Gwp (part 25)

Algeria
second-largest country in Africa (after Sudan)

American Samoa
Pago Pago has one of the best natural deepwater
harbors in the South Pacific Ocean, sheltered by shape from rough
seas and protected by peripheral mountains from high winds;
strategic location in the South Pacific Ocean

Andorra
landlocked; straddles a number of important crossroads in
the Pyrenees

Angola
the province of Cabinda is an exclave, separated from the
rest of the country by the Democratic Republic of the Congo

Anguilla
the most northerly of the Leeward Islands in the Lesser
Antilles

Antarctica
the coldest, windiest, highest (on average), and driest
continent; during summer, more solar radiation reaches the surface
at the South Pole than is received at the Equator in an equivalent
period; mostly uninhabitable

Antigua and Barbuda
Antigua has a deeply indented shoreline with
many natural harbors and beaches; Barbuda has a very large western
harbor

Arctic Ocean
major chokepoint is the southern Chukchi Sea (northern
access to the Pacific Ocean via the Bering Strait); strategic
location between North America and Russia; shortest marine link
between the extremes of eastern and western Russia; floating
research stations operated by the US and Russia; maximum snow cover
in March or April about 20 to 50 centimeters over the frozen ocean;
snow cover lasts about 10 months

Argentina
second-largest country in South America (after Brazil);
strategic location relative to sea lanes between the South Atlantic
and the South Pacific Oceans (Strait of Magellan, Beagle Channel,
Drake Passage); diverse geophysical landscapes range from tropical
climates in the north to tundra in the far south; Cerro Aconcagua is
the Western Hemisphere's tallest mountain, while Laguna del Carbon
is the lowest point in the Western Hemisphere

Armenia
landlocked in the Lesser Caucasus Mountains; Sevana Lich
(Lake Sevan) is the largest lake in this mountain range

Aruba
a flat, riverless island renowned for its white sand beaches;
its tropical climate is moderated by constant trade winds from the
Atlantic Ocean; the temperature is almost constant at about 27
degrees Celsius (81 degrees Fahrenheit)

Ashmore and Cartier Islands
Ashmore Reef National Nature Reserve
established in August 1983

Atlantic Ocean
major chokepoints include the Dardanelles, Strait of
Gibraltar, access to the Panama and Suez Canals; strategic straits
include the Strait of Dover, Straits of Florida, Mona Passage, The
Sound (Oresund), and Windward Passage; the Equator divides the
Atlantic Ocean into the North Atlantic Ocean and South Atlantic Ocean

Australia
world's smallest continent but sixth-largest country;
population concentrated along the eastern and southeastern coasts;
the invigorating tropical sea breeze known as the "Fremantle Doctor"
affects the city of Perth on the west coast, and is one of the most
consistent winds in the world

Austria
landlocked; strategic location at the crossroads of central
Europe with many easily traversable Alpine passes and valleys; major
river is the Danube; population is concentrated on eastern lowlands
because of steep slopes, poor soils, and low temperatures elsewhere

Azerbaijan
both the main area of the country and the Naxcivan
exclave are landlocked

Bahamas, The
strategic location adjacent to US and Cuba; extensive
island chain of which 30 are inhabited

Bahrain
close to primary Middle Eastern petroleum sources; strategic
location in Persian Gulf, through which much of the Western world's
petroleum must transit to reach open ocean

Baker Island
treeless, sparse, and scattered vegetation consisting
of grasses, prostrate vines, and low growing shrubs; primarily a
nesting, roosting, and foraging habitat for seabirds, shorebirds,
and marine wildlife

Bangladesh
most of the country is situated on deltas of large rivers
flowing from the Himalayas: the Ganges unites with the Jamuna (main
channel of the Brahmaputra) and later joins the Meghna to eventually
empty into the Bay of Bengal

Barbados
easternmost Caribbean island

Bassas da India
the islands emerge from a circular reef that sits
atop a long-extinct, submerged volcano

Belarus
landlocked; glacial scouring accounts for the flatness of
Belarusian terrain and for its 11,000 lakes

Belgium
crossroads of Western Europe; majority of West European
capitals within 1,000 km of Brussels, the seat of both the European
Union and NATO

Belize
only country in Central America without a coastline on the
North Pacific Ocean

Benin
sandbanks create difficult access to a coast with no natural
harbors, river mouths, or islands

Bermuda
consists of about 138 coral islands and islets with ample
rainfall, but no rivers or freshwater lakes; some land was leased by
US Government from 1941 to 1995

Bhutan
landlocked; strategic location between China and India;
controls several key Himalayan mountain passes

Bolivia
landlocked; shares control of Lago Titicaca, world's highest
navigable lake (elevation 3,805 m), with Peru

Bosnia and Herzegovina
within Bosnia and Herzegovina's recognized
borders, the country is divided into a joint Bosniak/Croat
Federation (about 51% of the territory) and the Bosnian Serb-led
Republika Srpska or RS (about 49% of the territory); the region
called Herzegovina is contiguous to Croatia and Serbia and
Montenegro (Montenegro), and traditionally has been settled by an
ethnic Croat majority in the west and an ethnic Serb majority in the
east

Botswana
landlocked; population concentrated in eastern part of the
country

Bouvet Island
covered by glacial ice; declared a nature reserve

Brazil
largest country in South America; shares common boundaries
with every South American country except Chile and Ecuador

British Indian Ocean Territory archipelago of 55 islands; Diego Garcia, largest and southernmost island, occupies strategic location in central Indian Ocean; island is site of joint US-UK military facility

British Virgin Islands
strong ties to nearby US Virgin Islands and
Puerto Rico

Brunei
close to vital sea lanes through South China Sea linking
Indian and Pacific Oceans; two parts physically separated by
Malaysia; almost an enclave within Malaysia

Bulgaria
strategic location near Turkish Straits; controls key land
routes from Europe to Middle East and Asia

Burkina Faso
landlocked savanna cut by the three principal rivers of
the Black, Red, and White Voltas

Burma
strategic location near major Indian Ocean shipping lanes

Burundi
landlocked; straddles crest of the Nile-Congo watershed; the
Kagera, which drains into Lake Victoria, is the most remote
headstream of the White Nile

Cambodia
a land of paddies and forests dominated by the Mekong River
and Tonle Sap

Cameroon
sometimes referred to as the hinge of Africa; throughout
the country there are areas of thermal springs and indications of
current or prior volcanic activity; Mount Cameroon, the highest
mountain in Sub-Saharan west Africa, is an active volcano

Canada
second-largest country in world (after Russia); strategic
location between Russia and US via north polar route; approximately
90% of the population is concentrated within 160 km of the US border

Cape Verde
strategic location 500 km from west coast of Africa near
major north-south sea routes; important communications station;
important sea and air refueling site

Cayman Islands
important location between Cuba and Central America

Central African Republic
landlocked; almost the precise center of
Africa

Chad
landlocked; Lake Chad is the most significant water body in the
Sahel

Chile
strategic location relative to sea lanes between Atlantic and
Pacific Oceans (Strait of Magellan, Beagle Channel, Drake Passage);
Atacama Desert is one of world's driest regions

China
world's fourth largest country (after Russia, Canada, and US);
Mount Everest on the border with Nepal is the world's tallest peak

Christmas Island
located along major sea lanes of Indian Ocean

Clipperton Island
reef 12 km in circumference

Cocos (Keeling) Islands
islands are thickly covered with coconut
palms and other vegetation

Colombia
only South American country with coastlines on both the
North Pacific Ocean and Caribbean Sea

Comoros
important location at northern end of Mozambique Channel

Congo, Democratic Republic of the straddles equator; has very narrow strip of land that controls the lower Congo River and is only outlet to South Atlantic Ocean; dense tropical rain forest in central river basin and eastern highlands

Congo, Republic of the
about 70% of the population lives in
Brazzaville, Pointe-Noire, or along the railroad between them

Cook Islands
the northern Cook Islands are seven low-lying, sparsely
populated, coral atolls; the southern Cook Islands, where most of
the population lives, consist of eight elevated, fertile, volcanic
isles, including the largest, Rarotonga, at 67 sq km

Coral Sea Islands
important nesting area for birds and turtles

Costa Rica
four volcanoes, two of them active, rise near the capital
of San Jose in the center of the country; one of the volcanoes,
Irazu, erupted destructively in 1963-65

Cote d'Ivoire
most of the inhabitants live along the sandy coastal
region; apart from the capital area, the forested interior is
sparsely populated

Croatia
controls most land routes from Western Europe to Aegean Sea
and Turkish Straits

Cuba
largest country in Caribbean and westernmost island of the
Greater Antilles

Cyprus
the third largest island in the Mediterranean Sea (after
Sicily and Sardinia)

Czech Republic
landlocked; strategically located astride some of
oldest and most significant land routes in Europe; Moravian Gate is
a traditional military corridor between the North European Plain and
the Danube in central Europe

Denmark
controls Danish Straits (Skagerrak and Kattegat) linking
Baltic and North Seas; about one-quarter of the population lives in
greater Copenhagen

Dhekelia
British extraterritorial rights also extended to several
small off-post sites scattered across Cyprus

Djibouti
strategic location near world's busiest shipping lanes and
close to Arabian oilfields; terminus of rail traffic into Ethiopia;
mostly wasteland; Lac Assal (Lake Assal) is the lowest point in
Africa

Dominica
known as "The Nature Island of the Caribbean" due to its
spectacular, lush, and varied flora and fauna, which are protected
by an extensive natural park system; the most mountainous of the
Lesser Antilles, its volcanic peaks are cones of lava craters and
include Boiling Lake, the second-largest, thermally active lake in
the world

Dominican Republic
shares island of Hispaniola with Haiti

East Timor
Timor comes from the Malay word for "East"; the island of
Timor is part of the Malay Archipelago and is the largest and
easternmost of the Lesser Sunda Islands

Ecuador
Cotopaxi in Andes is highest active volcano in world

Egypt
controls Sinai Peninsula, only land bridge between Africa and
remainder of Eastern Hemisphere; controls Suez Canal, a sea link
between Indian Ocean and Mediterranean Sea; size, and juxtaposition
to Israel, establish its major role in Middle Eastern geopolitics;
dependence on upstream neighbors; dominance of Nile basin issues;
prone to influxes of refugees

El Salvador
smallest Central American country and only one without a
coastline on Caribbean Sea

Equatorial Guinea
insular and continental regions widely separated

Eritrea
strategic geopolitical position along world's busiest
shipping lanes; Eritrea retained the entire coastline of Ethiopia
along the Red Sea upon de jure independence from Ethiopia on 24 May
1993

Estonia
the mainland terrain is flat, boggy, and partly wooded;
offshore lie more than 1,500 islands

Ethiopia
landlocked - entire coastline along the Red Sea was lost
with the de jure independence of Eritrea on 24 May 1993; the Blue
Nile, the chief headstream of the Nile by water volume, rises in
T'ana Hayk (Lake Tana) in northwest Ethiopia; three major crops are
believed to have originated in Ethiopia: coffee, grain sorghum, and
castor bean

Europa Island
wildlife sanctuary

Falkland Islands (Islas Malvinas)
deeply indented coast provides
good natural harbors; short growing season

Faroe Islands
archipelago of 17 inhabited islands and one
uninhabited island, and a few uninhabited islets; strategically
located along important sea lanes in northeastern Atlantic;
precipitous terrain limits habitation to small coastal lowlands

Fiji
includes 332 islands; approximately 110 are inhabited

Finland
long boundary with Russia; Helsinki is northernmost national
capital on European continent; population concentrated on small
southwestern coastal plain

France
largest West European nation

French Guiana
mostly an unsettled wilderness; the only
non-independent portion of the South American continent

French Polynesia
includes five archipelagoes (4 volcanic, 1 coral);
Makatea in French Polynesia is one of the three great phosphate rock
islands in the Pacific Ocean - the others are Banaba (Ocean Island)
in Kiribati and Nauru

French Southern and Antarctic Lands
islands component is widely
scattered across remote locations in the southern Indian Ocean

Gabon
a small population and oil and mineral reserves have helped
Gabon become one of Africa's wealthier countries; in general, these
circumstances have allowed the country to maintain and conserve its
pristine rain forest and rich biodiversity

Gambia, The
almost an enclave of Senegal; smallest country on the
continent of Africa

Gaza Strip
strategic strip of land along Mideast-North African trade
routes has experienced an incredibly turbulent history; the town of
Gaza itself has been besieged countless times in its history

Georgia
strategically located east of the Black Sea; Georgia
controls much of the Caucasus Mountains and the routes through them

Germany
strategic location on North European Plain and along the
entrance to the Baltic Sea

Ghana
Lake Volta is the world's largest artificial lake

Gibraltar
strategic location on Strait of Gibraltar that links the
North Atlantic Ocean and Mediterranean Sea

Glorioso Islands
the islands and rocks are surrounded by an
extensive reef system

Greece
strategic location dominating the Aegean Sea and southern
approach to Turkish Straits; a peninsular country, possessing an
archipelago of about 2,000 islands

Greenland
dominates North Atlantic Ocean between North America and
Europe; sparse population confined to small settlements along coast,
but close to one-quarter of the population lives in the capital,
Nuuk; world's second largest ice cap

Grenada
the administration of the islands of the Grenadines group is
divided between Saint Vincent and the Grenadines and Grenada

Guadeloupe
a narrow channel, the Riviere Salee, divides Guadeloupe
proper into two islands: the larger, western Basse-Terre and the
smaller, eastern Grande-Terre

Guam
largest and southernmost island in the Mariana Islands
archipelago; strategic location in western North Pacific Ocean

Guatemala
no natural harbors on west coast

Guernsey
large, deepwater harbor at Saint Peter Port

Guinea
the Niger and its important tributary the Milo have their
sources in the Guinean highlands

Guinea-Bissau
this small country is swampy along its western coast
and low-lying further inland

Guyana
the third-smallest country in South America after Suriname
and Uruguay; substantial portions of its western and eastern
territories are claimed by Venezuela and Suriname respectively

Haiti
shares island of Hispaniola with Dominican Republic (western
one-third is Haiti, eastern two-thirds is the Dominican Republic)

Holy See (Vatican City)
landlocked; enclave in Rome, Italy; world's
smallest state; beyond the territorial boundary of Vatican City, the
Lateran Treaty of 1929 grants the Holy See extraterritorial
authority over 23 sites in Rome and five outside of Rome, including
the Pontifical Palace at Castel Gandolfo (the Pope's summer
residence)

Honduras
has only a short Pacific coast but a long Caribbean
shoreline, including the virtually uninhabited eastern Mosquito Coast

Hong Kong
more than 200 islands

Howland Island
almost totally covered with grasses, prostrate vines,
and low-growing shrubs; small area of trees in the center; primarily
a nesting, roosting, and foraging habitat for seabirds, shorebirds,
and marine wildlife

Hungary
landlocked; strategic location astride main land routes
between Western Europe and Balkan Peninsula as well as between
Ukraine and Mediterranean basin; the north-south flowing Duna
(Danube) and Tisza Rivers divide the country into three large regions

Iceland
strategic location between Greenland and Europe; westernmost
European country; Reykjavik is the northernmost national capital in
the world; more land covered by glaciers than in all of continental
Europe

Iles Eparses
Bassas da India: the atoll is a circular reef that sits
atop a long-extinct, submerged volcano
Europa Island and Juan de Nova Island: wildlife sanctuary for
seabirds and sea turtles
Glorioso Islands: the islands and rocks are surrounded by an
extensive reef system
Tromelin Island: climatologically important location for forecasting
cyclones in the western Indian Ocean; wildlife sanctuary (seabirds,
tortoises)

India
dominates South Asian subcontinent; near important Indian
Ocean trade routes; Kanchenjunga, third tallest mountain in the
world, lies on the border with Nepal

Indian Ocean
major chokepoints include Bab el Mandeb, Strait of
Hormuz, Strait of Malacca, southern access to the Suez Canal, and
the Lombok Strait

Indonesia
archipelago of 17,508 islands (6,000 inhabited); straddles
equator; strategic location astride or along major sea lanes from
Indian Ocean to Pacific Ocean

Iran
strategic location on the Persian Gulf and Strait of Hormuz,
which are vital maritime pathways for crude oil transport

Iraq
strategic location on Shatt al Arab waterway and at the head of
the Persian Gulf

Ireland
strategic location on major air and sea routes between North
America and northern Europe; over 40% of the population resides
within 100 km of Dublin

Isle of Man
one small islet, the Calf of Man, lies to the southwest,
and is a bird sanctuary

Israel
there are 242 Israeli settlements and civilian land use sites
in the West Bank, 42 in the Israeli-occupied Golan Heights, 0 in the
Gaza Strip, and 29 in East Jerusalem (August 2005 est.); Sea of
Galilee is an important freshwater source

Italy
strategic location dominating central Mediterranean as well as
southern sea and air approaches to Western Europe

Jamaica
strategic location between Cayman Trench and Jamaica
Channel, the main sea lanes for the Panama Canal

Jan Mayen
barren volcanic island with some moss and grass

Japan
strategic location in northeast Asia

Jarvis Island
sparse bunch grass, prostrate vines, and low-growing
shrubs; primarily a nesting, roosting, and foraging habitat for
seabirds, shorebirds, and marine wildlife

Jersey
largest and southernmost of Channel Islands; about 30% of
population concentrated in Saint Helier

Johnston Atoll
strategic location in the North Pacific Ocean;
Johnston Island and Sand Island are natural islands, which have been
expanded by coral dredging; North Island (Akau) and East Island
(Hikina) are manmade islands formed from coral dredging; the
egg-shaped reef is 34 km in circumference; closed to the public; a
former US nuclear weapons test site; site of now-closed Johnston
Atoll Chemical Agent Disposal System (JACADS); most facilities
dismantled and cleanup complete in 2004; some low-growing vegetation

Jordan
strategic location at the head of the Gulf of Aqaba and as
the Arab country that shares the longest border with Israel and the
occupied West Bank

Juan de Nova Island
wildlife sanctuary

Kazakhstan
landlocked; Russia leases approximately 6,000 sq km of
territory enclosing the Baykonur Cosmodrome; in January 2004,
Kazakhstan and Russia extended the lease to 2050

Kenya
the Kenyan Highlands comprise one of the most successful
agricultural production regions in Africa; glaciers are found on
Mount Kenya, Africa's second highest peak; unique physiography
supports abundant and varied wildlife of scientific and economic
value

Kingman Reef
barren coral atoll with deep interior lagoon; closed to
the public

Kiribati
21 of the 33 islands are inhabited; Banaba (Ocean Island)
in Kiribati is one of the three great phosphate rock islands in the
Pacific Ocean - the others are Makatea in French Polynesia, and Nauru

Korea, North
strategic location bordering China, South Korea, and
Russia; mountainous interior is isolated and sparsely populated

Korea, South
strategic location on Korea Strait

Kuwait
strategic location at head of Persian Gulf

Kyrgyzstan
landlocked; entirely mountainous, dominated by the Tien
Shan range; many tall peaks, glaciers, and high-altitude lakes

Laos
landlocked; most of the country is mountainous and thickly
forested; the Mekong River forms a large part of the western
boundary with Thailand

Latvia
most of the country is composed of fertile, low-lying plains,
with some hills in the east

Lebanon
Nahr el Litani is the only major river in Near East not
crossing an international boundary; rugged terrain historically
helped isolate, protect, and develop numerous factional groups based
on religion, clan, and ethnicity

Lesotho
landlocked, completely surrounded by South Africa;
mountainous, more than 80% of the country is 1,800 meters above sea
level

Liberia
facing the Atlantic Ocean, the coastline is characterized by
lagoons, mangrove swamps, and river-deposited sandbars; the inland
grassy plateau supports limited agriculture

Libya
more than 90% of the country is desert or semidesert

Liechtenstein
along with Uzbekistan, one of only two doubly
landlocked countries in the world; variety of microclimatic
variations based on elevation

Lithuania
fertile central plains are separated by hilly uplands that
are ancient glacial deposits

Luxembourg
landlocked; the only Grand Duchy in the world

Macau
essentially urban; an area of land reclaimed from the sea
measuring 5.2 sq km and known as Cotai now connects the islands of
Coloane and Taipa; the island area is connected to the mainland
peninsula by three bridges

Macedonia
landlocked; major transportation corridor from Western and
Central Europe to Aegean Sea and Southern Europe to Western Europe

Madagascar
world's fourth-largest island; strategic location along
Mozambique Channel

Malawi
landlocked; Lake Nyasa, some 580 km long, is the country's
most prominent physical feature

Malaysia
strategic location along Strait of Malacca and southern
South China Sea

Maldives
1,190 coral islands grouped into 26 atolls (200 inhabited
islands, plus 80 islands with tourist resorts); archipelago with
strategic location astride and along major sea lanes in Indian Ocean

Mali
landlocked; divided into three natural zones: the southern,
cultivated Sudanese; the central, semiarid Sahelian; and the
northern, arid Saharan

Malta
the country comprises an archipelago, with only the three
largest islands (Malta, Ghawdex or Gozo, and Kemmuna or Comino)
being inhabited; numerous bays provide good harbors; Malta and
Tunisia are discussing the commercial exploitation of the
continental shelf between their countries, particularly for oil
exploration

Marshall Islands
Bikini and Enewetak are former US nuclear test
sites; Kwajalein, the famous World War II battleground, is used as a
US missile test range; island city of Ebeye is the second largest
settlement in the Marshall Islands, after the capital of Majuro, and
one of the most densely populated locations in the Pacific

Martinique
the island is dominated by Mount Pelee, which on 8 May
1902 erupted and completely destroyed the city of Saint Pierre,
killing 30,000 inhabitants

Mauritania
most of the population concentrated in the cities of
Nouakchott and Nouadhibou and along the Senegal River in the
southern part of the country

Mauritius
the main island, from which the country derives its name,
is of volcanic origin and is almost entirely surrounded by coral
reefs

Mayotte
part of Comoro Archipelago; 18 islands

Mexico
strategic location on southern border of US; corn (maize),
one of the world's major grain crops, is thought to have originated
in Mexico

Micronesia, Federated States of
four major island groups totaling
607 islands

Midway Islands
a coral atoll managed as a national wildlife refuge
and open to the public for wildlife-related recreation in the form
of wildlife observation and photography, sport fishing, snorkeling,
and scuba diving; the refuge is temporarily closed for
reorganization at present (2004)

Moldova
landlocked; well endowed with various sedimentary rocks and
minerals including sand, gravel, gypsum, and limestone

Monaco
second-smallest independent state in the world (after Holy
See); almost entirely urban

Mongolia
landlocked; strategic location between China and Russia

Montenegro
strategic location along the Adriatic coast

Montserrat
the island is entirely volcanic in origin and comprised
of three major volcanic centers of differing ages

Morocco
strategic location along Strait of Gibraltar

Mozambique
the Zambezi flows through the north-central and most
fertile part of the country

Namibia
first country in the world to incorporate the protection of
the environment into its constitution; some 14% of the land is
protected, including virtually the entire Namib Desert coastal strip

Nauru
Nauru is one of the three great phosphate rock islands in the
Pacific Ocean - the others are Banaba (Ocean Island) in Kiribati and
Makatea in French Polynesia; only 53 km south of Equator

Navassa Island
strategic location 160 km south of the US Naval Base
at Guantanamo Bay, Cuba; mostly exposed rock but with enough
grassland to support goat herds; dense stands of fig-like trees,
scattered cactus

Nepal
landlocked; strategic location between China and India;
contains eight of world's 10 highest peaks, including Mount Everest
and Kanchenjunga - the world's tallest and third tallest - on the
borders with China and India respectively

Netherlands
located at mouths of three major European rivers (Rhine,
Maas or Meuse, and Schelde)

Netherlands Antilles
the five islands of the Netherlands Antilles
are divided geographically into the Leeward Islands (northern) group
(Saba, Sint Eustatius, and Sint Maarten) and the Windward Islands
(southern) group (Bonaire and Curacao)

New Caledonia
consists of the main island of New Caledonia (one of
the largest in the Pacific Ocean), the archipelago of Iles Loyaute,
and numerous small, sparsely populated islands and atolls

New Zealand
about 80% of the population lives in cities; Wellington
is the southernmost national capital in the world

Nicaragua
largest country in Central America; contains the largest
freshwater body in Central America, Lago de Nicaragua

Niger
landlocked; one of the hottest countries in the world;
northern four-fifths is desert, southern one-fifth is savanna,
suitable for livestock and limited agriculture

Nigeria
the Niger enters the country in the northwest and flows
southward through tropical rain forests and swamps to its delta in
the Gulf of Guinea

Niue
one of world's largest coral islands

Norfolk Island
most of the 32 km coastline consists of almost
inaccessible cliffs, but the land slopes down to the sea in one
small southern area on Sydney Bay, where the capital of Kingston is
situated

Northern Mariana Islands
strategic location in the North Pacific
Ocean

Norway
about two-thirds mountains; some 50,000 islands off its much
indented coastline; strategic location adjacent to sea lanes and air
routes in North Atlantic; one of most rugged and longest coastlines
in the world

Oman
strategic location on Musandam Peninsula adjacent to Strait of
Hormuz, a vital transit point for world crude oil

Pacific Ocean
the major chokepoints are the Bering Strait, Panama
Canal, Luzon Strait, and the Singapore Strait; the Equator divides
the Pacific Ocean into the North Pacific Ocean and the South Pacific
Ocean; dotted with low coral islands and rugged volcanic islands in
the southwestern Pacific Ocean

Pakistan
controls Khyber Pass and Bolan Pass, traditional invasion
routes between Central Asia and the Indian Subcontinent

Palau
westernmost archipelago in the Caroline chain, consists of six
island groups totaling more than 300 islands; includes World War II
battleground of Beliliou (Peleliu) and world-famous rock islands

Palmyra Atoll
about 50 islets covered with dense vegetation, coconut
trees, and balsa-like trees up to 30 meters tall

Panama
strategic location on eastern end of isthmus forming land
bridge connecting North and South America; controls Panama Canal
that links North Atlantic Ocean via Caribbean Sea with North Pacific
Ocean

Papua New Guinea
shares island of New Guinea with Indonesia; one of
world's largest swamps along southwest coast

Paracel Islands
composed of 130 small coral islands and reefs
divided into the northeast Amphitrite Group and the western Crescent
Group

Paraguay
landlocked; lies between Argentina, Bolivia, and Brazil;
population concentrated in southern part of country

Peru
shares control of Lago Titicaca, world's highest navigable
lake, with Bolivia; a remote slope of Nevado Mismi, a 5,316 m peak,
is the ultimate source of the Amazon River

Philippines
the Philippine archipelago is made up of 7,107 islands;
favorably located in relation to many of Southeast Asia's main water
bodies: the South China Sea, Philippine Sea, Sulu Sea, Celebes Sea,
and Luzon Strait

