 22%-25% of GDP. Agriculture is the mainstay of the economy, providing a livelihood for more than 70% of the population and accounting for a little over one-third of GDP. Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain. Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of commercially feasible capacity, but political uncertainty and a difficult business climate have hampered foreign investment. Additional challenges to Nepal's growth include its landlocked geographic location, persistent power shortages, underdeveloped transportation infrastructure, civil strife and labor unrest, and its susceptibility to natural disaster. The lack of political consensus in the past several years has delayed national budgets and prevented much-needed economic reform, although the government passed a full budget in 2013 and 2014. Nepal and India signed trade and investment agreements in 2014 that will increase Nepal’s hydropower potential.
Netherlands The Netherlands, the sixth-largest economy in the European Union, plays an important role as a European transportation hub, with a persistently high trade surplus, stable industrial relations, and moderate unemployment. Industry focuses on food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized agricultural sector employs only 2% of the labor force but provides large surpluses for food-processing and underpins the country’s status as the world’s second largest agricultural exporter. The Netherlands is part of the Eurozone, and as such, its monetary policy is controlled by the European Central Bank. The Dutch financial sector is highly concentrated, with four commercial banks possessing over 90% of banking assets. The sector suffered as a result of the global financial crisis and required billions of dollars of government support, but the European Banking Authority completed stringent reviews in 2014 and deemed Dutch banks to be well-capitalized. To address the 2009 and 2010 economic downturns, the government sought to stimulate the domestic economy by accelerating infrastructure programs, offering corporate tax breaks for employers to retain workers, and expanding export credits. The stimulus programs and bank bailouts, however, resulted in a government budget deficit of 5.3% of GDP in 2010 that contrasted sharply with a surplus of 0.7% in 2008. The government of Prime Minister Mark RUTTE has since implemented significant austerity measures to improve public finances and has instituted broad structural reforms in key policy areas, including the labor market, the housing sector, the energy market, and the pension system. As a result, the government budget deficit at the end of 2014 dropped to 1.8% of GDP. Following a protracted recession during which unemployment doubled to 7.4% and household consumption contracted for nearly three consecutive years, the year 2014 saw fragile GDP growth of 0.8 percent and a rise in most economic indicators. Drivers of growth included increased exports and business investments, as well as newly invigorated household consumption.
New Caledonia New Caledonia has about 25% of the world's known nickel reserves. Only a small amount of the land is suitable for cultivation, and food accounts for about 20% of imports. In addition to nickel, substantial financial support from France - equal to more than 15% of GDP - and tourism are keys to the health of the economy; during 2009-10, France sent more development assistance to New Caledonia than to any of its other overseas territories. In October 2014, French Prime Minster Manuel VALLS confirmed financial support to New Caledonia totaling $500 million for the period 2016-20. Substantial new investment in the nickel industry — including two major new plants, combined with the recovery of global nickel prices, brightens the economic outlook for the next several years. In 2015 New Caledonia is likely to help fill China’s shortfall in nickel supplies left by an Indonesian ban on nickel ore exports. The new government, which inherited a $112 million deficit in 2013, is expected to focus on bringing the territory’s budget back into balance.
New Zealand Over the past 30 years the government has transformed New Zealand from an agrarian economy, dependent on concessionary British market access, to a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes - but left behind some at the bottom of the ladder - and broadened and deepened the technological capabilities of the industrial sector. Per capita income rose for ten consecutive years until 2007 in purchasing power parity terms, but fell in 2008-09. Debt-driven consumer spending drove robust growth in the first half of the decade, fueling a large balance of payments deficit that posed a challenge for policymakers. Inflationary pressures caused the central bank to raise its key rate steadily from January 2004 until it was among the highest in the OECD in 2007-08. The higher rate attracted international capital inflows, which strengthened the currency and housing market while aggravating the current account deficit. The economy fell into recession before the start of the global financial crisis and contracted for five consecutive quarters in 2008-09. In line with global peers, the central bank cut interest rates aggressively and the government developed fiscal stimulus measures. The economy pulled out of recession in 2009, and achieved 2%-3% growth between 2011 to 2014. Nevertheless, key trade sectors remain vulnerable to weak external demand and lower commodity prices. In the aftermath of the Canterbury earthquakes, the government has continued programs to expand export markets, develop capital markets, invest in innovation, raise productivity growth, and develop infrastructure, while easing its fiscal austerity.
Nicaragua Nicaragua, the poorest country in Central America and the second poorest in the Western Hemisphere, has widespread underemployment and poverty. The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) has been in effect since April 2006 and has expanded export opportunities for many agricultural and manufactured goods. Textiles and agriculture combined account for nearly 50% of Nicaragua's exports. In 2013, the government granted a 50-year concession to a newly formed Chinese-run company to finance and build an inter-oceanic canal and related projects, at an estimated cost of $50 billion. The economy grew 4.7% in 2014, despite a steep decline in coffee export revenues due to a coffee rust fungus.
Nigeria Following an April 2014 statistical "rebasing" exercise, Nigeria has emerged as Africa's largest economy, with 2014 GDP estimated at US$479 billion. Oil has been a dominant source of government revenues since the 1970s. Regulatory constraints and security risks have limited new investment in oil and natural gas, and Nigeria's oil production contracted in 2012 and 2013. Nevertheless, the Nigerian economy has continued to grow at a rapid 6%-8% per annum (pre-rebasing), driven by growth in agriculture, telecommunications, and services, and the medium-term outlook for Nigeria is good, assuming oil output stabilizes and oil prices remain strong. Fiscal authorities pursued countercyclical policies in 2011-13, significantly reducing the budget deficit. Monetary policy has also been contractionary. Following the 2008-9 global financial crises, the banking sector was effectively recapitalized and regulation enhanced. Despite its strong fundamentals, oil-rich Nigeria has been hobbled by inadequate power supply, lack of infrastructure, delays in the passage of legislative reforms, an inefficient property registration system, restrictive trade policies, an inconsistent regulatory environment, a slow and ineffective judicial system, unreliable dispute resolution mechanisms, insecurity, and pervasive corruption. Economic diversification and strong growth have not translated into a significant decline in poverty levels - over 62% of Nigeria's 170 million people live in extreme poverty. President JONATHAN has established an economic team that includes experienced and reputable members and has announced plans to increase transparency, continue to diversify production, and further improve fiscal management. The government is working to develop stronger public-private partnerships for roads, agriculture, and power.
Niger Niger is a landlocked, sub-Saharan nation, whose economy centers on subsistence crops, livestock, and some of the world's largest uranium deposits. Agriculture contributes nearly 40% of GDP and provides livelihood for most of the population. The UN ranked Niger as the least developed country in the world in 2014 due to multiple factors such as food insecurity, lack of industry, high population growth, a weak educational sector, and few prospects for work outside of subsistence farming and herding. Since 2011 public debt has increased in part from a large loan financing a new uranium mine. The government relies on foreign donor resources for a large portion of its fiscal budget. The economy in recent years has been hurt by terrorist activity and kidnappings near its uranium mines and instability in Mali, and concerns about security have boosted fiscal spending on defense. Future growth may be sustained by exploitation of oil, gold, coal, and other mineral resources. Niger has sizable reserves of oil and oil production. Food insecurity and drought remain perennial problems for Niger, and the government plans to invest more in the agriculture sector, most notably irrigation. The mining sector may be affected by the government’s attempt to renegotiate extraction rights contracts to increase royalty rates and reduce tax exemptions. Despite Niger’s three-year $121 million IMF Extended Credit Facility agreement for years 2012-15, formal private sector investment needed for economic diversification and growth remains a challenge, given the country’s limited domestic markets, access to credit, and competitiveness.
Niue The economy suffers from the typical Pacific island problems of geographic isolation, few resources, and a small population. Government expenditures regularly exceed revenues, and the shortfall is made up by critically needed grants from New Zealand that are used to pay wages to public employees. Niue has cut government expenditures by reducing the public service by almost half. The agricultural sector consists mainly of subsistence gardening, although some cash crops are grown for export. Industry consists primarily of small factories to process passion fruit, lime oil, honey, and coconut cream. The sale of postage stamps to foreign collectors is an important source of revenue. The island in recent years has suffered a serious loss of population because of emigration to New Zealand. Efforts to increase GDP include the promotion of tourism and financial services, although the International Banking Repeal Act of 2002 resulted in the termination of all offshore banking licenses. Economic aid allocation from New Zealand in FY13/14 was US$10.1 million. While in the process of rebuilding, Niue has been dependent on foreign aid.
Norfolk Island Norfolk Island is suffering from a severe economic downturn. Tourism, the primary economic activity, is the main driver of economic growth. The agricultural sector has become self sufficient in the production of beef, poultry, and eggs.
Northern Mariana Islands The Northern Mariana Islands' economy benefits substantially from financial assistance from the US. In fiscal year 2013, federal grants accounted for 35.4% of the Commonwealth’s total revenues. A small agriculture sector is made up of cattle ranches and small farms producing coconuts, breadfruit, tomatoes, and melons. The Commonwealth’s economy continued to recover in 2013. Real GDP increased 4.4%, following a 2.1% gain in 2012. Economic growth in 2013 reflected increases in consumer spending and exports of services, mainly spending by foreign tourists. Tourism continued to grow in 2013, after posting double-digit growth in 2012. The tourist industry employs approximately a quarter of the work force and accounts for roughly one-fourth of GDP. The Commonwealth is making a concerted effort to broaden its tourism by extending casino gambling from the small Islands of Tinian and Rota to the main Island of Saipan, it’s political and commercial center.
Norway The Norwegian economy is a prosperous mixed economy, with a vibrant private sector, a large state sector, and an extensive social safety net. The government controls key areas, such as the vital petroleum sector, through extensive regulation and large-scale state-majority-owned enterprises. The country is richly endowed with natural resources - petroleum, hydropower, fish, forests, and minerals - and is highly dependent on the petroleum sector, which accounts for the largest portion of export revenue and about 30% of government revenue. Norway is the world's third-largest natural gas exporter; and seventh largest oil exporter, making one of its largest offshore oil finds in 2011. Norway opted to stay out of the EU during a referendum in November 1994; nonetheless, as a member of the European Economic Area, it contributes sizably to the EU budget. In anticipation of eventual declines in oil and gas production, Norway saves state revenue from the petroleum sector in the world's largest sovereign wealth fund, valued at over $870 billion in December 2014 and annually uses up to 4% of the fund, it’s projected long term return, to help finance public expenses. After solid GDP growth in 2004-07, the economy slowed in 2008, and contracted in 2009, before returning to positive growth in 2010-14. Nevertheless, the government budget remains in surplus. Lower oil prices in 2015 may cause the economy to contract as higher costs production costs in the North Sea deter investment.
Oman Oman is heavily dependent on dwindling oil resources, which generates 77% of government revenue. It is using enhanced oil recovery techniques to boost production. Muscat has actively pursued a development plan that focuses on diversification, industrialization, and privatization, with the objective of reducing the oil sector's contribution to GDP from 46% to 9% by 2020. Muscat also is focused on creating more jobs to employ the rising numbers of Omanis entering the workforce. Tourism and gas-based industries are key components of the government's diversification strategy. However, increases in social welfare benefits, particularly since the Arab Spring, have challenged the government's ability to effectively balance its budget as oil prices decline. Despite government acknowledgement that Oman’s expansive social welfare benefits are unsustainable, Oman authorities are comfortable with short-term budget deficits and have approved an expansionary 2015 budget. Concurrently, Oman has expanded efforts to support the development of small and medium-size enterprises and entrepreneurship. Government agencies and large oligarchic group companies have announced new initiatives to spin off non-essential functions to entrepreneurs, incubate new businesses, train and mentor up and coming business people, and provide financing for start-ups.
Pacific Ocean The Pacific Ocean is a major contributor to the world economy and particularly to those nations its waters directly touch. It provides low-cost sea transportation between East and West, extensive fishing grounds, offshore oil and gas fields, minerals, and sand and gravel for the construction industry. In 1996, over 60% of the world's fish catch came from the Pacific Ocean. Exploitation of offshore oil and gas reserves is playing an ever-increasing role in the energy supplies of the US, Australia, NZ, China, and Peru. The high cost of recovering offshore oil and gas, combined with the wide swings in world prices for oil since 1985, has led to fluctuations in new drillings.
Pakistan Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fourth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to diversify its exportshas left the country vulnerable to shifts in world demand. Official unemployment was 6.9% in 2014, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Pakistan’s human development continues to lag behind most of the region.. As a result of political and macroeconomic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 to preventa balance of payments crisis, but the IMF ended the Arrangement early because of Pakistan’s failure to implement required reforms. The economy has stabilized, it continues to underperform and foreign investment has not returned to levels seen during themid-2000’s, due to investor concerns related to governance, electricity shortages, , and a slow-down in the global economy. Remittances from overseas workers, averaging more than$1 billion a month, remain a bright spot for Pakistan. After a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to a deficit where it remained through 2014, spurred by higher prices for imported oil and lower prices for exported cotton. In September 2013, after facing balance of payments concerns, Pakistan entered into a three-year, $6.7 billion IMF Extended Fund Facility. The Sharif government has since made modest progress implementing fiscal and energy reforms, and in December 2014 the IMF described Pakistan’s progress as “broadly on track.” Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2014. Pakistan must address long standing issues related to government revenues and the electricity and natural gas sectorsin order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.
Palau The economy consists of tourism and other services such as trade, subsistence agriculture, and fishing. Government is a major employer of the work force relying on financial assistance from the US under the Compact of Free Association (Compact) with the US. The Compact took effect, after the end of the UN trusteeship on 1 October 1994. The US provided Palau with roughly $700 million in aid for the first 15 years following commencement of the Compact in 1994 in return for unrestricted access to its land and waterways for strategic purposes. Business and leisure tourist arrivals numbered over 125,000 in fiscal year 2014, a 13.4% increase over the previous year. The population enjoys a per capita income roughly double that of the Philippines and much of Micronesia. Long-run prospects for tourism have been bolstered by the expansion of air travel in the Pacific, the rising prosperity of industrial East Asia, and the willingness of foreigners to finance infrastructure development. Proximity to Guam, the region's major destination for tourists from East Asia, and a regionally competitive tourist infrastructure enhance Palau's advantage as a destination.
Panama Panama's dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and is estimated to be completed by 2016 at a cost of $5.3 billion - about 10-15% of current GDP. The expansion project will more than double the Canal's capacity, enabling it to accommodate ships that are too large to traverse the existing canal. The United States and China are the top users of the Canal. Panama completed a metro system in Panama City, valued at $1.2 billion in 2014. Panama's transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $17 billion in 2014 because of excessive government spending and public works projects. Foreign direct investment has continued to be a source of growth. Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points. The US-Panama Trade Promotion Agreement was approved by Congress and signed into law in October 2011, and entered into force in October 2012.
Papua New Guinea Papua New Guinea (PNG) is richly endowed with natural resources, but exploitation has been hampered by rugged terrain, land tenure issues, and the high cost of developing infrastructure. The economy has a small formal sector, focused mainly on the export of those natural resources, and an informal sector, employing the majority of the population. Agriculture provides a subsistence livelihood for 85% of the people. Mineral deposits, including copper, gold, and oil, account for nearly two-thirds of export earnings. Natural gas reserves amount to an estimated 155 billion cubic meters. A consortium led by a major American oil company is constructing a liquefied natural gas (LNG) production facility that could begin exporting in 2014. As the largest investment project in the country's history, it has the potential to double GDP in the near-term and triple Papua New Guinea's export revenue. An American-owned firm also opened PNG's first oil refinery in 2004 and is building a second LNG production facility. The government faces the challenge of ensuring transparency and accountability for revenues flowing from this and other large LNG projects. In 2011 and 2012, the National Parliament passed legislation that created an offshore Sovereign Wealth Fund (SWF) to manage government surpluses from mineral, oil, and natural gas projects. In recent years, the government has opened up markets in telecommunications and air transport, making both more affordable to the people. Numerous challenges still face the government of Peter O'NEILL, including providing physical security for foreign investors, regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and maintaining good relations with Australia, its former colonial ruler. Other socio-cultural challenges could upend the economy including chronic law and order and land tenure issues. The global financial crisis had little impact because of continued foreign demand for PNG's commodities.
Paracel Islands The islands have the potential for oil and gas development. Waters around the islands support commercial fishing, but the islands themselves are not populated on a permanent basis.
Paraguay Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. On a per capita basis, real income has stagnated at 1980 levels. The economy grew rapidly between 2003 and 2008 as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion. Paraguay is the sixth largest soy producer in the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The economy fell 3.8% in 2009, as lower world demand and commodity prices caused exports to contract. The government reacted by introducing fiscal and monetary stimulus packages. Growth resumed at a 13% level in 2010, the highest in South America, but slowed in 2011-13 as the stimulus subsided and severe drought and outbreaks of foot-and-mouth disease led to a drop in beef and other agricultural exports. The economy took another leap in 2014, largely due to strong export growth. Political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to long-term growth.
Peru Peru's economy reflects its varied topography - an arid lowland coastal region, the central high sierra of the Andes, the dense forest of the Amazon, with tropical lands bordering Colombia and Brazil. A wide range of important mineral resources are found in the mountainous and coastal areas, and Peru's coastal waters provide excellent fishing grounds. Peru is the world's second largest producer of silver and third largest producer of copper. The Peruvian economy grew by an average of 5.6% from 2009-13 with a stable exchange rate and low inflation, which in 2013 was just below the upper limit of the Central Bank target range of 1 to 3%. This growth was due partly to high international prices for Peru's metals and minerals exports, which account for almost 60% of the country's total exports. Growth slipped in 2014, due to weaker world prices for these resources. Despite Peru's strong macroeconomic performance, dependence on minerals and metals exports and imported foodstuffs makes the economy vulnerable to fluctuations in world prices. Peru's rapid expansion coupled with cash transfers and other programs have helped to reduce the national poverty rate by 28 percentage points since 2002, but inequality persists and continues to pose a challenge for the Ollanta HUMALA administration, which has championed a policy of social inclusion and a more equitable distribution of income. Poor infrastructure hinders the spread of growth to Peru's non-coastal areas. The HUMALA administration passed several economic stimulus packages in 2014 to bolster growth, including reforms to environmental regulations in order to spur investment in Peru’s lucrative mining sector, a move that was opposed by some environmental groups. Peru's free trade policy has continued under the HUMALA administration; since 2006, Peru has signed trade deals with the US, Canada, Singapore, China, Korea, Mexico, Japan, the EU, the European Free Trade Association, Chile, Thailand, Costa Rica, Panama, Venezuela, concluded negotiations with Guatemala, and begun trade talks with Honduras, El Salvador, India, Indonesia, Turkey and the Trans-Pacific Partnership. Peru also has signed a trade pact with Chile, Colombia, and Mexico, called the Pacific Alliance, that seeks integration of services, capital, investment and movement of people. Since the US-Peru Trade Promotion Agreement entered into force in February 2009, total trade between Peru and the United States has doubled.
Philippines The economy has weathered global economic shocks better than its regional peers due to less exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from four- to five-million overseas Filipino workers, and a rapidly expanding outsourcing industry. The current account balance has recorded consecutive surpluses since 2003, international reserves remain at comfortable levels, and the banking system is stable; the stock market resumed an upward trajectory in 2014, climbing to new record highs during the first four months of 2015. Efforts to improve tax administration and management of expenditures have helped ease the Philippines' tight fiscal situation and reduce debt levels. Nevertheless, government taxation and spending remain weak. The Philippines has received investment-grade credit ratings on its sovereign debt under the AQUINO administration and has had little difficulty financing its deficits. Economic growth has accelerated, averaging 6.0% per year from 2011-2014, compared with 4.5% under the MACAPAGAL-ARROYO government; competitiveness has improved; and foreign direct investment hit a historic high in 2014, although it continues to lag compared with the rest of the region. Unemployment has remained high, hovering at around 7% of the population, and underemployment is nearly 20%. At least 40% of the employed work in the informal sector and poverty afflicts about a quarter of the population. The AQUINO administration has been working to boost expenditures for education, health, transfers to the poor, and other social spending programs. Infrastructure remains underfunded and the government is relying on the private sector to help with major projects under its Public-Private Partnership program. Other long term challenges include reforming governance, the judicial system, and the regulatory environment, and improving the ease of doing business. The Philippine Constitution and other laws restrict foreign ownership in important activities/sectors - such as land ownership and public utilities. Some progress has been made in establishing a Customs Modernization Act to meet international standards and commitments.
Pitcairn Islands The inhabitants of this tiny isolated economy exist on fishing, subsistence farming, handicrafts, and postage stamps. The fertile soil of the valleys produces a wide variety of fruits and vegetables, including citrus, sugarcane, watermelons, bananas, yams, and beans. Bartering is an important part of the economy. The major sources of revenue are the sale of postage stamps to collectors and the sale of handicrafts to passing ships.
Poland Poland has pursued a policy of economic liberalization since 1990 and Poland's economy was the only one in the EU to avoid a recession through the 2008-09 economic downturn. Although EU membership and access to EU structural funds have provided a major boost to the economy since 2004, GDP per capita remains significantly below the EU average. The unemployment rate is now below the EU average. The government of Prime Minister Donald TUSK steered the Polish economy through the economic downturn by skillfully managing public finances and adopting controversial pension and tax reforms to further shore up public finances. While the Polish economy has performed well over the past five years, growth slowed in 2013 and picked back up in 2014. Short-term, the key policy challenge will be to consolidate debt and spending without stifling economic growth. Over the longer term, Poland's economic performance could improve if the country addresses some of the remaining deficiencies in its road and rail infrastructure, business environment, rigid labor code, commercial court system, government red tape, and burdensome tax system, especially for entrepreneurs. Poland’s long-term challenges include diversifying Poland’s energy mix and sources of supply, as well as stemming the outflow of educated young Poles to other EU Member States, especially in light of a coming demographic contraction as the Solidarity-era baby boom generation ages.
Portugal Portugal has become a diversified and increasingly service-based economy since joining the European Community - the EU's predecessor - in 1986. Over the following two decades, successive governments privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. The country joined the Economic and Monetary Union (EMU) in 1999 and began circulating the euro on 1 January 2002 along with 11 other EU members. The economy grew by more than the EU average for much of the 1990s, but the rate of growth slowed in 2001-08. The economy contracted in 2009, and fell again from 2011 to 2014, as the government implemented spending cuts and tax increases to comply with conditions of an EU-IMF financial rescue package, signed in May 2011. A modest recovery began in 2013 and gathered steam in in 2014 due to strong export performance and a rebound in private consumption. Although austerity measures were instituted to reduce the large budget deficit, they contributed to record unemployment and a wave of emigration not seen since the 1960s. A continued reduction in private- and public-sector debt could weigh on consumption and investment in 2015, holding back a stronger recovery. The government of Pedro PASSOS COELHO has passed legislation aimed at reducing labor market rigidity, and, this, along with sustained fiscal discipline, could make Portugal more attractive to foreign direct investment. The government reduced the budget deficit from 11.2% of GDP in 2010 to 4.8% in 2014, a figure that is significantly higher than the EU-IMF target of 4%. The government has pledged to lower the deficit to under 3% of GDP in 2015 in order to comply with EU fiscal obligations, under the excessive deficit procedure. Legislative elections in 2015 could increase the risk of fiscal slippage and undermine investor confidence in Portugal’s economy, which has improved over the course of the EU-IMF program. EU-IMF financing expired in May 2014.
Puerto Rico Puerto Rico had one of the most dynamic economies in the Caribbean region until 2006, however, growth has been negative for each of the last nine years. The down-turn coincided with the phase-out of tax preferences that had led US firms to invest heavily in the Commonwealth since the 1950s, and a steep rise in the price of oil, which generates most of the island's electricity. Diminished job opportunities prompted a sharp rise in outmigration, as many Puerto Ricans sought jobs on the US mainland. Unemployment reached 16% in 2011, but declined to 13.7% in December 2014. US minimum wage laws apply in Puerto Rico, hampering job expansion. Per capita income is about half that of the US mainland. The industrial sector greatly exceeds agriculture as the locus of economic activity and income. Tourism has traditionally been an important source of income with estimated arrivals of more than 3.6 million tourists in 2008. Puerto Rico's merchandise trade surplus is exceptionally strong, with exports nearly 50% greater than imports, and its current account surplus amounts to about 10% of GDP. Closing the budget deficit while restoring economic growth and employment remain the central concerns of the government. The gap between revenues and expenditures narrowed to 0.2% of GDP in 2014, although analysts believe that not all expenditures have been accounted for in the budget and a better accounting of costs would yield an overall deficit of roughly 5% of GDP in 2014. Public debt rose to nearly 94% of GDP in 2014, the equivalent of $15,600 per person, or nearly three times the per capita debt of the State of Connecticut, the highest in the US. Much of that debt was issued by state-run schools and public corporations, including water and electric utilities. In June 2015, Governor Alejandro GARCIA Padilla announced that the island could not pay back at least $73 billion in debt and that it would seek a deal with its creditors.
Qatar Qatar has prospered in the last several years with continued high real GDP growth. GDP was driven largely by the oil and gas sector however growth in the manufacturing, construction, and financial services sectors have pushed the non-oil component to just over half of Qatar’s nominal GDP for the first time since 2000. Economic policy is focused on sustaining Qatar's nonassociated natural gas reserves and increasing private and foreign investment in non-energy sectors, but oil and gas still account for roughly 92% of export earnings, and 62% of government revenues. Oil and gas have made Qatar the world's highest per-capita income country and the country with the lowest unemployment. Proved oil reserves in excess of 25 billion barrels should enable continued output at current levels for about 56 years. Qatar's proved reserves of natural gas exceed 25 trillion cubic meters, about 13% of the world total and third largest in the world. Qatar's successful 2022 World Cup bid is accelerating large-scale infrastructure projects such as Qatar's metro system, light rail system, the construction of a new port, roads, stadiums and related sporting infrastructure. The new Hamad International Airport opened in mid-2014 with an initial annual passenger capacity of 24 million and with a projected 50 million when complete.
