Singapore has a highly developed and successful
free-market economy. It enjoys a remarkably open and corruption-free
environment, stable prices, and a per capita GDP equal to that of
the four largest West European countries. The economy depends
heavily on exports, particularly in consumer electronics and
information technology products. It was hard hit from 2001-03 by the
global recession, by the slump in the technology sector, and by an
outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003, which
curbed tourism and consumer spending. Fiscal stimulus, low interest
rates, a surge in exports, and internal flexibility led to vigorous
growth in 2004-07 with real GDP growth averaging 7% annually. The
government hopes to establish a new growth path that will be less
vulnerable to the global demand cycle for information technology
products - it has attracted major investments in pharmaceuticals and
medical technology production - and will continue efforts to
establish Singapore as Southeast Asia's financial and high-tech hub.
Slovakia
Slovakia has mastered much of the difficult transition from
a centrally planned economy to a modern market economy. The DZURINDA
government made excellent progress during 2001-04 in macroeconomic
stabilization and structural reform. Major privatizations are nearly
complete, the banking sector is almost completely in foreign hands,
and the government has helped facilitate a foreign investment boom
with business friendly policies such as labor market liberalization
and a 19% flat tax. Foreign investment in the automotive sector has
been strong. Slovakia's economic growth exceeded expectations in
2001-07 despite the general European slowdown. Unemployment, at an
unacceptable 18% in 2003-04, dropped to 8.6% in 2007 but remains the
economy's Achilles heel. Slovakia joined the EU on 1 May 2004 and
will be the second of the new EU member states to adopt the euro in
2009 if it continues to meet euro adoption criteria in 2008. Despite
its 2006 pre-election promises to loosen fiscal policy and reverse
the previous DZURINDA government's pro-market reforms, FICO's
cabinet has thus far been careful to keep a lid on spending in order
to meet euro adoption criteria. The FICO government is pursuing a
state-interventionist economic policy, however, and has pushed to
regulate energy and food prices.
Slovenia
Slovenia, which on 1 January 2007 became the first 2004
European Union entrant to adopt the euro, is a model of economic
success and stability for the region. With the highest per capita
GDP in Central Europe, Slovenia has excellent infrastructure, a
well-educated work force, and a strategic location between the
Balkans and Western Europe. Privatization has lagged since 2002, and
the economy has one of highest levels of state control in the EU.
Structural reforms to improve the business environment have allowed
for somewhat greater foreign participation in Slovenia's economy and
have helped to lower unemployment. In March 2004, Slovenia became
the first transition country to graduate from borrower status to
donor partner at the World Bank. In December 2007, Slovenia was
invited to begin the accession process for joining the OECD. Despite
its economic success, foreign direct investment (FDI) in Slovenia
has lagged behind the region average, and taxes remain relatively
high. Furthermore, the labor market is often seen as inflexible, and
legacy industries are losing sales to more competitive firms in
China, India, and elsewhere.
Solomon Islands
The bulk of the population depends on agriculture,
fishing, and forestry for at least part of its livelihood. Most
manufactured goods and petroleum products must be imported. The
islands are rich in undeveloped mineral resources such as lead,
zinc, nickel, and gold. Prior to the arrival of the Regional
Assistance Mission to the Solomon Islands (RAMSI), severe ethnic
violence, the closing of key businesses, and an empty government
treasury culminated in economic collapse. RAMSI's efforts to restore
law and order and economic stability have led to modest growth as
the economy rebuilds.