Pitcairn Islands
Britain's most isolated dependency; only the larger
island of Pitcairn is inhabited but it has no port or natural
harbor; supplies must be transported by rowed longboat from larger
ships stationed offshore

Poland
historically, an area of conflict because of flat terrain and
the lack of natural barriers on the North European Plain

Portugal
Azores and Madeira Islands occupy strategic locations along
western sea approaches to Strait of Gibraltar

Puerto Rico
important location along the Mona Passage - a key
shipping lane to the Panama Canal; San Juan is one of the biggest
and best natural harbors in the Caribbean; many small rivers and
high central mountains ensure land is well watered; south coast
relatively dry; fertile coastal plain belt in north

Qatar
strategic location in central Persian Gulf near major
petroleum deposits

Reunion
this mountainous, volcanic island has an active volcano,
Piton de la Fournaise; there is a tropical cyclone center at
Saint-Denis, which is the monitoring station for the whole of the
Indian Ocean

Romania
controls most easily traversable land route between the
Balkans, Moldova, and Ukraine

Russia
largest country in the world in terms of area but unfavorably
located in relation to major sea lanes of the world; despite its
size, much of the country lacks proper soils and climates (either
too cold or too dry) for agriculture; Mount El'brus is Europe's
tallest peak

Rwanda
landlocked; most of the country is savanna grassland with the
population predominantly rural

Saint Helena
Saint Helena harbors at least 40 species of plants
unknown anywhere else in the world; Ascension is a breeding ground
for sea turtles and sooty terns; Queen Mary's Peak on Tristan da
Cunha is the highest island mountain in the South Atlantic and a
prominent landmark on the sea lanes around southern Africa

Saint Kitts and Nevis
with coastlines in the shape of a baseball bat
and ball, the two volcanic islands are separated by a three-km-wide
channel called The Narrows; on the southern tip of long, baseball
bat-shaped Saint Kitts lies the Great Salt Pond; Nevis Peak sits in
the center of its almost circular namesake island and its ball shape
complements that of its sister island

Saint Lucia
the twin Pitons (Gros Piton and Petit Piton), striking
cone-shaped peaks south of Soufriere, are one of the scenic natural
highlights of the Caribbean

Saint Pierre and Miquelon
vegetation scanty

Saint Vincent and the Grenadines the administration of the islands of the Grenadines group is divided between Saint Vincent and the Grenadines and Grenada; Saint Vincent and the Grenadines is comprised of 32 islands and cays

Samoa
occupies an almost central position within Polynesia

San Marino
landlocked; smallest independent state in Europe after
the Holy See and Monaco; dominated by the Apennines

Sao Tome and Principe
the smallest country in Africa; the two main
islands form part of a chain of extinct volcanoes and both are
fairly mountainous

Saudi Arabia
extensive coastlines on Persian Gulf and Red Sea
provide great leverage on shipping (especially crude oil) through
Persian Gulf and Suez Canal

Senegal
westernmost country on the African continent; The Gambia is
almost an enclave within Senegal

Serbia
controls one of the major land routes from Western Europe to
Turkey and the Near East

Seychelles
41 granitic and about 75 coralline islands

Sierra Leone
rainfall along the coast can reach 495 cm (195 inches)
a year, making it one of the wettest places along coastal, western
Africa

Singapore
focal point for Southeast Asian sea routes

Slovakia
landlocked; most of the country is rugged and mountainous;
the Tatra Mountains in the north are interspersed with many scenic
lakes and valleys

Slovenia
despite its small size, this eastern Alpine country
controls some of Europe's major transit routes

Solomon Islands
strategic location on sea routes between the South
Pacific Ocean, the Solomon Sea, and the Coral Sea

Somalia
strategic location on Horn of Africa along southern
approaches to Bab el Mandeb and route through Red Sea and Suez Canal

South Africa
South Africa completely surrounds Lesotho and almost
completely surrounds Swaziland

South Georgia and the South Sandwich Islands
the north coast of
South Georgia has several large bays, which provide good anchorage;
reindeer, introduced early in the 20th century, live on South Georgia

Southern Ocean
the major chokepoint is the Drake Passage between
South America and Antarctica; the Polar Front (Antarctic
Convergence) is the best natural definition of the northern extent
of the Southern Ocean; it is a distinct region at the middle of the
Antarctic Circumpolar Current that separates the very cold polar
surface waters to the south from the warmer waters to the north; the
Front and the Current extend entirely around Antarctica, reaching
south of 60 degrees south near New Zealand and near 48 degrees south
in the far South Atlantic coinciding with the path of the maximum
westerly winds

Spain
strategic location along approaches to Strait of Gibraltar

Spratly Islands
strategically located near several primary shipping
lanes in the central South China Sea; includes numerous small
islands, atolls, shoals, and coral reefs

Sri Lanka
strategic location near major Indian Ocean sea lanes

Sudan
largest country in Africa; dominated by the Nile and its
tributaries

Suriname
smallest independent country on South American continent;
mostly tropical rain forest; great diversity of flora and fauna
that, for the most part, is increasingly threatened by new
development; relatively small population, mostly along the coast

Svalbard
northernmost part of the Kingdom of Norway; consists of
nine main islands; glaciers and snowfields cover 60% of the total
area; site of future seed repository under construction by the
Global Crop Diversity Trust and the Norwegian Government

Swaziland
landlocked; almost completely surrounded by South Africa

Sweden
strategic location along Danish Straits linking Baltic and
North Seas

Switzerland
landlocked; crossroads of northern and southern Europe;
along with southeastern France, northern Italy, and southwestern
Austria, has the highest elevations in the Alps

Syria
there are 42 Israeli settlements and civilian land use sites
in the Israeli-occupied Golan Heights (August 2005 est.)

Taiwan
strategic location adjacent to both the Taiwan Strait and the
Luzon Strait

Tajikistan
landlocked; mountainous region dominated by the
Trans-Alay Range in the north and the Pamirs in the southeast;
highest point, Qullai Ismoili Somoni (formerly Communism Peak), was
the tallest mountain in the former USSR

Tanzania
Kilimanjaro is highest point in Africa; bordered by three
of the largest lakes on the continent: Lake Victoria (the world's
second-largest freshwater lake) in the north, Lake Tanganyika (the
world's second deepest) in the west, and Lake Nyasa in the southwest

Thailand
controls only land route from Asia to Malaysia and Singapore

Togo
the country's length allows it to stretch through six distinct
geographic regions; climate varies from tropical to savanna

Tokelau
consists of three atolls, each with a lagoon surrounded by a
number of reef-bound islets of varying length and rising to over
three meters above sea level

Tonga
archipelago of 169 islands (36 inhabited)

Trinidad and Tobago
Pitch Lake, on Trinidad's southwestern coast, is
the world's largest natural reservoir of asphalt

Tromelin Island
climatologically important location for forecasting
cyclones; wildlife sanctuary (seabirds, tortoises)

Tunisia
strategic location in central Mediterranean; Malta and
Tunisia are discussing the commercial exploitation of the
continental shelf between their countries, particularly for oil
exploration

Turkey
strategic location controlling the Turkish Straits (Bosporus,
Sea of Marmara, Dardanelles) that link Black and Aegean Seas; Mount
Ararat, the legendary landing place of Noah's Ark, is in the far
eastern portion of the country

Turkmenistan
landlocked; the western and central low-lying, desolate
portions of the country make up the great Garagum (Kara-Kum) desert,
which occupies over 80% of the country; eastern part is plateau

Turks and Caicos Islands
about 40 islands (eight inhabited)

Tuvalu
one of the smallest and most remote countries on Earth; six
of the coral atolls - Nanumea, Nui, Vaitupu, Nukufetau, Funafuti,
and Nukulaelae - have lagoons open to the ocean; Nanumaya and Niutao
have landlocked lagoons; Niulakita does not have a lagoon

Uganda
landlocked; fertile, well-watered country with many lakes and
rivers

Ukraine
strategic position at the crossroads between Europe and
Asia; second-largest country in Europe

United Arab Emirates
strategic location along southern approaches to
Strait of Hormuz, a vital transit point for world crude oil

United Kingdom
lies near vital North Atlantic sea lanes; only 35 km
from France and linked by tunnel under the English Channel; because
of heavily indented coastline, no location is more than 125 km from
tidal waters

United States
world's third-largest country by size (after Russia
and Canada) and by population (after China and India); Mt. McKinley
is highest point in North America and Death Valley the lowest point
on the continent

United States Pacific Island Wildlife Refuges
Baker, Howland, and
Jarvis Islands: scattered vegetation consisting of grasses,
prostrate vines, and low growing shrubs; primarily a nesting,
roosting, and foraging habitat for seabirds, shorebirds, and marine
wildlife
Johnston Atoll: Johnston Island and Sand Island are natural islands,
which have been expanded by coral dredging; North Island (Akau) and
East Island (Hikina) are manmade islands formed from coral dredging;
the egg-shaped reef is 34 km in circumference
Kingman Reef: barren coral atoll with deep interior lagoon; closed
to the public
Midway Islands: a coral atoll managed as a national wildlife refuge
and open to the public for wildlife-related recreation in the form
of wildlife observation and photography
Palmyra Atoll: the high rainfall and resulting lush vegetation make
the environment of this atoll unique among the US Pacific Island
territories; it supports one of the largest remaining undisturbed
stands of Pisonia beach forest in the Pacific

Uruguay
second-smallest South American country (after Suriname);
most of the low-lying landscape (three-quarters of the country) is
grassland, ideal for cattle and sheep raising

Uzbekistan
along with Liechtenstein, one of the only two doubly
landlocked countries in the world

Vanuatu
a Y-shaped chain of four main islands and 80 smaller
islands; several of the islands have active volcanoes

Venezuela
on major sea and air routes linking North and South
America; Angel Falls in the Guiana Highlands is the world's highest
waterfall

Vietnam
extending 1,650 km north to south, the country is only 50 km
across at its narrowest point

Virgin Islands
important location along the Anegada Passage - a key
shipping lane for the Panama Canal; Saint Thomas has one of the best
natural deepwater harbors in the Caribbean

Wake Island
strategic location in the North Pacific Ocean; emergency
landing location for transpacific flights

Wallis and Futuna
both island groups have fringing reefs

West Bank
landlocked; highlands are main recharge area for Israel's
coastal aquifers; there are 242 West Bank settlements and 29 East
Jerusalem settlements in addition to at least 20 occupied outposts
(August 2005 est.)

Western Sahara
the waters off the coast are particularly rich
fishing areas

World
the world is now thought to be about 4.55 billion years old,
just about one-third of the 13-billion-year age estimated for the
universe

Yemen
strategic location on Bab el Mandeb, the strait linking the
Red Sea and the Gulf of Aden, one of world's most active shipping
lanes

Zambia
landlocked; the Zambezi forms a natural riverine boundary
with Zimbabwe

Zimbabwe
landlocked; the Zambezi forms a natural riverine boundary
with Zambia; in full flood (February-April) the massive Victoria
Falls on the river forms the world's largest curtain of falling water

This page was last updated on 19 December, 2006

@2115 Political pressure groups and leaders

Afghanistan
Jamiat-e Islami (Society of Islam) [former President
Burhanuddin RABBANI]; Ittihad-e Islami (Islamic Union for the
Liberation of Afghanistan) [Abdul Rasul SAYYAF]; there are also
small monarchist, communist, and democratic groups

Albania
Citizens Advocacy Office [Kreshnik SPAHIU]; Confederation of
Trade Unions of Albania or KSSH [Kastriot MUCO]; Front for Albanian
National Unification or FBKSH [Gafur ADILI]; Mjaft Movement [Erion
VELIAJ]; Omonia [Jani JANI]; Union of Independent Trade Unions of
Albania or BSPSH [Gezim KALAJA]

Algeria
The Algerian Human Rights League or LADH or LADDH [Yahia Ali
ABDENOUR]; SOS Disparus [Nacera DUTOUR]; Somoud [Ali MERABET]

American Samoa
NA

Andorra
NA

Angola
Front for the Liberation of the Enclave of Cabinda or FLEC
[N'zita Henriques TIAGO, Antonio Bento BEMBE]
note: FLEC's small-scale, highly factionalized armed struggle for
the independence of Cabinda Province has largely ended

Anguilla
NA

Antigua and Barbuda
Antigua Trades and Labor Union or ATLU [William
ROBINSON]; People's Democratic Movement or PDM [Hugh MARSHALL]

Argentina
Argentine Association of Pharmaceutical Labs (CILFA);
Argentine Industrial Union (manufacturers' association); Argentine
Rural Society (large landowners' association); business
organizations; Central of Argentine Workers or CTA (a radical union
for employed and unemployed workers); General Confederation of Labor
or CGT (Peronist-leaning umbrella labor organization);
Peronist-dominated labor movement; Piquetero groups (popular protest
organizations that can be either pro or anti-government); Roman
Catholic Church; students

Armenia
Yerkrapah Union [Manvel GRIGORIAN]

Aruba
NA

Austria
Austrian Trade Union Federation (nominally independent but
primarily Socialist) or OeGB; Federal Economic Chamber;
OeVP-oriented League of Austrian Industrialists or VOeI; Roman
Catholic Church, including its chief lay organization, Catholic
Action; three composite leagues of the Austrian People's Party or
OeVP representing business, labor, and farmers and other
non-government organizations in the areas of environment and human
rights

Azerbaijan
Sadval, Lezgin movement; self-proclaimed Armenian
Nagorno-Karabakh Republic; Talysh independence movement; Union of
Pro-Azerbaijani Forces (UPAF)

Bahamas, The
NA

Bahrain
Shi'a activists fomented unrest sporadically in 1994-97 and
have recently engaged in protests and marches, demanding that more
power be vested in the elected Council of Representatives and that
the government do more to decrease unemployment; several small,
clandestine leftist and Islamic fundamentalist groups are active

Bangladesh
NA

Barbados
Barbados Workers Union [Leroy TROTMAN]; Clement Payne Labor
Union [David COMISSIONG]; People's Progressive Movement [Eric
SEALY]; Worker's Party of Barbados [Dr. George BELLE]

Belarus
Assembly of Pro-Democratic NGOs [Sergey MATSKEVICH];
Belarusian Congress of Democratic Trade Unions [Alyaksandr
YAROSHUK]; Belarusian Helsinki Committee [Tatiana PROTKO];
Belarusian Organization of Working Women [Irina ZHIKHAR]; Charter 97
[Andrey SANNIKOV]; Lenin Communist Union of Youth (youth wing of the
Belarusian Party of Communists or PKB); National Strike Committee of
Entrepreneurs [Aleksandr VASILYEV, Valery LEVONEVSKY]; Partnership
NGO [Nikolay ASTREYKA]; Perspektiva kiosk watchdog NGO [Anatol
SHUMCHENKO]; Vyasna [Ales BYALATSKY]; Women's Independent Democratic
Movement [Ludmila PETINA]; Youth Front (Malady Front) [Dzmitryy
DASHKEVICH, Syarhey BAKHUN]; Zubr youth group [Vladimir KOBETS]

Belgium
Christian, Socialist, and Liberal Trade Unions; Federation
of Belgian Industries; numerous other associations representing
bankers, manufacturers, middle-class artisans, and the legal and
medical professions; various organizations represent the cultural
interests of Flanders and Wallonia; various peace groups such as Pax
Christi and groups representing immigrants

Belize
Society for the Promotion of Education and Research or SPEAR
[Adele CATZIM]

Benin
NA

Bermuda
Bermuda Employer's Union [Eddie SAINTS]; Bermuda Industrial
Union or BIU [Derrick BURGESS]; Bermuda Public Services Union or
BPSU [Ed BALL]; Bermuda Union of Teachers [Michael CHARLES]

Bhutan
Buddhist clergy; ethnic Nepalese organizations leading
militant antigovernment campaign; Indian merchant community; United
Front for Democracy (exiled)

Bolivia
Cocalero groups; indigenous organizations; labor unions;
Sole Confederation of Campesino Workers of Bolivia or CSUTCB [Roman
LOAYZA]

Bosnia and Herzegovina
NA

Botswana
NA

Brazil
Landless Worker's Movement; labor unions and federations;
large farmers' associations; religious groups including evangelical
Christian churches and the Catholic Church

British Virgin Islands
NA

Brunei
NA

Bulgaria
Confederation of Independent Trade Unions of Bulgaria or
CITUB; Podkrepa Labor Confederation; numerous regional, ethnic, and
national interest groups with various agendas

Burkina Faso
Burkinabe General Confederation of Labor or CGTB;
Burkinabe Movement for Human Rights or MBDHP; Group of 14 February;
National Confederation of Burkinabe Workers or CNTB; National
Organization of Free Unions or ONSL; watchdog/political action
groups throughout the country in both organizations and communities

Burma
National Coalition Government of the Union of Burma or NCGUB
(self-proclaimed government in exile) ["Prime Minister" Dr. SEIN
WIN] consists of individuals, some legitimately elected to the
People's Assembly in 1990 (the group fled to a border area and
joined insurgents in December 1990 to form parallel government in
exile); Kachin Independence Organization or KIO; Karen National
Union or KNU; several Shan factions; United Wa State Army or UWSA;
Union Solidarity and Development Association or USDA (pro-regime, a
social and political mass-member organization) [HTAY OO, general
secretary]

Burundi
none

Cambodia
NA

Cameroon
Southern Cameroon National Council [Ayamba Ette OTUN];
Human Rights Defense Group [Albert MUKONG, president]

Canada
NA

Cape Verde
NA

Cayman Islands
NA

Central African Republic
NA

Chad
NA

Chile
revitalized university student federations at all major
universities; Roman Catholic Church; United Labor Central or CUT
includes trade unionists from the country's five largest labor
confederations

China
no substantial political opposition groups exist, although the
government has identified the Falungong spiritual movement and the
China Democracy Party as subversive groups

Christmas Island
none

Cocos (Keeling) Islands
none

Colombia
two largest insurgent groups active in Colombia -
Revolutionary Armed Forces of Colombia or FARC and National
Liberation Army or ELN; largest illegal paramilitary group, a
roughly organized umbrella group of disparate paramilitary forces,
is United Self-Defense Groups of Colombia or AUC

Comoros
NA

Congo, Democratic Republic of the
NA

Congo, Republic of the
Congolese Trade Union Congress or CSC;
General Union of Congolese Pupils and Students or UGEEC;
Revolutionary Union of Congolese Women or URFC; Union of Congolese
Socialist Youth or UJSC

Cook Islands
NA

Costa Rica
Authentic Confederation of Democratic Workers or CATD
(Communist Party affiliate); Chamber of Coffee Growers; Confederated
Union of Workers or CUT (Communist Party affiliate); Costa Rican
Confederation of Democratic Workers or CCTD (Liberation Party
affiliate); Federation of Public Service Workers or FTSP; National
Association for Economic Development or ANFE; National Association
of Educators or ANDE; Rerum Novarum or CTRN (PLN affiliate) [Gilbert
BROWN]

Cote d'Ivoire
NA

Croatia
NA

Cuba
NA

Cyprus
Confederation of Cypriot Workers or SEK (pro-West);
Confederation of Revolutionary Labor Unions or Dev-Is; Federation of
Turkish Cypriot Labor Unions or Turk-Sen; Pan-Cyprian Labor
Federation or PEO (Communist controlled)

Czech Republic
Czech-Moravian Confederation of Trade Unions or CMKOS
[Milan STECH]

Denmark
NA

Djibouti
Union for Presidential Majority UMP (coalition includes
RPP, FRUD, PPSD and PND); Union for Democratic Changeover or UAD
(opposition coalition includes ARD, MRDD, UDJ, and PDD) [Ahmed Dini
AHMED]

Dominica
Dominica Liberation Movement or DLM (a small leftist party)

Dominican Republic
Citizen Participation Group (Participacion
Ciudadania); Collective of Popular Organizations or COP; Foundation
for Institution-Building and Justice (FINJUS)

East Timor
Popular Council for the Defense of the Democratic
Republic of East Timor or CPD-RDTL [Antonio-Aitahan MATAK] is
largest political pressure group; dissatisfied veterans of struggle
against Indonesia, led by one-time government advisor Cornelio GAMA
(also known as L-7), also play an important role in pressuring
government

Ecuador
Confederation of Indigenous Nationalities of Ecuador or
CONAIE [Luis MACAS, president]; Coordinator of Social Movements or
CMS [F. Napoleon SANTOS]; Federation of Indigenous Evangelists of
Ecuador or FEINE [Marco MURILLO, president]; National Federation of
Indigenous Afro-Ecuatorianos and Peasants or FENOCIN [Pedro DE LA
CRUZ, president]

Egypt
despite a constitutional ban against religious-based parties,
the technically illegal Muslim Brotherhood constitutes Hosni
MUBARAK's potentially most significant political opposition; MUBARAK
tolerated limited political activity by the Brotherhood for his
first two terms, but moved more aggressively since then to block its
influence; civic society groups are sanctioned, but constrained in
practical terms; trade unions and professional associations are
officially sanctioned

El Salvador
labor organizations - Electrical Industry Union of El
Salvador or SIES; Federation of the Construction Industry, Similar
Transport and other activities, or FESINCONTRANS; National
Confederation of Salvadoran Workers or CNTS; National Union of
Salvadoran Workers or UNTS; Port Industry Union of El Salvador or
SIPES; Salvadoran Union of Ex-Petrolleros and Peasant Workers or
USEPOC; Salvadoran Workers Central or CTS; Workers Union of
Electrical Corporation or STCEL; business organizations - National
Association of Small Enterprise or ANEP; Salvadoran Assembly
Industry Association or ASIC; Salvadoran Industrial Association or
ASI

Equatorial Guinea
NA

Eritrea
Eritrean Islamic Jihad or EIJ (also including Eritrean
Islamic Jihad Movement or EIJM (also known as the Abu Sihel
Movement)); Eritrean Islamic Salvation or EIS (also known as the
Arafa Movement); Eritrean Liberation Front or ELF [ABDULLAH
Muhammed]; Eritrean National Alliance or ENA (a coalition including
EIJ, EIS, ELF, and a number of ELF factions) [HERUY Tedla Biru];
Eritrean Public Forum or EPF [ARADOM Iyob]

Estonia
NA

Ethiopia
Afar Revolutionary Democratic Union Front or ARDUF; Oromo
Liberation Front or OLF [DAOUD Ibsa]; Oromo National Liberation
Front or ONLF

Falkland Islands (Islas Malvinas)
none

Faroe Islands
NA

Fiji
NA

France
historically-Communist labor union (Confederation Generale du
Travail) or CGT, approximately 700,000 members (claimed);
left-leaning labor union (Confederation Francaise Democratique du
Travail) or CFDT, approximately 889,000 members (claimed);
independent labor union (Confederation Generale du Travail - Force
Ouvriere) or FO, 300,000 members (est.); independent white-collar
union (Confederation Generale des Cadres) or CGC, 196,000 members
(claimed); employers' union (Mouvement des Entreprises de France) or
MEDEF, 750,000 companies as members (claimed)

French Guiana
NA

French Polynesia
NA

Gabon
NA

Gambia, The
NA

Georgia
Georgian independent deputies from Abkhaz government in
exile; separatists in the breakaway regions of Abkhazia and South
Ossetia; supporters of former President Zviad GAMSAKHURDYA ousted in
1991

Germany
business associations, employers' organizations; expellee,
refugee, trade unions, and veterans groups

Ghana
NA

Gibraltar
Chamber of Commerce; Gibraltar Representatives
Organization; Women's Association

Greece
General Confederation of Greek Workers or GSEE [Khristos
POLYZOGOPOULOS]; Federation of Greek Industries or SEV [Odysseas
KYRIAKOPOULOS]; Civil Servants Confederation or ADEDY [Spyros
PAPASPYROS]

Greenland
NA

Grenada
NA

Guadeloupe
Christian Movement for the Liberation of Guadeloupe or
KLPG; General Federation of Guadeloupe Workers or CGT-G; General
Union of Guadeloupe Workers or UGTG; Movement for Independent
Guadeloupe or MPGI; The Socialist Renewal Movement

Guam
NA

Guatemala
Agrarian Owners Group or UNAGRO; Alliance Against Impunity
or AAI; Committee for Campesino Unity or CUC; Coordinating Committee
of Agricultural, Commercial, Industrial, and Financial Associations
or CACIF; Mutual Support Group or GAM

Guernsey
none

Guinea
Student and teacher unions

Guinea-Bissau
NA

Guyana
Amerindian People's Association; Guyana Citizens Initiative;
Guyana Bar Association; Guyana Human Rights Association; Guyana
Public Service Union or GPSU; Private Sector Commission; Trades
Union Congress

Haiti
Autonomous Organizations of Haitian Workers or CATH [Fignole
ST-CYR]; Confederation of Haitian Workers or CTH; Federation of
Workers Trade Unions or FOS; Grand-Anse Resistance Committee, or
KOREGA; Group of 184 Civil Society Organizations, or G-184 [Andy
APAID]; National Popular Assembly or APN; Papaye Peasants Movement
or MPP [Chavannes JEAN-BAPTISTE]; Popular Organizations Gathering
Power or PROP; Roman Catholic Church; Protestant Federation of Haiti

Holy See (Vatican City)
none (exclusive of influence exercised by
church officers)

Honduras
Committee for the Defense of Human Rights in Honduras or
CODEH; Confederation of Honduran Workers or CTH; Coordinating
Committee of Popular Organizations or CCOP; General Workers
Confederation or CGT; Honduran Council of Private Enterprise or
COHEP; National Association of Honduran Campesinos or ANACH;
National Union of Campesinos or UNC; Popular Bloc or BP; United
Confederation of Honduran Workers or CUTH

Hong Kong
Article 45 Concern Group (pro-democracy); Chinese General
Chamber of Commerce (pro-China); Chinese Manufacturers' Association
of Hong Kong; Confederation of Trade Unions or CTU (pro-democracy)
[LAU Chin-shek, president; LEE Cheuk-yan, general secretary];
Federation of Hong Kong Industries; Federation of Trade Unions or
FTU (pro-China) [CHENG Yiu-tong, executive councilor]; Hong Kong
Alliance in Support of the Patriotic Democratic Movement in China
[Szeto WAH, chairman]; Hong Kong and Kowloon Trade Union Council
(pro-Taiwan); Hong Kong General Chamber of Commerce; Hong Kong
Professional Teachers' Union [CHEUNG Man-kwong, president];
Neighborhood and Workers' Service Center or NWSC (pro-democracy);
The Alliance [Bernard CHAN, exco member]

Hungary
NA

Iceland
NA

India
numerous religious or militant/chauvinistic organizations,
including Vishwa Hindu Parishad, Bajrang Dal, and Rashtriya
Swayamsevak Sangh; various separatist groups seeking greater
communal and/or regional autonomy, including the All Parties
Hurriyat Conference in the Kashmir Valley and the National Socialist
Council of Nagaland in the Northeast