Romania Romania, which joined the EU on 1 January 2007, began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania's widespread poverty. Corruption and red tape continue to permeate the business environment. In the aftermath of the global financial crisis, Romania signed on to a $26 billion emergency assistance package from the IMF, the EU, and other international lenders, but GDP contracted until 2011. In March 2011, Romania and the IMF/EU/World Bank signed a 24-month precautionary stand-by agreement, worth $6.6 billion, to promote fiscal discipline, encourage progress on structural reforms, and strengthen financial sector stability. In September 2013, Romanian authorities and the IMF/EU agreed to a follow-on precautionary two-year stand-by agreement, worth $5.4 billion, to continue with reforms, although Bucharest has announced that it does not intend to draw funds under the agreement. Economic growth rebounded in 2013, driven by strong industrial exports and an excellent agricultural harvest, and the current account deficit was reduced substantially. The economy closed out 2014 with 2.8% growth, down from the 3.5% posted in 2013. Industry outperformed other sectors of the economy. Exports remained the engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. In 2014, the Government of Romania succeeded in meeting its annual target for the budget deficit, the external deficit remained low, and inflation was the lowest since 1989, allowing a gradual loosening of the monetary policy throughout the year. However, progress on structural reforms has been uneven and the economy still is vulnerable to external shocks. An ageing population, weak domestic demand, tax evasion, and insufficient health-care represent the top vulnerabilities.
Russia Russia has undergone significant changes since the collapse of the Soviet Union, moving from a globally-isolated, centrally-planned economy towards a more market-based and globally-integrated economy, but stalling as a partially reformed, statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy and defense-related sectors. The protection of property rights is still weak and the private sector remains subject to heavy state interference. Russia is one of the world's leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia's manufacturing sector is generally uncompetitive on world markets and is geared toward domestic consumption. Russia's reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during 1998-2008 as oil prices rose rapidly, was one of the hardest hit by the 2008-09 global economic crisis as oil prices plummeted and the foreign credits that Russian banks and firms relied on dried up. In 2014, economic growth declined further when Russia forcibly violated Ukraine’s sovereignty and territorial integrity, and interfered in Ukraine’s internal affairs. In the second half of 2014, the Russian ruble lost about half of its value, contributing to increased capital outflows that reached $151.5 billion for the year; the ruble remains volatile. Declining oil prices, lack of economic reforms, and the imposition of foreign sanctions have contributed to the downturn and created wide expectations the economy will continue to slump. In April 2015, the Russian Ministry of Economic Development predicted that the Russia’s economy will contract by 3% in 2015, and average only 2.5% growth through 2030.
Rwanda Rwanda is a rural country with about 90% of the population engaged in subsistence agriculture and some mineral and agro-processing. Tourism, minerals, coffee and tea are Rwanda's main sources of foreign exchange. The 1994 genocide decimated Rwanda's fragile economic base, severely impoverished the population, particularly women, and temporarily stalled the country's ability to attract private and external investment. However, Rwanda has made substantial progress in stabilizing and rehabilitating its economy to pre-1994 levels. GDP has rebounded with an average annual growth of 7%-8% since 2003 and inflation has been reduced to single digits. Nonetheless, a significant percent of the population still live below the official poverty line; 45% of the population now lives below the poverty line, compared to 57% in 2006. Despite Rwanda's fertile ecosystem, food production often does not keep pace with demand, requiring food imports In recognition of Rwanda's successful management of its macro economy, in 2010, the IMF graduated Rwanda to a Policy Support Instrument (PSI). Africa's most densely populated country is trying to overcome the limitations of its small, landlocked economy by leveraging regional trade; Rwanda joined the East African Community and is aligning its budget, trade, and immigration policies with its regional partners. The government has embraced an expansionary fiscal policy to reduce poverty by improving education, infrastructure, and foreign and domestic investment and pursuing market-oriented reforms. Energy shortages, instability in neighboring states, and lack of adequate transportation linkages to other countries continue to handicap private sector growth. The Rwandan Government is seeking to become regional leader in information and communication technologies. In 2012, Rwanda completed the first modern Special Economic Zone (SEZ) in Kigali. The SEZ seeks to attract investment in all sectors, but specifically in agribusiness, information and communications technologies, trade and logistics, mining, and construction.
Saint Barthelemy The economy of Saint Barthelemy is based upon high-end tourism and duty-free luxury commerce, serving visitors primarily from North America. The luxury hotels and villas host 70,000 visitors each year with another 130,000 arriving by boat. The relative isolation and high cost of living inhibits mass tourism. The construction and public sectors also enjoy significant investment in support of tourism. With limited fresh water resources, all food must be imported, as must all energy resources and most manufactured goods. Employment is strong and attracts labor from Brazil and Portugal.
Saint Helena, Ascension, and Tristan da Cunha The economy depends largely on financial assistance from the UK, which amounted to about $27 million in FY06/07 or more than twice the level of annual budgetary revenues. The local population earns income from fishing, raising livestock, and sales of handicrafts. Because there are few jobs, 25% of the work force has left to seek employment on Ascension Island, on the Falklands, and in the UK.
Saint Kitts and Nevis The economy of Saint Kitts and Nevis depends on tourism; since the 1970s, tourism has replaced sugar as the economy’s traditional mainstay. Following the 2005 harvest, the government closed the sugar industry after several decades of losses. To compensate for lost jobs, the government has embarked on a program to diversify the agricultural sector and to stimulate other sectors of the economy, such as export-oriented manufacturing and offshore banking. Roughly 200,000 tourists visited the islands in 2009, but reduced tourism arrivals and foreign investment led to an economic contraction in 2009-2013, and the economy returned to growth only in 2014. Like other tourist destinations in the Caribbean, St. Kitts and Nevis is vulnerable to damage from natural disasters and shifts in tourism demand. The government has made notable progress on reducing its public debt, from 154% of GDP in 2011 to 83% in 2013, although it still faces one of the highest levels in the world, largely attributable to public enterprise losses.
Saint Lucia The island nation has been able to attract foreign business and investment, especially in its offshore banking and tourism industries . Tourism is Saint Lucia's main source of jobs and income - accounting for 65% of GDP - and the island's main source of foreign exchange earnings. The manufacturing sector is the most diverse in the Eastern Caribbean area. Crops such as bananas, mangos, and avocados continue to be grown for export, but St. Lucia's once solid banana industry has been devastated by strong competition. Saint Lucia is vulnerable to a variety of external shocks, including volatile tourism receipts, natural disasters, and dependence on foreign oil. Furthermore, high public debt - 77% of GDP in 2012 - and high debt servicing obligations constrain the ANTHONY administration's ability to respond to adverse external shocks. St. Lucia has experienced anemic growth since the onset of the global financial crisis in 2008, largely because of a slowdown in tourism - airlines cut back on their routes to St. Lucia in 2012. Also, St. Lucia introduced a value added tax in 2012 of 15%, becoming the last country in the Eastern Caribbean to do so. In 2013, the government introduced a National Competitiveness and Productivity Council to address St. Lucia's high public wages and lack of productivity.
Saint Martin The economy of Saint Martin centers around tourism with 85% of the labor force engaged in this sector. Over one million visitors come to the island each year with most arriving through the Princess Juliana International Airport in Sint Maarten. No significant agriculture and limited local fishing means that almost all food must be imported. Energy resources and manufactured goods are also imported, primarily from Mexico and the United States. Saint Martin is reported to have the highest per capita income in the Caribbean.
Saint Pierre and Miquelon The inhabitants have traditionally earned their livelihood by fishing and by servicing fishing fleets operating off the coast of Newfoundland. The economy has been declining, however, because of disputes with Canada over fishing quotas and a steady decline in the number of ships stopping at Saint Pierre. In 1992, an arbitration panel awarded the islands an exclusive economic zone of 12,348 sq km to settle a longstanding territorial dispute with Canada, although it represents only 25% of what France had sought. France heavily subsidizes the islands to the great betterment of living standards. The government hopes an expansion of tourism will boost economic prospects. Fish farming, crab fishing, and agriculture are being developed to diversify the local economy. Recent test drilling for oil may pave the way for development of the energy sector.
Saint Vincent and the Grenadines Success of the economy hinges upon seasonal variations in agriculture, tourism, and construction activity as well as remittance inflows. Much of the workforce is employed in banana production and tourism, but persistent high unemployment has prompted many to leave the islands. This lower-middle-income country is vulnerable to natural disasters - tropical storms wiped out substantial portions of crops in 1994, 1995, and 2002. Floods and mudslides caused by unseasonable 2013 rainfall caused substantial damage to infrastructure, homes, and crops, which the World Bank estimated at US$112 million. In 2013, the islands had more than 200,000 tourist arrivals, mostly to the Grenadines. The arrival numbers represent a marginal increase from 2012 but remain 26% below St. Vincent's 2009 peak. Saint Vincent is home to a small offshore banking sector and has moved to adopt international regulatory standards. The government's ability to invest in social programs and respond to external shocks is constrained by its high public debt burden, which was 67% of GDP - one of the lowest levels in the Eastern Caribbean - at the end of 2013. Weak recovery in the tourism and construction sectors limited growth in 2014.
Samoa The economy of Samoa has traditionally been dependent on development aid, family remittances from overseas, tourism, agriculture, and fishing. It has a nominal GDP of $780 million. Agriculture, including fishing, employs roughly two-thirds of the labor force and furnishes 90% of exports, featuring fish, coconut oil, nonu products, and taro. The manufacturing sector mainly processes agricultural products. One factory in the Foreign Trade Zone employs 1,000 people to make automobile electrical harnesses for an assembly plant in Australia, and is responsible for 65% of total exports. Industry accounts for nearly 15% of GDP while employing less than 6% of the work force. The service sector accounts for nearly three-quarters of GDP and employs approximately 50% of the labor force. Tourism is an expanding sector accounting for 25% of GDP; 132,000 tourists visited the islands in 2013. The country is vulnerable to devastating storms. In late September 2009, an earthquake and the resulting tsunami severely damaged Samoa, and nearby American Samoa, disrupting transportation and power generation, and resulting in about 200 deaths. In December 2012, extensive flooding and wind damage from Tropical Cyclone Evan killed four people, displaced over 6,000, and damaged or destroyed an estimated 1,500 homes in Samoa's Upolu Island. The Samoan Government has called for deregulation of the financial sector, encouragement of investment, and continued fiscal discipline, while at the same time protecting the environment. Foreign reserves are in a relatively healthy state and inflation is low, but the external debt is approximately 55% of GDP. Samoa became the 155th member of the WTO in May 2012, and graduated from least developed country (LDC) status in January 2014.
San Marino San Marino's economy relies heavily on tourism, the banking industry and the manufacture and export of ceramics, clothing, fabrics, furniture, paints, spirits, tiles, and wine. The manufacturing and financial sectors account for more than half of San Marino's GDP. The per capita level of output and standard of living are comparable to those of the most prosperous regions of Italy. The economy benefits from foreign investment due to its relatively low corporate taxes and low taxes on interest earnings. The income tax rate is also very low, about one-third the average EU level. San Marino does not issue public debt securities; when necessary, it finances deficits by drawing down central bank deposits. San Marino's economy has been contracting since 2008, largely due to weakened demand from Italy - which accounts for nearly 90% of its export market - and financial sector consolidation. Difficulties in the banking sector, the recent global economic downturn, and the sizable decline in tax revenues have contributed to negative real GDP growth. The government has adopted measures to counter the economic downturn, including subsidized credit to businesses and is seeking to shift its growth model away from a reliance on bank and tax secrecy. San Marino continues to work towards harmonizing its fiscal laws with EU and international standards. In September 2009, the OECD removed San Marino from its list of tax havens that have yet to fully adopt global tax standards, and in 2010 San Marino signed Tax Information Exchange Agreements with most major countries. In 2013 San Marino's Government signed a Double Taxation Agreement with Italy, but a referendum on EU membership failed to reach the quorum needed to bring it to a vote.
Sao Tome and Principe This small, poor island economy has become increasingly dependent on cocoa since independence in 1975. Cocoa production has substantially declined in recent years because of drought and mismanagement. Sao Tome and Principe has to import fuels, most manufactured goods, consumer goods, and a substantial amount of food, making it vulnerable to fluctuations in global commodity prices. Over the years, it has had difficulty servicing its external debt and has relied heavily on concessional aid and debt rescheduling. Sao Tome and Principe benefited from $200 million in debt relief in December 2000 under the Highly Indebted Poor Countries program, which helped bring down the country's $300 million debt burden. In August 2005, the government signed on to a new 3-year IMF Poverty Reduction and Growth Facility program worth $4.3 million. In April 2011 the country completed a Threshold Country Program with The Millennium Challenge Corporation to help increase tax revenues, reform customs, and improve the business environment. Considerable potential exists for development of a tourist industry, and the government has taken steps to expand facilities in recent years. The government also has attempted to reduce price controls and subsidies. Potential exists for the development of petroleum resources in Sao Tome and Principe's territorial waters in the oil-rich Gulf of Guinea, which are being jointly developed in a 60-40 split with Nigeria, but any actual production is at least several years off. The first production licenses were sold in 2004, though a dispute over licensing with Nigeria delayed the country's receipt of more than $20 million in signing bonuses for almost a year. Maintaining control of inflation, fiscal discipline, and increasing flows of foreign direct investment into the oil sector are the major economic problems facing the country.
Saudi Arabia Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 16% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings. Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Diversification efforts are focusing on power generation, telecommuncations, natural gas exploration, and petrochemical sectors. Over 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors, while Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population, which generally lacks the education and technical skills the private sector needs. In 2014 the Kingdom ran its first budget deficit since 2009, and faces budget deficits for the foreseeable future because it requires an oil price greater than $100 per barrel to balance its budget. Although the Kingdom can finance high deficits for several years by drawing down its considerable foreign assets or borrowing, it probably will begin to reduce capital spending if oil prices stay low through the next year.
Senegal Senegal’s economy is driven by mining, construction, tourism, fisheries and agriculture which is the primary source of employment in rural areas. The country's key export industries include phosphate mining, fertilizer production, agricultural products and commercial fishing and it is also working on oil exploration projects. Senegal relies heavily on donor assistance, remittances and foreign direct investment. President Macky SALL, who was elected in March 2012 under a reformist policy agenda, inherited an economy with high energy costs, a challenging business environment, and a culture of overspending. Senegal received technical support from the IMF in 2010-2014 under a Policy Support Instrument to assist economic reform through sound macroeconomic and fiscal policies to reduce the fiscal deficit, increase transparency and facilitate private investment. President SALL unveiled an ambitious economic plan, the Emerging Senegal Plan, which aims to implement priority economic reforms and investment projects to increase economic growth. Bureaucratic bottlenecks and a challenging business climate are among the perennial challenges that may slow the implementation of this plan. Investors have signaled confidence in the country through Senegal’s successful Eurobond issuances in recent years, including in 2014.
Serbia Serbia has a transitional economy largely dominated by market forces, but the state sector remains significant in certain areas and many institutional reforms are needed. The economy relies on manufacturing and exports, driven largely by foreign investment. MILOSEVIC-era mismanagement of the economy, an extended period of international economic sanctions, civil war, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy only half the size it was in 1990. After the ousting of former Federal Yugoslav President MILOSEVIC in September 2000, the Democratic Opposition of Serbia (DOS) coalition government implemented stabilization measures and embarked on a market reform program. After renewing its membership in the IMF in December 2000, Serbia continued to reintegrate into the international community by rejoining the World Bank (IBRD) and the European Bank for Reconstruction and Development (EBRD). Serbia has made progress in trade liberalization and enterprise restructuring and privatization, but many large enterprises - including the power utilities, telecommunications company, natural gas company, and others - remain in state hands. Serbia has made some progress towards EU membership, signing a Stabilization and Association Agreement with Brussels in May 2008, and with full implementation of the Interim Trade Agreement with the EU in February 2010, gained candidate status in March 2012. In January 2014, Serbia's EU accession talks officially opened. Serbia's negotiations with the World Trade Organization are advanced, with the country's complete ban on the trade and cultivation of agricultural biotechnology products representing the primary remaining obstacle to accession. Serbia's program with the IMF was frozen in early 2012 because the 2012 budget approved by parliament deviated from the program parameters; the arrangement is now void. High unemployment and stagnant household incomes are ongoing political and economic problems. Structural economic reforms needed to ensure the country's long-term prosperity have largely stalled since the onset of the global financial crisis. Growing budget deficits constrain the use of stimulus efforts to revive the economy and contribute to growing concern of a public debt crisis, given that Serbia's total public debt as a share of GDP more than doubled between 2008 and 2014. Serbia's concerns about inflation and exchange-rate stability may preclude the use of expansionary monetary policy. During 2014 the SNS party addressed issues with the fiscal deficit, state-owned enterprises, the labor market, construction permits, bankruptcy and privatization, and other areas. Major challenges ahead include: high unemployment rates and the need for job creation; high government expenditures for salaries, pensions, healthcare, and unemployment benefits; a growing need for new government borrowing; rising public and private foreign debt; attracting new foreign direct investment; and getting the IMF program back on track. Other serious longer-term challenges include an inefficient judicial system, high levels of corruption, and an aging population. Factors favorable to Serbia's economic growth include its strategic location, a relatively inexpensive and skilled labor force, and free trade agreements with the EU, Russia, Turkey, and countries that are members of the Central European Free Trade Agreement (CEFTA). In late 2014, Serbia and the IMF announced a tentative plan for a precautionary loan worth approximately $1 billion. In 2015, the government will be challenged to implement IMF-mandated reforms—which will target social spending, the large public sector, and social spending.
Seychelles Since independence in 1976, per capita output in this Indian Ocean archipelago has expanded to roughly seven times the pre-independence, near-subsistence level, moving the island into the upper-middle-income group of countries. Growth has been led by the tourist sector, which employs about 30% of the labor force and provides more than 70% of hard currency earnings, and by tuna fishing. In recent years, the government has encouraged foreign investment to upgrade hotels and other services. At the same time, the government has moved to reduce the dependence on tourism by promoting the development of farming, fishing, and small-scale manufacturing. In 2008, having depleted its foreign exchange reserves, Seychelles defaulted on interest payments due on a $230 million Eurobond, requested assistance from the International Monetary Fund (IMF), and immediately enacted a number of significant structural reforms, including liberalization of the exchange rate, reform of the public sector to include layoffs, and the selling of some state assets. In December 2013, the IMF declared that Seychelles had successfully transitioned to a market-based economy with full employment and a fiscal surplus.
Sierra Leone Sierra Leone is extremely poor and nearly half of the working-age population engages in subsistence agriculture. The country possesses substantial mineral, agricultural, and fishery resources, but it is still recovering from a civil war that destroyed most institutions before ending in the early 2000s. In recent years economic growth has been driven by mining - particularly iron ore. The country’s principal exports are iron ore, diamonds, and rutile, and the economy is vulnerable to fluctuations in international prices. In 2014, rapid spread of Ebolavirus caused a contraction of economic activity in several areas, including transportation, health, and industrial production. Iron ore production dropped, due to low global prices and high costs, driven by the epidemic. A long-term shutdown of the industry would badly hurt the economy because it supports thousands of jobs and creates about 20% of GDP. Until 2014, the government had relied on external assistance to support its budget, but it was gradually becoming more independent. The epidemic has disrupted economic activity, deterred private investment, and forced the government to increase expenditures on health care, straining the budget and restricting other public investment projects. A rise in international donor support will partially offset these fiscal constraints.
Singapore Singapore has a highly developed and successful free-market economy. It enjoys a remarkably open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries. Unemployment is very low. The economy depends heavily on exports, particularly of consumer electronics, information technology products, medical and optical devices, pharmaceuticals, and on its vibrant transportation, business, and financial services sectors. The economy contracted 0.6% in 2009 as a result of the global financial crisis, but has continued to grow since 2010 on the strength of renewed exports. Growth in 2014 was slower at 2.9%, largely a result of soft demand for exports amid a sluggish global economy and weak growth in Singapore’s manufacturing sector. The government is attempting to restructure Singapore’s economy by weaning its dependence on foreign labor, addressing weak productivity, and increasing Singaporean wages. Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue efforts to strengthen its position as Southeast Asia's leading financial and high-tech hub. Singapore is a member of the 12-nation Trans-Pacific Partnership free trade negotiations, the Regional Comprehensive Economic Partnership negotiations with the nine other ASEAN members plus Australia, China, India, Japan, South Korea and New Zealand, and in 2015, Singapore will form, with the other ASEAN members, the ASEAN Economic Community.
Sint Maarten The economy of Sint Maarten centers around tourism with nearly four-fifths of the labor force engaged in this sector. Nearly 1.8 million visitors came to the island by cruise ship and roughly 500,000 visitors arrived through Princess Juliana International Airport in 2013. Cruise ships and yachts also call on Sint Maarten's numerous ports and harbors. Limited agriculture and local fishing means that almost all food must be imported. Energy resources and manufactured goods are also imported. Sint Maarten had the highest per capita income among the five islands that formerly comprised the Netherlands Antilles.
Slovakia Slovakia has made significant economic reforms since its separation from the Czech Republic in 1993. With a population of 5.4 million, the Slovak Republic has a small, open economy, with exports, at about 92% of GDP, serving as the main driver of GDP growth. Slovakia joined the European Union (EU) in 2004 and the Eurozone in 2009. The country’s banking sector is sound. Slovakia has led the region garnering FDI, because of its relatively low-cost, highly-skilled labor force, reasonable tax rates, and favorable geographic location in the heart of Central Europe. However, recent increases in corporate taxes, as well as changes to the Labor Code, slow dispute resolution, and ongoing corruption potentially threaten the attractiveness of the Slovak market. Moreover, the energy sector is characterized by high costs, unpredictable regulatory oversight, and growing government interference.
Slovenia With excellent infrastructure, a well-educated work force, and a strategic location between the Balkans and Western Europe, Slovenia has one of the highest per capita GDPs in Central Europe, despite having suffered a protracted recession in 2008-2009 in the wake of the global financial crisis. Slovenia became the first 2004 European Union entrant to adopt the euro (on 1 January 2007) and has experienced one of the most stable political transitions in Central and Southeastern Europe. In March 2004, Slovenia became the first transition country to graduate from borrower status to donor partner at the World Bank. In 2007, Slovenia was invited to begin the process for joining the OECD; it became a member in 2012. However, long-delayed privatizations, particularly within Slovenia’s largely state-owned and increasingly indebted banking sector, have fueled investor concerns since 2012 that the country would need EU-IMF financial assistance. In 2013, the European Commission granted Slovenia permission to begin recapitalizing ailing lenders and transferring their nonperforming assets into a “bad bank” established to restore bank balance sheets. Export-led growth fueled by demand in larger European markets pushed GDP growth to 2.6% in 2014, while stubbornly-high unemployment fell slightly to 13%. PM CERAR’s government took office in September 2014, pledging to press ahead with commitments to privatize a select group of state-run companies, rationalize public spending, and further stabilize the banking sector.
Solomon Islands The bulk of the population depends on agriculture, fishing, and forestry for at least part of its livelihood. Most manufactured goods and petroleum products must be imported. The islands are rich in undeveloped mineral resources such as lead, zinc, nickel, and gold. Prior to the arrival of The Regional Assistance Mission to the Solomon Islands (RAMSI), severe ethnic violence, the closing of key businesses, and an empty government treasury culminated in economic collapse. RAMSI's efforts to restore law and order and economic stability have led to modest growth as the economy rebuilds.
Somalia Despite the lack of effective national governance, Somalia maintains an informal economy largely based on livestock, remittance/money transfer companies, and telecommunications. Agriculture is the most important sector with livestock normally accounting for about 40% of GDP and more than 50% of export earnings. Nomads and semi-pastoralists, who are dependent upon livestock for their livelihood, make up a large portion of the population. Livestock, hides, fish, charcoal, and bananas are Somalia's principal exports, while sugar, sorghum, corn, qat, and machined goods are the principal imports. Somalia's small industrial sector, based on the processing of agricultural products, has largely been looted and the machinery sold as scrap metal. Telecommunication firms provide wireless services in most major cities and offer the lowest international call rates on the continent. Mogadishu's main market offers a variety of goods from food to electronic gadgets. Hotels continue to operate and are supported with private-security militias. Somalia's government lacks the ability to collect domestic revenue, and arrears to the IMF have continued to grow. Somalia's capital city - Mogadishu - has witnessed the development of the city's first gas stations, supermarkets, and flights between Europe (Istanbul-Mogadishu) since the collapse of central authority in 1991. This economic growth has yet to expand outside of Mogadishu, and within the city, security concerns dominate business. In the absence of a formal banking sector, money transfer/remittance services have sprouted throughout the country, handling up to $1.6 billion in remittances annually, although international concerns over the money transfers into Somalia currently threatens these services.
South Africa South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors; and a stock exchange that is Africa’s largest and among the top 20 in the world.
Even though the country's modern infrastructure supports a relatively efficient distribution of goods to major urban centers throughout the region, unstable electricity supplies retard growth. Economic growth has decelerated in recent years, slowing to just 1.5% in 2014. Unemployment, poverty, and inequality - among the highest in the world - remain a challenge. Official unemployment is roughly 25% of the work force, and runs significantly higher among black youth. Eskom, the state-run power company, is building three new power stations and is installing new power demand management programs to improve power grid reliability. Load shedding and resulting rolling blackouts gripped many parts of South Africa in late 2014 and early 2015 because of electricity supply constraints that resulted from technical problems at some generation units, unavoidable planned maintenance, and an accident at a power station in Mpumalanga province. The rolling black outs were the worst the country faced since 2008. Construction delays at two additional plants, however, mean South Africa will continue to operate on a razor thin margin; economists judge that growth cannot exceed 3% until electrical supply problems are resolved.
South Africa's economic policy has focused on controlling inflation; however, the country faces structural constraints that also limit economic growth, such as skills shortages, declining global competitiveness and frequent work stoppages due to strike action. The current government faces growing pressure from urban constituencies to improve the delivery of basic services to low-income areas and to increase job growth.
Southern Ocean Fisheries in 2006-07 landed 126,976 metric tons, of which 82% (104,586 tons) was krill (Euphausia superba) and 9.5% (12,027 tons) Patagonian toothfish (also known as Chilean sea bass), compared to 127,910 tons in 2005-06 of which 83% (106,591 tons) was krill and 9.7% (12,396 tons) Patagonian toothfish (estimated fishing from the area covered by the Convention of the Conservation of Antarctic Marine Living Resources (CCAMLR), which extends slightly beyond the Southern Ocean area). International agreements were adopted in late 1999 to reduce illegal, unreported, and unregulated fishing, which in the 2000-01 season landed, by one estimate, 8,376 metric tons of Patagonian and Antarctic toothfish. In the 2007-08 Antarctic summer, 45,213 tourists visited the Southern Ocean, compared to 35,552 in 2006-07, and 29,799 in 2005-06 (estimates provided to the Antarctic Treaty by the International Association of Antarctica Tour Operators (IAATO), and does not include passengers on overflights and those flying directly in and out of Antarctica).
South Georgia and South Sandwich Islands Some fishing takes place in adjacent waters. Harvesting finfish and krill are potential sources of income. The islands receive income from postage stamps produced in the UK, the sale of fishing licenses, and harbor and landing fees from tourist vessels. Tourism from specialized cruise ships is increasing rapidly.
South Sudan Following several decades of civil war with Sudan, industry and infrastructure in landlocked South Sudan are severely underdeveloped and poverty is widespread. Subsistence agriculture provides a living for the vast majority of the population. Property rights are insecure and price signals are weak, because markets are not well organized. After independence, South Sudan's central bank issued a new currency, the South Sudanese Pound, allowing a short grace period for turning in the old currency.