Somalia
Despite the lack of effective national governance, Somalia
has maintained a healthy informal economy, largely based on
livestock, remittance/money transfer companies, and
telecommunications. Agriculture is the most important sector, with
livestock normally accounting for about 40% of GDP and about 65% of
export earnings. Nomads and semi-pastoralists, who are dependent
upon livestock for their livelihood, make up a large portion of the
population. Livestock, hides, fish, charcoal, and bananas are
Somalia's principal exports, while sugar, sorghum, corn, qat, and
machined goods are the principal imports. Somalia's small industrial
sector, based on the processing of agricultural products, has
largely been looted and sold as scrap metal. Somalia's service
sector also has grown. Telecommunication firms provide wireless
services in most major cities and offer the lowest international
call rates on the continent. In the absence of a formal banking
sector, money exchange services have sprouted throughout the
country, handling between $500 million and $1 billion in remittances
annually. Mogadishu's main market offers a variety of goods from
food to the newest electronic gadgets. Hotels continue to operate
and are supported with private-security militias. Somalia's arrears
to the IMF continued to grow in 2006-07. Statistics on Somalia's
GDP, growth, per capita income, and inflation should be viewed
skeptically. In late December 2004, a major tsunami caused an
estimated 150 deaths and resulted in destruction of property in
coastal areas.
South Africa
South Africa is a middle-income, emerging market with
an abundant supply of natural resources; well-developed financial,
legal, communications, energy, and transport sectors; a stock
exchange that is 17th largest in the world; and modern
infrastructure supporting an efficient distribution of goods to
major urban centers throughout the region. Growth has been robust
since 2004, as South Africa has reaped the benefits of macroeconomic
stability and a global commodities boom. However, unemployment
remains high and outdated infrastructure has constrained growth. At
the end of 2007, South Africa began to experience an electricity
crisis because state power supplier Eskom suffered supply problems
with aged plants, necessitating "load-shedding" cuts to residents
and businesses in the major cities. Daunting economic problems
remain from the apartheid era - especially poverty, lack of economic
empowerment among the disadvantaged groups, and a shortage of public
transportation. South African economic policy is fiscally
conservative but pragmatic, focusing on controlling inflation,
maintaining a budget surplus, and using state-owned enterprises to
deliver basic services to low-income areas as a means to increase
job growth and household income.
South Georgia and the South Sandwich Islands
Some fishing takes
place in adjacent waters. There is a potential source of income from
harvesting finfish and krill. The islands receive income from
postage stamps produced in the UK, sale of fishing licenses, and
harbor and landing fees from tourist vessels. Tourism from
specialized cruise ships is increasing rapidly.
Southern Ocean
Fisheries in 2005-06 landed 128,081 metric tons, of
which 83% (106,591 tons) was krill (Euphausia superba) and 9.7%
(12,364 tons) Patagonian toothfish (Dissostichus eleginoides),
compared to 147,506 tons in 2004-05 of which 86% (127,035 tons) was
krill and 8% (11,821 tons) Patagonian toothfish (estimated fishing
from the area covered by the Convention of the Conservation of
Antarctic Marine Living Resources (CCAMLR), which extends slightly
beyond the Southern Ocean area). International agreements were
adopted in late 1999 to reduce illegal, unreported, and unregulated
fishing, which in the 2000-01 season landed, by one estimate, 8,376
metric tons of Patagonian and Antarctic toothfish. In the 2006-07
Antarctic summer, 35,552 tourists visited the Southern Ocean,
compared to 29,799 in 2005-2006 (estimates provided to the Antarctic
Treaty by the International Association of Antarctica Tour Operators
(IAATO), and does not include passengers on overflights and those
flying directly in and out of Antarctica).
Spain
The Spanish economy boomed from 1986 to 1990 averaging 5%
annual growth. After a European-wide recession in the early 1990s,
the Spanish economy resumed moderate growth starting in 1994.
Spain's mixed capitalist economy supports a GDP that on a per capita
basis is equal to that of the leading West European economies. The
center-right government of former President Jose Maria AZNAR
successfully worked to gain admission to the first group of
countries launching the European single currency (the euro) on 1
January 1999. The AZNAR administration continued to advocate
liberalization, privatization, and deregulation of the economy and
introduced some tax reforms to that end. Unemployment fell steadily
under the AZNAR administration but remains high at 7.6%. Growth
averaging more than 3% annually during 2003-07 was satisfactory
given the background of a faltering European economy. The Socialist
president, Jose Luis Rodriguez ZAPATERO, has made mixed progress in
carrying out key structural reforms, which need to be accelerated
and deepened to sustain Spain's economic growth. Despite the
economy's relative solid footing significant downside risks remain
including Spain's continued loss of competitiveness, the potential
for a housing market collapse, the country's changing demographic
profile, and a decline in EU structural funds.