Indonesia
NA

Iran
political pressure groups conduct most of Iran's political
activities; groups that generally support the Islamic Republic
include Ansar-e Hizballah, Muslim Students Following the Line of the
Imam, Tehran Militant Clergy Association (Ruhaniyat), Islamic
Coalition Party (Motalefeh), and Islamic Engineers Society; active
pro-reform student groups include the Office of Strengthening Unity
(OSU); opposition groups include Freedom Movement of Iran, the
National Front, Marz-e Por Gohar, and various ethnic and Monarchist
organizations; armed political groups that have been almost
completely repressed by the government include Mujahidin-e Khalq
Organization (MEK), People's Fedayeen, Democratic Party of Iranian
Kurdistan, and Komala

Iraq
an insurgency against the Iraqi Transitional Government and
Coalition forces is primarily concentrated in Baghdad and in areas
west and north of the capital; the diverse, multigroup insurgency is
led principally by Sunni Arabs whose only common denominator is a
shared desire to oust the Coalition and end US influence in Iraq

Ireland
NA

Isle of Man
none

Israel
Israeli nationalists advocating Jewish settlement on the West
Bank and Gaza Strip; Peace Now supports territorial concessions in
the West Bank and Gaza Strip; Yesha (settler) Council promotes
settler interests and opposes territorial compromise; B'Tselem
monitors human rights abuses

Italy
Italian manufacturers and merchants associations
(Confindustria, Confcommercio); organized farm groups
(Confcoltivatori, Confagricoltura); Roman Catholic Church; three
major trade union confederations (Confederazione Generale Italiana
del Lavoro or CGIL [Guglielmo EPIFANI] which is left wing,
Confederazione Italiana dei Sindacati Lavoratori or CISL [Savino
PEZZOTTA], which is Roman Catholic centrist, and Unione Italiana del
Lavoro or UIL [Luigi ANGELETTI] which is lay centrist)

Jamaica
New Beginnings Movement or NBM; Rastafarians (black
religious/racial cultists, pan-Africanists)

Japan
NA

Jersey
none

Jordan
Anti-Normalization Committee [Ali Abu SUKKAR, president vice
chairman]; Jordan Bar Association [Hussein Mujalli, chairman];
Jordanian Press Association [Sayf al-SHARIF, president]; Muslim
Brotherhood [Salem AL-FALAHAT, secretary general]

Kazakhstan
Adil-Soz [Tamara KALEYEVA]; Almaty Helsinki Group [Ninel
FOKINA]; Confederation of Free Trade Unions [Sergei BELKIN]; For a
Just Kazakhstan [Bolat ABILOV, Altynbek SARSENBAYEV]; For Fair
Elections [Yevgeniy ZHOVTIS, Sabit ZHUSUPOV, Sergey DUVANOV, Ibrash
NUSUPBAYEV]; Kazakhstan International Bureau on Human Rights
[Yevgeniy ZHOVTIS, executive director]; Pensioners Movement or
Pokoleniye [Irina SAVOSTINA, chairwoman]; Republican Network of
International Monitors [Dos KUSHIM]; Transparency International
[Sergei ZLOTNIKOV]

Kenya
human rights groups; labor unions; Muslim organizations;
National Convention Executive Council or NCEC, a proreform coalition
of political parties and nongovernment organizations [Kivutha
KIBWANA]; Protestant National Council of Churches of Kenya or NCCK
[Mutava MUSYIMI]; Roman Catholic and other Christian churches;
Supreme Council of Kenya Muslims or SUPKEM [Shaykh Abdul Gafur
al-BUSAIDY]

Kiribati
NA

Korea, North
none

Korea, South
Federation of Korean Industries; Federation of Korean
Trade Unions; Korean Confederation of Trade Unions; Korean National
Council of Churches; Korean Traders Association; Korean Veterans'
Association; National Council of Labor Unions; National Democratic
Alliance of Korea; National Federation of Farmers' Associations;
National Federation of Student Associations

Kuwait
a number of political groups act as de facto parties; several
legislative blocs operate in the National Assembly: tribal groups,
merchants, Shi'a activists, Islamists, and secular liberals

Kyrgyzstan
Council of Free Trade Unions; Kyrgyz Committee on Human
Rights [Ramazan DYRYLDAYEV]; National Unity Democratic Movement;
Union of Entrepreneurs

Laos
noncommunist political groups proscribed; most opposition
leaders fled the country in 1975

Latvia
Headquarters for the Protection of Russian Schools (SHTAB)
[Aleksandr KAZAKOV]

Lebanon
none

Lesotho
NA

Liberia
NA

Libya
various Arab nationalist movements with almost negligible
memberships may be functioning clandestinely, as well as some
Islamic elements; an anti-QADHAFI Libyan exile movement exists,
primarily based in London, but has little influence

Liechtenstein
NA

Lithuania
NA

Luxembourg
ABBL (bankers' association); ALEBA (financial sector
trade union); Centrale Paysanne (federation of agricultural
producers); CEP (professional sector chamber); CGFP (trade union
representing civil service); Chambre de Commerce (Chamber of
Commerce); Chambre des Metiers (Chamber of Artisans); FEDIL
(federation of industrialists); Greenpeace (environment protection);
LCGP (center-right trade union); Mouvement Ecologique (protection of
ecology); OGBL (center-left trade union)

Macau
NA

Macedonia
Civic Movement of Macedonia [Gordana SILJANOVSKA]; World
Macedonian Congress [Todor PETROV]

Madagascar
Committee for the Defense of Truth and Justice or KMMR;
Committee for National Reconciliation or CRN [Albert Zafy]; National
Council of Christian Churches or FFKM

Malawi
NA

Malaysia
NA

Maldives
various unregistered political parties

Mali
Patriotic Movement of the Ghanda Koye or MPGK; United Movement
and Fronts of Azawad or MFUA

Malta
NA

Marshall Islands
NA

Martinique
Caribbean Revolutionary Alliance or ARC; Central Union
for Martinique Workers or CSTM [Marc PULVAR]; Frantz Fanon Circle;
League of Workers and Peasants; Proletarian Action Group or GAP

Mauritania
Arab nationalists; Ba'thists; General Confederation of
Mauritanian Workers or CGTM [Abdallahi Ould MOHAMED, secretary
general]; Independent Confederation of Mauritanian Workers or CLTM
[Samory Ould BEYE]; Islamists; Mauritanian Workers Union or UTM
[Mohamed Ely Ould BRAHIM, secretary general]

Mauritius
various labor unions

Mayotte
NA

Mexico
Confederation of Employers of the Mexican Republic or
COPARMEX; Confederation of Industrial Chambers or CONCAMIN;
Confederation of Mexican Workers or CTM; Confederation of National
Chambers of Commerce or CONCANACO; Coordinator for Foreign Trade
Business Organizations or COECE; Federation of Unions Providing
Goods and Services or FESEBES; National Chamber of Transformation
Industries or CANACINTRA; National Peasant Confederation or CNC;
National Union of Workers or UNT; Regional Confederation of Mexican
Workers or CROM; Revolutionary Confederation of Workers and Peasants
or CROC; Roman Catholic Church

Moldova
NA

Monaco
NA

Mongolia
NA

Montserrat
NA

Morocco
Democratic Confederation of Labor or CDT [Noubir AMAOUI];
General Union of Moroccan Workers or UGTM [Abderrazzak AFILAL];
Moroccan Employers Association or CGEM [Hassan CHAMI]; National
Labor Union of Morocco or UNMT [Abdelslam MAATI]; Union of Moroccan
Workers or UMT [Mahjoub BENSEDDIK]

Mozambique
Institute for Peace and Democracy (Instituto para Paz e
Democracia) or IPADE [Raul DOMINGOS, president]; Etica [Abdul CARIMO
Issa, chairman]; Movement for Peace and Citizenship (Movimento para
Paz e Cidadania); Mozambican League of Human Rights (Liga
Mocambicana dos Direitos Humanos) or LDH [Alice MABOTE, president];
Human Rights and Development (Direitos Humanos e Desenvolvimento) or
DHD [Artemisia FRANCO, secretary general]

Namibia
NA

Nauru
NA

Nepal
Maoist guerrilla-based insurgency [Pushpa Kamal DAHAL, also
known as PRACHANDA, chairman; Dr. Baburam BHATTARAI]; numerous
small, left-leaning student groups in the capital; several small,
radical Nepalese antimonarchist groups

Netherlands
Netherlands Trade Union Federation or FNV (consisting of
a merger of Socialist and Catholic trade unions); Christian Trade
Union Federation or CNV; Trade Union Federation of Middle and High
Personnel or MHP; Federation of Catholic and Protestant Employers
Associations; Interchurch Peace Council or IKV; large multinational
firms; the nondenominational Federation of Netherlands Enterprises

Netherlands Antilles
Unions (AVBO) and Employers Association (VBC)

New Caledonia
NA

New Zealand
NA

Nicaragua
National Workers Front or FNT is a Sandinista umbrella
group of eight labor unions including - Farm Workers Association or
ATC, Health Workers Federation or FETASALUD, Heroes and Martyrs
Confederation of Professional Associations or CONAPRO, National
Association of Educators of Nicaragua or ANDEN, National Union of
Employees or UNE, National Union of Farmers and Ranchers or UNAG,
Sandinista Workers Central or CST, and Union of Journalists of
Nicaragua or UPN; Permanent Congress of Workers or CPT is an
umbrella group of four non-Sandinista labor unions including -
Autonomous Nicaraguan Workers Central or CTN-A, Confederation of
Labor Unification or CUS, Independent General Confederation of Labor
or CGT-I, and Labor Action and Unity Central or CAUS; Nicaraguan
Workers' Central or CTN is an independent labor union; Superior
Council of Private Enterprise or COSEP is a confederation of
business groups

Niger
Coalition Against a High Cost of Living [Nouhou ARZIKA]

Nigeria
NA

Niue
NA

Norfolk Island
none

Northern Mariana Islands
NA

Norway
NA

Oman
none

Pakistan
military remains most important political force; ulema
(clergy), landowners, industrialists, and small merchants also
influential

Palau
NA

Panama
Chamber of Commerce; National Civic Crusade; National Council
of Organized Workers or CONATO; National Council of Private
Enterprise or CONEP; National Union of Construction and Similar
Workers (SUNTRACS); Panamanian Association of Business Executives or
APEDE; Panamanian Industrialists Society or SIP; Workers
Confederation of the Republic of Panama or CTRP

Papua New Guinea
NA

Paraguay
Ahorristas Estafados or AE; National Coordinating Board of
Campesino Organizations or MCNOC [Luis AGUAYO]; National Federation
of Campesinos or FNC [Odilon ESPINOLA]; National Workers Central or
CNT [Secretary General Juan TORRALES]; Paraguayan Workers
Confederation or CPT; Roman Catholic Church; Unitary Workers Central
or CUT [Jorge Guzman ALVARENGA Malgarejo]

Peru
leftist guerrilla groups include Shining Path [Abimael GUZMAN
Reynoso (imprisoned), Gabriel MACARIO (top leader at-large)]; Tupac
Amaru Revolutionary Movement or MRTA [Victor POLAY (imprisoned),
Hugo AVALLENEDA Valdez (top leader at-large)]

Philippines
AKBAYAN [Reps. Etta ROSALES, Mario AGUJA, and Risa
HONTIVEROS-BARAQUIEL]; ALAGAD [Rep. Rodante MARROLITA]; ALIF [Rep.
Acmad TOMAWIS]; An Waray [Rep. Horencio NOEL]; Anak Mindanao [Mujiv
HATAMIN]; ANAKPAWIS [Reps. Crispin BELTRAN and Rafael MARIANO]; APEC
[Reps. Ernesto PABLO, Edgar VALDEZ]; Association of Philippine
Electric Cooperatives (APEC) [Reps. Edgar VALDEZ, Ernesto PABLO, and
Sunny Rose MADAMBA]; AVE [Rep. Eulogio MAGSAYSAY]; Bayan Muna [Reps.
Satur OCAMPO, Joel VIRADOR, and Teodoro CASINO, Jr.]; BUHAY [Reps.
Rene VELARDE and Hans Christian SENERES]; BUTIL [Rep. Benjamin
CRUZ]; CIBAC [Rep. Emmanuel Joel VILLANUEVA]; COOP-NATCO [Rep.
Guillermo CUA]; GABRIELA [Rep. Liza MAZA]; Partido Ng Manggagawa
[Rep. Renato MAGTUBO]; Veterans Federation of the Philippines [Rep.
Ernesto GIDAYA] (2006)

Pitcairn Islands
none

Poland
All Poland Trade Union Alliance or OPZZ (trade union) [Jan
GUZ]; Roman Catholic Church [Cardinal Jozef GLEMP]; Solidarity Trade
Union [Janusz SNIADEK]

Portugal
NA

Puerto Rico
Boricua Popular Army or EPB (a revolutionary group also
known as Los Macheteros); note - the following radical groups are
considered dormant by Federal law enforcement: Armed Forces for
National Liberation or FALN, Armed Forces of Popular Resistance,
Volunteers of the Puerto Rican Revolution

Qatar
none

Reunion
NA

Romania
various human rights and professional associations

Russia
NA

Rwanda
IBUKA - association of genocide survivors

Saint Helena
none

Saint Kitts and Nevis
NA

Saint Lucia
NA

Saint Pierre and Miquelon
NA

Saint Vincent and the Grenadines
NA

Samoa
NA

San Marino
NA

Sao Tome and Principe
NA

Saudi Arabia
none

Senegal
labor; Muslim brotherhoods; students; teachers

Seychelles
Roman Catholic Church; trade unions

Sierra Leone
trade unions and student unions

Singapore
NA

Slovakia
Federation of Employers' Associations of the Slovak
Republic; Association of Towns and Villages or ZMOS; Confederation
of Trade Unions or KOZ

Slovenia
NA

Solomon Islands
Isatabu Freedom Movement (IFM); Malaita Eagle Force
(MEF); note - these rival armed ethnic factions crippled the Solomon
Islands in a wave of violence from 1999 to 2003

Somalia
numerous clan and sub-clan factions are currently vying for
power

South Africa
Congress of South African Trade Unions or COSATU
[Zwelinzima VAVI, general secretary]; South African Communist Party
or SACP [Blade NZIMANDE, general secretary]; South African National
Civics Organization or SANCO [Mlungisi HLONGWANE, national
president]; note - COSATU and SACP are in a formal alliance with the
ANC

Spain
business and landowning interests; Catholic Church; free labor
unions (authorized in April 1977); Socialist General Union of
Workers or UGT and the smaller independent Workers Syndical Union or
USO; university students; Trade Union Confederation of Workers'
Commissions or CC.OO.; Nunca Mas (Galician for "Never Again"; formed
in response to the oil tanker Prestige oil spill)

Sri Lanka
Buddhist clergy; labor unions; Liberation Tigers of Tamil
Eelam or LTTE [Velupillai PRABHAKARAN](insurgent group fighting for
a separate state); radical chauvinist Sinhalese groups such as the
National Movement Against Terrorism; Sinhalese Buddhist lay groups

Sudan
Umma Party [Sadiq al-MAHDI]; Popular Congress Party or PCP
[Hassan al-TURABI]

Suriname
Association of Indigenous Village Chiefs [Ricardo PANE];
Association of Saramaccan Authorities or Maroon [Head Captain WASE];
Women's Parliament Forum or PVF [Iris GILLIAD]

Swaziland
NA

Sweden
NA

Switzerland
NA

Syria
Kurdish Democratic Alliance (includes several groups but has
no designated leader); Kurdish Democratic Front (includes several
groups but has no designated leader); Muslim Brotherhood (operates
in exile in London) [Sadr al-Din al-BAYANUNI]; National Democratic
Front [Hassan Abd al-AZIM]

Taiwan
Taiwan independence movement, various business and
environmental groups
note: debate on Taiwan independence has become acceptable within the
mainstream of domestic politics on Taiwan; political liberalization
and the increased representation of opposition parties in Taiwan's
legislature have opened public debate on the island's national
identity; a broad popular consensus has developed that Taiwan
currently enjoys de facto independence and - whatever the ultimate
outcome regarding reunification or independence - that Taiwan's
people must have the deciding voice; advocates of Taiwan
independence oppose the stand that the island will eventually unify
with mainland China; goals of the Taiwan independence movement
include establishing a sovereign nation on Taiwan and entering the
UN; other organizations supporting Taiwan independence include the
World United Formosans for Independence and the Organization for
Taiwan Nation Building

Tajikistan
unregistered political parties: Agrarian Party
[Hikmatullo NASREDDINOV]; Party of Justice [Abdurahim KARIMOV];
People's Unity Party [Abdumalik ABDULLOJONOV]; Progressive Party
[Sulton QUVVATOV]; Socialist Party [Mirhuseyn NAZRIYEV]; note - this
is the SPT that was disbanded, another pro-government SPT (listed
above under political parties) replaced it; Unity Party [Hikmatullo
SAIDOV]

Tanzania
NA

Thailand
NA

Togo
NA

Tokelau
none

Tonga
Human Rights and Democracy Movement Tonga or HRDMT [Rev.
Simote VEA, chairman]; Public Servant's Association [Finau TUTONE]

Trinidad and Tobago
Jamaat-al Muslimeen [Yasin BAKR]

Tunisia
the Islamic fundamentalist party, Al Nahda (Renaissance), is
outlawed

Turkey
Confederation of Public Sector Unions or KESK [Sami EVREN];
Confederation of Revolutionary Workers Unions or DISK [Suleyman
CELEBI]; Independent Industrialists' and Businessmen's Association
or MUSIAD [Omer BOLAT]; Moral Rights Workers Union or Hak-Is [Salim
USLU]; Turkish Confederation of Employers' Unions or TISK [Refik
BAYDUR]; Turkish Confederation of Labor or Turk-Is [Salih KILIC];
Turkish Confederation of Tradesmen and Craftsmen or TESK [Dervis
GUNDAY]; Turkish Industrialists' and Businessmen's Association or
TUSIAD [Omer SABANCI]; Turkish Union of Chambers of Commerce and
Commodity Exchanges or TOBB [M. Rifat HISARCIKLIOGLU]

Turkmenistan
NA

Turks and Caicos Islands
NA

Tuvalu
none

Uganda
Popular Resistance Against a Life President or PRALP

Ukraine
Committee of Voters of Ukraine [Ihor POPOV]

United Arab Emirates
NA

United Kingdom
Campaign for Nuclear Disarmament; Confederation of
British Industry; National Farmers' Union; Trades Union Congress

United States
NA

Uruguay
Architect's Society of Uruguay (professional organization);
Catholic Church; Chamber of Uruguayan Industries (manufacturer's
association); Chemist and Pharmaceutical Association (professional
organization); PIT-CNT (powerful federation of Uruguayan unions);
Rural Association of Uruguay (rancher's association); students;
Uruguayan Construction League

Uzbekistan
Agrarian and Entrepreneurs' Party [Marat ZAHIDOV]; Birlik
(Unity) Movement [Abdurakhim POLAT, chairman]; Erk (Freedom)
Democratic Party [Muhammad SOLIH, chairman] was banned 9 December
1992; Ezgulik Human Rights Society [Vasilia INOYATOVA]; Free
Farmers' Party or Ozod Dehqonlar [Nigara KHIDOYATOVA]; Human Rights
Society of Uzbekistan [Tolib YAKUBOV, chairman]; Independent Human
Rights Society of Uzbekistan [Mikhail ARDZINOV, chairman]; Mazlum;
Sunshine Coalition [Sanjar UMAROV, chairman]

Vanuatu
NA

Venezuela
FEDECAMARAS, a conservative business group; VECINOS
groups; Venezuelan Confederation of Workers or CTV (labor
organization dominated by the Democratic Action)

Vietnam
none

Virgin Islands
NA

Wallis and Futuna
NA

Western Sahara
none

Yemen
NA

Zambia
NA

Zimbabwe
Crisis in Zimbabwe Coalition [Wellington CHIBEBE]; National
Constitutional Assembly or NCA [Lovemore MADHUKU]; Zimbabwe Congress
of Trade Unions or ZCTU [Lovemore MATOMBO]

This page was last updated on 19 December, 2006

@2116 Economy - overview

Afghanistan
Afghanistan's economic outlook has improved
significantly since the fall of the Taliban regime in 2001 because
of the infusion of over $8 billion in international assistance,
recovery of the agricultural sector and growth of the service
sector, and the reestablishment of market institutions. Real GDP
growth is estimated to have slowed in the last fiscal year primarily
because adverse weather conditions cut agricultural production, but
is expected to rebound over 2005-06 because of foreign donor
reconstruction and service sector growth. Despite the progress of
the past few years, Afghanistan remains extremely poor, landlocked,
and highly dependent on foreign aid, farming, and trade with
neighboring countries. It will probably take the remainder of the
decade and continuing donor aid and attention to significantly raise
Afghanistan's living standards from its current status, among the
lowest in the world. Much of the population continues to suffer from
shortages of housing, clean water, electricity, medical care, and
jobs, but the Afghan government and international donors remain
committed to improving access to these basic necessities by
prioritizing infrastructure development, education, housing
development, jobs programs, and economic reform over the next year.
Growing political stability and continued international commitment
to Afghan reconstruction create an optimistic outlook for continuing
improvements in the Afghan economy in 2006. Expanding poppy
cultivation and a growing opium trade may account for one-third of
GDP and looms as one of Kabul's most serious policy challenges.
Other long-term challenges include: boosting the supply of skilled
labor, reducing vulnerability to severe natural disasters, expanding
health services, and rebuilding a war torn infrastructure.

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
Lagging behind its Balkan neighbors, Albania is making the
difficult transition to a more modern open-market economy. The
government has taken measures to curb violent crime and to spur
economic activity and trade. The economy is bolstered by annual
remittances from abroad of $600-$800 million, mostly from Greece and
Italy; this helps offset the towering trade deficit. Agriculture,
which accounts for about one-quarter of GDP, is held back because of
frequent drought and the need to modernize equipment, to clarify
property rights, and to consolidate small plots of land. Energy
shortages and antiquated and inadequate infrastructure contribute to
Albania's poor business environment, which make it difficult to
attract and sustain foreign investment. The planned construction of
a new thermal power plant near Vlore and improved transmission and
distribution facilities will help relieve the energy shortages.
Also, the government is moving slowly to improve the poor national
road and rail network, a long-standing barrier to sustained economic
growth. On the positive side: growth was strong in 2003-05 and
inflation is not a problem.

Algeria
The hydrocarbons sector is the backbone of the economy,
accounting for roughly 60% of budget revenues, 30% of GDP, and over
95% of export earnings. Algeria has the seventh-largest reserves of
natural gas in the world and is the second-largest gas exporter; it
ranks 14th in oil reserves. Sustained high oil prices in recent
years, along with macroeconomic policy reforms supported by the IMF,
have helped improve Algeria's financial and macroeconomic
indicators. Algeria is running substantial trade surpluses and
building up record foreign exchange reserves. Real GDP has risen due
to higher oil output and increased government spending. The
government's continued efforts to diversify the economy by
attracting foreign and domestic investment outside the energy
sector, however, has had little success in reducing high
unemployment and improving living standards. The population is
becoming increasingly restive due to the lack of jobs and housing
and frequently stages protests, which have resulted in arrests and
injuries, including some deaths as government forces intervened to
restore order. Structural reform within the economy, such as
development of the banking sector and the construction of
infrastructure, moves ahead slowly hampered by corruption and
bureaucratic resistance.

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 foreign trade. Tuna fishing and tuna processing
plants are the backbone of the private sector, with canned tuna the
primary export. Transfers from the US Government add substantially
to American Samoa's economic well being. Attempts by the government
to develop a larger and broader economy are restrained by Samoa's
remote location, its limited transportation, and its devastating
hurricanes. Tourism is a promising developing sector.

Andorra
Tourism, the mainstay of Andorra's tiny, well-to-do economy,
accounts for more than 80% of GDP. An estimated 11.6 million
tourists visit annually, attracted by Andorra's duty-free status and
by its summer and winter resorts. Andorra's comparative advantage
has recently eroded as the economies of neighboring France and Spain
have been opened up, providing broader availability of goods and
lower tariffs. The banking sector, with its partial "tax haven"
status, also contributes substantially to the economy. Agricultural
production is limited - only 2% of the land is arable - and most
food has to be imported. The principal livestock activity is sheep
raising. Manufacturing output consists mainly of cigarettes, cigars,
and furniture. Andorra is a member of the EU Customs Union and is
treated as an EU member for trade in manufactured goods (no tariffs)
and as a non-EU member for agricultural products.

Angola
Angola's high growth rate is driven by its oil sector, with
record oil prices and rising petroleum production. Oil production
and its supporting activities contribute about half of GDP and 90%
of exports. Increased oil production supported 12% growth in 2004
and 19% growth in 2005. A postwar reconstruction boom and
resettlement of displaced persons has led to high rates of growth in
construction and agriculture as well. Much of the country's
infrastructure is still damaged or undeveloped from the 27-year-long
civil war. Remnants of the conflict such as widespread land mines
still mar the countryside even though an apparently durable peace
was established after the death of rebel leader Jonas SAVIMBI in
February 2002. Subsistence agriculture provides the main livelihood
for half of the population, but half of the country's food must
still be imported. In 2005, the government started using a $2
billion line of credit from China to rebuild Angola's public
infrastructure, and several large-scale projects are scheduled for
completion by 2006. The central bank in 2003 implemented an exchange
rate stabilization program using foreign exchange reserves to buy
kwanzas out of circulation, a policy that was more sustainable in
2005 because of strong oil export earnings, and has significantly
reduced inflation. Consumer inflation declined from 325% in 2000 to
about 18% in 2005, but the stabilization policy places pressure on
international net liquidity. To fully take advantage of its rich
national resources - gold, diamonds, extensive forests, Atlantic
fisheries, and large oil deposits - Angola will need to continue
reforming government policies and to reduce corruption. The
government has made sufficient progress on reforms recommended by
the IMF such as promoting greater transparency in government
spending but continues to be without a formal monitoring agreement
with the institution.

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, which has spurred the growth of the construction sector,
has contributed to economic growth. Anguillan officials have put
substantial effort into developing the offshore financial sector,
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
Fishing off the coast and tourism, both based abroad,
account for Antarctica's limited economic activity. Antarctic
fisheries in 2003-04 (1 July-30 June) reported landing 136,262
metric tons (estimated fishing 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, is a
serious problem. The CCAMLR determines the recommended catch limits
for marine species. A total of 23,175 tourists visited in the
2004-05 Antarctic summer, up from the 19,486 visitors the previous
year. Nearly all of them were passengers on commercial
(nongovernmental) ships and several yachts that make trips during
the summer. Most tourist trips last approximately two weeks.

Antigua and Barbuda
Tourism continues to dominate the economy,
accounting for more than half of GDP. Weak tourist arrival numbers
since early 2000 have slowed the economy, however, and pressed the
government into a tight fiscal corner. 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 income growth in the industrialized world, especially in
the US, which accounts for slightly more than one-third of tourist
arrivals.