South Sudan has little infrastructure - approximately 250 kilometers of paved roads. Electricity is produced mostly by costly diesel generators, and indoor plumbing and potable water are scarce. South Sudan depends largely on imports of goods, services, and capital - mainly from Uganda, Kenya and Sudan.

Nevertheless, South Sudan does have abundant natural resources. At independence in 2011, South Sudan produced nearly three-fourths of former Sudan's total oil output of nearly a half million barrels per day. The government of South Sudan derives nearly 98% of its budget revenues from oil. Oil is exported through two pipelines that run to refineries and shipping facilities at Port Sudan on the Red Sea. The economy of South Sudan will remain linked to Sudan for some time, given the long lead time and great expense required to build another pipeline, should the government decide to do so. In January 2012, South Sudan suspended production of oil because of its dispute with Sudan over transshipment fees. This suspension lasted 15 months and had a devastating impact on GDP, which declined by 48% in 2012. With the resumption of oil flows the economy rebounded strongly during the second half of calendar year 2013. This occurred in spite of the fact that oil production, at an average level of 222,000 barrels per day, was 40% lower compared with 2011, prior to the shutdown. GDP grew by about 25% in 2014. However, the outbreak of conflict on 15 December 2013 combined with a further reduction of oil exports, meant that GDP growth fell significantly in 2014 and poverty and food insecurity rose. South Sudan holds one of the richest agricultural areas in Africa with fertile soils and abundant water supplies. Currently the region supports 10-20 million head of cattle.