Spratly Islands
Economic activity is limited to commercial fishing.
The proximity to nearby oil- and gas-producing sedimentary basins
suggests the potential for oil and gas deposits, but the region is
largely unexplored. There are no reliable estimates of potential
reserves. Commercial exploitation has yet to be developed.
Sri Lanka
In 1977, Colombo abandoned statist economic policies and
its import substitution trade policy for more market-oriented
policies, export-oriented trade, and encouragement of foreign
investment. Recent changes in government, however, have brought some
policy reversals. Currently, the ruling Sri Lanka Freedom Party has
a more statist economic approach, which seeks to reduce poverty by
steering investment to disadvantaged areas, developing small and
medium enterprises, promoting agriculture, and expanding the already
enormous civil service. The government has halted privatizations.
Although suffering a brutal civil war that began in 1983, Sri Lanka
saw GDP growth average 4.5% in the last 10 years with the exception
of a recession in 2001. In late December 2004, a major tsunami took
about 31,000 lives, left more than 6,300 missing and 443,000
displaced, and destroyed an estimated $1.5 billion worth of
property. Government spending and reconstruction drove growth to
more than 7% in 2006 but reduced agriculture output probably slowed
growth to about 6 percent in 2007. Government spending and loose
monetary policy drove inflation to nearly 16% in 2007. Sri Lanka's
most dynamic sectors now are food processing, textiles and apparel,
food and beverages, port construction, telecommunications, and
insurance and banking. In 2006, plantation crops made up only about
15% of exports (compared with more than 90% in 1970), while textiles
and garments accounted for more than 60%. About 800,000 Sri Lankans
work abroad, 90% of them in the Middle East. They send home more
than $1 billion a year. The struggle by the Tamil Tigers of the
north and east for an independent homeland continues to cast a
shadow over the economy.
Sudan
Sudan's economy is booming on the back of increases in oil
production, high oil prices, and large inflows of foreign direct
investment. GDP growth registered more than 10% per year in 2006 and
2007. From 1997 to date, Sudan has been working with the IMF to
implement macroeconomic reforms, including a managed float of the
exchange rate. Sudan began exporting crude oil in the last quarter
of 1999. Agricultural production remains important, because it
employs 80% of the work force and contributes a third of GDP. The
Darfur conflict, the aftermath of two decades of civil war in the
south, the lack of basic infrastructure in large areas, and a
reliance by much of the population on subsistence agriculture ensure
much of the population will remain at or below the poverty line for
years despite rapid rises in average per capita income. In January
2007, the government introduced a new currency, the Sudanese Pound,
at an initial exchange rate of $1.00 equals 2 Sudanese Pounds.
Suriname
The economy is dominated by the mining industry, with
exports of alumina, gold, and oil accounting for about 85% of
exports and 25% of government revenues, making the economy highly
vulnerable to mineral price volatility. The short-term economic
outlook depends on the government's ability to control inflation and
on the development of projects in the bauxite and gold mining
sectors. Suriname has received aid for these projects from
Netherlands, Belgium, and the European Development Fund. Suriname's
economic prospects for the medium term will depend on continued
commitment to responsible monetary and fiscal policies and to the
introduction of structural reforms to liberalize markets and promote
competition. In 2000, the government of Ronald VENETIAAN, returned
to office and inherited an economy with inflation of over 100% and a
growing fiscal deficit. He quickly implemented an austerity program,
raised taxes, attempted to control spending, and tamed inflation.
These economic policies are likely to remain in effect during
VENETIAAN's third term. Prospects for local onshore oil production
are good as a drilling program is underway. Offshore oil drilling
was given a boost in 2004 when the State Oil Company (Staatsolie)
signed exploration agreements with Repsol, Maersk, and Occidental.