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

Argentina
Argentina benefits from rich natural resources, a highly
literate population, an export-oriented agricultural sector, and a
diversified industrial base. Over the past decade, however, the
country has suffered problems of inflation, external debt, capital
flight, and budget deficits. Growth in 2000 was a negative 0.8%, as
both domestic and foreign investors remained skeptical of the
government's ability to pay debts and maintain the peso's fixed
exchange rate with the US dollar. The economic situation worsened in
2001 with the widening of spreads on Argentine bonds, massive
withdrawals from the banks, and a further decline in consumer and
investor confidence. Government efforts to achieve a "zero deficit,"
to stabilize the banking system, and to restore economic growth
proved inadequate in the face of the mounting economic problems. The
peso's peg to the dollar was abandoned in January 2002, and the peso
was floated in February. The exchange rate plunged and real GDP fell
by 10.9% in 2002, but by mid-year the economy had stabilized, albeit
at a lower level. GDP expanded by about 9% per year from 2003 to
2005. Growth is being led by a revival in domestic demand, solid
exports, and favorable external conditions. The government boosted
spending ahead of the October 2005 midterm congressional elections,
but strong revenue performance allowed Argentina to maintain a
budget surplus. Inflation has been rising steadily and reached 12.3
percent in 2005.

Armenia
Under the old Soviet central planning system, Armenia had
developed a modern industrial sector, supplying machine tools,
textiles, and other manufactured goods to sister republics in
exchange for raw materials and energy. Since the implosion of the
USSR in December 1991, Armenia has switched to small-scale
agriculture away from the large agroindustrial complexes of the
Soviet era. The agricultural sector has long-term needs for more
investment and updated technology. The privatization of industry has
been at a slower pace, but has been given renewed emphasis by the
current administration. Armenia is a food importer, and its mineral
deposits (copper, gold, bauxite) are small. The ongoing conflict
with Azerbaijan over the ethnic Armenian-dominated region of
Nagorno-Karabakh and the breakup of the centrally directed economic
system of the former Soviet Union contributed to a severe economic
decline in the early 1990s. By 1994, however, the Armenian
Government had launched an ambitious IMF-sponsored economic
liberalization program that resulted in positive growth rates in
1995-2005. Armenia joined the WTO in January 2003. Armenia also has
managed to slash inflation, stabilize its currency, and privatize
most small- and medium-sized enterprises. Armenia's unemployment
rate, however, remains high, despite strong economic growth. The
chronic energy shortages Armenia suffered in the early and mid-1990s
have been offset by the energy supplied by one of its nuclear power
plants at Metsamor. Armenia is now a net energy exporter, although
it does not have sufficient generating capacity to replace Metsamor,
which is under international pressure to close. The electricity
distribution system was privatized in 2002. Armenia's severe trade
imbalance has been offset somewhat by international aid, remittances
from Armenians working abroad, and foreign direct investment.
Economic ties with Russia remain close, especially in the energy
sector. The government made some improvements in tax and customs
administration in 2005, but anti-corruption measures will be more
difficult to implement. Investment in the construction and
industrial sectors is expected to continue in 2006 and will help to
ensure annual average real GDP growth of about 13.9%.

Aruba
Tourism is the mainstay of the small, open Aruban economy,
with offshore banking and oil refining and storage also important.
The rapid growth of the tourism sector over the last decade has
resulted in a substantial expansion of other activities. Over 1.5
million tourists per year visit Aruba, with 75% of those from the
US. Construction continues to boom, with hotel capacity five times
the 1985 level. In addition, the reopening of the country's oil
refinery in 1993, a major source of employment and foreign exchange
earnings, has further spurred growth. Tourist arrivals have
rebounded strongly following a dip after the 11 September 2001
attacks. The island experiences only a brief low season, and hotel
occupancy in 2004 averaged 80%, compared to 68% throughout the rest
of the Caribbean. The newly re-elected government has made cutting
the budget and trade deficits a high priority.

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
Australia has an enviable Western-style capitalist economy
with a per capita GDP on par with the four dominant West European
economies. Rising output in the domestic economy, robust business
and consumer confidence, and rising exports of raw materials and
agricultural products are fueling the economy. Australia's emphasis
on reforms, low inflation, and growing ties with China are other key
factors behind the economy's strength. The impact of drought, weak
foreign demand, and strong import demand pushed the trade deficit up
from $8 billion in 2002, to $18 billion in 2003, $13 billion in
2004, and nearly $17 billion in 2005. Housing prices probably peaked
in 2005, diminishing the prospect that interest rates would be
raised to prevent a speculative bubble. Conservative fiscal policies
have kept Australia's budget in surplus from 2002 to 2005.

Austria
Austria, with its well-developed market economy and high
standard of living, is closely tied to other EU economies,
especially Germany's. The Austrian economy also benefits greatly
from strong commercial relations, especially in the banking and
insurance sectors, with central, eastern, and southeastern Europe.
The economy features a large service sector, a sound industrial
sector, and a small, but highly developed agricultural sector.
Membership in the EU has drawn an influx of foreign investors
attracted by Austria's access to the single European market and
proximity to the new EU economies. The current government has
successfully pursued a comprehensive economic reform program, aimed
at streamlining government, creating a more competitive business
environment, further strengthening Austria's attractiveness as an
investment location, pursuing a balanced budget, and implementing
effective pension reforms. Weak domestic consumption and slow growth
in Europe have held the economy to growth rates of 0.4% in 2002,
1.4% in 2003, 2.4% in 2004, and 1.8% in 2005. To meet increased
competition from both EU and Central European countries,
particularly the new EU members, Austria will need to continue
restructuring, emphasizing knowledge-based sectors of the economy,
and encouraging greater labor flexibility and greater labor
participation by its aging population.

Azerbaijan
Azerbaijan's number one export is oil. Azerbaijan's oil
production declined through 1997, but has registered an increase
every year since. Negotiation of production-sharing arrangements
(PSAs) with foreign firms, which have thus far committed $60 billion
to long-term oilfield development, should generate the funds needed
to spur future industrial development. Oil production under the
first of these PSAs, with the Azerbaijan International Operating
Company, began in November 1997. A consortium of Western oil
companies is scheduled to begin pumping 1 million barrels a day from
a large offshore field in early 2006, through a $4 billion pipeline
it built from Baku to Turkey's Mediterranean port of Ceyhan.
Economists estimate that by 2010 revenues from this project will
double the country's current GDP. Azerbaijan shares all the
formidable problems of the former Soviet republics in making the
transition from a command to a market economy, but its considerable
energy resources brighten its long-term prospects. Baku has only
recently begun making progress on economic reform, and old economic
ties and structures are slowly being replaced. Several other
obstacles impede Azerbaijan's economic progress: the need for
stepped up foreign investment in the non-energy sector, the
continuing conflict with Armenia over the Nagorno-Karabakh region,
and the pervasive corruption. 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 will
depend on world oil prices, the location of new pipelines in the
region, and Azerbaijan's ability to manage its oil wealth.

Bahamas, The
The Bahamas is a stable, developing nation with an
economy heavily dependent on tourism and offshore banking. Tourism
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. Steady growth in tourism receipts
and a boom in construction of new hotels, resorts, and residences
had led to solid GDP growth in recent years, but the slowdown in the
US economy and the attacks of 11 September 2001 held back growth in
these sectors in 2001-03. The current government has presided over a
period of economic recovery and an upturn in large-scale private
sector investments in tourism. Financial services constitute the
second-most important sector of the Bahamian economy, accounting for
about 15% of GDP. However, since December 2000, when the government
enacted new regulations on the financial sector, many international
businesses have left The Bahamas. Manufacturing and agriculture
together contribute approximately a tenth of GDP and show little
growth, despite government incentives aimed at those sectors.
Overall growth prospects in the short run rest heavily on the
fortunes of the tourism sector, which depends on growth in the US,
the source of more than 80% of the visitors.

Bahrain
Petroleum production and refining account for about 60% of
Bahrain's export receipts, 60% of government revenues, and 30% of
GDP. With its highly developed communication and transport
facilities, Bahrain is home to numerous multinational firms with
business in the Gulf. A large share of exports consists of petroleum
products made from refining imported crude. Construction proceeds on
several major industrial projects. Unemployment, especially among
the young, and the depletion of oil and underground water resources
are major long-term economic problems. In 2005 Bahrain and the US
ratified a Free Trade Agreement (FTA), the first FTA between the US
and a Gulf state.

Baker Island
no economic activity

Bangladesh
Despite sustained domestic and international efforts to
improve economic and demographic prospects, Bangladesh remains a
poor, overpopulated, and inefficiently-governed nation. Although
half of GDP is generated through the service sector, nearly
two-thirds of Bangladeshis are employed in the agriculture sector,
with rice as the single-most-important product. Major impediments to
growth include frequent cyclones and floods, inefficient state-owned
enterprises, inadequate port facilities, a rapidly growing labor
force that cannot be absorbed by agriculture, delays in exploiting
energy resources (natural gas), insufficient power supplies, and
slow implementation of economic reforms. Reform is stalled in many
instances by political infighting and corruption at all levels of
government. Progress also has been blocked by opposition from the
bureaucracy, public sector unions, and other vested interest groups.
The BNP government, led by Prime Minister Khaleda ZIA, has the
parliamentary strength to push through needed reforms, but the
party's political will to do so has been lacking in key areas. One
encouraging note: growth has been a steady 5% for the past several
years.

Barbados
Historically, the Barbadian economy had been dependent on
sugarcane cultivation and related activities, but production in
recent years has diversified into light industry and tourism.
Offshore finance and information services are important foreign
exchange earners. The government continues its efforts to reduce
unemployment, to encourage direct foreign investment, and to
privatize remaining state-owned enterprises. The economy contracted
in 2002-03 mainly due to a decline in tourism. Growth was positive
in 2005, as economic conditions in the US and Europe moderately
improved.

Bassas da India
no economic activity

Belarus
Belarus's economy in 2005 posted 8% growth. The government
has succeeded in lowering inflation over the past several years.
Trade with Russia - by far its largest single trade partner -
decreased in 2005, largely as a result of a change in the way the
Value Added Tax (VAT) on trade was collected. Trade with European
countries increased. Belarus has seen little structural reform since
1995, when President LUKASHENKO launched the country on the path of
"market socialism." In keeping with this policy, LUKASHENKO
reimposed administrative controls over prices and currency exchange
rates and expanded the state's right to intervene in the management
of private enterprises. During 2005, the government re-nationalized
a number of private companies. In addition, businesses have been
subject to pressure by central and local governments, e.g.,
arbitrary changes in regulations, numerous rigorous inspections,
retroactive application of new business regulations, and arrests of
"disruptive" businessmen and factory owners. A wide range of
redistributive policies has helped those at the bottom of the
ladder; the Gini coefficient is among the lowest in the world.
Because of these restrictive economic policies, Belarus has had
trouble attracting foreign investment, which remains low. Growth has
been strong in recent years, despite the roadblocks in a tough,
centrally directed economy with a high, but decreasing, rate of
inflation. Belarus continues to receive heavily discounted oil and
natural gas from Russia. Much of Belarus' growth can be attributed
to the re-export of Russian oil at market prices.

Belgium
This modern, private-enterprise economy has capitalized on
its central geographic location, highly developed transport network,
and diversified industrial and commercial base. Industry is
concentrated mainly in the populous Flemish area in the north. With
few natural resources, Belgium must import substantial quantities of
raw materials and export a large volume of manufactures, making its
economy unusually dependent on the state of world markets. Roughly
three-quarters of its trade is with other EU countries. Public debt
is nearly 100% of GDP. On the positive side, the government has
succeeded in balancing its budget, and income distribution is
relatively equal. Belgium began circulating the euro currency in
January 2002. Economic growth in 2001-03 dropped sharply because of
the global economic slowdown, with moderate recovery in 2004-05.

Belize
In this small, essentially private-enterprise economy the
tourism industry is the number one foreign exchange earner followed
by marine products, citrus, cane sugar, bananas, and garments. The
government's expansionary monetary and fiscal policies, initiated in
September 1998, led to sturdy GDP growth averaging nearly 5% in
1999-2005. Major concerns continue to be the sizable trade deficit
and foreign debt. A key short-term objective remains the reduction
of poverty with the help of international donors.

Benin
The economy of Benin remains underdeveloped and dependent on
subsistence agriculture, cotton production, and regional trade.
Growth in real output has averaged around 5% in the past six years,
but rapid population growth has offset much of this increase.
Inflation has subsided over the past several years. In order to
raise growth still further, 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. Many of these proposals are included in Benin's
application to receive Millennium Challenge Account funding - for
which it was a finalist in 2004-05. The 2001 privatization policy
continues in telecommunications, water, electricity, and agriculture
in spite of government reluctance. The Paris Club and bilateral
creditors have eased the external debt situation, with Benin
benefiting from a G8 debt reduction announced in July 2005, while
pressing for more rapid structural reforms. Benin continues to be
hurt by Nigerian trade protection that bans imports of a growing
list of products from Benin and elsewhere, which has resulted in
increased smuggling and criminality in the border region.

Bermuda
Bermuda enjoys the highest per capita income in the world,
more than 50% higher than that of the US. Its economy is primarily
based on providing financial services for international business and
luxury facilities for tourists. A number of reinsurance companies
relocated to the island following 11 September 2001 and again after
Hurricane Katrina, contributing to the expansion of an already
robust international business sector. Bermuda's tourism industry -
which derives over 80% of its visitors from the US - continues to
struggle but remains the island's number two industry. Most capital
equipment and food must be imported. Bermuda's industrial sector is
small, although construction continues to be important; the average
cost of a house in June 2003 had risen to $976,000. Agriculture is
limited with only 20% of the land being arable.

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

Bolivia
Bolivia, long one of the poorest and least developed Latin
American countries, reformed its economy after suffering a
disastrous economic crisis in the early 1980s. The reforms spurred
real GDP growth, which averaged 4% in the 1990s, and poverty rates
fell. Economic growth, however, lagged again beginning in 1999
because of a global slowdown and homegrown factors such as political
turmoil, civil unrest, and soaring fiscal deficits, all of which
hurt investor confidence. In 2003, violent protests against the
pro-foreign investment economic policies of President SANCHEZ DE
LOZADA led to his resignation and the cancellation of plans to
export Bolivia's newly discovered natural gas reserves to large
northern hemisphere markets. In 2005, the government passed a
controversial natural gas law that imposes on the oil and gas firms
significantly higher taxes as well as new contracts that give the
state control of their operations. Bolivian officials are in the
process of implementing the law; meanwhile, foreign investors have
stopped investing and have taken the first legal steps to secure
their investments. Real GDP growth in 2003-05 - helped by increased
demand for natural gas in neighboring Brazil - was positive, but
still below the levels seen during the 1990s. Bolivia's fiscal
position has improved in recent years, but the country remains
dependent on foreign aid from multilateral lenders and foreign
governments to meet budget shortfalls. In 2005, the G8 announced a
$2 billion debt-forgiveness plan over the next few decades that
should help reduce some fiscal pressures on the government in the
near term.

Bosnia and Herzegovina
Bosnia and Herzegovina ranked next to
Macedonia as the poorest republic in the old Yugoslav federation.
Although agriculture is almost all in private hands, farms are small
and inefficient, and the republic traditionally is a net importer of
food. Industry remains greatly overstaffed, a holdover from the
socialist economic structure of Yugoslavia. TITO had pushed the
development of military industries in the republic with the result
that Bosnia was saddled with a host of industrial firms with little
commercial potential. The interethnic warfare in Bosnia caused
production to plummet by 80% from 1992 to 1995 and unemployment to
soar. With an uneasy peace in place, output recovered in 1996-99 at
high percentage rates from a low base; but output growth slowed in
2000-02. Part of the lag in output was made up in 2003-05.
National-level statistics are limited and do not capture the large
share of black market activity. 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 increased. Implementation of privatization, however, has been
slow, and local entities only reluctantly support national-level
institutions. Banking reform accelerated in 2001 as all the
Communist-era payments bureaus were shut down; foreign banks,
primarily from Western Europe, now control most of the banking
sector. A sizeable current account deficit and high unemployment
rate remain the two most serious economic problems. The country
receives substantial amounts of reconstruction assistance and
humanitarian aid from the international community but will have to
prepare for an era of declining assistance.

Botswana
Botswana has maintained one of the world's highest economic
growth rates since independence in 1966. Through fiscal discipline
and sound management, Botswana has transformed itself from one of
the poorest countries in the world to a middle-income country with a
per capita GDP of $10,000 in 2005. 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 and for 70-80% of export earnings. Tourism,
financial services, subsistence farming, and cattle raising are
other key sectors. On the downside, the government must deal with
high rates of unemployment and poverty. Unemployment officially is
23.8%, but unofficial estimates place it closer to 40%. HIV/AIDS
infection rates are the second highest in the world and threaten
Botswana's impressive economic gains. An expected leveling off in
diamond mining production overshadows long-term prospects.

Bouvet Island
no economic activity; declared a nature reserve

Brazil
Characterized by large and well-developed agricultural,
mining, manufacturing, and service sectors, Brazil's economy
outweighs that of all other South American countries and is
expanding its presence in world markets. From 2001-03 real wages
fell and Brazil's economy grew, on average only 2.2% per year, as
the country absorbed a series of domestic and international economic
shocks. That Brazil absorbed these shocks without financial collapse
is a tribute to the resiliency of the Brazilian economy and the
economic program put in place by former President CARDOSO and
strengthened by President LULA DA SILVA. In 2004, Brazil enjoyed
more robust growth that yielded increases in employment and real
wages. The three pillars of the economic program are a floating
exchange rate, an inflation-targeting regime, and tight fiscal
policy, all reinforced by a series of IMF programs. The currency
depreciated sharply in 2001 and 2002, which contributed to a
dramatic current account adjustment; in 2003 to 2005, Brazil ran
record trade surpluses and recorded its first current account
surpluses since 1992. Productivity gains - particularly in
agriculture - also contributed to the surge in exports, and Brazil
in 2005 surpassed the previous year's record export level. While
economic management has been good, there remain important economic
vulnerabilities. The most significant are debt-related: the
government's largely domestic debt increased steadily from 1994 to
2003 - straining government finances - before falling as a
percentage of GDP in 2005, while Brazil's foreign debt (a mix of
private and public debt) is large in relation to Brazil's small (but
growing) export base. Another challenge is maintaining economic
growth over a period of time to generate employment and make the
government debt burden more manageable.

British Indian Ocean Territory
All economic activity is concentrated
on the largest island of Diego Garcia, where joint UK-US defense
facilities are located. Construction projects and various services
needed to support the military installations are done by military
and contract employees from the UK, Mauritius, the Philippines, and
the US. There are no industrial or agricultural activities on the
islands. When the Ilois return, they plan to reestablish sugarcane
production and fishing. The country makes money 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. An estimated
350,000 tourists, mainly from the US, visited the islands in 1998.
Tourism suffered in 2002 because of the lackluster US economy. 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
This small, well-to-do economy encompasses a mixture of
foreign and domestic entrepreneurship, government regulation,
welfare measures, and village tradition. Crude oil and natural gas
production account for nearly half of GDP and more than 90% of
government revenues. Per capita GDP is far above most other Third
World countries, and substantial income from overseas investment
supplements income from domestic production. The government provides
for all medical services and free education through the university
level and subsidizes rice and housing. Brunei's leaders are
concerned that steadily increased integration in the world economy
will undermine internal social cohesion, although it became a more
prominent player by serving as chairman for the 2000 APEC (Asian
Pacific Economic Cooperation) forum. Plans for the future include
upgrading the labor force, reducing unemployment, strengthening the
banking and tourist sectors, and, in general, further widening the
economic base beyond oil and gas.

Bulgaria
Bulgaria, a former communist country soon to enter the
European Union, has experienced macroeconomic stability and strong
growth since a major economic downturn in 1996 led to the fall of
the then socialist government. As a result, the government became
committed to economic reform and responsible fiscal planning.
Minerals, including coal, copper, and zinc, play an important role
in industry. In 1997, macroeconomic stability was reinforced by the
imposition of a fixed exchange rate of the lev against the German
D-mark - the currency is now fixed against the euro - and the
negotiation of an IMF standby agreement. Low inflation and steady
progress on structural reforms improved the business environment;
Bulgaria has averaged 4% growth since 2000 and has begun to attract
significant amounts of foreign direct investment. Corruption in the
public administration, a weak judiciary, and the presence of
organized crime remain the largest challenges for Bulgaria.

Burkina Faso
One of the poorest countries in the world, landlocked
Burkina Faso has few natural resources and a weak industrial base.
About 90% of the population is engaged in subsistence agriculture,
which is vulnerable to harsh climatic conditions. Cotton is the key
crop and the government has joined with other cotton producing
countries in the region to lobby for improved access to Western
markets. GDP growth has largely been driven by increases in world
cotton prices. Industry remains dominated by unprofitable
government-controlled corporations. Following the CFA franc currency
devaluation in January 1994, the government updated its development
program in conjunction with international agencies; exports and
economic growth have increased. The government devolved
macroeconomic policy and inflation targeting to the West African
regional central bank (BCEAO), but maintains control over fiscal and
microeconomic policies, including implementing reforms to encourage
private investment. The bitter internal crisis in neighboring Cote
d'Ivoire continues to hurt trade and industrial prospects and
deepens the need for international assistance.

Burma
Burma, a resource-rich country, suffers from pervasive
government controls, inefficient economic policies, and rural
poverty. The junta took steps in the early 1990s to liberalize the
economy after decades of failure under the "Burmese Way to
Socialism," but those efforts stalled, and some of the
liberalization measures were rescinded. Burma does not have monetary
or fiscal stability, so the economy suffers from serious
macroeconomic imbalances - including inflation, multiple official
exchange rates that overvalue the Burmese kyat, and a distorted
interest rate regime. Most overseas development assistance ceased
after the junta began to suppress the democracy movement in 1988 and
subsequently refused to honor the results of the 1990 legislative
elections. In response to the government of Burma's attack in May
2003 on AUNG SAN SUU KYI and her convoy, the US imposed new economic
sanctions against Burma - including a ban on imports of Burmese
products and a ban on provision of financial services by US persons.
A poor investment climate further slowed the inflow of foreign
exchange. The most productive sectors will continue to be in
extractive industries, especially oil and gas, mining, and timber.
Other areas, such as manufacturing and services, are struggling with
inadequate infrastructure, unpredictable import/export policies,
deteriorating health and education systems, and corruption. A major
banking crisis in 2003 shuttered the country's 20 private banks and
disrupted the economy. As of December 2005, the largest private
banks operate under tight restrictions limiting the private sector's
access to formal credit. Official statistics are inaccurate.
Published statistics on foreign trade are greatly understated
because of the size of the black market and unofficial border trade
- often estimated to be as large as the official economy. Burma's
trade with Thailand, China, and India is rising. Though the Burmese
government has good economic relations with its neighbors, better
investment and business climates and an improved political situation
are needed to promote foreign investment, exports, and tourism.

Burundi
Burundi is a landlocked, resource-poor country with an
underdeveloped manufacturing sector. The economy is predominantly
agricultural with more than 90% of the population dependent on
subsistence agriculture. Economic growth depends on coffee and tea
exports, which account for 90% of foreign exchange earnings. The
ability to pay for imports, therefore, rests primarily on weather
conditions and international coffee and tea prices. The Tutsi
minority, 14% of the population, dominates the government and the
coffee trade at the expense of the Hutu majority, 85% of the
population. An ethnic-based war that lasted for over a decade
resulted in more than 200,000 deaths, forced more than 48,000
refugees into Tanzania, and displaced 140,000 others internally.
Only one in two children go to school, and approximately one in 10
adults has HIV/AIDS. Food, medicine, and electricity remain in short
supply. 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, and low administrative capacity - risk
undermining planned economic reforms.

Cambodia
In 1999, the first full year of peace in 30 years, the
government made progress on economic reforms. The US and Cambodia
signed a Bilateral Textile Agreement, which gave Cambodia a
guaranteed quota of US textile imports and established a bonus for
improving working conditions and enforcing Cambodian labor laws and
international labor standards in the industry. From 2001 to 2004,
the economy grew at an average rate of 6.4%, driven largely by an
expansion in the garment sector and tourism. With the January 2005
expiration of a WTO Agreement on Textiles and Clothing,
Cambodia-based textile producers were forced to compete directly
with lower-priced producing countries such as China and India.
Although initial 2005 GDP growth estimates were less than 3%,
better-than-expected garment sector performance led the IMF to
forecast 6% growth in 2005. Faced with the possibility that its
vibrant garment industry, with more than 200,000 jobs, could be in
serious danger, the Cambodian government has committed itself to a
policy of continued support for high labor standards in an attempt
to maintain favor with buyers. The tourism industry continues to
grow rapidly, with foreign visitors surpassing 1 million for the
year by September 2005. In 2005, exploitable oil and natural gas
deposits were found beneath Cambodia's territorial waters,
representing a new revenue stream for the government once commercial
extraction begins in the coming years. The long-term development of
the economy remains a daunting challenge. The Cambodian government
continues to work with bilateral and multilateral donors, including
the World Bank and IMF, to address the country's many pressing
needs. In December 2004, official donors pledged $504 million in aid
for 2005 on the condition that the Cambodian government implement
steps to reduce corruption. The 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. More than 50% of the
population is 20 years or younger. The population lacks education
and productive skills, particularly in the poverty-ridden
countryside, which suffers from an almost total lack of basic
infrastructure. Fully 75% of the population remains engaged in
subsistence farming.

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

Canada
As an affluent, high-tech industrial society in the trillion
dollar class, Canada resembles the US in its market-oriented
economic system, pattern of production, and affluent 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. Given its great natural resources, skilled
labor force, and modern capital plant, Canada enjoys solid economic
prospects. Top-notch fiscal management has produced consecutive
balanced budgets since 1997, although public debate continues over
how to manage the rising cost of the publicly funded healthcare
system. Exports account for roughly a third of GDP. Canada enjoys a
substantial trade surplus with its principal trading partner, the
US, which absorbs more than 85% of Canadian exports. Canada is the
US' largest foreign supplier of energy, including oil, gas, uranium,
and electric power.

Cape Verde
This island economy suffers from a poor natural resource
base, including serious water shortages exacerbated by cycles of
long-term drought. The economy is service-oriented, with commerce,
transport, tourism, and public services accounting for 66% of GDP.
Although nearly 70% of the population lives in rural areas, the
share of agriculture in GDP in 2004 was only 12%, of which fishing
accounted for 1.5%. About 82% of food must be imported. The fishing
potential, mostly lobster and tuna, is not fully exploited. Cape
Verde annually runs a high trade deficit, financed by foreign aid
and remittances from emigrants; remittances supplement GDP by more
than 20%. Economic reforms are aimed at developing the private
sector and attracting foreign investment to diversify the economy.
Future prospects depend heavily on the maintenance of aid flows, the
encouragement of tourism, remittances, and the momentum of the
government's development program.