South Sudan is currently burdened by considerable debt, accrued largely in 2012, because of rapidly accumulating arrears and increased military spending. South Sudan has received more than $4 billion in foreign aid since 2005, largely from the UK, the US, Norway, and the Netherlands. Annual inflation peaked at 79.5% in May 2012 but declined rapidly thereafter, to 1.7% in 2013. Following the December 2013 outbreak of violence, inflation is on the rise again. Long-term challenges include diversifying the formal economy, alleviating poverty, maintaining macroeconomic stability, improving tax collection and financial management and improving the business environment.
Spain After experiencing a prolonged recession in the wake of the global financial crisis that began in 2008, in 2014 Spain marked the first full year of positive economic growth in seven years, largely due to increased private consumption. At the onset of the global financial crisis Spain's GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and continued contracting through most of 2013. In 2013 the government successfully shored up struggling banks - exposed to the collapse of Spain's depressed real estate and construction sectors - and in January 2014 completed an EU-funded restructuring and recapitalization program.

Until 2014, credit contraction in the private sector, fiscal austerity, and high unemployment weighed on domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 23.7% in 2014. High unemployment strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP in 2010, but Spain gradually reduced the deficit to just under 7% of GDP in 2013-14, slightly above the 6.5% target negotiated between Spain and the EU. Public debt has increased substantially – from 60.1% of GDP in 2010 to more than 97% in 2014.