Bidding on these new offshore blocks was completed in July 2006.
Svalbard
Coal mining is the major economic activity on Svalbard. The
treaty of 9 February 1920 gave the 41 signatories equal rights to
exploit mineral deposits, subject to Norwegian regulation. Although
US, UK, Dutch, and Swedish coal companies have mined in the past,
the only companies still mining are Norwegian and Russian. The
settlements on Svalbard are essentially company towns. The Norwegian
state-owned coal company employs nearly 60% of the Norwegian
population on the island, runs many of the local services, and
provides most of the local infrastructure. There is also some
hunting of seal, reindeer, and fox.
Swaziland
In this small, landlocked economy, subsistence agriculture
occupies approximately 70% of the population. The manufacturing
sector has diversified since the mid-1980s. Sugar and wood pulp
remain important foreign exchange earners. In 2007, the sugar
industry increased efficiency and diversification efforts, in
response to a 17% decline in EU sugar prices. Mining has declined in
importance in recent years with only coal and quarry stone mines
remaining active. Surrounded by South Africa, except for a short
border with Mozambique, Swaziland is heavily dependent on South
Africa from which it receives more than nine-tenths of its imports
and to which it sends 60% of its exports. Swaziland's currency is
pegged to the South African rand, subsuming Swaziland's monetary
policy to South Africa. Customs duties from the Southern African
Customs Union, which may equal as much as 70% of government revenue
this year, and worker remittances from South Africa substantially
supplement domestically earned income. Swaziland is not poor enough
to merit an IMF program; however, the country is struggling to
reduce the size of the civil service and control costs at public
enterprises. The government is trying to improve the atmosphere for
foreign investment. With an estimated 40% unemployment rate,
Swaziland's need to increase the number and size of small and medium
enterprises and attract foreign direct investment is acute.
Overgrazing, soil depletion, drought, and sometimes floods persist
as problems for the future. More than one-fourth of the population
needed emergency food aid in 2006-07 because of drought, and nearly
two-fifths of the adult population has been infected by HIV/AIDS.
Sweden
Aided by peace and neutrality for the whole of the 20th
century, Sweden has achieved an enviable standard of living under a
mixed system of high-tech capitalism and extensive welfare benefits.
It has a modern distribution system, excellent internal and external
communications, and a skilled labor force. Timber, hydropower, and
iron ore constitute the resource base of an economy heavily oriented
toward foreign trade. Privately owned firms account for about 90% of
industrial output, of which the engineering sector accounts for 50%
of output and exports. Agriculture accounts for only 1% of GDP and
2% of employment. Sweden is in the midst of a sustained economic
upswing, boosted by increased domestic demand and strong exports.
This and robust finances have offered the center-right government
considerable scope to implement its reform program aimed at
increasing employment, reducing welfare dependence, and streamlining
the state's role in the economy. The government plans to sell $31
billion in state assets during the next three years to further
stimulate growth and raise revenue to pay down the federal debt. In
September 2003, Swedish voters turned down entry into the euro
system concerned about the impact on the economy and sovereignty.
Switzerland
Switzerland is a peaceful, prosperous, and stable modern
market economy with low unemployment, a highly skilled labor force,
and a per capita GDP larger than that of the big Western European
economies. The Swiss in recent years have brought their economic
practices largely into conformity with the EU's to enhance their
international competitiveness. Switzerland remains a safehaven for
investors, because it has maintained a degree of bank secrecy and
has kept up the franc's long-term external value. Reflecting the
anemic economic conditions of Europe, GDP growth stagnated during
the 2001-03 period, improved during 2004-05, and jumped to 2.9% in
2006, and 2.6% in 2007. Unemployment has remained at less than half
the EU average.