Cayman Islands
With no direct taxation, the islands are a thriving
offshore financial center. More than 40,000 companies were
registered in the Cayman Islands as of 1998, including almost 600
banks and trust companies; banking assets exceed $500 billion. A
stock exchange was opened in 1997. Tourism is also a mainstay,
accounting for about 70% of GDP and 75% of foreign currency
earnings. The tourist industry is aimed at the luxury market and
caters mainly to visitors from North America. Total tourist arrivals
exceeded 1.2 million in 1997, with 600,000 from the US. About 90% of
the islands' food and consumer goods must be imported. The
Caymanians enjoy one of the highest outputs per capita and one of
the highest standards of living in the world.

Central African Republic
Subsistence agriculture, together with
forestry, remains the backbone of the economy of the Central African
Republic (CAR), with more than 70% of the population living in
outlying areas. The agricultural sector generates half of GDP.
Timber has accounted for about 16% of export earnings and the
diamond industry, for 40%. 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, with GDP growth at only 0.5% in 2004 and 2.5% in
2005. Distribution of income is extraordinarily unequal. Grants from
France and the international community can only partially meet
humanitarian needs.

Chad
Chad's primarily agricultural economy will continue to be
boosted by major foreign direct investment projects in the oil
sector that began in 2000. Over 80% of Chad's population relies on
subsistence farming and livestock raising for its livelihood. Chad's
economy has long been handicapped by its landlocked position, high
energy costs, and a history of instability. Chad relies on foreign
assistance and foreign capital for most public and private sector
investment projects. A consortium led by two US companies has been
investing $3.7 billion to develop oil reserves - estimated at 1
billion barrels - in southern Chad. The nation's total oil reserves
has been estimated to be 2 billion barrels. Oil production came on
stream in late 2003. Chad began to export oil in 2004. Cotton,
cattle, and gum arabic provide the bulk of Chad's non-oil export
earnings.

Chile
Chile has a market-oriented economy characterized by a high
level of foreign trade. During the early 1990s, Chile's reputation
as a role model for economic reform was strengthened when the
democratic government of Patricio AYLWIN - which took over from the
military in 1990 - deepened the economic reform initiated by the
military government. Growth in real GDP averaged 8% during 1991-97,
but fell to half that level in 1998 because of tight monetary
policies implemented to keep the current account deficit in check
and because of lower export earnings - the latter a product of the
global financial crisis. A severe drought exacerbated the recession
in 1999, reducing crop yields and causing hydroelectric shortfalls
and electricity rationing, and Chile experienced negative economic
growth for the first time in more than 15 years. Despite the effects
of the recession, Chile maintained its reputation for strong
financial institutions and sound policy that have given it the
strongest sovereign bond rating in South America. By the end of
1999, exports and economic activity had begun to recover, and growth
rebounded to 4.2% in 2000. Growth fell back to 3.1% in 2001 and 2.1%
in 2002, largely due to lackluster global growth and the devaluation
of the Argentine peso. Chile's economy began a slow recovery in
2003, growing 3.2%, and accelerated to 6.1% in 2004-05, while Chile
maintained a low rate of inflation. GDP growth benefited from high
copper prices, solid export earnings (particularly forestry,
fishing, and mining), and stepped-up foreign direct investment.
Unemployment, however, remains stubbornly high. 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 signed a free trade agreement with China in November
2005, and it already has several trade deals signed with other
nations and blocs, including the European Union, Mercosur, South
Korea, and Mexico. Record-high copper prices helped to strengthen
the peso to a 5½-year high, as of December 2005, and will boost GDP
in 2006.

China China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion. The process continues with key moves in 2005 including the sale of equity in China's largest state banks to foreign investors and refinements in foreign exchange and bond markets. 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, China in 2005 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income and 150 million Chinese fall below international poverty lines. Economic development has generally been more rapid in coastal provinces than in the interior, and there are large disparities in per capita income between regions. The government has struggled to: (a) sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) contain environmental damage and social strife related to the economy's rapid transformation. From 100 to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north. China continues to lose arable land because of erosion and economic development. China has benefited from a huge expansion in computer Internet use, with more than 100 million users at the end of 2005. Foreign investment remains a strong element in China's remarkable expansion in world trade and has been an important factor in the growth of urban jobs. In July 2005, China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Reports of shortages of electric power in the summer of 2005 in southern China receded by September-October and did not have a substantial impact on China's economy. More power generating capacity is scheduled to come on line in 2006 as large scale investments are completed. Thirteen years in construction at a cost of $24 billion, the immense Three Gorges Dam across the Yangtze River will be essentially completed in 2006 and will revolutionize electrification and flood control in the area. The Central Committee of the Chinese Communist Party in October 2005 approved the draft 11th Five-Year Plan and the National People's Congress is expected to give final approval in March 2006. The plan calls for a 20% reduction in energy consumption per unit of GDP by 2010 and an estimated 45% increase in GDP by 2010. The plan states that conserving resources and protecting the environment are basic goals, but it lacks details on the policies and reforms necessary to achieve these goals.

Christmas Island
Phosphate mining had been the only significant
economic activity, but in December 1987 the Australian Government
closed the mine. In 1991, the mine was reopened. With the support of
the government, a $34 million casino opened in 1993. The casino
closed in 1998. The Australian Government in 2001 agreed to support
the creation of a commercial space-launching site on the island,
projected to begin operations in the near future.

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

Cocos (Keeling) Islands
Grown throughout the islands, coconuts are
the sole cash crop. 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 economy has been on a recovery trend during the
past two years despite a serious armed conflict. The economy
continues to improve thanks to austere government budgets, focused
efforts to reduce public debt levels, an export-oriented growth
strategy, and an improved security situation in the country. Ongoing
economic problems facing President URIBE range from reforming the
pension system to reducing high unemployment. New exploration is
needed to offset declining oil production. On the positive side,
several international financial institutions have praised the
economic reforms introduced by URIBE, which succeeded in reducing
the public-sector deficit below 1.5% of GDP. The government's
economic policy and democratic security strategy have engendered a
growing sense of confidence in the economy, particularly within the
business sector. Coffee prices have recovered from previous lows as
the Colombian coffee industry pursues greater market shares in
developed countries such as the United States.

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

Congo, Democratic Republic of the
The economy of the Democratic
Republic of the Congo - a nation endowed with vast potential wealth
- has declined drastically since the mid-1980s. The war, which began
in August 1998, dramatically reduced national output and government
revenue, increased external debt, and resulted in the deaths of
perhaps 3.5 million people from violence, famine, and disease.
Foreign businesses curtailed operations due to uncertainty about the
outcome of the conflict, lack of infrastructure, and the difficult
operating environment. Conditions improved in late 2002 with the
withdrawal of a large portion of the invading foreign troops. The
transitional government has reopened relations with international
financial institutions and international donors, and President
KABILA has begun implementing reforms. Much economic activity lies
outside the GDP data. Economic stability improved in 2003-05,
although an uncertain legal framework, corruption, and a lack of
openness in government policy continues to hamper growth. In 2005,
renewed activity in the mining sector, the source of most exports,
boosted Kinshasa's fiscal position and GDP growth. Business and
economic prospects are expected to improve once a new government is
installed after elections.

Congo, Republic of the
The economy is a mixture of village
agriculture and handicrafts, an industrial sector based largely on
oil, support services, and a government characterized by budget
problems and overstaffing. Oil has supplanted forestry as the
mainstay of the economy, providing a major share of government
revenues and exports. In the early 1980s, rapidly rising oil
revenues enabled the government to finance large-scale development
projects with GDP growth averaging 5% annually, one of the highest
rates in Africa. The government has mortgaged a substantial portion
of its oil earnings through oil-backed loans that have contributed
to a growing debt burden and chronic revenue shortfalls. Economic
reform efforts have been undertaken with the support of
international organizations, notably the World Bank and the IMF.
However, the reform program came to a halt in June 1997 when civil
war erupted. Denis SASSOU-NGUESSO, who returned to power when the
war ended in October 1997, publicly expressed interest in moving
forward on economic reforms and privatization and in renewing
cooperation with international financial institutions. Economic
progress was badly hurt by slumping oil prices and the resumption of
armed conflict in December 1998, which worsened the republic's
budget deficit. The current administration presides over an uneasy
internal peace and faces difficult economic challenges of
stimulating recovery and reducing poverty. Recovery of oil prices
has boosted the economy's GDP and near-term prospects. The Republic
of Congo may be eligible for an IMF-World Bank heavily indebted poor
countries (HIPC) initiative in early 2006, provided it meets the
strict fiscal and monetary targets set out for it under a new
three-year Poverty Reduction and Growth Facility (PRGF) with the IMF.

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
about 70% of the working population, provides the economic base with
major exports made up of copra and citrus fruit. Black pearls are
the Cook Island's 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
Costa Rica's basically stable economy depends on tourism,
agriculture, and electronics exports. Poverty has been substantially
reduced over the past 15 years, and a strong social safety net has
been put into place. Foreign investors remain attracted by the
country's political stability and high education levels, and tourism
continues to bring in foreign exchange. Low prices for coffee and
bananas have hurt the agricultural sector. The government continues
to grapple with its large internal and external deficits and sizable
internal debt. The reduction of inflation remains a difficult
problem because of rises in the price of imports, labor market
rigidities, and fiscal deficits. The country also needs to reform
its tax system and its pattern of public expenditure. Costa Rica is
the only signatory to the US-Central American Free Trade Agreement
(CAFTA) that has not ratified it. CAFTA implementation would result
in economic reforms and an improved investment climate.

Cote d'Ivoire
Cote d'Ivoire is among the world's largest producers
and exporters of coffee, cocoa beans, and palm oil. Consequently,
the economy is highly sensitive to fluctuations in international
prices for these products and weather conditions. Despite government
attempts to diversify the economy, it is still heavily dependent on
agriculture and related activities, engaging roughly 68% of the
population. Growth was negative in 2000-03 because of the difficulty
of meeting the conditions of international donors, continued low
prices of key exports, and severe civil war. In November 2004, the
situation deteriorated when President GBAGBO's troops attacked and
killed nine French peacekeeping forces, and the UN imposed an arms
embargo. Political turmoil damaged the economy in 2005, with fear
among Ivorians spreading, foreign investment shriveling, French
businesses and expats fleeing, travel within the country falling,
and criminal elements that traffic in weapons and diamonds gaining
ground. The government will continue to survive financially off of
the sale of cocoa, which represents 90% of foreign exchange
earnings. Though the 2005 harvest was largely unaffected by past
fighting, the government will likely lose between 10% and 20% of its
cocoa harvest to northern rebels, who smuggle the cocoa they control
to neighboring countries where cocoa prices are higher. The
government remains hopeful that ongoing exploration of Cote
d'Ivoire's offshore oil reserves will result in significant
production that could boost daily crude output from roughly 33,000
barrels per day (b/d) to over 200,000 b/d by the end of the decade.

Croatia
Before the dissolution of Yugoslavia, the Republic of
Croatia, after Slovenia, was the most prosperous and industrialized
area with a per capita output perhaps one-third above the Yugoslav
average. The economy emerged from a mild recession in 2000 with
tourism, banking, and public investments leading the way.
Unemployment remains high, at about 18%, with structural factors
slowing its decline. While macroeconomic stabilization has largely
been achieved, structural reforms lag because of deep resistance on
the part of the public and lack of strong support from politicians.
Growth, while impressive at about 3% to 4% for the last several
years, has been stimulated, in part, through high fiscal deficits
and rapid credit growth. The EU accession process should accelerate
fiscal and structural reform.

Cuba
The government continues to balance the need for economic
loosening against a desire for firm political control. It has rolled
back limited reforms undertaken in the 1990s to increase enterprise
efficiency and alleviate serious shortages of food, consumer goods,
and services. The average Cuban's standard of living remains at a
lower level than before the downturn of the 1990s, which was caused
by the loss of Soviet aid and domestic inefficiencies. The
government in 2005 strengthened its controls over dollars coming
into the economy from tourism, remittances, and trade. External
financing has helped growth in the mining, oil, construction, and
tourism sectors.

Cyprus
The Republic of Cyprus has a market economy dominated by the
service sector, which accounts for 76% of GDP. Tourism and financial
services are the most important sectors; erratic growth rates over
the past decade reflect the economy's reliance on tourism, which
often fluctuates with political instability in the region and
economic conditions in Western Europe. Nevertheless, the economy
grew a healthy 3.7% per year in 2004 and 2005, well above the EU
average. Cyprus joined the European Exchange Rate Mechanism (ERM2)
in May 2005. The government has initiated an aggressive austerity
program, which has cut the budget deficit to below 3% but continued
fiscal discipline is necessary if Cyprus is to meet its goal of
adopting the euro on 1 January 2008. As in the area administered by
Turkish Cypriots, water shortages are a perennial problem; a few
desalination plants are now on line. After 10 years of drought, the
country received substantial rainfall from 2001-03 alleviating
immediate concerns. The Turkish Cypriot economy has roughly
one-third of the per capita GDP of the south, and economic growth
tends to be volatile, given north Cyprus's relative isolation,
bloated public sector, reliance on the Turkish lira, and small
market size. The Turkish Cypriot economy grew 15.4% in 2004, fueled
by growth in the construction and education sectors, as well as
increased employment of Turkish Cypriots in the Republic of Cyprus.
The Turkish Cypriots are heavily dependent on transfers from the
Turkish Government. Under the 2003-06 economic protocol, Ankara
plans to provide around $550 million to the "TRNC." Agriculture and
services, together, employ more than half of the work force.

Czech Republic
The Czech Republic is one of the most stable and
prosperous of the post-Communist states of Central and Eastern
Europe. Growth in 2000-05 was supported by exports to the EU,
primarily to Germany, and a strong recovery of foreign and domestic
investment. Domestic demand is playing an ever more important role
in underpinning growth as interest rates drop and the availability
of credit cards and mortgages increases. The current account deficit
has declined to around 3% of GDP as demand for Czech products in the
European Union has increased. Inflation is under control. Recent
accession to the EU gives further impetus and direction to
structural reform. In early 2004 the government passed increases in
the Value Added Tax (VAT) and tightened eligibility for social
benefits with the intention to bring the public finance gap down to
4% of GDP by 2006, but more difficult pension and healthcare reforms
will have to wait until after the next elections. Privatization of
the state-owned telecommunications firm Cesky Telecom took place in
2005. Intensified restructuring among large enterprises,
improvements in the financial sector, and effective use of available
EU funds should strengthen output growth.

Denmark
This thoroughly modern market economy features high-tech
agriculture, up-to-date small-scale and corporate industry,
extensive government welfare measures, comfortable living standards,
a stable currency, and high dependence on foreign trade. Denmark is
a net exporter of food and energy and enjoys a comfortable balance
of payments surplus. Government objectives include streamlining the
bureaucracy and further privatization of state assets. The
government has been successful in meeting, and even exceeding, the
economic convergence criteria for participating in the third phase
(a common European currency) of the European Economic and Monetary
Union (EMU), but Denmark has decided not to join 12 other EU members
in the euro. Nonetheless, the Danish krone remains pegged to the
euro. Economic growth gained momentum in 2004 and the upturn
accelerated through 2005. Because of high GDP per capita, welfare
benefits, a low Gini index, and political stability, the Danish
people enjoy living standards topped by no other nation. A major
long-term issue will be the sharp decline in the ratio of workers to
retirees.

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
The economy is based on service activities connected with
the country's strategic location and status as a free trade zone in
northeast Africa. Two-thirds of the inhabitants live in the capital
city; the remainder are mostly nomadic herders. Scanty rainfall
limits crop production to fruits and vegetables, and most food must
be imported. Djibouti provides services as both a transit port for
the region and an international transshipment and refueling center.
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 at least 50% 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. Per capita consumption dropped an estimated 35% over the
last seven years because of recession, civil war, and a high
population growth rate (including immigrants and refugees). Faced
with a multitude of economic difficulties, the government has fallen
in arrears on long-term external debt and has been struggling to
meet the stipulations of foreign aid donors.

Dominica
The Dominican economy depends on agriculture, primarily
bananas, and remains highly vulnerable to climatic conditions and
international economic developments. Production of bananas dropped
precipitously in 2003, a major reason for the 1% decline in GDP.
Tourism increased in 2003 as the government sought to promote
Dominica as an "ecotourism" destination. Development of the tourism
industry remains difficult, however, because of the rugged
coastline, lack of beaches, and the absence of an international
airport. The government began a comprehensive restructuring of the
economy in 2003 - including elimination of price controls,
privatization of the state banana company, and tax increases - to
address Dominica's economic crisis and to meet IMF targets. In order
to diversify the island's production base, the government is
attempting to develop an offshore financial sector and is planning
to construct an oil refinery on the eastern part of the island.

Dominican Republic
The Dominican Republic is a Caribbean
representative democracy that enjoyed strong GDP growth until 2003.
Although the country has long been viewed primarily as an exporter
of sugar, coffee, and tobacco, in recent years the service sector
has overtaken agriculture as the economy's largest employer due to
growth in tourism and free trade zones. Growth turned negative in
2003 with reduced tourism, a major bank fraud, and limited growth in
the US economy (the source of about 80% of export revenues), but
recovered in 2004 and 2005. With the help of strict fiscal targets
agreed in the 2004 renegotiation of an IMF standby loan, President
FERNANDEZ has stabilized the country's financial situation. Although
the economy continues to grow at a respectable rate, unemployment
remains an important challenge. The country suffers from marked
income inequality; the poorest half of the population receives less
than one-fifth of GNP, while the richest 10% enjoys nearly 40% of
national income. The Dominican Republic's development prospects
improved with the ratification of the Central America-Dominican
Republic Free Trade Agreement (CAFTA-DR) in September 2005.

East Timor
In late 1999, about 70% of the economic infrastructure of
East Timor was laid waste by Indonesian troops and anti-independence
militias, and 300,000 people fled westward. Over the next three
years, however, a massive international program, manned by 5,000
peacekeepers (8,000 at peak) and 1,300 police officers, led to
substantial reconstruction in both urban and rural areas. By the end
of 2005, all refugees either returned or resettled in Indonesia.
Non-petroleum GDP growth was held back in 2003 by extensive drought
and the gradual winding down of the international presence but
recovered somewhat in 2004. The country faces great challenges in
continuing the rebuilding of infrastructure, strengthening the
infant civil administration, and generating jobs for young people
entering the work force. The development of oil and gas resources in
nearby waters has begun to supplement government revenues ahead of
schedule and above expectations - the result of high petroleum
prices - but the technology-intensive industry does little to create
jobs for the unemployed, because there are no production facilities
in Timor and the gas is piped to Australia. The parliament in June
2005 unanimously approved the creation of a Petroleum Fund to serve
as a repository for all petroleum revenues and preserve the value of
East Timor's petroleum wealth for future generations.

Ecuador
Ecuador has substantial petroleum resources, which have
accounted for 40% of the country's export earnings and one-third of
central government budget revenues in recent years. Consequently,
fluctuations in world market prices can have a substantial domestic
impact. In the late 1990s, Ecuador suffered its worst economic
crisis, with natural disasters and sharp declines in world petroleum
prices driving Ecuador's economy into free fall in 1999. Real GDP
contracted by more than 6%, with poverty worsening significantly.
The banking system also collapsed, and Ecuador defaulted on its
external debt later that year. The currency depreciated by some 70%
in 1999, and, on the brink of hyperinflation, the MAHAUD government
announced it would dollarize the economy. A coup, however, ousted
MAHAUD from office in January 2000, and after a short-lived junta
failed to garner military support, Vice President Gustavo NOBOA took
over the presidency. In March 2000, Congress approved a series of
structural reforms that also provided the framework for the adoption
of the US dollar as legal tender. Dollarization stabilized the
economy, and growth returned to its pre-crisis levels in the years
that followed. Under the administration of Lucio GUTIERREZ - January
2003 to April 2005 - Ecuador benefited from higher world petroleum
prices. However, the government under Alfredo PALACIO has reversed
economic reforms that reduced Ecuador's vulnerability to petroleum
price swings and financial crises, allowing the central government
greater access to oil windfalls and disbursing surplus retirement
funds.

Egypt
Occupying the northeast corner of the African continent, Egypt
is bisected by the highly fertile Nile valley, where most economic
activity takes place. In the last 30 years, the government has
reformed the highly centralized economy it inherited from President
NASSER. In 2005, Prime Minister Ahmed NAZIF reduced personal and
corporate tax rates, reduced energy subsidies, and privatized
several enterprises. The stock market boomed, and GDP grew nearly
5%. Despite these achievements, the government has failed to raise
living standards for the average Egyptian, and has had to continue
providing subsidies for basic necessities. The subsidies have
contributed to a growing budget deficit - more than 8% of GDP in
2005 - and represent a significant drain on the economy. Foreign
direct investment remains low. To achieve higher GDP growth the
NAZIF government will need to continue its aggressive pursuit of
reform, especially in the energy sector. Egypt's export sectors -
particularly natural gas - have bright prospects.

El Salvador
The smallest country in Central America, El Salvador has
the third largest economy, but growth has been minimal in recent
years. Hoping to stimulate the sluggish economy, the government is
striving to open new export markets, encourage foreign investment,
and modernize the tax and healthcare systems. Implementation in 2006
of the Central America-Dominican Republic Free Trade Agreement,
which El Salvador was the first to ratify, is viewed as a key policy
to help achieve these objectives. The trade deficit has been offset
by annual remittances from Salvadorans living abroad - 16.6% of GDP
in 2005 - and external aid. With the adoption of the US dollar as
its currency in 2001, El Salvador has lost control over monetary
policy and must concentrate on maintaining a disciplined fiscal
policy.

Equatorial Guinea
The discovery and exploitation of large oil
reserves have contributed to dramatic economic growth in recent
years. Forestry, farming, and fishing are also major components of
GDP. Subsistence farming predominates. Although pre-independence
Equatorial Guinea counted on cocoa production for hard currency
earnings, the neglect of the rural economy under successive regimes
has diminished potential for agriculture-led growth (the government
has stated its intention to reinvest some oil revenue into
agriculture). A number of aid programs sponsored by the World Bank
and the IMF have been cut off since 1993, because of corruption and
mismanagement. No longer eligible for concessional financing because
of large oil revenues, the government has been trying to agree on a
"shadow" fiscal management program with the World Bank and IMF.
Businesses, for the most part, are owned by government officials and
their family members. Undeveloped natural resources include
titanium, iron ore, manganese, uranium, and alluvial gold. Growth
remained strong in 2005, led by oil. Equatorial Guinea now has the
second highest per capita income in the world, after Luxembourg.

Eritrea
Since independence from Ethiopia in 1993, Eritrea has faced
the economic problems of a small, desperately poor country. Like the
economies of many African nations, the economy is largely based on
subsistence agriculture, with 80% of the population involved in
farming and herding. The Ethiopian-Eritrea war in 1998-2000 severely
hurt Eritrea's economy. GDP growth fell to zero in 1999 and to
-12.1% in 2000. The May 2000 Ethiopian offensive into northern
Eritrea caused some $600 million in property damage and loss,
including losses of $225 million in livestock and 55,000 homes. The
attack prevented planting of crops in Eritrea's most productive
region, causing food production to drop by 62%. Even during the war,
Eritrea developed its transportation infrastructure, asphalting new
roads, improving its ports, and repairing war-damaged roads and
bridges. Since the war ended, the government has maintained a firm
grip on the economy, expanding the use of the military and
party-owned businesses to complete Eritrea's development agenda.
Erratic rainfall and the delayed demobilization of agriculturalists
from the military kept cereal production well below normal, holding
down growth in 2002-05. Eritrea's economic future depends upon its
ability to master social problems such as illiteracy, unemployment,
and low skills, as well as the willingness to open its economy to
private enterprise so that the diaspora's money and expertise can
foster economic growth.

Estonia
Estonia, as a new member of the World Trade Organization and
the European Union, has transitioned effectively to a modern market
economy with strong ties to the West, including the pegging of its
currency to the euro. The economy benefits from strong electronics
and telecommunications sectors and is greatly influenced by
developments in Finland, Sweden, and Germany, three major trading
partners. The current account deficit remains high; however, the
state budget is essentially in balance, and public debt is low.

Ethiopia
Ethiopia's poverty-stricken economy is based on
agriculture, accounting for half of GDP, 60% of exports, and 80% of
total employment. The agricultural sector suffers from frequent
drought and poor cultivation practices. Coffee is critical to the
Ethiopian economy with exports of some $156 million in 2002, but
historically low prices have seen many farmers switching to qat to
supplement income. The war with Eritrea in 1998-2000 and recurrent
drought have buffeted the economy, in particular coffee production.
In November 2001, Ethiopia qualified for debt relief from the Highly
Indebted Poor Countries (HIPC) initiative, and in December 2005 the
International Monetary Fund voted to forgive Ethiopia's debt to the
body. Under Ethiopia's land tenure system, the government owns all
land and provides long-term leases to the tenants; the system
continues to hamper growth in the industrial sector as entrepreneurs
are unable to use land as collateral for loans. Drought struck again
late in 2002, leading to a 2% decline in GDP in 2003. Normal weather
patterns late in 2003 helped agricultural and GDP growth recover in
2004-05.

Europa Island
no economic activity

European Union
Domestically, the European Union attempts to lower
trade barriers, adopt a common currency, and move toward convergence
of living standards. Internationally, the EU aims to bolster
Europe's trade position and its political and economic power.
Because of the great differences in per capita income (from $15,000
to $56,000) and historic national animosities, the European
Community faces difficulties in devising and enforcing common
policies. For example, since 2003 Germany and France have flouted
the member states' treaty obligation to prevent their national
budgets from running more than a 3% deficit. In 2004, the EU
admitted 10 central and eastern European countries that are, in
general, less advanced technologically and economically than the
other 15. Twelve EU member states introduced the euro as their
common currency on 1 January 1999, but the UK, Sweden, and Denmark
do not participate. The 10 new member states may choose to adopt the
euro when they meet the EU's fiscal and monetary criteria and the
other euro states so agree.

Falkland Islands (Islas Malvinas) The economy was formerly based on agriculture, mainly sheep farming, but today fishing contributes the bulk of economic activity. In 1987 the government began selling fishing licenses to foreign trawlers operating within the Falkland Islands' exclusive fishing zone. These license fees total more than $40 million per year, which goes to support the island's health, education, and welfare system. Squid accounts for 75% of the fish taken. Dairy farming supports domestic consumption; crops furnish winter fodder. Exports feature shipments of high-grade wool to the UK and the sale of postage stamps and coins. The islands are now self-financing except for defense. The British Geological Survey announced a 200-mile oil exploration zone around the islands in 1993, and early seismic surveys suggest substantial reserves capable of producing 500,000 barrels per day; to date, no exploitable site has been identified. An agreement between Argentina and the UK in 1995 seeks to defuse licensing and sovereignty conflicts that would dampen foreign interest in exploiting potential oil reserves. Tourism, especially eco-tourism, is increasing rapidly, with about 30,000 visitors in 2001. Another large source of income is interest paid on money the government has in the bank. The British military presence also provides a sizeable economic boost.