Exports were resilient throughout the economic downturn and helped to bring Spain's current account into surplus in 2013 for the first time since 1986, where it remained in 2014. Rising labor productivity and an internal devaluation resulting from moderating labor costs and lower inflation have helped to improve foreign investor interest in the economy and positive FDI flows have been restored.

The government's efforts to implement labor, pension, health, tax, and education reforms - aimed at supporting investor sentiment - have become overshadowed by political activity in 2015 in anticipation of the national parliamentary elections in November. Spain’s 2015 budget, published in September 2014, rolls back some recently imposed taxes in advance of the elections and leaves untouched the country’s value-added tax (VAT) regime, which continues to generate significantly lower revenue than the EU average. Spain’s borrowing costs are dramatically lower since their peak in mid-2012, and despite the recent uptic in economic activity, inflation has dropped sharply, from 1.5% in 2013 to nearly flat in 2014.
Spratly Islands Economic activity is limited to commercial fishing. The proximity to nearby oil- and gas-producing sedimentary basins indicate potential oil and gas deposits, but the region is largely unexplored. No reliable estimates of potential reserves are available. Commercial exploitation has yet to be developed.
Sri Lanka Sri Lanka continues to experience strong economic growth following the end of the government's 26-year conflict with the Liberation Tigers of Tamil Eelam. The government has been pursuing large-scale reconstruction and development projects in its efforts to spur growth in war-torn and disadvantaged areas, develop small and medium enterprises and increase agricultural productivity. The government's high debt payments and bloated civil service have contributed to historically high budget deficits, but fiscal consolidation efforts and strong GDP growth in recent years have helped bring down the government's fiscal deficit, but low tax revenues remain a concern. The 2008-09 global financial crisis and recession exposed Sri Lanka's economic vulnerabilities and nearly caused a balance of payments crisis. Agriculture slowed due to a drought and weak global demand affected exports and trade. In early 2012, Sri Lanka floated the rupee, resulting in a sharp depreciation, and took steps to curb imports. A large trade deficit remains a concern, but strong remittances from Sri Lankan workers abroad help offset the trade deficit. Government debt of about 80% of GDP remains among the highest in emerging markets.
Sudan Sudan is an extremely poor country that has experienced protracted social conflict, civil war, and, in July 2011, the loss of three-quarters of its oil production due to the secession of South Sudan. The oil sector had driven much of Sudan's GDP growth since 1999. For nearly a decade, the economy boomed on the back of rising oil production, high oil prices, and significant inflows of foreign direct investment. Since the economic shock of South Sudan's secession, Sudan has struggled to stabilize its economy and make up for the loss of foreign exchange earnings. The interruption of oil production in South Sudan in 2012 for over a year and the consequent loss of oil transit fees further exacerbated the fragile state of Sudan’s economy. Sudan is also subject to comprehensive US sanctions. Sudan is attempting to develop non-oil sources of revenues, such as gold mining, while carrying out an austerity program to reduce expenditures. The world’s largest exporter of gum Arabic, Sudan produces 75-80% of the world’s total output. Agriculture continues to employ 80% of the work force. Sudan introduced a new currency, still called the Sudanese pound, following South Sudan's secession, but the value of the currency has fallen since its introduction. Khartoum formally devalued the currency in June 2012, when it passed austerity measures that included gradually repealing fuel subsidies. Sudan also faces rising inflation, which reached 47% on an annual basis in November 2012 but subsided to 37% in 2014. Ongoing conflicts in Southern Kordofan, Darfur, and the Blue Nile states, lack of basic infrastructure in large areas, and reliance by much of the population on subsistence agriculture keep close to half of the population at or below the poverty line.
Suriname The economy is dominated by the mining industry, with exports of oil, gold, and alumina accounting for about 85% of exports and 27% of government revenues, making the economy highly vulnerable to mineral price volatility. Economic growth has declined from just under 5% in 2012 and 2013 to 4% in 2014. In January 2011, the government devalued the currency by 20% and raised taxes to reduce the budget deficit. As a result of these measures, inflation receded to less than 4% in 2014. Suriname's economic prospects for the medium term will depend on continued commitment to responsible monetary and fiscal policies and to the introduction of structural reforms to liberalize markets and promote competition. The government's reliance on revenue from extractive industries will temper Suriname's economic outlook, especially if gold prices continue their downward trend.
Svalbard Coal mining, tourism, and international research are Svalbard's major revenue sources. Coal mining is the dominant economic activity and a treaty of 9 February 1920 gave the 41 signatories equal rights to exploit mineral deposits, subject to Norwegian regulation. Although US, UK, Dutch, and Swedish coal companies have mined in the past, the only companies still engaging in this are Norwegian and Russian. The settlements on Svalbard were established as company towns, and at their height in the 1950s, the Norwegian state-owned coal company supported around 1,000 jobs. Today, around 300 people work in the mining industry. Since the 1990s the tourism and hospitality industry has grown rapidly and Svalbard now receives 60,000 visitors annually. Goods such as alcohol, tobacco, and vehicles, normally highly taxed on mainland Norway, are considerably cheaper in Svalbard in an effort by the Norwegian government to entice more people to live on the Arctic archipelago. By law, the Norway collects only enough taxes to pay for the needs of the local government; none of tax proceeds go to Norway.
Swaziland Surrounded by South Africa, except for a short border with Mozambique, Swaziland depends heavily on South Africa for more than 90% of its imports and for 60% of its exports. Swaziland's currency is pegged to the South African rand, effectively relinquishing Swaziland's monetary policy to South Africa. The government is heavily dependent on customs duties from the Southern African Customs Union, and worker remittances from South Africa supplement domestically earned income. Swaziland’s GDP per capita makes it a lower middle income country, but its income distribution is highly skewed, with an estimated 20% of the population controlling 80% of the nation’s wealth. Subsistence agriculture employs approximately 70% of the population. The manufacturing sector diversified in the 1980s and 1990s, but manufacturing has grown little in the last decade. Sugar and wood pulp had been major foreign exchange earners until the wood pulp producer closed in January 2010, and sugar is now the main export earner. Mining has declined in importance in recent years. Coal, gold, diamond, and quarry stone mines are small-scale, and the only iron ore mine closed in 2014. With an estimated 40% unemployment rate, Swaziland's need to increase the number and size of small and medium enterprises and to attract foreign direct investment is acute. Overgrazing, soil depletion, drought, and floods are persistant problems. On 1 January 2015, Swaziland lost its eligibility for benefits under the African Growth and Opportunity Act (AGOA), threatening the remaining 12,000 jobs in the textile and apparel sector, after 3,000 jobs were lost since the 2014 announcement of the loss of AGOA. As of 2013 more than one-quarter of the adult population was infected by HIV/AIDS; Swaziland has the world’s highest HIV prevalence rate.
Sweden Aided by peace and neutrality for the whole of the 20th century, Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits. Sweden remains outside the Eurozone because of concerns over its impact on the country’s economy, welfare system, and sovereignty. Timber, hydropower, and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Privately owned firms account for vast majority of industrial output. Agriculture accounts for less than 1% of GDP. Economic growth slowed in 2013, as a result of continued economic weakness in the EU - Sweden’s main export market; however, Sweden’s economy experienced modest growth in 2014, with an adjusted real GDP growth that averaged 2.1%. Sweden’s economy is expected to grow modestly in 2015, although the country continues to struggle with deflationary pressure.
Switzerland Switzerland is a peaceful, prosperous, and modern market economy with low unemployment, a highly skilled labor force, and a per capita GDP among the highest in the world. Switzerland's economy benefits from a highly developed service sector, led by financial services, and a manufacturing industry that specializes in high-technology, knowledge-based production. Its economic and political stability, transparent legal system, exceptional infrastructure, efficient capital markets, and low corporate tax rates also make Switzerland one of the world's most competitive economies.

The Swiss have brought their economic practices largely into conformity with the EU's to enhance their international competitiveness, but some trade protectionism remains, particularly for its small agricultural sector. The fate of the Swiss economy is tightly linked to that of its neighbors in the euro zone, which purchases half of Swiss exports. The global financial crisis of 2008 and resulting economic downturn in 2009 stalled demand for Swiss exports and put Switzerland into a recession. During this period, the Swiss National Bank (SNB) implemented a zero-interest rate policy to boost the economy, as well as to prevent appreciation of the franc, and Switzerland's economy began to recover in 2010.

The sovereign debt crises unfolding in neighboring euro-zone countries, however, coupled with ongoing economic instability in Russia and other eastern European economies continue to pose a significant risk to the Swiss economy, driving up demand for the Swiss franc by investors seeking a safe-haven currency. In January 2015, the SNB abandoned the Swiss franc’s peg to the Euro, roiling global currency markets and making active SNB intervention a necessary hallmark of present-day Swiss monetary policy. The independent SNB has upheld its zero interest rate policy and conducted major market interventions to prevent further appreciation of the Swiss franc, but parliamentarians have urged it to do more to weaken the currency. The franc's strength has made Swiss exports less competitive and weakened the country's growth outlook; GDP growth fell below 2% per year from 2011-14.

In recent years, Switzerland has responded to increasing pressure from neighboring countries and trading partners to reform its banking secrecy laws, by agreeing to conform to OECD regulations on administrative assistance in tax matters, including tax evasion. The Swiss government has also renegotiated its double taxation agreements with numerous countries, including the US, to incorporate OECD standards, and is openly considering the possibility of imposing taxes on bank deposits held by foreigners.
Syria Syria's economy continues to deteriorate amid the ongoing conflict that began in 2011. The economy further contracted in 2014 because of international sanctions, widespread infrastructure damage, diminished domestic consumption and production, reduced subsidies, and high inflation. The government has struggled to address the effects of economic decline, which include dwindling foreign exchange reserves, rising budget and trade deficits, and the decreasing value of the Syrian pound and household purchasing power. During 2014, the ongoing conflict and continued unrest and economic decline worsened the humanitarian crisis and elicited a greater need for international assistance, as the number of people in need inside Syria increased from 9.3 million to 12.2 million, and the number of Syrian refugees increased from 2.2 million to more than 3.3 million. Prior to the turmoil, Damascus began liberalizing economic policies, including cutting lending interest rates, opening private banks, consolidating multiple exchange rates, raising prices on some subsidized items, and establishing the Damascus Stock Exchange, but the economy remains highly regulated. Long-run economic constraints include foreign trade barriers, declining oil production, high unemployment, rising budget deficits, increasing pressure on water supplies caused by heavy use in agriculture, rapid population growth, industrial expansion, water pollution, and widespread infrastructure damage.
Taiwan Taiwan has a dynamic capitalist economy with gradually decreasing government guidance of investment and foreign trade. Exports, led by electronics, machinery, and petrochemicals have provided the primary impetus for economic development. This heavy dependence on exports exposes the economy to fluctuations in world demand. Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are other major long-term challenges.

Free trade agreements have proliferated in East Asia over the past several years. Following the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010, Taiwan in July 2013 signed a free trade deal with New Zealand - Taipei’s first-ever with a country with which it does not maintain diplomatic relations - and, in November, inked a trade pact with Singapore. However, follow-on components of the ECFA, including a signed agreement on trade in services and negotiations on trade in goods and dispute resolution, have stalled. In early 2014, the government bowed to public demand and proposed a new law governing the oversight of cross-Strait agreements, before any additional deals with China are implemented; the legislature has yet to vote on such legislation, leaving the future of ECFA up in the air as President MA enters his final full year in office. MA has portrayed ECFA as Taiwan’s key to greater participation in East Asia’s free trade networks.

Taiwan's total fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 expected to account for nearly 20% of the island's total population by 2025.

The island runs a trade surplus, largely because of its surplus with China, and its foreign reserves are the world's fifth largest, behind those of China, Japan, Saudi Arabia, and Switzerland. In 2006 China overtook the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Taiwan since 2009 has gradually loosened rules governing Chinese investment on the island and has also secured greater market access for its investors in the mainland. In August 2012, the Taiwan Central Bank signed a memorandum of understanding (MOU) on cross-Strait currency settlement with its Chinese counterpart. The MOU allows for the direct settlement of Chinese RMB and the New Taiwan dollar across the Strait, which has helped Taiwan develop into a local RMB hub.