Syria
The Syrian economy grew by an estimated 3.3% in real terms in
2007 led by the petroleum and agricultural sectors, which together
account for about one-half of GDP. Higher crude oil prices countered
declining oil production and led to higher budgetary and export
receipts. Damascus has implemented modest economic reforms in the
past few years, including cutting lending interest rates, opening
private banks, consolidating all of the multiple exchange rates,
raising prices on some subsidized items, most notably gasoline and
cement, and establishing the Damascus Stock Exchange - which is set
to begin operations in 2009. In October 2007, for example, Damascus
raised the price of subsidized gasoline by 20%, and may institute a
rationing system in 2008. In addition, President ASAD signed
legislative decrees to encourage corporate ownership reform, and to
allow the Central Bank to issue Treasury bills and bonds for
government debt. Nevertheless, the economy remains highly controlled
by the government. Long-run economic constraints include declining
oil production, high unemployment and inflation, rising budget
deficits, and increasing pressure on water supplies caused by heavy
use in agriculture, rapid population growth, industrial expansion,
and water pollution.
Taiwan
Taiwan has a dynamic capitalist economy with gradually
decreasing guidance of investment and foreign trade by the
authorities. In keeping with this trend, some large, state-owned
banks and industrial firms are being privatized. Exports have
provided the primary impetus for industrialization. The island runs
a large trade surplus, and its foreign reserves are among the
world's largest. Despite restrictions on cross-strait links, China
has overtaken the US to become Taiwan's largest export market and
its second-largest source of imports after Japan. China is also the
island's number one destination for foreign direct investment.
Strong trade performance in 2007 pushed Taiwan's GDP growth rate
above 5%, and unemployment is below 4%.
Tajikistan
Tajikistan has one of the lowest per capita GDPs among
the 15 former Soviet republics. Only 7% of the land area is arable.
Cotton is the most important crop, but this sector is burdened with
debt and an obsolete infrastructure. Mineral resources include
silver, gold, uranium, and tungsten. Industry consists only of a
large aluminum plant, hydropower facilities, and small obsolete
factories mostly in light industry and food processing. The civil
war (1992-97) severely damaged the already weak economic
infrastructure and caused a sharp decline in industrial and
agricultural production. While Tajikistan has experienced steady
economic growth since 1997, nearly two-thirds of the population
continues to live in abject poverty. Economic growth reached 10.6%
in 2004, but dropped to 8% in 2005, 7% in 2006, and 7.8% in 2007.
Tajikistan's economic situation remains fragile due to uneven
implementation of structural reforms, corruption, weak governance,
widespread unemployment, seasonal power shortages, and the external
debt burden. Continued privatization of medium and large state-owned
enterprises could increase productivity. A debt restructuring
agreement was reached with Russia in December 2002 including a $250
million write-off of Tajikistan's $300 million debt. Tajikistan
ranks third in the world in terms of water resources per head, but
suffers winter power shortages due to poor management of water
levels in rivers and reservoirs. Completion of the Sangtuda I
hydropower dam - built with Russian investment - and the Sangtuda II
and Rogun dams will add substantially to electricity output. If
finished according to Tajik plans, Rogun will be the world's tallest
dam. Tajikistan has also received substantial infrastructure
development loans from the Chinese government to improve roads and
an electricity transmission network. To help increase north-south
trade, the US funded a $36 million bridge which opened in August
2007 and links Tajikistan and Afghanistan.
Tanzania
Tanzania is one of the poorest countries in the world. The
economy depends heavily on agriculture, which accounts for more than
40% of GDP, provides 85% of exports, and employs 80% of the work
force. Topography and climatic conditions, however, limit cultivated
crops to only 4% of the land area. Industry traditionally featured
the processing of agricultural products and light consumer goods.
The World Bank, the IMF, and bilateral donors have provided funds to
rehabilitate Tanzania's out-of-date economic infrastructure and to
alleviate poverty. Long-term growth through 2005 featured a pickup
in industrial production and a substantial increase in output of
minerals led by gold. Recent banking reforms have helped increase
private-sector growth and investment. Continued donor assistance and
solid macroeconomic policies supported real GDP growth of nearly 7%
in 2007.