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

Fiji
Fiji, endowed with forest, mineral, and fish resources, is one
of the most developed of the Pacific island economies, though still
with a large subsistence sector. Sugar exports, remittances from
Fijians working abroad, and a growing tourist industry - with
300,000 to 400,000 tourists annually - are the major sources of
foreign exchange. Fiji's sugar has special access to European Union
markets, but will be harmed by the EU's decision to cut sugar
subsidies. Sugar processing makes up one-third of industrial
activity but is not efficient. Long-term problems include low
investment, uncertain land ownership rights, and the government's
ability to manage its budget. Yet, because of a tourist boom,
short-run economic prospects are good, provided tensions do not
again erupt between indigenous Fijians and Indo-Fijians. Overseas
remittances from Fijians working in Kuwait and Iraq have increased
significantly.

Finland
Finland has a highly industrialized, largely free-market
economy with per capita output roughly that of the UK, France,
Germany, and Italy. Its key economic sector is manufacturing -
principally the wood, metals, engineering, telecommunications, and
electronics industries. Trade is important; exports equal two-fifths
of GDP. Finland excels in high-tech exports, e.g., mobile phones.
Except for timber and several minerals, Finland depends on imports
of raw materials, energy, and some components for manufactured
goods. Because of the climate, agricultural development is limited
to maintaining self-sufficiency in basic products. Forestry, an
important export earner, provides a secondary occupation for the
rural population. Rapidly increasing integration with Western Europe
- Finland was one of the 12 countries joining the European Economic
and Monetary Union (EMU) - will dominate the economic picture over
the next several years. High unemployment remains a persistent
problem.

France
France is in the midst of transition from a well-to-do modern
economy that has featured extensive government ownership and
intervention to one that relies more on market mechanisms. The
government has partially or fully privatized many large companies,
banks, and insurers. It retains controlling stakes in several
leading firms, including Air France, France Telecom, Renault, and
Thales, and is dominant in some sectors, particularly power, public
transport, and defense industries. The telecommunications sector is
gradually being opened to competition. France's leaders remain
committed to a capitalism in which they maintain social equity by
means of laws, tax policies, and social spending that reduce income
disparity and the impact of free markets on public health and
welfare. The government has lowered income taxes and introduced
measures to boost employment and reform the pension system. In
addition, it is focusing on the problems of the high cost of labor
and labor market inflexibility resulting from the 35-hour workweek
and restrictions on lay-offs. The tax burden remains one of the
highest in Europe (nearly 50% of GDP in 2005). The lingering
economic slowdown and inflexible budget items have pushed the budget
deficit above the eurozone's 3%-of-GDP limit; unemployment stands at
10%.

French Guiana
The economy is tied closely to the much larger French
economy through subsidies and imports. Besides the French space
center at Kourou (which accounts for 25% of GDP), fishing and
forestry are the most important economic activities. Forest and
woodland cover 90% of the country. The large reserves of tropical
hardwoods, not fully exploited, support an expanding sawmill
industry that provides sawn logs for export. Cultivation of crops is
limited to the coastal area, where the population is largely
concentrated; rice and manioc are the major crops. French Guiana is
heavily dependent on imports of food and energy. Unemployment is a
serious problem, particularly among younger workers.

French Polynesia
Since 1962, when France stationed military
personnel in the region, French Polynesia has changed from a
subsistence 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. Tourism
accounts for about one-fourth of GDP and is a primary source of hard
currency earnings. Other sources of income are pearl farming and
deep-sea commercial fishing. The small manufacturing sector
primarily processes agricultural products. The territory benefits
substantially from development agreements with France aimed
principally at creating new businesses and strengthening social
services.

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

Gabon
Gabon enjoys a per capita income four times that of most of
sub-Saharan African nations. This has supported a sharp decline in
extreme poverty; yet, because of high income inequality, a large
proportion of the population remains poor. Gabon depended on timber
and manganese until oil was discovered offshore in the early 1970s.
The oil sector now accounts for 50% of GDP. Gabon continues to face
fluctuating prices for its oil, timber, and manganese exports.
Despite the abundance of natural wealth, poor fiscal management
hobbles the economy. Devaluation of its currency by 50% in January
1994 sparked a one-time inflationary surge, to 35%; the rate dropped
to 6% in 1996. The IMF provided a one-year standby arrangement in
1994-95, a three-year Enhanced Financing Facility (EFF) at near
commercial rates beginning in late 1995, and stand-by credit of $119
million in October 2000. Those agreements mandated progress in
privatization and fiscal discipline. France provided additional
financial support in January 1997 after Gabon met IMF targets for
mid-1996. In 1997, an IMF mission to Gabon criticized the government
for overspending on off-budget items, overborrowing from the central
bank, and slipping on its schedule for privatization and
administrative reform. The rebound of oil prices in 1999-2000 helped
growth, but drops in production hampered Gabon from fully realizing
potential gains. In December 2000, Gabon signed a new agreement with
the Paris Club to reschedule its official debt. A follow-up
bilateral repayment agreement with the US was signed in December
2001. Gabon signed a 14-month Stand-By Arrangement with the IMF in
May 2004, and received Paris Club debt rescheduling later that year.
Short-term progress depends on an upbeat world economy and fiscal
and other adjustments in line with IMF policies.

Gambia, The
The Gambia has no significant mineral or natural
resource deposits and has a limited agricultural base. About 75% of
the population depends on crops and livestock for its livelihood.
Small-scale manufacturing activity features the processing of
peanuts, fish, and hides. Reexport trade normally constitutes a
major segment of economic activity, but a 1999 government-imposed
preshipment inspection plan, and instability of the Gambian dalasi
(currency) have drawn some of the reexport trade away from The
Gambia. The government's 1998 seizure of the private peanut firm
Alimenta eliminated the largest purchaser of Gambian groundnuts.
Despite an announced program to begin privatizing key parastatals,
no plans have been made public that would indicate that the
government intends to follow through on its promises. Unemployment
and underemployment rates remain extremely high; short-run economic
progress depends on sustained bilateral and multilateral aid, on
responsible government economic management, on continued technical
assistance from the IMF and bilateral donors, and on expected growth
in the construction sector.

Gaza Strip
High population density, limited land access, and strict
internal and external controls have kept economic conditions in the
Gaza Strip - the smaller of the two areas under the Palestinian
Authority (PA)- even more degraded than in the West Bank. The
beginning of the second intifadah in September 2000 sparked an
economic downturn, largely the result of Israeli closure policies;
these policies, which were imposed in response to security interests
in Israel, disrupted labor and commodity relationships with the Gaza
Strip. In 2001, and even more severely in 2003, Israeli military
measures in PA areas resulted in the destruction of much capital
plant, the disruption of administrative structure, and widespread
business closures. Including the West Bank, the UN estimates that
more than 100,000 Palestinians out of the 125,000 who used to work
in Israel or in joint industrial zones have lost their jobs. Half
the labor force is unemployed. Israeli withdrawal from the Gaza
Strip in September 2005 offers some medium-term opportunities for
economic growth, especially given the removal of restrictions on
internal movement. In addition, recent agreements and continuing
negotiations on the administration of Gaza's border crossings
increase the prospects for trade.

Georgia
Georgia's main economic activities include the cultivation
of agricultural products such as grapes, citrus fruits, and
hazelnuts; mining of manganese and copper; and output of a small
industrial sector producing alcoholic and nonalcoholic beverages,
metals, machinery, and chemicals. The country imports the bulk of
its energy needs, including natural gas and oil products. It has
sizeable but underdeveloped hydropower capacity. Despite the severe
damage the economy has suffered due to civil strife, Georgia, with
the help of the IMF and World Bank, has made substantial economic
gains since 2000, achieving positive GDP growth and curtailing
inflation. Georgia had suffered from a chronic failure to collect
tax revenues; however, the new government is making progress and has
reformed the tax code, improved tax administration, increased tax
enforcement, and cracked down on corruption. In addition, the
reinvigorated privatization process has met with success,
supplementing government expenditures on infrastructure, defense,
and poverty reduction. Despite customs and financial (tax)
enforcement improvements, smuggling is a drain on the economy.
Georgia also suffers from energy shortages due to aging and badly
maintained infrastructure, as well as poor management. Due to
concerted reform efforts, collection rates have improved
considerably to roughly 60%, both in T'bilisi and throughout the
regions. Continued reform in the management of state-owned power
entities is essential to successful privatization and onward
sustainability in this sector. The country is pinning its hopes for
long-term growth on its role as a transit state for pipelines and
trade. The construction on the Baku-T'bilisi-Ceyhan oil pipeline and
the Baku-T'bilisi-Erzerum gas pipeline have brought much-needed
investment and job opportunities. Nevertheless, high energy prices
in 2006 will compound the pressure on the country's inefficient
energy sector. Restructuring the sector and finding energy supply
alternatives to Russia remain major challenges.

Germany
Germany's affluent and technologically powerful economy -
the fifth largest in the world - has become one of the slowest
growing economies in the euro zone. A quick turnaround is not in the
offing in the foreseeable future. Growth in 2001-03 fell short of
1%, rising to 1.7% in 2004 before falling back to 0.9% in 2005. The
modernization and integration of the eastern German economy
continues to be a costly long-term process, with annual transfers
from west to east amounting to roughly $70 billion. Germany's aging
population, combined with high unemployment, has pushed social
security outlays to a level exceeding contributions from workers.
Structural rigidities in the labor market - including strict
regulations on laying off workers and the setting of wages on a
national basis - have made unemployment a chronic problem. Corporate
restructuring and growing capital markets are setting the
foundations that could allow Germany to meet the long-term
challenges of European economic integration and globalization,
particularly if labor market rigidities are further addressed. In
the short run, however, the fall in government revenues and the rise
in expenditures have raised the deficit above the EU's 3% debt limit.

Ghana
Well endowed with natural resources, Ghana has roughly twice
the per capita output of the poorer countries in West Africa. Even
so, Ghana remains heavily dependent on international financial and
technical assistance. Gold, timber, and cocoa production are major
sources of foreign exchange. The domestic economy continues to
revolve around subsistence agriculture, which accounts for 34% of
GDP and employs 60% of the work force, mainly small landholders.
Ghana opted for debt relief under the Heavily Indebted Poor Country
(HIPC) program in 2002, but was included in a G-8 debt relief
program decided upon at the Gleneagles Summit in July 2005.
Priorities under its current $38 million Poverty Reduction and
Growth Facility (PRGF) include tighter monetary and fiscal policies,
accelerated privatization, and improvement of social services.
Receipts from the gold sector helped sustain GDP growth in 2005
along with record high prices for Ghana's largest cocoa crop to
date. Inflation should ease but remains a major internal problem.
Ghana also remains a candidate country to benefit from Millennium
Challenge Corporation (MCC) funding that could assist in
transforming Ghana's agricultural export sector. A final decision on
its MCC bid is expected in spring 2006.

Gibraltar
Self-sufficient Gibraltar benefits from an extensive
shipping trade, offshore banking, and its position as an
international conference center. The British military presence has
been sharply reduced and now contributes about 7% to the local
economy, compared with 60% in 1984. The financial sector, tourism
(almost 5 million visitors in 1998), shipping services fees, and
duties on consumer goods also generate revenue. The financial
sector, the shipping sector, and tourism each contribute 25%-30% of
GDP. Telecommunications accounts for another 10%. In recent years,
Gibraltar has seen major structural change from a public to a
private sector economy, but changes in government spending still
have a major impact on the level of employment.

Glorioso Islands
no economic activity

Greece
Greece has a capitalist economy with the public sector
accounting for about 40% of GDP and with per capita GDP at least 75%
of the leading euro-zone economies. Tourism provides 15% of GDP.
Immigrants make up nearly one-fifth of the work force, mainly in
menial jobs. Greece is a major beneficiary of EU aid, equal to about
3.3% of annual GDP. The Greek economy grew by about 4.0% for the
between 2003 and 2005, largely because of an investment boom and
infrastructure upgrades for the 2004 Athens Olympic Games. Economic
growth slowed to about 3% in 2005. Greece has not met the EU's
Growth and Stability Pact budget deficit criteria of 3% of GDP since
2000. Public debt, inflation, and unemployment are above the
euro-zone average. To overcome these challenges, the Greek
Government is expected to continue cutting government spending,
reducing the size of the public sector, and reforming the labor and
pension systems.

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

Grenada
Grenada relies on tourism as its main source of foreign
exchange, especially since the construction of an international
airport in 1985. Strong performances in construction and
manufacturing, together with the development of an offshore
financial industry, have also contributed to growth in national
output.

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

Guam
The economy depends largely on US military spending and
tourism. Total US grants, wage payments, and procurement outlays
amounted to $1.3 billion in 2004. Over the past 30 years, the
tourist industry has grown to become the largest income source
following national defense. The Guam economy continues to experience
expansion in both its tourism and military sectors.

Guatemala
Guatemala is the largest and most populous of the Central
American countries with a GDP per capita roughly one-half that of
Brazil, Argentina, and Chile. The agricultural sector accounts for
about one-fourth of GDP, two-thirds of exports, and half of the
labor force. Coffee, sugar, and bananas are the main products. The
1996 signing of peace accords, which ended 36 years of civil war,
removed a major obstacle to foreign investment, but widespread
political violence and corruption scandals continue to dampen
investor confidence. The distribution of income remains highly
unequal with perhaps 75% of the population below the poverty line.
Other ongoing challenges include increasing government revenues,
negotiating further assistance from international donors, upgrading
both government and private financial operations, curtailing drug
trafficking, and narrowing the trade deficit.

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

Guinea
Guinea possesses major mineral, hydropower, and agricultural
resources, yet remains an underdeveloped nation. The country
possesses almost half of the world's bauxite reserves and is the
second-largest bauxite producer. The mining sector accounted for
over 70% of exports in 2004. Long-run improvements in government
fiscal arrangements, literacy, and the legal framework are needed if
the country is to move out of poverty. Fighting along the Sierra
Leonean and Liberian borders, as well as refugee movements, have
caused major economic disruptions, aggravating a loss in investor
confidence. Panic buying has created food shortages and inflation
and caused riots in local markets. Guinea is not receiving
multilateral aid; the IMF and World Bank cut off most assistance in
2003. Growth rose slightly in 2005, primarily due to increases in
global demand and commodity prices on world markets.

Guinea-Bissau
One of the 10 poorest countries in the world,
Guinea-Bissau depends mainly on farming and fishing. Cashew crops
have increased remarkably in recent years, and the country now ranks
sixth in cashew production. Guinea-Bissau exports fish and seafood
along with small amounts of peanuts, palm kernels, and timber. Rice
is the major crop and staple food. However, intermittent fighting
between Senegalese-backed government troops and a military junta
destroyed much of the country's infrastructure and caused widespread
damage to the economy in 1998; the civil war led to a 28% drop in
GDP that year, with partial recovery in 1999-2002. Before the war,
trade reform and price liberalization were the most successful part
of the country's structural adjustment program under IMF
sponsorship. The tightening of monetary policy and the development
of the private sector had also begun to reinvigorate the economy.
Because of high costs, the development of petroleum, phosphate, and
other mineral resources is not a near-term prospect. However,
offshore oil prospecting has begun and could lead to much-needed
revenue in the long run. The inequality of income distribution is
one of the most extreme in the world. The government and
international donors continue to work out plans to forward economic
development from a lamentably low base. In December 2003, the World
Bank, IMF, and UNDP were forced to step in to provide emergency
budgetary support in the amount of $107 million for 2004,
representing over 80% of the total national budget. Government drift
and indecision, however, have resulted in continued low growth in
2002-05.

Guyana
The Guyanese economy exhibited moderate economic growth in
2001-02, based on expansion in the agricultural and mining sectors,
a more favorable atmosphere for business initiatives, a more
realistic exchange rate, fairly low inflation, and the continued
support of international organizations. Growth slowed in 2003 and
came back gradually in 2004, buoyed largely by increased export
earnings; it slowed again in 2005. Chronic problems include a
shortage of skilled labor and a deficient infrastructure. The
government is juggling a sizable external debt against the urgent
need for expanded public investment. The bauxite mining sector
should benefit in the near term from restructuring and partial
privatization. Export earnings from agriculture and mining have
fallen sharply, while the import bill has risen, driven by higher
energy prices. Guyana's entrance into the Caricom Single Market and
Economy (CSME) in January 2006 might broaden the country's export
market, primarily in the raw materials sector.

Haiti
In this poorest country in the Western Hemisphere, 80% of the
population lives in abject poverty. Two-thirds of all Haitians
depend on the agriculture sector, mainly small-scale subsistence
farming, and remain vulnerable to damage from frequent natural
disasters, exacerbated by the country's widespread deforestation.
The economy grew 1.5% in 2005, the highest growth rate since 1999.
Haiti suffers from rampant inflation, a lack of investment, and a
severe trade deficit. In early 2005, Haiti paid its arrears to the
World Bank, paving the way for reengagement with the Bank. The
government is reliant on formal international economic assistance
for fiscal sustainability. Remittances are the primary source of
foreign exchange, equaling nearly a quarter of GDP in 2005.

Heard Island and McDonald Islands
No indigenous economic activity,
but the Australian Government allows limited fishing around the
islands.

Holy See (Vatican City)
This unique, noncommercial economy is
supported financially by an annual contribution from Roman Catholic
dioceses throughout the world (known as Peter's Pence); by the sale
of postage stamps, coins, medals, and tourist mementos; by fees for
admission to museums; and by the sale of publications. Investments
and real estate income also account for a sizable portion of
revenue. The incomes and living standards of lay workers are
comparable to those of counterparts who work in the city of Rome.

Honduras
Honduras, one of the poorest countries in the Western
Hemisphere with an extraordinarily unequal distribution of income
and massive unemployment, is banking on expanded trade under the
US-Central America Free Trade Agreement (CAFTA) and on debt relief
under the Heavily Indebted Poor Countries (HIPC) initiative. The
country has met most of its macroeconomic targets, and began a
three-year IMF Poverty Reduction and Growth Facility (PGRF) program
in February 2004. Growth remains dependent on the economy of the US,
its largest trading partner, on continued exports of non-traditional
agricultural products (such as melons, chiles, tilapia, and shrimp),
and on reduction of the high crime rate.

Hong Kong
Hong Kong has a free market, entrepot economy, highly
dependent on international trade. Natural resources are limited, and
food and raw materials must be imported. Gross imports and exports
(i.e., including reexports to and from third countries) each exceed
GDP in dollar value. Even before Hong Kong reverted to Chinese
administration on 1 July 1997, it had extensive trade and investment
ties with China. Hong Kong has been further integrating its economy
with China because China's growing openness to the world economy has
made manufacturing in China much more cost effective. Hong Kong's
reexport business to and from China is a major driver of growth. Per
capita GDP is comparable to that of the four big economies of
Western Europe. GDP growth averaged a strong 5% from 1989 to 2005,
but Hong Kong suffered two recessions in the past eight years
because of the Asian financial crisis in 1997-1998 and the global
downturn in 2001-2002. Although the Severe Acute Respiratory
Syndrome (SARS) outbreak in 2003 also battered Hong Kong's economy,
a solid rise in exports, a boom in tourism from the mainland because
of China's easing of travel restrictions, and a return of consumer
confidence resulted in the resumption of strong growth from late
2003 through 2005.

Howland Island
no economic activity

Hungary
Hungary has made the transition from a centrally planned to
a market economy, with a per capita income about 60% of the EU-25
average. Hungary continues to demonstrate strong economic growth and
acceded to the EU in May 2004. The private sector accounts for over
80% of GDP. Foreign ownership of and investment in Hungarian firms
are widespread, with cumulative foreign direct investment totaling
more than $34 billion between 1990 and 2003. Several private sector
analysts and sovereign ratings agencies have expressed concerns over
Hungary's unsustainable budget and current account deficits.
Inflation has declined from 14% in 1998 to 3.5% in 2005.
Unemployment in 2005 rose to 7.1%, its highest point since 1999;
Hungary's labor force participation rate of 57% is one of the lowest
in the Organization for Economic Cooperation and Development (OECD).
Germany is by far Hungary's largest economic partner. Policy
challenges include cutting the public sector deficit to 3% of GDP by
2008, from about 6.1% in 2005, and orchestrating an orderly interest
rate reduction without sparking capital outflows.

Iceland
Iceland's Scandinavian-type economy is basically
capitalistic, yet with an extensive welfare system (including
generous housing subsidies), low unemployment, and remarkably even
distribution of income. In the absence of other natural resources
(except for abundant geothermal power), the economy depends heavily
on the fishing industry, which provides 70% of export earnings and
employs 4% of the work force. The economy 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. Government policies include reducing the current
account deficit, limiting foreign borrowing, containing inflation,
revising agricultural and fishing policies, and diversifying the
economy. The government remains opposed to EU membership, primarily
because of Icelanders' concern about losing control over their
fishing resources. Iceland's economy has been diversifying into
manufacturing and service industries in the last decade, and new
developments in software production, biotechnology, and financial
services are taking place. The tourism sector is also expanding,
with the recent trends in ecotourism and whale watching. Growth had
been remarkably steady in 1996-2001 at 3%-5%, but could not be
sustained in 2002 in an environment of global recession. Growth
resumed in 2003, and estimates call for strong growth until 2007,
slowly dropping until the end of the decade.

Iles Eparses
no economic activity

India
India's diverse economy encompasses traditional village
farming, modern agriculture, handicrafts, a wide range of modern
industries, and a multitude of services. Services are the major
source of economic growth, accounting for half of India's output
with less than one quarter of its labor force. About three-fifths of
the work-force is in agriculture, leading the UPA government to
articulate an economic reform program that includes developing basic
infrastructure to improve the lives of the rural poor and boost
economic performance. Government controls on foreign trade and
investment have been reduced in some areas, but high tariffs
(averaging 20% on non-agricultural items in 2004) and limits on
foreign direct investment are still in place. The government in 2005
liberalized investment in the civil aviation, telecom, and
construction sectors. Privatization of government-owned industries
essentially came to a halt in 2005, and continues to generate
political debate; continued social, political, and economic
rigidities hold back needed initiatives. The economy has posted an
average growth rate of more than 7% in the decade since 1994,
reducing poverty by about 10 percentage points. India achieved 7.6%
GDP growth in 2005, significantly expanding manufacturing. India is
capitalizing on its large numbers of well-educated people skilled in
the English language to become a major exporter of software services
and software workers. Despite strong growth, the World Bank and
others worry about the combined state and federal budget deficit,
running at approximately 9% of GDP; government borrowing has kept
interest rates high. Economic deregulation would help attract
additional foreign capital and lower interest rates. The huge and
growing population is the fundamental social, economic, and
environmental problem.

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, a vast polyglot nation, has struggled to
overcome the Asian financial crisis, and still grapples with high
unemployment, a fragile banking sector, endemic corruption,
inadequate infrastructure, a poor investment climate, and unequal
resource distribution among regions. Indonesia became a net oil
importer in 2004 because of declining production and lack of new
exploration investment. In late December 2004, the Indian Ocean
tsunami took 131,000 lives with another 37,000 missing, left some
570,000 displaced persons, and caused an estimated $4.5 billion in
damages and losses. The cost of subsidizing domestic fuel placed
increasing strain on the budget in 2005, and combined with
indecisive monetary policy, contributed to a run on the currency in
August 2005, prompting the government to enact a 126% average fuel
price hike in October. The resulting inflation and interest rate
hikes dampened growth prospects in 2006. However, in October 2006,
Jakarta paid off its outstanding IMF debt, incurred during the
1997-98 Asian financial crisis, four years ahead of schedule. Keys
to future growth remain internal reform, building up the confidence
of international and domestic investors, and strong global economic
growth.

Iran
Iran's economy is marked by a bloated, inefficient state
sector, over reliance on the oil sector, and statist policies that
create major distortions throughout. Most economic activity is
controlled by the state. Private sector activity is typically
small-scale - workshops, farming, and services. President Mahmud
AHMADI-NEJAD has continued to follow the market reform plans of
former President RAFSANJANI, with limited progress. Relatively high
oil prices in recent years have enabled Iran to amass some $40
billion in foreign exchange reserves, but have not eased economic
hardships such as high unemployment and inflation. The proportion of
the economy devoted to the development of weapons of mass
destruction remains a contentious issue with leading Western nations.

Iraq
Iraq's economy is dominated by the oil sector, which has
traditionally provided about 95% of foreign exchange earnings.
Iraq's seizure of Kuwait in August 1990, subsequent international
economic sanctions, and damage from military action by an
international coalition beginning in January 1991 drastically
reduced economic activity. Although government policies supporting
large military and internal security forces and allocating resources
to key supporters of the regime hurt the economy, implementation of
the UN's oil-for-food program, which began in December 1996, helped
improve conditions for the average Iraqi citizen. Iraq was allowed
to export limited amounts of oil in exchange for food, medicine, and
some infrastructure spare parts. In December 1999, the UN Security
Council authorized Iraq to export under the program as much oil as
required to meet humanitarian needs. Per capita food imports
increased significantly, while medical supplies and health care
services steadily improved. Per capita output and living standards
were still well below the pre-1991 level, but any estimates have a
wide range of error. The military victory of the US-led coalition in
March-April 2003 resulted in the shutdown of much of the central
economic administrative structure. Although a comparatively small
amount of capital plant was damaged during the hostilities, looting,
insurgent attacks, and sabotage have undermined efforts to rebuild
the economy. Attacks on key economic facilities - especially oil
pipelines and infrastructure - have prevented Iraq from reaching
projected export volumes, but total government revenues have been
higher than anticipated due to high oil prices. Despite political
uncertainty, Iraq has established the institutions needed to
implement economic policy, has successfully concluded a three-stage
debt reduction agreement with the Paris Club, and is working toward
a Standby Arrangement with the IMF. The Standby Arrangement would
clear the way for continued debt relief from the Paris Club.

Ireland
Ireland is a small, modern, trade-dependent economy with
growth averaging a robust 7% in 1995-2004. Agriculture, once the
most important sector, is now dwarfed by industry and services.
Industry accounts for 46% of GDP, about 80% of exports, and 29% of
the labor force. Although exports remain the primary engine for
Ireland's growth, the economy has also benefited from a rise in
consumer spending, construction, and business investment. Per capita
GDP is 10% above that of the four big European economies and the
second highest in the EU behind Luxembourg. Over the past decade,
the Irish Government has implemented a series of national economic
programs designed to curb price and wage inflation, reduce
government spending, increase labor force skills, and promote
foreign investment. Ireland joined in circulating the euro on 1
January 2002 along with 11 other EU nations.