Closer economic links with the mainland bring greater opportunities for Taiwan’s economy but also pose new challenges as the island becomes more economically dependent on China at a time when political differences remain unresolved. During 2014, the press paid increasing attention to domestic economic issues, while pushing aside the debates over trade liberalization that were a hallmark of MA’s tenure. The media focused on the divide between Taiwan’s “haves” and “have nots,” providing extensive coverage of public frustration with stagnant wages, skyrocketing housing prices, and the difficulty of finding decent entry-level jobs.
Tajikistan Tajikistan's economic situation remains fragile due to the uneven implementation of structural reforms, corruption, weak governance, seasonal power shortages, and its large external debt burden. Tajikistan has one of the lowest per capita GDPs among the 15 former Soviet republics. The 1992-97 civil war severely damaged an already weak economic infrastructure and caused a sharp decline in industrial and agricultural production. Because of a lack of employment opportunities in Tajikistan, more than one million Tajik citizens work abroad - roughly 90% in Russia - supporting families back home through remittances that amount to nearly 50% of GDP. Less than 7% of the land area is arable and cotton is the most important crop. Tajikistan imports approximately 60% of its food, mostly by rail. Mineral resources include silver, gold, uranium, and tungsten. Industry consists mainly of small obsolete factories in food processing and light industry, substantial hydropower facilities, and a large aluminum plant - currently operating well below its capacity. Some experts estimate the value of narcotics transiting Tajikistan is equivalent to 30-50% of GDP. Tajikistan has sought to develop its substantial hydroelectricity potential through partnership with Russian and Iranian investors. The government is pinning its drive for energy independence on completion of the Roghun dam, which will take at least 8 to 11 years to construct, according to a World Bank feasibility study that was published in July 2014. If built according to plan, Roghun would be the tallest dam in the world and would significantly expand Tajikistan’s electricity output. However, Uzbekistan opposes the project, which has damaged relations between the two countries. Uzbekistan closed one of the rail lines into Tajikistan in late 2011, hampering the transit of goods to and from the southern part of the country. As a result, food and fuel prices in Tajikistan have increased to the highest levels since 2002.
Tanzania Tanzania is one of the world's poorest economies in terms of per capita income, but has achieved high growth rates based on its vast natural resource wealth and tourism. GDP growth in 2009-14 was an impressive 6-7% per year. Tanzania has largely completed its transition to a market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining. The economy depends on agriculture, which accounts for more than one-quarter of GDP, provides 85% of exports, and employs about 80% of the work force. The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging infrastructure, including rail and port, that provide important trade links for inland countries. Recent banking reforms have helped increase private-sector growth and investment, and the government has increased spending on agriculture to 7% of its budget. The financial sector in Tanzania has expanded in recent years and foreign-owned banks account for about 48% of the banking industry's total assets. Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of financial services, though interest rates are still relatively high, reflecting high fraud risk. All land in Tanzania is owned by the government, which can lease land for up to 99 years. Proposed reforms to allow for land ownership, particularly foreign land ownership, remain unpopular. In 2013, Tanzania completed the world's largest Millennium Challenge Compact grant, worth $698 million, and, in December 2014, the Millennium Challenge Corporation selected Tanzania for a second Compact. Dar es Salaam used fiscal stimulus measures and easier monetary policies to lessen the impact of the global recession. In late 2014, a highly publicized scandal in the energy sector involving senior Tanzanian officials resulted in international donors freezing nearly $500 million in direct budget support to the government.
Thailand With a well-developed infrastructure, a free-enterprise economy, and generally pro-investment policies Thailand has historically had a strong economy due in part to competitive industrial and agriculture exports - mostly electronics, agricultural commodities, automobiles and parts, and processed foods. The economy experienced slow growth and declining exports in 2014, in part due to domestic political turmoil and sluggish global demand. With full employment, Thailand attracts an estimated 2-4 million migrant workers from neighboring countries, and faces labor shortages. Following the May 2014 coup d’état, tourism decreased 6-7% but is beginning to recover. The household debt to GDP ratio is over 80%. The Thai government in 2013 implemented a nation-wide 300 baht ($10) per day minimum wage policy and deployed new tax reforms designed to lower rates on middle-income earners. The Thai baht has remained stable.
Timor-Leste Since gaining its independence in 1999, Timor-Leste has faced great challenges in rebuilding its infrastructure, strengthening the civil administration, and generating jobs for young people entering the work force. The development of oil and gas resources in offshore waters has greatly supplemented government revenues. This technology-intensive industry, however, has done little to create jobs in part because there are no production facilities in Timor-Leste. Gas is currently piped to Australia for processing, but Timor-Leste has expressed interest in developing a domestic processing capacity. In June 2005, the National Parliament unanimously approved the creation of a Petroleum Fund to serve as a repository for all petroleum revenues and to preserve the value of Timor-Leste's petroleum wealth for future generations. The Fund held assets of $16.5 billion, as of December 2014. Oil accounts for 90% of government revenues, and the drop in the price of oil in 2014 has led to concerns about the long-term sustainability of government spending. The Ministry of Finance maintains that the Petroleum Fund is sufficient to sustain government operations for the foreseeable future. Annual government budget expenditures increased markedly between 2009 and 2012 but dropped significantly in 2013 and again in 2014. Historically, the government has failed to spend as much as its budget allowed. The government has focused significant resources on basic infrastructure, including electricity and roads. Limited experience in procurement and infrastructure building has hampered these projects. The underlying economic policy challenge the country faces remains how best to use oil-and-gas wealth to lift the non-oil economy onto a higher growth path and to reduce poverty.
Togo This small, sub-Saharan economy depends heavily on both commercial and subsistence agriculture, which provides employment for a significant share of the labor force. Some basic foodstuffs must still be imported. Cocoa, coffee, and cotton generate about 40% of export earnings with cotton being the most important cash crop. Togo is among the world's largest producers of phosphate and seeks to develop its carbonate phosphate reserves. The government's decade-long effort, supported by the World Bank and the IMF, to implement economic reform measures, encourage foreign investment, and bring revenues in line with expenditures has moved slowly. Progress depends on follow through on privatization, increased openness in government financial operations, progress toward legislative elections, and continued support from foreign donors. Foreign direct investment inflows have slowed over recent years. Togo completed its IMF Extended Credit Facility in 2011 and reached a Heavily Indebted Poor Country (HIPC) debt relief completion point in 2010 at which 95% of the country's debt was forgiven. Togo continues to work with the IMF on structural reforms.
Tokelau Tokelau's small size (three villages), isolation, and lack of resources greatly restrain economic development and confine agriculture to the subsistence level. The people rely heavily on aid from New Zealand - about $15 million annually in FY12/13 and FY13/14 - to maintain public services. New Zealand's support amounts to 80% of Tokelau's recurrent government budget. An international trust fund, currently worth nearly $32 million, was established in 2004 by New Zealand to provide Tokelau an independent source of revenue. The principal sources of revenue come from sales of copra, postage stamps, souvenir coins, and handicrafts. Money is also remitted to families from relatives in New Zealand.
Tonga Tonga has a small, open, island economy and is the last constitutional monarchy among the Pacific Island countries. It has a narrow export base in agricultural goods. Squash, vanilla beans, and yams are the main crops. Agricultural exports, including fish, make up two-thirds of total exports. The country must import a high proportion of its food, mainly from New Zealand. The country remains dependent on external aid and remittances from overseas Tongans to offset its trade deficit. Tourism is the second-largest source of hard currency earnings following remittances. Tonga had 39,000 visitors in 2006. The government is emphasizing the development of the private sector, encouraging investment, and is committing increased funds for health and education. Tonga's English-speaking and educated workforce offer a viable labor market, and the tropical climate provides fertile soil. Renewable energy and deep sea mining also offer opportunities for investment. Tonga has a reasonably sound basic infrastructure and well developed social services. The government faces high unemployment among the young, moderate inflation, pressures for democratic reform, and rising civil service expenditures.
Trinidad and Tobago Trinidad and Tobago attracts considerable foreign direct investment, particularly in energy, and has one of the highest per capita incomes in Latin America and the Caribbean. Trinidad and Tobago is the leading Caribbean producer of oil and gas, and its economy is heavily dependent upon these resources. It also supplies manufactured goods, notably food products and beverages, as well as cement to the Caribbean region. Oil and gas account for about 40% of GDP and 80% of exports but only 5% of employment.

Growth has been fueled by investments in liquefied natural gas, petrochemicals, and steel with additional upstream and downstream investment planned. Oil production has declined over the last decade as the country focused the majority of its efforts on natural gas. Economic growth between 2000 and 2007 averaged slightly over 8% per year, significantly above the regional average of about 3.7% for that same period; however, GDP slowed down since then and contracted during 2009-12 due to depressed natural gas prices and changing markets. The current administration has been working to arrest this decline by opening bid rounds and providing fiscal incentives for investments in on-shore and deep water acreage to boost oil reserves and production. The government keeps a close watch on the changing global gas markets and has shown flexibility in diversifying natural gas export destinations. The economy benefits from a growing trade surplus with the US. The US is Trinidad and Tobago's leading trade partner.

Although Trinidad and Tobago enjoys cheap electricity from natural gas, the renewable energy sector has recently garnered increased interest. The country is also a regional financial center with a well-regulated and stable financial system. Other sectors the Government of Trinidad and Tobago has targeted for increased investment and projected growth include tourism, agriculture, information and communications technology, and shipping.

The previous MANNING administration benefited from fiscal surpluses fueled by the dynamic export sector; however, declines in oil and gas prices have reduced government revenues, challenging the current government's commitment to maintaining high levels of public investment. Crime and bureaucratic hurdles continue to be the biggest deterrents for attracting more foreign direct investment and business.
Tunisia Tunisia's diverse, market-oriented economy has long been cited as a success story in Africa and the Middle East, but it faces an array of challenges following the 2011 revolution. Following an ill-fated experiment with socialist economic policies in the 1960s, Tunisia embarked on a successful strategy focused on bolstering exports, foreign investment, and tourism, all of which have become central to the country's economy. Key exports now include textiles and apparel, food products, petroleum products, chemicals, and phosphates, with about 80% of exports bound for Tunisia's main economic partner, the European Union. Tunisia's liberal strategy, coupled with investments in education and infrastructure, fueled decades of 4-5% annual GDP growth and improving living standards. Former President (1987-2011) Zine el Abidine BEN ALI continued these policies, but as his reign wore on cronyism and corruption stymied economic performance and unemployment rose among the country's growing ranks of university graduates. These grievances contributed to the January 2011 overthrow of BEN ALI, sending Tunisia's economy into a tailspin as tourism and investment declined sharply. During 2012 and 2013, security and political upheaval during transition led to a deterioration of the economy and resulted in several downgrades of Tunisia’s credit rating. Tunisia's government faces challenges reassuring businesses and investors, bringing budget and current account deficits under control, shoring up the country's financial system, bringing down high unemployment, and reducing economic disparities between the more developed coastal region and the impoverished interior.
Turkey Turkey's largely free-market economy is increasingly driven by its industry and service sectors, although its traditional agriculture sector still accounts for about 25% of employment. An aggressive privatization program has reduced state involvement in basic industry, banking, transport, and communication, and an emerging cadre of middle-class entrepreneurs is adding dynamism to the economy and expanding production beyond the traditional textiles and clothing sectors. The automotive, construction, and electronics industries are rising in importance and have surpassed textiles within Turkey's export mix.

Oil began to flow through the Baku-Tbilisi-Ceyhan pipeline in May 2006, marking a major milestone that has brought up to 1 million barrels per day from the Caspian region to market. Several gas pipeline projects also are moving forward to help transport Caspian gas to Europe through Turkey, which over the long term will help address Turkey's dependence on imported oil and gas, which currently meets 97% of its energy needs.

After Turkey experienced a severe financial crisis in 2001, Ankara adopted financial and fiscal reforms as part of an IMF program. The reforms strengthened the country's economic fundamentals and ushered in an era of strong growth averaging more than 6% annually until 2008. Global economic conditions and tighter fiscal policy caused GDP to contract in 2009, but Turkey's well-regulated financial markets and banking system helped the country weather the global financial crisis, and GDP rebounded strongly to around 9% in 2010-11, as exports returned to normal levels following the recession. Two rating agencies upgraded Turkey's debt to investment grade in 2012 and 2013, and Turkey's public sector debt to GDP ratio fell to 33% in 2014. The stock value of Foreign Direct Investment reached nearly $195 billion at year-end 2014.

Despite these positive trends, GDP growth dropped to 4.4% in 2013 and 2.9% in 2014. Growth slowed considerably in the last quarter of 2014, largely due to lackluster consumer demand both domestically and in Europe, Turkey’s most important export market. High interest rates have also contributed to the slowdown in growth, as Turkey sharply increased interest rates in January 2014 in order to strengthen the country’s currency and reduce inflation. Turkey then cut rates in February 2015 in a bid to spur economic growth.

The Turkish economy retains significant weaknesses. Specifically, Turkey's relatively high current account deficit, domestic political uncertainty, and turmoil within Turkey's neighborhood leave the economy vulnerable to destabilizing shifts in investor confidence. Turkey also remains dependent on often volatile, short-term investment to finance its large current account deficit.
Turkmenistan Turkmenistan is largely a desert country with intensive agriculture in irrigated oases and significant natural gas and some oil resources. The two largest crops are cotton, most of which is produced for export, and wheat, which is domestically consumed. Although agriculture accounts for roughly 14% of GDP, it continues to employ nearly half of the country's workforce.

From 1998-2005, Turkmenistan suffered from the continued lack of adequate export routes for natural gas and from obligations on extensive short-term external debt. At the same time, however, total exports rose by an average of roughly 15% per year from 2003-08, largely because of higher international oil and gas prices. Additional pipelines to China, that began operation in early 2010, and increased pipeline capacity to Iran, have expanded Turkmenistan's export routes for its gas. Two other export initiatives - a trans-Caspian pipeline that would carry gas to Europe and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline - are not likely to be realized any time soon.

Since his election in 2007, President BERDIMUHAMEDOV unified the country's dual currency exchange rate, ordered the redenomination of the manat, reduced state subsidies for gasoline, electricity, natural gas, and transportation services, and initiated development of a special tourism zone on the Caspian Sea. Although foreign investment is encouraged, and some improvements in macroeconomic policy have been made, numerous bureaucratic obstacles impede international business activity.

Turkmenistan's authoritarian regime has taken a cautious approach to economic reform, hoping to use gas and cotton export revenues to sustain its inefficient and highly corrupt economy. The government introduced a privatization plan in 2012. While some small- and medium-size enterprises have been privatized since 2013, the implementation of this initiative has been slow, and privatization goals remain limited.

Overall prospects in the near future are discouraging because of endemic corruption, a poor educational system, government misuse of oil and gas revenues, and Ashgabat's reluctance to adopt market-oriented reforms. The majority of Turkmenistan's economic statistics are state secrets. The GDP numbers and other figures that the government makes public are subject to wide margins of error. Based on government-provided data, the International Monetary Fund (IMF) reported 10.3% GDP growth in 2014. In January 2015, Turkmenistan devalued its local currency, the manat, by 19%.
Turks and Caicos Islands The Turks and Caicos economy is based on tourism, offshore financial services, and fishing. Most capital goods and food for domestic consumption are imported. The US is the leading source of tourists, accounting for more than three-quarters of the more than 1 million visitors that arrived in 2013. Three-quarters of the visitors came by ship. Major sources of government revenue also include fees from offshore financial activities and customs receipts.
Tuvalu Tuvalu consists of a densely populated, scattered group of nine coral atolls with poor soil. Only eight of the atolls are inhabited. It is one of the smallest countries in the world, with its highest point at 4.6 meters above sea level. The country is isolated, almost entirely dependent on imports, particularly of food and fuel, and vulnerable to climate change and rising sea levels, which pose significant challenges to development. The public sector dominates economic activity. Tuvalu has few natural resources, except for its fisheries. Earnings from fish exports and fishing licenses for Tuvalu’s territorial waters are a significant source of government revenue. In 2013, revenue from fishing licenses doubled and totaled more than 45% of GDP. Official aid from foreign development partners has also increased. Tuvalu has substantial assets abroad. The Tuvalu Trust Fund, an international trust fund established in 1987 by development partners, has grown to $141 million in 2013 and is an important cushion for meeting shortfalls in the government's budget. While remittances are another substantial source of income, the value of remittances has declined since the global financial crisis of 2008. Growing income inequality is one of many concerns for the nation.
Uganda Uganda has substantial natural resources, including fertile soils, regular rainfall, small deposits of copper, gold, and other minerals, and recently discovered oil. Agriculture is the most important sector of the economy, employing over two-thirds of the work force. Coffee accounts for the bulk of export revenues. Since 1986, the government - with the support of foreign countries and international agencies - has acted to rehabilitate and stabilize the economy by undertaking currency reform, raising producer prices on export crops, increasing prices of petroleum products, and improving civil service wages. The policy changes are especially aimed at dampening inflation and boosting production and export earnings. Since 1990 economic reforms ushered in an era of solid economic growth based on continued investment in infrastructure, improved incentives for production and exports, lower inflation, better domestic security, and the return of exiled Indian-Ugandan entrepreneurs. The global economic downturn in 2008 hurt Uganda's exports; however, Uganda's GDP growth has largely recovered due to past reforms and sound management of the downturn. Oil revenues and taxes will become a larger source of government funding as oil comes on line in the next few years, although lower oil prices since 2014 and protracted negotiations and legal disputes between the Ugandan government and oil companies may prove a stumbling block to further exploration and development. Instability in South Sudan is a risk for the Ugandan economy because Uganda is a key destination for Sudanese refugees and South Sudan is Uganda's main export partner. Unreliable power, high energy costs, inadequate transportation infrastructure, and corruption inhibit economic development and investor confidence. During 2014 to 2015 the Uganda shilling depreciated against the dollar, and this, coupled with increased public debt, has severely impeded production, especially since Uganda imports most of its capital goods.
Ukraine After Russia, the Ukrainian republic was the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic. Its fertile black soil generated more than one-fourth of Soviet agricultural output, and its farms provided substantial quantities of meat, milk, grain, and vegetables to other republics. Likewise, its diversified heavy industry supplied the unique equipment (for example, large diameter pipes) and raw materials to industrial and mining sites (vertical drilling apparatus) in other regions of the former USSR.

Shortly after independence in August 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output by 1999 had fallen to less than 40% of the 1991 level. Outside institutions - particularly the IMF –encouraged Ukraine to quicken the pace and scope of reforms to foster economic growth. Ukrainian Government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine's large shadow economy, but more improvements are needed, including fighting corruption, developing capital markets, and improving the legislative framework. From 2000 until mid-2008, Ukraine's economy was buoyant despite political turmoil between the prime minister and president.

Ukraine's dependence on Russia for energy supplies and the lack of significant structural reform have made the Ukrainian economy vulnerable to external shocks. Ukraine depends on imports to meet about three-fourths of its annual oil and natural gas requirements and 100% of its nuclear fuel needs. In January 2009, after a two-week dispute that saw gas supplies cutoff to Europe, Ukraine agreed to 10-year gas supply and transit contracts with Russia that brought gas prices to "world" levels. The strict terms of the contracts further hobbled Ukraine's cash-strapped state gas company, Naftohaz. The economy contracted nearly 15% in 2009, among the worst economic performances in the world. In April 2010, Ukraine negotiated a price discount on Russian gas imports in exchange for extending Russia's lease on its naval base in Crimea.

Movement toward an Association Agreement with the European Union, which would commit Ukraine to economic and financial reforms in exchange for preferential access to EU markets, was curtailed by a November 2013 decision of President YANUKOVYCH. In response, on 17 December 2013 then President YANUKOVYCH and President PUTIN concluded a financial assistance package containing $15 billion in loans and lower gas prices. However, the end of the YANUKOVYCH government in February 2014 caused Russia to halt further funding. With the formation of an interim government in late February 2014, the international community began efforts to stabilize the Ukrainian economy, including a 27 March 2014 IMF assistance package of $14-18 billion. Russia’s seizure of the Crimean Peninsula created uncertainty as to the annual rate of growth of the Ukrainian economy in 2014.
United Arab Emirates The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP based on oil and gas output to 25%. Since the discovery of oil in the UAE more than 30 years ago, the country has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living. The government has increased spending on job creation and infrastructure expansion and is opening up utilities to greater private sector involvement. The country's free trade zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign investors. The global financial crisis of 2008, tight international credit, and deflated asset prices constricted the economy in 2009. UAE authorities tried to blunt the crisis by increasing spending and boosting liquidity in the banking sector. The crisis hit Dubai hardest, as it was heavily exposed to depressed real estate prices. Dubai lacked sufficient cash to meet its debt obligations, prompting global concern about its solvency and ultimately a $20 billion bailout from the UAE Central Bank and Abu Dhabi-emirate government that was refinanced in March 2014. Dependence on oil, a large expatriate workforce, and growing inflation pressures are significant long-term challenges. The UAE's strategic plan for the next few years focuses on economic diversification and creating more job opportunities for nationals through improved education and increased private sector employment.
United Kingdom The UK, a leading trading power and financial center, is the third largest economy in Europe after Germany and France. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with less than 2% of the labor force. The UK has large coal, natural gas, and oil resources, but its oil and natural gas reserves are declining and the UK has been a net importer of energy since 2005. Services, particularly banking, insurance, and business services, are key drivers of British GDP growth. Manufacturing, meanwhile, has declined in importance but still accounts for about 10% of economic output.

In 2008, the global financial crisis hit the economy particularly hard, due to the importance of its financial sector. Falling home prices, high consumer debt, and the global economic slowdown compounded Britain's economic problems, pushing the economy into recession in the latter half of 2008 and prompting the then BROWN (Labour) government to implement a number of measures to stimulate the economy and stabilize the financial markets. Facing burgeoning public deficits and debt levels, in 2010 the CAMERON-led coalition government (between Conservatives and Liberal Democrats) initiated an austerity program, which aimed to lower London's budget deficit from about 11% of GDP in 2010 to nearly 1% by 2015. The CAMERON government raised the value added tax from 17.5% to 20% in 2011. It has pledged to reduce the corporation tax rate to 20% by 2015. However, the deficit still remains one of the highest in the G7, standing at 6.0% in 2014.

In 2012, weak consumer spending and subdued business investment weighed on the economy, however, in 2013 GDP grew 1.7% and in 2014, 2.6%, accelerating unexpectedly because of greater consumer spending and a recovering housing market.

The Bank of England (BoE) implemented an asset purchase program of £375 billion (approximately $586 billion) as of December 2014. During times of economic crisis, the BoE coordinates interest rate moves with the European Central Bank, but Britain remains outside the European Economic and Monetary Union (EMU).
United States Pacific Island Wildlife Refuges no economic activity
United States The US has the most technologically powerful economy in the world, with a per capita GDP of $54,800. US firms are at or near the forefront in technological advances, especially in computers, pharmaceuticals, and medical, aerospace, and military equipment; however, their advantage has narrowed since the end of World War II. Based on a comparison of GDP measured at Purchasing Power Parity conversion rates, the US economy in 2014, having stood as the largest in the world for more than a century, slipped into second place behind China, which has more than tripled the US growth rate for each year of the past four decades.

In the US, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets.

Long-term problems for the US include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits.

The onrush of technology has been a driving factor in the gradual development of a "two-tier" labor market in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. But the globalization of trade, and especially the rise of low-wage producers such as China, has put additional downward pressure on wages and upward pressure on the return to capital. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income.

Imported oil accounts for nearly 55% of US consumption and oil has a major impact on the overall health of the economy. Crude oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008.

The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP. In 2012, the federal government reduced the growth of spending and the deficit shrank to 7.6% of GDP.

Wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the budget deficit and public debt. Through 2014, the direct costs of the wars totaled more than $1.5 trillion, according to US Government figures. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries.

In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform that was designed to extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on health care - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010.

In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight.

In December 2012, the Federal Reserve Board (Fed) announced plans to purchase $85 billion per month of mortgage-backed and Treasury securities in an effort to hold down long-term interest rates, and to keep short term rates near zero until unemployment dropped below 6.5% or inflation rose above 2.5%. In late 2013, the Fed announced that it would begin scaling back long-term bond purchases to $75 billion per month in January 2014 and reduce them further as conditions warranted; the Fed ended the purchases during the summer of 2014. In 2014, the unemployment rate dropped to 6.2%, and continued to fall to 5.5% by mid-2015, the lowest rate of joblessness since before the global recession began; inflation stood at 1.7%, and public debt as a share of GDP continued to decline, following several years of increase.
Uruguay Uruguay has a free market economy characterized by an export-oriented agricultural sector, a well-educated work force, and high levels of social spending. Following financial difficulties in the late 1990s and early 2000s, Uruguay's economic growth averaged 8% annually during the period 2004-08. The 2008-09 global financial crisis put a brake on Uruguay's vigorous growth, which decelerated to 2.6% in 2009. Nevertheless, the country managed to avoid a recession and keep positive growth rates, mainly through higher public expenditure and investment; GDP growth reached 8.9% in 2010 but slowed in 2012-13 as a result of a renewed slowdown in the global economy and in Uruguay's main trade partners and Common Market of the South (Mercosur) counterparts, Argentina and Brazil. Uruguay has sought to expand trade within Mercosur and with non-Mercosur members, and President VAZQUEZ has said he will maintain his predecessor’s mix of pro-market policies and a strong social safety net.
Uzbekistan Uzbekistan is a dry, landlocked country; more than 60% of the population lives in densely populated rural communities. Export of natural gas, gold and cotton provides a significant share of foreign exchange earnings. Despite ongoing efforts to diversify crops, Uzbekistani agriculture remains largely centered around cotton; Uzbekistan is now the world's fifth largest cotton exporter and sixth largest producer.
The country is beginning to enforce a ban on the use of child labor in its cotton harvest and is trying to address international criticism for its previous use of this practice. Following independence in September 1991, the government sought to prop up its Soviet-style command economy with subsidies and tight controls on production and prices. A sharp increase in the inequality of income distribution has hurt the lower ranks of society since independence. While aware of the need to improve the investment climate, the government continues to intervene in the business sector and has not addressed the impediments to foreign investment in the country. In 2003, the government accepted Article VIII obligations under the IMF, providing for full currency convertibility. However, strict currency controls and tightening of borders have lessened the effects of convertibility and have also led to some shortages that have further stifled economic activity. The Central Bank often delays or restricts convertibility, especially for consumer goods.
Uzbekistan's growth has been driven primarily by state-led investments and a favorable export environment. In the past Uzbekistani authorities have accused US and other foreign companies operating in Uzbekistan of violating Uzbekistani laws and have frozen and even seized their assets. At the same time, the Uzbekistani Government has actively courted several major US and international corporations, offering financing and tax advantages. Diminishing foreign investment and difficulties transporting goods across borders further challenge Uzbekistan’s economy, though it recently has intensified economic ties to Beijing. Tashkent began exporting natural gas to China and Chinese investments in the country have substantially increased.
Vanuatu This South Pacific island economy is based primarily on small-scale agriculture, which provides a living for about two-thirds of the population. Fishing, offshore financial services, and tourism, with nearly 197,000 visitors in 2008, are other mainstays of the economy. Mineral deposits are negligible; the country has no known petroleum deposits. A small light industry sector caters to the local market. Tax revenues come mainly from import duties. Economic development is hindered by dependence on relatively few commodity exports, vulnerability to natural disasters, and long distances from main markets and between constituent islands. In response to foreign concerns, the government has promised to tighten regulation of its offshore financial center. In mid-2002, the government stepped up efforts to boost tourism through improved air connections, resort development, and cruise ship facilities. Agriculture, especially livestock farming, is a second target for growth. Australia and New Zealand are the main suppliers of tourists and foreign aid.
Venezuela Venezuela remains highly dependent on oil revenues, which account for roughly 96% of export earnings, about 40% of government revenues, and 11% of GDP. The country ended 2014 with an estimated 4% contraction in its GDP, 68.4% inflation, widespread shortages of consumer goods, and declining central bank international reserves. The International Monetary Fund forecasts that the GDP will shrink another 7% in 2015 and inflation may reach 80%. Under President Nicolas MADURO, the Venezuelan government’s response to the economic crisis has been to increase state control over the economy and blame the private sector for the shortages. The Venezuelan government has maintained strict currency controls since 2003. Currently, three official currency exchange mechanisms are in place for the sale of dollars to private sector firms and individuals, with rates based on the government's import priorities. These currency controls present significant obstacles to trade with Venezuela because importers cannot obtain sufficient dollars to purchase goods needed to maintain their operations. MADURO has used decree powers to enact legislation to deepen the state’s role as the primary buyer and marketer of imports, further tighten currency controls, cap business profits, and extend price controls. Falling oil prices since 2014 have aggravated Venezuela’s economic crisis. Insufficient access to dollars, price controls, and rigid labor regulations have led some US and multinational firms to reduce or shut down their Venezuelan operations. High costs for oil production and state oil company PDVSA’s poor cash flow have slowed investment in the petroleum sector, resulting in a decline in oil production.
Vietnam Vietnam is a densely populated developing country that has been transitioning from the rigidities of a centrally-planned economy since 1986. Agriculture's share of economic output has shrunk from about 25% in 2000 to 18% in 2014, while industry's share increased from 36% to 38% in the same period. State-owned enterprises now account for only about 40% of GDP.

Vietnamese authorities have reaffirmed their commitment to economic modernization and a more open economy. Vietnam joined the World Trade Organization in January 2007, which has promoted more competitive, export-driven industries. Vietnam joined the 12-nation Trans-Pacific Partnership free trade agreement negotiations in 2010.

Hanoi has oscillated between promoting growth and emphasizing macroeconomic stability in recent years. Between 2008 and 2011, Vietnam's managed currency, the dong, was devalued in excess of 20%, but its value has remained relatively stable since then. Poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year.