Isle of Man
Offshore banking, manufacturing, and tourism are key
sectors of the economy. The government offers 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 shares of
GDP. Trade is mostly with the UK. The Isle of Man enjoys free access
to EU markets.

Israel
Israel has a technologically advanced market economy with
substantial government participation. It depends on imports of crude
oil, grains, raw materials, and military equipment. Despite limited
natural resources, Israel has intensively developed its agricultural
and industrial sectors over the past 20 years. Israel imports
substantial quantities of grain, but is largely self-sufficient in
other agricultural products. Cut diamonds, high-technology
equipment, and agricultural products (fruits and vegetables) are the
leading exports. Israel usually posts sizable current account
deficits, which are covered by large transfer payments from abroad
and by foreign loans. Roughly half of the government's external debt
is owed to the US, which is its major source of economic and
military aid. The bitter Israeli-Palestinian conflict; difficulties
in the high-technology, construction, and tourist sectors; and
fiscal austerity in the face of growing inflation led to small
declines in GDP in 2001 and 2002. The economy rebounded in 2003 and
2004, growing at a 4% rate each year, as the government tightened
fiscal policy and implemented structural reforms to boost
competition and efficiency in the markets. In 2005, rising consumer
confidence, tourism, and foreign direct investment - as well as
higher demand for Israeli exports - boosted GDP by 4.7%.

Italy
Italy has a diversified industrial economy with roughly the
same total and per capita output as France and the UK. This
capitalistic economy remains divided into a developed industrial
north, dominated by private companies, and a less-developed,
welfare-dependent, agricultural south, with 20% unemployment. Most
raw materials needed by industry and more than 75% of energy
requirements are imported. Over the past decade, Italy has pursued a
tight fiscal policy in order to meet the requirements of the
Economic and Monetary Unions and has benefited from lower interest
and inflation rates. The current government has enacted numerous
short-term reforms aimed at improving competitiveness and long-term
growth. Italy has moved slowly, however, on implementing needed
structural reforms, such as lightening the high tax burden and
overhauling Italy's rigid labor market and over-generous pension
system, because of the current economic slowdown and opposition from
labor unions. But the leadership faces a severe economic constraint:
the budget deficit has breached the 3% EU ceiling. The economy
experienced almost no growth in 2005, and unemployment remained at a
high level.

Jamaica
The Jamaican economy is heavily dependent on services, which
now account for 60% of GDP. The country continues to derive most of
its foreign exchange from remittances, tourism, and bauxite/alumina.
The global economic slowdown, particularly after the terrorist
attacks in the US on 11 September 2001, stunted economic growth; the
economy rebounded moderately in 2003-04, with brisk tourist seasons.
But the economy faces serious long-term problems: high interest
rates, increased foreign competition, exchange rate instability, a
sizable merchandise trade deficit, large-scale unemployment and
underemployment, and a growing stock of internal debt - the result
of government bailouts to ailing sectors of the economy, most
notably the financial sector in the mid-1990s. The ratio of debt to
GDP is 135%. Inflation, previously a bright spot, is expected to
remain in the double digits. Uncertain economic conditions have led
to increased civil unrest, including gang violence fueled by the
drug trade. In 2004, the government faced the difficult prospect of
having to achieve fiscal discipline in order to maintain debt
payments while simultaneously attacking a serious and growing crime
problem that is hampering economic growth. Attempts at deficit
control were derailed by Hurricane Ivan in September 2004, which
required substantial government spending to repair the damage.
Despite the hurricane, tourism looks set to enjoy solid growth for
the foreseeable future.

Jan Mayen
Jan Mayen is a volcanic island with no exploitable natural
resources. Economic activity is limited to providing services for
employees of Norway's radio and meteorological stations on the
island.

Japan
Government-industry cooperation, a strong work ethic, mastery
of high technology, and a comparatively small defense allocation (1%
of GDP) helped Japan advance with extraordinary rapidity to the rank
of second most technologically powerful economy in the world after
the US and the third-largest economy in the world after the US and
China, measured on a purchasing power parity (PPP) basis. One
notable characteristic of the economy is how manufacturers,
suppliers, and distributors work together in closely-knit groups
called keiretsu. A second basic feature has been the guarantee of
lifetime employment for a substantial portion of the urban labor
force. Both features are now eroding. Japan's industrial sector is
heavily dependent on imported raw materials and fuels. The tiny
agricultural sector is highly subsidized and protected, with crop
yields among the highest in the world. Usually self sufficient in
rice, Japan must import about 60% of its food on a caloric basis.
Japan maintains one of the world's largest fishing fleets and
accounts for nearly 15% of the global catch. For three decades,
overall real economic growth had been spectacular - 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 after effects of overinvestment during the late 1980s
and contractionary domestic policies intended to wring speculative
excesses from the stock and real estate markets and to force a
restructuring of the economy. From 2000 to 2003, government efforts
to revive economic growth met with little success and were further
hampered by the slowing of the US, European, and Asian economies. In
2004 and 2005, growth improved and the lingering fears of deflation
in prices and economic activity lessened. Japan's huge government
debt, which totals 170% of GDP, and the aging of the population are
two major long-run problems. Some fear that a rise in taxes could
endanger the current economic recovery. Internal conflict over the
proper way to reform the financial system will continue as Japan
Post's banking, insurance, and delivery services undergo
privatization between 2007 and 2017.

Jarvis Island
no economic activity

Jersey
Jersey's economy is based on international financial
services, agriculture, and tourism. In 1996, the finance sector
accounted for about 60% 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.
Milk products go to the UK and other EU countries. Tourism accounts
for 24% of GDP. In recent years, the government has encouraged light
industry to locate in Jersey, with the result that an electronics
industry has developed alongside the traditional manufacturing of
knitwear. 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. Living standards come
close to those of the UK.

Johnston Atoll
no economic activity

Jordan
Jordan is a small Arab country with inadequate supplies of
water and other natural resources such as oil. Debt, poverty, and
unemployment are fundamental problems, but King ABDALLAH, since
assuming the throne in 1999, has undertaken some broad economic
reforms in a long-term effort to improve living standards. 'Amman in
the past three years has worked closely with the IMF, practiced
careful monetary policy, and made substantial headway with
privatization. The government also has liberalized the trade regime
sufficiently to secure Jordan's membership in the WTO (2000), a free
trade accord with the US (2001), and an association agreement with
the EU (2001). These measures have helped improve productivity and
have put Jordan on the foreign investment map. Jordan imported most
of its oil from Iraq, but the US-led war in Iraq in 2003 made Jordan
more dependent on oil from other Gulf nations, forcing the Jordanian
Government to raise retail petroleum product prices and the sales
tax base. Jordan's export market, which is heavily dependent on
exports to Iraq, was also affected by the war but recovered quickly
while contributing to the Iraq recovery effort. The main challenges
facing Jordan are reducing dependence on foreign grants, reducing
the budget deficit, and creating investment incentives to promote
job creation.

Juan de Nova Island
Up to 12,000 tons of guano are mined per year.

Kazakhstan
Kazakhstan, the largest of the former Soviet republics in
territory, excluding Russia, possesses enormous fossil fuel reserves
and plentiful supplies of other minerals and metals. It also has a
large agricultural sector featuring livestock and grain.
Kazakhstan's industrial sector rests on the extraction and
processing of these natural resources and also on a growing
machine-building sector specializing in construction equipment,
tractors, agricultural machinery, and some defense items. The
breakup of the USSR in December 1991 and the collapse in demand for
Kazakhstan's traditional heavy industry products resulted in a
short-term contraction of the economy, with the steepest annual
decline occurring in 1994. In 1995-97, the pace of the government
program of economic reform and privatization quickened, resulting in
a substantial shifting of assets into the private sector. Kazakhstan
enjoyed double-digit growth in 2000-01 - 9% or more per year in
2002-05 - thanks largely to its booming energy sector, but also to
economic reform, good harvests, and foreign investment. The opening
of the Caspian Consortium pipeline in 2001, from western
Kazakhstan's Tengiz oilfield to the Black Sea, substantially raised
export capacity. Kazakhstan also has begun work on an ambitious
cooperative construction effort with China to build an oil pipeline
that will extend from the country's Caspian coast eastward to the
Chinese border. The country has embarked upon an industrial policy
designed to diversify the economy away from overdependence on the
oil sector by developing light industry. The policy aims to reduce
the influence of foreign investment and foreign personnel. The
government has engaged in several disputes with foreign oil
companies over the terms of production agreements; tensions
continue. Upward pressure on the local currency continued in 2005
due to massive oil-related foreign-exchange inflows.

Kenya
The regional hub for trade and finance in East Africa, Kenya
has been hampered by corruption and by reliance upon several primary
goods whose prices have remained low. In 1997, the IMF suspended
Kenya's Enhanced Structural Adjustment Program due to the
government's failure to maintain reforms and curb corruption. A
severe drought from 1999 to 2000 compounded Kenya's problems,
causing water and energy rationing and reducing agricultural output.
As a result, GDP contracted by 0.2% in 2000. The IMF, which had
resumed loans in 2000 to help Kenya through the drought, again
halted lending in 2001 when the government failed to institute
several anticorruption measures. Despite the return of strong rains
in 2001, weak commodity prices, endemic corruption, and low
investment limited Kenya's economic growth to 1.2%. Growth lagged at
1.1% in 2002 because of erratic rains, low investor confidence,
meager donor support, and political infighting up to the elections.
In the key December 2002 elections, Daniel Arap MOI's 24-year-old
reign ended, and a new opposition government took on the formidable
economic problems facing the nation. In 2003, progress was made in
rooting out corruption and encouraging donor support. GDP grew more
than 5% in 2005.

Kingman Reef
no economic activity

Kiribati
A remote country of 33 scattered coral atolls, Kiribati has
few natural resources. Commercially viable phosphate deposits were
exhausted at the time of independence from the UK in 1979. Copra and
fish now represent the bulk of production and exports. The economy
has fluctuated widely in recent years. Economic development is
constrained by a shortage of skilled workers, weak infrastructure,
and remoteness from international markets. Tourism provides more
than one-fifth of GDP. The financial sector is at an early stage of
development as is the expansion of private sector initiatives.
Foreign financial aid from UK, Japan, Australia, New Zealand, and
China equals about 20% of GDP. Remittances from seamen on merchant
ships abroad account for more than $5 million each year. Kiribati
receives around $15 million annually for the government budget from
an Australian trust fund.

Korea, North
North Korea, one of the world's most centrally planned
and isolated economies, faces desperate economic conditions.
Industrial capital stock is nearly beyond repair as a result of
years of underinvestment and shortages of spare parts. Industrial
and power output have declined in parallel. Despite an increased
harvest in 2005 because of more stable weather conditions,
fertilizer assistance from South Korea, and an extraordinary
mobilization of the population to help with agricultural production,
the nation has suffered its 11th year of food shortages because of
on-going systemic problems, including a lack of arable land,
collective farming practices, and chronic shortages of tractors and
fuel. Massive international food aid deliveries have allowed the
people of North Korea to escape mass starvation since famine
threatened in 1995, but the population continues to suffer from
prolonged malnutrition and poor living conditions. Large-scale
military spending eats up resources needed for investment and
civilian consumption. In 2004, the regime formalized an arrangement
whereby private "farmers markets" were allowed to begin selling a
wider range of goods. It also permitted some private farming on an
experimental basis in an effort to boost agricultural output. In
October 2005, the regime reversed some of these policies by
forbidding private sales of grains and reinstituting a centralized
food rationing system. In December 2005, the regime confirmed that
it intended to carry out earlier threats to terminate all
international humanitarian assistance operations in the DPRK
(calling instead for developmental assistance only) and to restrict
the activities of international and non-governmental aid
organizations such as the World Food Program. Firm political control
remains the Communist government's overriding concern, which will
likely inhibit the loosening of economic regulations.

Korea, South
Since the early 1960s, South Korea has achieved an
incredible record of growth and integration into the high-tech
modern world economy. Four decades ago, 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. Today its GDP per capita is equal to the lesser economies
of the EU. This success through the late 1980s was achieved by a
system of close government/business ties, including directed credit,
import restrictions, sponsorship of specific industries, and a
strong labor effort. 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 1997-99 exposed longstanding weaknesses in South
Korea's development model, including high debt/equity ratios,
massive foreign borrowing, and an undisciplined financial sector.
GDP plunged by 6.9% in 1998, then recovered 9.5% in 1999 and 8.5% in
2000. Growth fell back to 3.3% in 2001 because of the slowing global
economy, falling exports, and the perception that much-needed
corporate and financial reforms had stalled. Led by consumer
spending and exports, growth in 2002 was an impressive 7%, despite
anemic global growth. Between 2003 and 2005, growth moderated to
about 4%. A downturn in consumer spending was offset by rapid export
growth. In 2005, the government proposed labor reform legislation
and a corporate pension scheme to help make the labor market more
flexible, and new real estate policies to cool property speculation.
Moderate inflation, low unemployment, an export surplus, and fairly
equal distribution of income characterize this solid economy.

Kuwait
Kuwait is a small, rich, relatively open economy with
self-reported crude oil reserves of about 96 billion barrels - 10%
of world reserves. Petroleum accounts for nearly half of GDP, 95% of
export revenues, and 80% of government income. Kuwait's climate
limits agricultural development. Consequently, with the exception of
fish, it depends almost wholly on food imports. About 75% of potable
water must be distilled or imported. Kuwait continues its
discussions with foreign oil companies to develop fields in the
northern part of the country.

Kyrgyzstan
Kyrgyzstan is a poor, mountainous country with a
predominantly agricultural economy. Cotton, tobacco, wool, and meat
are the main agricultural products, although only tobacco and cotton
are exported in any quantity. Industrial exports include gold,
mercury, uranium, natural gas, and electricity. Kyrgyzstan has been
progressive in carrying out market reforms, such as an improved
regulatory system and land reform. Kyrgyzstan was the first CIS
country to be accepted into the World Trade Organization. Much of
the government's stock in enterprises has been sold. 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. Kyrgyzstan has distinguished itself by
adopting relatively liberal economic policies. The drop in output at
the Kumtor gold mine sparked a 0.5% decline in GDP in 2002, but GDP
growth bounced back in 2003-05. The government has made steady
strides in controlling its substantial fiscal deficit and reduced
the deficit to 1% of GDP in 2005. The government and international
financial institutions have been engaged in a comprehensive
medium-term poverty reduction and economic growth strategy, and in
2005 agreed to pursue much-needed tax reform. Progress fighting
corruption, further restructuring of domestic industry, and success
in attracting foreign investment are keys to future growth.

Laos
The government of Laos, one of the few remaining official
Communist states, began decentralizing control and encouraging
private enterprise in 1986. The results, starting from an extremely
low base, were striking - growth averaged 6% in 1988-2004 except
during the short-lived drop caused by the Asian financial crisis
beginning in 1997. Despite this high growth rate, Laos remains a
country with a primitive infrastructure. It has no railroads, a
rudimentary road system, and limited external and internal
telecommunications, though the government is sponsoring major
improvements in the road system with possible support from Japan.
Electricity is available in only a few urban areas. Subsistence
agriculture, dominated by rice, accounts for about half of GDP and
provides 80% of total employment. The economy will continue to
benefit from aid by the IMF and other international sources and from
new foreign investment in food processing and mining. Construction
will be another strong economic driver, especially as hydroelectric
dam and road projects gain steam. In late 2004, Laos gained Normal
Trade Relations status with the US, allowing Laos-based producers to
face lower tariffs on exports. This new status may help spur growth.
In addition, the European Union has agreed to provide $1 million to
the Lao Government for technical assistance in preparations for WTO
membership. If the avian flu worsens and spreads in the region,
however, prospects for tourism could dim.

Latvia
Latvia's transitional economy recovered from the 1998 Russian
financial crisis, largely due to the government's budget stringency
and a gradual reorientation of exports toward EU countries,
lessening Latvia's trade dependency on Russia. The majority of
companies, banks, and real estate have been privatized, although the
state still holds sizable stakes in a few large enterprises. Latvia
officially joined the World Trade Organization in February 1999. EU
membership, a top foreign policy goal, came in May 2004. The current
account deficit - 11.5% of GDP in 2005 - remains a major concern. A
growing perception that many of Latvia's banks facilitate illicit
activity could damage the country's vibrant financial sector.

Lebanon
The 1975-91 civil war seriously damaged Lebanon's economic
infrastructure, cut national output by half, and all but ended
Lebanon's position as a Middle Eastern entrepot and banking hub. In
the years since, Lebanon has rebuilt much of its war-torn physical
and financial infrastructure by borrowing heavily - mostly from
domestic banks. In an attempt to reduce the ballooning national
debt, the Rafiq HARIRI government began an austerity program,
reining in government expenditures, increasing revenue collection,
and privatizing state enterprises. In November 2002, the government
met with international donors at the Paris II conference to seek
bilateral assistance in restructuring its massive domestic debt at
lower interest rates. Substantial receipts from donor nations
stabilized government finances in 2003, but did little to reduce the
debt, which stands at nearly 170% of GDP. In 2004 the HARIRI
government issued Eurobonds in an effort to manage maturing debt.
The downturn in economic activity that followed the assassination of
Rafiq al-HARIRI has eased, but has yet to be reversed. Tourism
remains below the level of 2004. The new Prime Minister, Fuad
SINIORA, has pledged to push ahead with economic reform, including
privatization and more efficient government. The Core Group of
nations has announced plans to hold a Donor's Conference in early
2006 to assist the government of Lebanon in restructuring its debt
and increasing foreign investment.

Lesotho
Small, landlocked, and mountainous, Lesotho relies on
remittances from miners employed in South Africa and customs duties
from the Southern Africa Customs Union for the majority of
government revenue. However, the government has recently
strengthened its tax system to reduce dependency on customs duties.
Completion of a major hydropower facility in January 1998 now
permits the sale of water to South Africa, also generating royalties
for Lesotho. As the number of mineworkers has declined steadily over
the past several years, a small manufacturing base has developed
based on farm products that support the milling, canning, leather,
and jute industries, as well as a rapidly expanding apparel-assembly
sector. The latter has grown significantly, mainly due to Lesotho
qualifying for the trade benefits contained in the Africa Growth and
Opportunity Act. The economy is still primarily based on subsistence
agriculture, especially livestock, although drought has decreased
agricultural activity. The extreme inequality in the distribution of
income remains a major drawback. Lesotho has signed an Interim
Poverty Reduction and Growth Facility with the IMF.

Liberia
Civil war and government mismanagement have destroyed much
of Liberia's economy, especially the infrastructure in and around
Monrovia, while continued international sanctions on diamonds and
timber exports will limit growth prospects for the foreseeable
future. Many businessmen have fled the country, taking capital and
expertise with them. Some have returned, but many will not. Richly
endowed with water, mineral resources, forests, and a climate
favorable to agriculture, Liberia had been a producer and exporter
of basic products - primarily raw timber and rubber. Local
manufacturing, mainly foreign owned, had been small in scope. The
departure of the former president, Charles TAYLOR, to Nigeria in
August 2003, the establishment of the all-inclusive Transitional
Government, and the arrival of a UN mission have helped defuse the
political crisis, but have done little to encourage economic
development. Wealthy international donors, who are ready to assist
reconstruction efforts, are withholding funding until Liberia's
National Assembly signs onto a Governance and Economic Management
Action Plan (GEMAP). The Plan was created in October 2005 by the
International Contact Group for Liberia to help ensure transparent
revenue collection and allocation - something that was lacking under
the Transitional Government and that has limited Liberia's economic
recovery. The reconstruction of infrastructure and the raising of
incomes in this ravaged economy will largely depend on generous
financial support and technical assistance from donor countries.

Libya
The Libyan economy depends primarily upon revenues from the
oil sector, which contribute about 95% of export earnings, about
one-quarter of GDP, and 60% of public sector wages. Substantial
revenues from the energy sector coupled with a small population give
Libya one of the highest per capita GDPs in Africa, but little of
this income flows down to the lower orders of society. Libyan
officials in the past four years have made progress on economic
reforms as part of a broader campaign to reintegrate the country
into the international fold. This effort picked up steam after UN
sanctions were lifted in September 2003 and as Libya announced that
it would abandon programs to build weapons of mass destruction in
December 2003. Almost all US unilateral sanctions against Libya were
removed in April 2004, helping Libya attract more foreign direct
investment, mostly in the energy sector. Libya faces a long road
ahead in liberalizing the socialist-oriented economy, but initial
steps - including applying for WTO membership, reducing some
subsidies, and announcing plans for privatization - are laying the
groundwork for a transition to a more market-based economy. The
non-oil manufacturing and construction sectors, which account for
about 20% of GDP, have expanded from processing mostly agricultural
products to include the production of petrochemicals, iron, steel,
and aluminum. Climatic conditions and poor soils severely limit
agricultural output, and Libya imports about 75% of its food.

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 living standards on a par with its large European
neighbors. 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 or so-called letter box 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.

Lithuania
Lithuania, the Baltic state that has conducted the most
trade with Russia, has slowly rebounded from the 1998 Russian
financial crisis. Unemployment dropped from 11% in 2003 to about 8%
in 2005. Growing domestic consumption and increased investment have
furthered recovery. Trade has been increasingly oriented toward the
West. Lithuania has gained membership in the World Trade
Organization and joined the EU in May 2004. Privatization of the
large, state-owned utilities, particularly in the energy sector, is
nearing completion. Overall, more than 80% of enterprises have been
privatized. Foreign government and business support have helped in
the transition from the old command economy to a market economy.

Luxembourg
This stable, high-income economy - benefitting from its
proximity to France, Belgium, and Germany - features solid growth,
low inflation, and low unemployment. The industrial sector,
initially dominated by steel, has become increasingly diversified to
include chemicals, rubber, and other products. Growth in the
financial sector, which now accounts for about 28% of GDP, has more
than compensated for the decline in steel. Most banks are
foreign-owned and have extensive foreign dealings. Agriculture is
based on small family-owned farms. The economy depends on foreign
and cross-border workers for more than 30% of its labor force.
Although Luxembourg, like all EU members, has suffered from the
global economic slump, the country enjoys an extraordinarily high
standard of living - GDP per capita ranks first in the world.

Macau
Macau's well-to-do economy has remained one of the most open
in the world since its reversion to China in 1999. Apparel exports
and tourism are mainstays of the economy. Although the territory was
hit hard by the 1997-98 Asian financial crisis and the global
downturn in 2001, its economy grew 10.1% in 2002, 14.2% in 2003, and
28.6% in 2004. During the first three quarters of 2005, Macau
registered year-on-year GDP increases of 6.2%. A rapid rise in the
number of mainland visitors because of China's easing of travel
restrictions, increased public works expenditures, and significant
investment inflows associated with the liberalization of Macau's
gaming industry drove the four-year recovery. The budget also
returned to surplus since 2002 because of the surge in visitors from
China and a hike in taxes on gambling profits, which generated about
70% of government revenue. The three companies awarded gambling
licenses have pledged to invest $2.2 billion in the territory, which
will boost GDP growth. Much of Macau's textile industry may move to
the mainland as the Multi-Fiber Agreement is phased out. The
territory may have to rely more on gambling and trade-related
services to generate growth. Two new casinos were opened by new
foreign gambling licensees in 2004; development of new
infrastructure and facilities in preparation for Macau's hosting of
the 2005 East Asian Games led the construction sector. The Closer
Economic Partnership Agreement (CEPA) between Macau and mainland
China that came into effect on 1 January 2004 offers many Macau-made
products tariff-free access to the mainland, and the range of
products covered by CEPA was expanded on 1 January 2005.

Macedonia
At independence in September 1991, Macedonia was the least
developed of the Yugoslav republics, producing a mere 5% of the
total federal output of goods and services. The collapse of
Yugoslavia ended transfer payments from the central government and
eliminated advantages from inclusion in a de facto free trade area.
An absence of infrastructure, UN sanctions on the downsized
Yugoslavia, one of its largest markets, and a Greek economic embargo
over a dispute about the country's constitutional name and flag
hindered economic growth until 1996. GDP subsequently rose each year
through 2000. However, the leadership's commitment to economic
reform, free trade, and regional integration was undermined by the
ethnic Albanian insurgency of 2001. The economy shrank 4.5% because
of decreased trade, intermittent border closures, increased deficit
spending on security needs, and investor uncertainty. Growth barely
recovered in 2002 to 0.9%, then rose by 3.4% in 2003, 4.1% in 2004,
and 3.7% in 2005. Macedonia has maintained macroeconomic stability
with low inflation, but it has lagged the region in attracting
foreign investment and job growth has been anemic. Macedonia has an
extensive grey market, estimated to be more than 20 percent of GDP,
that falls outside official statistics.

Madagascar
Having discarded past socialist economic policies,
Madagascar has since the mid 1990s followed a World Bank- and
IMF-led policy of privatization and liberalization. This strategy
placed the country on a slow and steady growth path from an
extremely low level. Agriculture, including fishing and forestry, is
a mainstay of the economy, accounting for more than one-fourth of
GDP and employing 80% of the population. Exports of apparel have
boomed in recent years primarily due to duty-free access to the
United States. Deforestation and erosion, aggravated by the use of
firewood as the primary source of fuel, are serious concerns.
President RAVALOMANANA has worked aggressively to revive the economy
following the 2002 political crisis, which triggered a 12% drop in
GDP that year. Poverty reduction and combating corruption will be
the centerpieces of economic policy for the next few years.

Malawi
Landlocked Malawi ranks among the world's least developed
countries. The economy is predominately agricultural, with about 90%
of the population living in rural areas. Agriculture accounted for
nearly 36% of GDP and 80% of export revenues in 2005. The
performance of the tobacco sector is key to short-term growth as
tobacco accounts for over 60% of exports. The economy depends on
substantial inflows of economic assistance from the IMF, the World
Bank, and individual donor nations. In late 2000, Malawi was
approved for relief under the Heavily Indebted Poor Countries (HIPC)
program. The government faces strong challenges, including
developing a market economy, improving educational facilities,
facing up to environmental problems, dealing with the rapidly
growing problem of HIV/AIDS, and satisfying foreign donors that
fiscal discipline is being tightened. In 2005, President MUTHARIKA
championed an anticorruption campaign. Malawi's recent fiscal policy
performance has been very strong, but a serious drought in 2005 and
2006 will heighten pressure on the government to increase spending.

Malaysia
Malaysia, a middle-income country, transformed itself from
1971 through the late 1990s from a producer of raw materials into an
emerging multi-sector economy. Growth was almost exclusively driven
by exports - particularly of electronics. As a result, Malaysia was
hard hit by the global economic downturn and the slump in the
information technology (IT) sector in 2001 and 2002. GDP in 2001
grew only 0.5% because of an estimated 11% contraction in exports,
but a substantial fiscal stimulus package equal to US $1.9 billion
mitigated the worst of the recession, and the economy rebounded in
2002 with a 4.1% increase. The economy grew 4.9% in 2003,
notwithstanding a difficult first half, when external pressures from
Severe Acute Respiratory Syndrome (SARS) and the Iraq War led to
caution in the business community. Growth topped 7% in 2004 and 5%
in 2005. As an oil and gas exporter, Malaysia has profited from
higher world energy prices, although the cost of government
subsidies for domestic gasoline and diesel fuel has risen and offset
some of the benefit. Malaysia "unpegged" the ringgit from the US
dollar in 2005, but so far there has been little movement in the
exchange rate. Healthy foreign exchange reserves, low inflation, and
a small external debt are all strengths that make it unlikely that
Malaysia will experience a financial crisis over the near term
similar to the one in 1997. The economy remains dependent on
continued growth in the US, China, and Japan - top export
destinations and key sources of foreign investment.

Maldives
Tourism, Maldives' largest industry, accounts for 20% of
GDP and more than 60% of the Maldives' foreign exchange receipts.
Over 90% of government tax revenue comes from import duties and
tourism-related taxes. Fishing is a second leading sector. The
Maldivian Government began an economic reform program in 1989
initially by lifting import quotas and opening some exports to the
private sector. Subsequently, it has liberalized regulations to
allow more foreign investment. 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. Most staple foods must be imported. Industry, which consists
mainly of garment production, boat building, and handicrafts,
accounts for about 18% of GDP. Maldivian authorities worry about the
impact of erosion and possible global warming on their low-lying
country; 80% of the area is one meter or less above sea level. In
late December 2004, a major tsunami left more than 100 dead, 12,000
displaced, and property damage exceeding $300 million. Over the past
decade, real GDP growth averaged over 7.5% per year. As a result of
the tsunami, the GDP contracted by about 5.5% in 2005.

Mali
Mali is among the poorest countries in the world, with 65% of
its land area desert or semidesert and with a highly unequal
distribution of income. Economic activity is largely confined to the
riverine area irrigated by the Niger. About 10% of the population is
nomadic and some 80% of the labor force is engaged in farming and
fishing. Industrial activity is concentrated on processing farm
commodities. Mali is heavily dependent on foreign aid and vulnerable
to fluctuations in world prices for cotton, its main export, along
with gold. The government has continued its successful
implementation of an IMF-recommended structural adjustment program
that is helping the economy grow, diversify, and attract foreign
investment. Mali's adherence to economic reform and the 50%
devaluation of the CFA franc in January 1994 have pushed up economic
growth to a sturdy 5% average in 1996-2005. Worker remittances and
external trade routes for the landlocked country have been
jeopardized by continued unrest in neighboring Cote d'Ivoire.

Malta
Major resources are limestone, a favorable geographic
location, and a productive labor force. Malta produces only about
20% of its food needs, has limited fresh water supplies, and has few
domestic energy sources. The economy is dependent on foreign trade,
manufacturing (especially electronics and textiles), and tourism.
Continued sluggishness in the European economy is holding back
exports, tourism, and overall growth.

Marshall Islands
US Government assistance is the mainstay of this
tiny island economy. Agricultural production, primarily subsistence,
is concentrated on small farms; the most important commercial crops
are coconuts and breadfruit. Small-scale industry is limited to
handicrafts, tuna processing, and copra. The tourist industry, now a
small source of foreign exchange employing less than 10% of the
labor force, remains the best hope for future added income. The
islands have few natural resources, and imports far exceed exports.
Under the terms of the Amended Compact of Free Association, the US
will provide millions of dollars per year to the Marshall Islands
(RMI) through 2023, at which time a Trust Fund made up of US and RMI
contributions will begin perpetual annual payouts. Government
downsizing, drought, a drop in construction, the decline in tourism
and foreign investment due to the Asian financial difficulties, and
less income from the renewal of fishing vessel licenses have held
GDP growth to an average of 1% over the past decade.

Martinique
The economy is based on sugarcane, bananas, tourism, and
light industry. Agriculture accounts for about 6% of GDP and the
small industrial sector for 11%. Sugar production has declined, with
most of the sugarcane now used for the production of rum. Banana
exports are increasing, going mostly to France. The bulk of meat,
vegetable, and grain requirements must be imported, contributing to
a chronic trade deficit that requires large annual transfers of aid
from France. Tourism, which employs more than 11,000 people, has
become more important than agricultural exports as a source of
foreign exchange.

Mauritania
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. Mauritania has extensive deposits
of iron ore, which account for nearly 40% of total exports. The
decline in world demand for this ore, however, has led to cutbacks
in production. The nation's coastal waters are among the richest
fishing areas in the world, but overexploitation by foreigners
threatens this key source of revenue. The country's first deepwater
port opened near Nouakchott in 1986. In the past, drought and
economic mismanagement resulted in a buildup of foreign debt which
now stands at more than three times the level of annual exports. In
February 2000, Mauritania qualified for debt relief under the
Heavily Indebted Poor Countries (HIPC) initiative and in December
2001 received strong support from donor and lending countries at a
triennial Consultative Group review. A new investment code approved
in December 2001 improved the opportunities for direct foreign
investment. Ongoing negotiations with the IMF involve problems of
economic reforms and fiscal discipline. In 2001, exploratory oil
wells in tracts 80 km offshore indicated potential extraction at
current world oil prices. Mauritania has an estimated 1 billion
barrels of proved reserves. Substantial oil production and exports
are scheduled to begin in early 2006 and may average 75,000 barrels
per day for that year. Meantime the government emphasizes reduction
of poverty, improvement of health and education, and promoting
privatization of the economy.

Mauritius
Since independence in 1968, Mauritius has developed from a
low-income, agriculturally based economy to a middle-income
diversified economy with growing industrial, financial, and tourist
sectors. For most of the period, annual growth has been in the order
of 5% to 6%. This remarkable achievement has been reflected in more
equitable income distribution, increased life expectancy, lowered
infant mortality, and a much-improved infrastructure. Sugarcane is
grown on about 90% of the cultivated land area and accounts for 25%
of export earnings. The government's development strategy centers on
expanding local financial institutions and building a domestic
information telecommunications industry. Mauritius has attracted
more than 9,000 offshore entities, many aimed at commerce in India
and South Africa, and investment in the banking sector alone has
reached over $1 billion. Mauritius, with its strong textile sector,
has been well poised to take advantage of the Africa Growth and
Opportunity Act (AGOA).

Mayotte
Economic activity is based primarily on the agricultural
sector, including fishing and livestock raising. Mayotte is not
self-sufficient and must import a large portion of its food
requirements, mainly from France. The economy and future development
of the island are heavily dependent on French financial assistance,
an important supplement to GDP. Mayotte's remote location is an
obstacle to the development of tourism.

Mexico
Mexico has a free market economy that recently entered the
trillion dollar class. It contains a mixture of modern and outmoded
industry and agriculture, increasingly dominated by the private
sector. Recent administrations have expanded competition in
seaports, railroads, telecommunications, electricity generation,
natural gas distribution, and airports. Per capita income is
one-fourth that of the US; income distribution remains highly
unequal. Trade with the US and Canada has tripled since the
implementation of NAFTA in 1994. Mexico has 12 free trade agreements
with over 40 countries including, Guatemala, Honduras, El Salvador,
the European Free Trade Area, and Japan, putting more than 90% of
trade under free trade agreements. The FOX administration is
cognizant of the need to upgrade infrastructure, modernize the tax
system and labor laws, and allow private investment in the energy
sector, but has been unable to win the support of the opposition-led
Congress. The next government that takes office in December 2006
will confront the same challenges of boosting economic growth,
improving Mexico's international competitiveness, and reducing
poverty.

Micronesia, Federated States of Economic activity consists primarily of subsistence farming and fishing. The islands have few mineral deposits worth exploiting, except for high-grade phosphate. The potential for a tourist industry exists, but the remote location, a lack of adequate facilities, and limited air connections hinder development. The Amended Compact of Free Association with the US guarantees the Federated States of Micronesia (FSM) millions of dollars in annual aid through 2023, and establishes a Trust Fund into which the US and the FSM make annual contributions in order to provide annual payouts to the FSM in perpetuity after 2023. The country's medium-term economic outlook appears fragile due not only to the reduction in US assistance but also to the slow growth of the private sector.

Midway Islands
The economy is based on providing support services
for the national wildlife refuge activities located on the islands.
All food and manufactured goods must be imported.

Moldova
Moldova remains one of the poorest countries in Europe
despite recent progress from its small economic base. It enjoys a
favorable climate and good farmland but has no major mineral
deposits. As a result, the economy depends heavily on agriculture,
featuring fruits, vegetables, wine, and tobacco. Moldova must import
almost all of its energy supplies. Energy shortages contributed to
sharp production declines after the breakup of the Soviet Union in
December 1991. As part of an ambitious reform effort after
independence, Moldova introduced a convertible currency, freed
prices, stopped issuing preferential credits to state enterprises,
backed steady land privatization, removed export controls, and freed
interest rates. The government entered into agreements with the
World Bank and the IMF to promote growth and reduce poverty. The
economy returned to positive growth in 2000, and has remained at or
above 6% every year since. Further reforms will come slowly because
of strong political forces backing government controls. The economy
remains vulnerable to higher fuel prices, poor agricultural weather,
and the skepticism of foreign investors.

Monaco
Monaco, bordering France on the Mediterranean coast, is a
popular resort, attracting tourists to its casino and pleasant
climate. In 2001, a major construction project extended the pier
used by cruise ships in the main harbor. The principality 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. 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
Economic activity in Mongolia has traditionally been based
on herding and agriculture. Mongolia has extensive mineral deposits.
Copper, coal, molybdenum, tin, tungsten and gold account for a large
part of industrial production. 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 due to political inaction and
natural disasters, as well as economic growth because of
reform-embracing, free-market economics and extensive privatization
of the formerly state-run economy. Severe winters and summer
droughts in 2000-2002 resulted in massive livestock die-off and zero
or negative GDP growth. This was compounded by falling prices for
Mongolia's primary sector exports and widespread opposition to
privatization. Growth was 10.6% in 2004 and 5.5% in 2005, largely
because of high copper prices and new gold production. Mongolia's
economy continues to be heavily influenced by its neighbors. For
example, Mongolia purchases 80% of its petroleum products and a
substantial amount of electric power from Russia, leaving it
vulnerable to price increases. China is Mongolia's chief export
partner and a main source of the "shadow" or "grey" economy. The
World Bank and other international financial institutions estimate
the grey economy to be at least equal to that of the official
economy, but the former's actual size is difficult to calculate
since the money does not pass through the hands of tax authorities
or the banking sector. Remittances from Mongolians working abroad
both legally and illegally are sizeable, and money laundering is a
growing concern. Mongolia settled its $11 billion debt with Russia
at the end of 2003 on favorable terms. Mongolia, which joined the
World Trade Organization in 1997, seeks to expand its participation
and integration into Asian regional economic and trade regimes.

Montenegro
The republic of Montenegro severed its economy from
federal control and from Serbia during the MILOSEVIC era and
continues to maintain its own central bank, uses the euro instead of
the Yugoslav dinar as official currency, collects customs tariffs,
and manages its own budget. The dissolution of the loose political
union between Serbia and Montenegro in 2006 led to separate
membership in several international financial institutions, such as
the IMF, World Bank, and the European Bank for Reconstruction and
Development. Montenegro is pursuing its own membership in the World
Trade Organization as well as negotiating a Stabilization and
Association agreement with the European Union in anticipation of
eventual membership. Severe unemployment remains a key political and
economic problem for this entire region. Montenegro has privatized
its large aluminum complex - the dominant industry - as well as most
of its financial sector, and has begun to attract foreign direct
investment in the tourism sector.

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 airports 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. The UK has launched a three-year $122.8 million aid
program to help reconstruct the economy. Half of the island is
expected to remain uninhabitable for another decade.

Morocco
Moroccan economic policies brought macroeconomic stability
to the country in the early 1990s but have not spurred growth
sufficient to reduce unemployment that nears 20% in urban areas.
Poverty has actually increased due to the volatile nature of GDP,
Morocco's continued dependence on foreign energy, and its inability
to promote the growth of small and medium size enterprises. Despite
structural adjustment programs supported by the IMF, the World Bank,
and the Paris Club, the dirham is only fully convertible for current
account transactions and Morocco's financial sector is rudimentary.
Moroccan authorities understand that reducing poverty and providing
jobs is key to domestic security and development. In 2004, Moroccan
authorities instituted measures to boost foreign direct investment
and trade by signing a free trade agreement with the US and selling
government shares in the state telecommunications company and in the
largest state-owned bank. The Free Trade agreement went into effect
in January 2006. In 2005, GDP growth slipped to 1.2% and the budget
deficit rose sharply - to 7.5% of GDP - because of substantial
increases in wages and oil subsidies. Long-term challenges include
preparing the economy for freer trade with the US and European
Union, improving education and job prospects for Morocco's youth,
and raising living standards, which the government hopes to achieve
by increasing tourist arrivals and boosting competitiveness in
textiles.

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, have led to dramatic improvements in the country's growth
rate. Inflation was reduced to single digits during the late 1990s
although it returned to double digits in 2000-03. 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, Mozambique remains dependent
upon foreign assistance for much of its annual budget, and the
majority of 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 the opening of the Mozal aluminum smelter, the country's
largest foreign investment project to date, has increased export
earnings. In late 2005, and after years of negotiations, the
government signed an agreement to gain Portugal's majority share of
the Cahora Bassa Hydroelectricity (HCB) company, a dam that was not
transferred to Mozambique at independence because of the ensuing
civil war and unpaid debts. More power is needed for additional
investment projects in titanium extraction and processing and
garment manufacturing that could further close the import/export
gap. 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.

Namibia
The economy is heavily dependent on the extraction and
processing of minerals for export. Mining accounts for 20% of GDP.
Rich alluvial diamond deposits make Namibia a primary source for
gem-quality diamonds. Namibia is the fourth-largest exporter of
nonfuel minerals in Africa, the world's fifth-largest producer of
uranium, and the producer of large quantities of lead, zinc, tin,
silver, and tungsten. The mining sector employs only about 3% of the
population while about half of the population depends on subsistence
agriculture for its livelihood. 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 the world's worst inequality of income distribution.
The Namibian economy is closely linked to South Africa with the
Namibian dollar pegged one-to-one to the South African rand.
Privatization of several enterprises in coming years may stimulate
long-run foreign investment. Increased fish production and mining of
zinc, copper, uranium, and silver spurred growth in 2003-05.

Nauru
Revenues of this tiny island have traditionally come from
exports of phosphates, now significantly depleted. An Australian
company in 2005 entered into an agreement intended to exploit
remaining supplies. Few other resources exist with most necessities
being imported, mainly from Australia, its former occupier and later
major source of support. 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. As a result of heavy spending from the trust funds,
the government faces virtual bankruptcy. To cut costs the government
has frozen wages and reduced overstaffed public service departments.
In 2005, the deterioration in housing, hospitals, and other capital
plant continued, and the cost to Australia of keeping the government
and economy afloat continued 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 almost one-third of its population living below the
poverty line. Agriculture is the mainstay of the economy, providing
a livelihood for three-fourths of the population and accounting for
38% of GDP. Industrial activity mainly involves the processing of
agricultural produce including jute, sugarcane, tobacco, and grain.
Security concerns relating to the Maoist conflict have led to a
decrease in tourism, a key source of foreign exchange. Nepal has
considerable scope for exploiting its potential in hydropower and
tourism, areas of recent foreign investment interest. Prospects for
foreign trade or investment in other sectors will remain poor,
however, because of the small size of the economy, its technological
backwardness, its remoteness, its landlocked geographic location,
its civil strife, and its susceptibility to natural disaster.

Netherlands
The Netherlands has a prosperous and open economy, which
depends heavily on foreign trade. The economy is noted for stable
industrial relations, moderate unemployment and inflation, a sizable
current account surplus, and an important role as a European
transportation hub. Industrial activity is predominantly in food
processing, chemicals, petroleum refining, and electrical machinery.
A highly mechanized agricultural sector employs no more than 2% of
the labor force but provides large surpluses for the food-processing
industry and for exports. The Netherlands, along with 11 of its EU
partners, began circulating the euro currency on 1 January 2002. The
country continues to be one of the leading European nations for
attracting foreign direct investment. Economic growth slowed
considerably in 2001-05, as part of the global economic slowdown,
but for the four years before that, annual growth averaged nearly
4%, well above the EU average.

Netherlands Antilles
Tourism, petroleum refining, and offshore
finance are the mainstays of this small economy, which is closely
tied to the outside world. Although GDP has declined or grown
slightly in each of the past eight years, the islands enjoy a high
per capita income and a well-developed infrastructure compared with
other countries in the region. Almost all consumer and capital goods
are imported, the US and Mexico being the major suppliers. Poor
soils and inadequate water supplies hamper the development of
agriculture. Budgetary problems hamper reform of the health and
pension systems of an aging population.

New Caledonia
New Caledonia has about 25% of the world's known
nickel resources. 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 one-fourth of GDP - and tourism are keys to the health of the
economy. Substantial new investment in the nickel industry, combined
with the recovery of global nickel prices, brightens the economic
outlook for the next several years.

New Zealand
Over the past 20 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 many at the bottom of the ladder),
broadened and deepened the technological capabilities of the
industrial sector, and contained inflationary pressures. Per capita
income has risen for six consecutive years and was more than $24,000
in 2005 in purchasing power parity terms. New Zealand is heavily
dependent on trade - particularly in agricultural products - to
drive growth. Exports are equal to about 22% of GDP. Thus far the
economy has been resilient, and the Labor Government promises that
expenditures on health, education, and pensions will increase
proportionately to output.

Nicaragua
Nicaragua, one of the Western Hemisphere's poorest
countries, has low per capita income, widespread underemployment,
and a heavy external debt burden. Distribution of income is one of
the most unequal on the globe. While the country has progressed
toward macroeconomic stability in the past few years, GDP annual
growth has been far too low to meet the country's needs, forcing the
country to rely on international economic assistance to meet fiscal
and debt financing obligations. Nicaragua qualified in early 2004
for some $4.5 billion in foreign debt reduction under the Heavily
Indebted Poor Countries (HIPC) initiative because of its earlier
successful performances under its International Monetary Fund policy
program and other efforts. In October 2005, Nicaragua ratified the
US-Central America Free Trade Agreement (CAFTA), which will provide
an opportunity for Nicaragua to attract investment, create jobs, and
deepen economic development. High oil prices helped drive inflation
to 9.6% in 2005, leading to a fall in real GDP growth to 4% from
over 5% in 2004.

Niger
Niger is one of the poorest countries in the world, ranking
last on the United Nations Development Fund index of human
development. It is a landlocked, Sub-Saharan nation, whose economy
centers on subsistence crops, livestock, and some of the world's
largest uranium deposits. Drought cycles, desertification, a 2.9%
population growth rate, and the drop in world demand for uranium
have undercut the economy. Niger shares a common currency, the CFA
franc, and a common central bank, the Central Bank of West African
States (BCEAO), with seven other members of the West African
Monetary Union. In December 2000, Niger qualified for enhanced debt
relief under the International Monetary Fund program for Highly
Indebted Poor Countries (HIPC) and concluded an agreement with the
Fund on a Poverty Reduction and Growth Facility (PRGF). Debt relief
provided under the enhanced HIPC initiative significantly reduces
Niger's annual debt service obligations, freeing funds for
expenditures on basic health care, primary education, HIV/AIDS
prevention, rural infrastructure, and other programs geared at
poverty reduction. In December 2005, it was announced that Niger had
received 100% multilateral debt relief from the IMF, which
translates into the forgiveness of approximately $86 million USD in
debts to the IMF, excluding the remaining assistance under HIPC.
Nearly half of the government's budget is derived from foreign donor
resources. Future growth may be sustained by exploitation of oil,
gold, coal, and other mineral resources. Uranium prices have
recovered somewhat in the last few years. A drought and locust
infestation in 2005 led to food shortages for as many as 2.5 million
Nigerians.

Nigeria
Oil-rich Nigeria, long hobbled by political instability,
corruption, inadequate infrastructure, and poor macroeconomic
management, is undertaking some reforms under a new reform-minded
administration. Nigeria's former military rulers failed to diversify
the economy away from its overdependence on the capital-intensive
oil sector, which provides 20% of GDP, 95% of foreign exchange
earnings, and about 65% of budgetary revenues. The largely
subsistence agricultural sector has failed to keep up with rapid
population growth - Nigeria is Africa's most populous country - and
the country, once a large net exporter of food, now must import
food. Following the signing of an IMF stand-by agreement in August
2000, Nigeria received a debt-restructuring deal from the Paris Club
and a $1 billion credit from the IMF, both contingent on economic
reforms. Nigeria pulled out of its IMF program in April 2002, after
failing to meet spending and exchange rate targets, making it
ineligible for additional debt forgiveness from the Paris Club. In
the last year the government has begun showing the political will to
implement the market-oriented reforms urged by the IMF, such as to
modernize the banking system, to curb inflation by blocking
excessive wage demands, and to resolve regional disputes over the
distribution of earnings from the oil industry. In 2003, the
government began deregulating fuel prices, announced the
privatization of the country's four oil refineries, and instituted
the National Economic Empowerment Development Strategy, a
domestically designed and run program modeled on the IMF's Poverty
Reduction and Growth Facility for fiscal and monetary management.
GDP rose strongly in 2005, based largely on increased oil exports
and high global crude prices. In November 2005, Abuja won Paris Club
approval for a historic debt-relief deal that by March 2006 should
eliminate $30 billion worth of Nigeria's total $37 billion external
debt. The deal first requires that Nigeria repay roughly $12 billion
in arrears to its bilateral creditors. Nigeria would then be allowed
to buy back its remaining debt stock at a discount. The deal also
commits Nigeria to more intensified IMF reviews.

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 a financial services industry, although the
International Banking Repeal Act of 2002 resulted in the termination
of all offshore banking licenses. Economic aid from New Zealand in
2002 was about US$2 million. Niue suffered a devastating typhoon in
January 2004, which decimated nascent economic programs. While in
the process of rebuilding, Niue has been dependent on foreign aid.

Norfolk Island
Tourism, the primary economic activity, has steadily
increased over the years and has brought a level of prosperity
unusual among inhabitants of the Pacific islands. The agricultural
sector has become self-sufficient in the production of beef,
poultry, and eggs.

Northern Mariana Islands
The economy benefits substantially from
financial assistance from the US. The rate of funding has declined
as locally generated government revenues have grown. The key tourist
industry employs about 50% of the work force and accounts for
roughly one-fourth of GDP. Japanese tourists predominate. Annual
tourist entries have exceeded one-half million in recent years, but
financial difficulties in Japan have caused a temporary slowdown.
The agricultural sector is made up of cattle ranches and small farms
producing coconuts, breadfruit, tomatoes, and melons. Garment
production is by far the most important industry with the employment
of 17,500 mostly Chinese workers and sizable shipments to the US
under duty and quota exemptions.

Norway
The Norwegian economy is a prosperous bastion of welfare
capitalism, featuring a combination of free market activity and
government intervention. The government controls key areas such as
the vital petroleum sector (through large-scale state enterprises).
The country is richly endowed with natural resources - petroleum,
hydropower, fish, forests, and minerals - and is highly dependent on
its oil production and international oil prices, with oil and gas
accounting for one-third of exports. Only Saudi Arabia and Russia
export more oil than Norway. Norway opted to stay out of the EU
during a referendum in November 1994; nonetheless, it contributes
sizably to the EU budget. The government has moved ahead with
privatization. Although Norwegian oil production peaked in 2000,
natural gas production is still rising. Norwegians realize that once
their gas production peaks they will eventually face declining oil
and gas revenues; accordingly, Norway has been saving its
oil-and-gas-boosted budget surpluses in a Government Petroleum Fund,
which is invested abroad and now is valued at more than $250
billion. After lackluster growth of 1% in 2002 and 0.5% in 2003, GDP
growth picked up to 3.3% in 2004 and to 3.7% in 2005.

Oman
Oman is a middle-income economy in the Middle East with notable
oil and gas resources, a substantial trade surplus, and low
inflation. Work on a new liquefied natural gas (LNG) facility
progressed in 2005 and will contribute to slightly higher oil and
gas exports in 2006. Oman continues to liberalize its markets and
joined the World Trade Organization (WTO) in November 2000. To
reduce unemployment and limit dependence on foreign labor, the
government is encouraging the replacement of foreign expatriate
workers with local workers. Training in information technology,
business management, and English support this objective. Industrial
development plans focus on gas resources, metal manufacturing,
petrochemicals, and international transshipment ports. In 2005, Oman
signed agreements with several foreign investors to boost oil
reserves, build and operate a power plant, and develop a second
mobile phone network in the country.

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
Pakistan, an impoverished and underdeveloped country, has
suffered from decades of internal political disputes, low levels of
foreign investment, and a costly, ongoing confrontation with
neighboring India. However, IMF-approved government policies,
bolstered by generous foreign assistance and renewed access to
global markets since 2001, have generated solid macroeconomic
recovery the last four years. The government has made substantial
macroeconomic reforms since 2000, although progress on more
politically sensitive reforms has slowed. For example, in the budget
for fiscal year 2006, Islamabad did not impose taxes on the
agriculture or real estate sectors, despite Pakistan's chronically
low tax-to-GDP ratio. While long-term prospects remain uncertain,
given Pakistan's low level of development, medium-term prospects for
job creation and poverty reduction are the best in more than a
decade. Islamabad has raised development spending from about 2% of
GDP in the 1990s to 4% in 2003, a necessary step towards reversing
the broad underdevelopment of its social sector. GDP growth, spurred
by double-digit gains in industrial production over the past year,
has become less dependent on agriculture, and remained above 7% in
2004 and 2005. Inflation remains the biggest threat to the economy,
jumping to more than 9% in 2005. The World Bank and Asian
Development Bank announced that they would provide US $1 billion
each in aid to help Pakistan rebuild areas hit by the October 2005
earthquake in Kashmir. Foreign exchange reserves continued to reach
new levels in 2005, supported by steady worker remittances. In the
near term, growth probably cannot be sustained at the 7% level;
however, massive international aid, increased government spending,
lower taxes, and pay increases for government workers will help
Pakistan maintain strong GDP growth over the longer term.

Palau
The economy consists primarily of tourism, subsistence
agriculture, and fishing. The government is the major employer of
the work force, relying heavily on financial assistance from the US.
Business and tourist arrivals numbered 63,000 in 2003. The
population enjoys a per capita income twice that of the Philippines
and much of Micronesia. Long-run prospects for the key tourist
sector have been greatly bolstered by the expansion of air travel in
the Pacific, the rising prosperity of leading East Asian countries,
and the willingness of foreigners to finance infrastructure
development.

Palmyra Atoll
no economic activity