In February 2011, the government shifted from policies aimed at achieving a high rate of economic growth, which had stoked inflation, to those aimed at stabilizing the economy, through tighter monetary and fiscal control. Although Vietnam unveiled a broad, "three pillar" economic reform program in early 2012, proposing to restructure public investment, state-owned enterprises, and the banking sector, Hanoi’s progress in meeting its goals is lagging behind its proposed schedule. Vietnam's economy continues to face challenges from an undercapitalized banking sector and non-performing loans weigh heavily on banks and businesses.
Virgin Islands Tourism, trade, and other services are the primary economic activities, accounting for nearly 60% of the Virgin Island's GDP and about half of total civilian employment. The islands host nearly 3 million tourists per year, mostly from visiting cruise ships. The islands are vulnerable to damage from storms. The agriculture sector is small, with most food being imported. Industry and government each account for about one-fifth of GDP. Federal programs and grants, totaling $241.4 million in 2013, contributed 19.7% of the territory’s total revenues. The manufacturing sector consists of rum distilling, electronics, pharmaceuticals, and watch assembly. A refinery on St. Croix, one of the world’s largest, processed 350,000 barrels of crude oil a day until it was shut down in February 2012, after operating for 45 years. The economy declined in 2013, due to decreases in exports resulting from the loss of refined oil products. Nevertheless, the economy remains relatively diversified. Along with a vibrant tourism industry, rum exports, trade, and services will be major income sources in future years.
Wake Island Economic activity is limited to providing services to military personnel and contractors located on the island. All food and manufactured goods must be imported.
Wallis and Futuna The economy is limited to traditional subsistence agriculture, with 80% of labor force earnings coming from agriculture (coconuts and vegetables), livestock (mostly pigs), and fishing. Revenues come from French Government subsidies, licensing of fishing rights to Japan and South Korea, import taxes, and remittances from expatriate workers in New Caledonia. France directly finances the public sector, health and education services. It also provides funding for key development projects in a range of areas, including infrastructure, economic development, environmental management, and health facilities. 70% of employment is in the public sector, although only about 20% of the population is in salaried employment. A key concern for Wallis and Futuna is an aging population with consequent economic development issues. Very few people aged 18-30 live in the islands due to the limited formal employment opportunities. Improving job creation is a current priority for the territorial government.
West Bank Economic growth in the West Bank - the larger of the two areas comprising the Palestinian territories - has slowed since 2013, in part because of a decline in donor aid and government spending. Private sector development has been weak. Despite the Palestinian Authority's (PA) successful implementation of economic and security reforms and the easing of some movement and access restrictions by the Israeli government, Israeli closure policies continue to disrupt labor and trade flows, industrial capacity, and basic commerce, constraining the productive capacity of the West Bank economy. The biggest impediments to economic improvements in the West Bank remain Palestinians' inability to access land and resources in Israeli-controlled areas, import and export restrictions, and a high-cost capital structure. The PA for the foreseeable future will continue to rely heavily on donor aid for its budgetary needs and economic activity.
Western Sahara Western Sahara has a small market-based economy whose main industries are fishing, phosphate mining, and pastoral nomadism. The territory's arid desert climate makes sedentary agriculture difficult, and Western Sahara imports much of its food. The Moroccan Government administers Western Sahara's economy and is a key source of employment, infrastructure development, and social spending in the territory. Western Sahara's unresolved legal status makes the exploitation of its natural resources a contentious issue between Morocco and the Polisario. Morocco and the EU in December 2013 finalized a four-year agreement allowing European vessels to fish off the coast of Morocco, including disputed waters off the coast of Western Sahara. Oil has never been found in Western Sahara in commercially significant quantities, but Morocco and the Polisario have quarreled over who has the right to authorize and benefit from oil exploration in the territory. Western Sahara's main long-term economic challenge is the development of a more diverse set of industries capable of providing greater employment and income to the territory.
World The international financial crisis of 2008-09 led to the first downturn in global output since 1946 and presented the world with a major new challenge: determining what mix of fiscal and monetary policies to follow to restore growth and jobs, while keeping inflation and debt under control. Financial stabilization and stimulus programs that started in 2009-11, combined with lower tax revenues in 2009-10, required most countries to run large budget deficits. Treasuries issued new public debt - totaling $9.1 trillion since 2008 - to pay for the additional expenditures. To keep interest rates low, most central banks monetized that debt, injecting large sums of money into their economies - between December 2008 and December 2013 the global money supply increased by more than 35%. Governments are now faced with the difficult task of spurring current growth and employment without saddling their economies with so much debt that they sacrifice long-term growth and financial stability. When economic activity picks up, central banks will confront the difficult task of containing inflation without raising interest rates so high they snuff out further growth.

Fiscal and monetary data for 2013 are currently available for 180 countries, which together account for 98.5% of World GDP. Of the 180 countries, 82 pursued unequivocally expansionary policies, boosting government spending while also expanding their money supply relatively rapidly - faster than the world average of 3.1%; 28 followed restrictive fiscal and monetary policies, reducing government spending and holding money growth to less than the 3.1% average; and the remaining 70 followed a mix of counterbalancing fiscal and monetary policies, either reducing government spending while accelerating money growth, or boosting spending while curtailing money growth.

(For more information, see attached spreadsheet, Fiscal and Monetary Data, 2008-2012.)

In 2013, for many countries the drive for fiscal austerity that began in 2011 abated. While 5 out of 6 countries slowed spending in 2012, only 1 in 2 countries slowed spending in 2013. About 1 in 3 countries actually lowered the level of their expenditures. The global growth rate for government expenditures increased from 1.6% in 2012 to 5.1% in 2013, after falling from a 10.1% growth rate in 2011. On the other hand, nearly 2 out of 3 central banks tightened monetary policy in 2013, decelerating the rate of growth of their money supply, compared with only 1 out of 3 in 2012. Roughly 1 of 4 central banks actually withdrew money from circulation, an increase from 1 out of 7 in 2012. Growth of the global money supply, as measured by the narrowly defined M1, slowed from 8.7% in 2009 and 10.4% in 2010 to 5.2% in 2011, 4.6% in 2012, and 3.1% in 2013. Several notable shifts occurred in 2013. By cutting government expenditures and expanding money supplies, the US and Canada moved against the trend in the rest of the world. France reversed course completely. Rather than reducing expenditures and money as it had in 2012, it expanded both. Germany reversed its fiscal policy, sharply expanding federal spending, while continuing to grow the money supply. South Korea shifted monetary policy into high gear, while maintaining a strongly expansionary fiscal policy. Japan, however, continued to pursue austere fiscal and monetary policies.

Austere economic policies have significantly affected economic performance. The global budget deficit narrowed to roughly $2.7 trillion in 2012 and $2.1 trillion in 2013, or 3.8% and 2.5% of World GDP, respectively. But growth of the world economy slipped from 5.1% in 2010 and 3.7% in 2011, to just 3.1% in 2012, and 2.9% in 2013.

Countries with expansionary fiscal and monetary policies achieved significantly higher rates of growth, higher growth of tax revenues, and greater success reducing the public debt burden than those countries that chose contractionary policies. In 2013, the 82 countries that followed a pro-growth approach achieved a median GDP growth rate of 4.7%, compared to 1.7% for the 28 countries with restrictive fiscal and monetary policies, a difference of 3 percentage points. Among the 82, China grew 7.7%, Philippines 6.8%, Malaysia 4.7%, Pakistan and Saudi Arabia 3.6%, Argentina 3.5%, South Korea 2.8%, and Russia 1.3%, while among the 28, Brazil grew 2.3%, Japan 2.0%, South Africa 2.0%, Netherlands -0.8%, Croatia -1.0%, Iran -1.5%, Portugal -1.8%, Greece -3.8%, and Cyprus -8.7%.

Faster GDP growth and lower unemployment rates translated into increased tax revenues and a less cumbersome debt burden. Revenues for the 82 expansionary countries grew at a median rate of 10.7%, whereas tax revenues fell at a median rate of 6.8% for the 28 countries that chose austere economic policies. Budget balances improved for about three-quarters of the 28, but, for most, debt grew faster than GDP, and the median level of their public debt as a share of GDP increased 9.1 percentage points, to 59.2%. On the other hand, budget balances deteriorated for most of the 82 pro-growth countries, but GDP growth outpaced increases in debt, and the median level of public debt as a share of GDP increased just 1.9%, to 39.8%.

The world recession has suppressed inflation rates - world inflation declined 1.0 percentage point in 2012 to about 4.1% and 0.2 percentage point to 3.9% in 2013. In 2013 the median inflation rate for the 82 pro-growth countries was 1.3 percentage points higher than that for the countries that followed more austere fiscal and monetary policies. Overall, the latter countries also improved their current account balances by shedding imports; as a result, current account balances deteriorated for most of the countries that pursued pro-growth policies. Slow growth of world income continued to hold import demand in check and crude oil prices fell. Consequently, the dollar value of world trade grew just 1.3% in 2013.

Beyond the current global slowdown, the world faces several long-standing economic challenges. The addition of 80 million people each year to an already overcrowded globe is exacerbating the problems of pollution, waste-disposal, epidemics, water-shortages, famine, over-fishing of oceans, deforestation, desertification, and depletion of non-renewable resources. The nation-state, as a bedrock economic-political institution, is steadily losing control over international flows of people, goods, services, funds, and technology. The introduction of the euro as the common currency of much of Western Europe in January 1999, while paving the way for an integrated economic powerhouse, has created economic risks because the participating nations have varying income levels and growth rates, and hence, require a different mix of monetary and fiscal policies. Governments, especially in Western Europe, face the difficult political problem of channeling resources away from welfare programs in order to increase investment and strengthen incentives to seek employment. Because of their own internal problems and priorities, the industrialized countries are unable to devote sufficient resources to deal effectively with the poorer areas of the world, which, at least from an economic point of view, are becoming further marginalized. The terrorist attacks on the US on 11 September 2001 accentuated a growing risk to global prosperity - the diversion of resources away from capital investments to counter-terrorism programs.

Despite these vexing problems, the world economy also shows great promise. Technology has made possible further advances in a wide range of fields, from agriculture, to medicine, alternative energy, metallurgy, and transportation. Improved global communications have greatly reduced the costs of international trade, helping the world gain from the international division of labor, raise living standards, and reduce income disparities among nations. Much of the resilience of the world economy in the aftermath of the financial crisis resulted from government and central bank leaders around the globe working in concert to stem the financial onslaught, knowing well the lessons of past economic failures.
Yemen Yemen is a low-income country that is highly dependent on declining oil resources for revenue. Oil and gas revenues account for roughly 25% of GDP and 65% of government revenue. Yemen has tried to counter the effects of its declining oil resources and continuing attacks on its oil pipelines by diversifying its economy through a 2006 reform program that was designed to bolster non-oil sectors of the economy and foreign investment. In October 2009, Yemen exported its first liquefied natural gas as part of this diversification effort. In January 2010, the international community established the Friends of Yemen group that aimed to support Yemen's efforts toward economic and political reform. In 2012, the Friends of Yemen pledged nearly $7 billion in assistance to Yemen. The Yemeni Government also endorsed a Mutual Accountability Framework to facilitate the efficient implementation of donor aid. The unrest that began in early 2011 caused GDP to plunge almost 11% in that year. Progress toward achieving stability has been slow and uneven. Yemen continues to face difficult long-term challenges, including declining water resources, high unemployment, severe food scarcity, and a high population growth rate. The Yemeni Government regularly faces annual budget shortfalls. In July 2014, the government eliminated some fuel subsidies that accounted for approximately 25% of government spending in 2013; and in August 2014, the IMF approved a three-year, $570 million Extended Credit Facility for Yemen. Deteriorating security restricts economic growth and the provision of government services.
Zambia Zambia has had one of the world’s fastest growing economies for the past ten years, with real GDP growth averaging roughly 6.7% per annum. Privatization of government-owned copper mines in the 1990s relieved the government from covering mammoth losses generated by the industry and greatly increased copper mining output and profitability, spurring economic growth. Copper output increased steadily from 2004, due to higher copper prices and foreign investment, but weakened in 2014 when Zambia was overtaken by the Democratic Republic of Congo as Africa’s largest copper producer. Zambia's dependency on copper makes it vulnerable to depressed commodity prices, but record high copper prices and a bumper maize crop in 2010 helped Zambia rebound quickly from the world economic slowdown that began in 2008. Despite strong economic growth and its status as a lower middle-income country, widespread and extreme rural poverty and high unemployment levels remain significant problems, made worse by a high birth rate, a relatively high HIV/AIDS burden, and by market-distorting agricultural policies. Economic policy inconsistency and poor budget execution in recent years has hindered the economy and contributed to weakness in the kwacha, which was Africa’s worst performing currency during 2014. Zambia has raised $1.75 billion from international investors by issuing separate sovereign bonds in September 2012 and April 2014, significantly increasing the country’s public debt as a share of GDP. On January 1, 2015, a new mineral royalty tax regime dramatically increased mining taxes, and has led to an economic impasse between the government and the mines. If left intact, the new tax could result in the closure of less profitable mines, the loss of thousands of jobs, and the loss of additional foreign investment.
Zimbabwe Zimbabwe's economy depends heavily on its mining and agriculture sectors. Following a decade of contraction from 1998 to 2008, the economy recorded real growth of more than 10% per year from 2010-13, before slowing to roughly 3% in 2014 due to poor harvests, low diamond revenues, and decreased investment. Infrastructure and regulatory deficiencies, a poor investment climate, a large public and external debt burden, and extremely high government wage expenses impede the country’s economic performance. Until early 2009, the Reserve Bank of Zimbabwe (RBZ) routinely printed money to fund the budget deficit, causing hyperinflation. Dollarization in early 2009 - which allowed currencies such as the Botswana pula, the South Africa rand, and the US dollar to be used locally - ended hyperinflation and reduced inflation below 10% per year, but exposed structural weaknesses that inhibit broad-based growth. The RBZ introduced bond coins denominated in 1, 5, 10, and 25 cent increments on a par with the US dollar in December 2014, more than five years after the Zimbabwe dollar was taken out of circulation. In January 2015, as part of the government’s effort to boost trade and attract foreign investment, the RBZ announced that the Chinese renmimbi, Indian rupee, Australian dollar, and Japanese yen would be accepted as legal tender in Zimbabwe. Zimbabwe’s government entered a second Staff Monitored Program with the International Monetary Fund in 2014 and undertook other measures to reengage with international financial institutions. Foreign and domestic investment continues to be hindered by the lack of clarity regarding the government’s Indigenization and Economic Empowerment Act.