Well endowed with natural resources, Ghana has roughly twice
the per capita output of the poorest countries in West Africa. Even
so, Ghana remains heavily dependent on international financial and
technical assistance. Gold and cocoa production, and individual
remittances, are major sources of foreign exchange. The domestic
economy continues to revolve around agriculture, which accounts for
about 35% of GDP and employs about 55% of the work force, mainly
small landholders. Ghana signed a Millennium Challenge Corporation
(MCC) Compact in 2006, which aims to assist in transforming Ghana's
agricultural sector. Ghana opted for debt relief under the Heavily
Indebted Poor Country (HIPC) program in 2002, and is also benefiting
from the Multilateral Debt Relief Initiative that took effect in
2006. Thematic priorities under its current Growth and Poverty
Reduction Strategy, which also provides the framework for
development partner assistance, are: macroeconomic stability;
private sector competitiveness; human resource development; and good
governance and civic responsibility. Sound macro-economic management
along with high prices for gold and cocoa helped sustain GDP growth
in 2008.
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.
Greece
Greece has a capitalist economy with the public sector
accounting for about 40% of GDP and with per capita GDP about
two-thirds that of the leading euro-zone economies. Tourism provides
15% of GDP. Immigrants make up nearly one-fifth of the work force,
mainly in agricultural and unskilled jobs. Greece is a major
beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek
economy grew by nearly 4.0% per year between 2003 and 2007, due
partly to infrastructural spending related to the 2004 Athens
Olympic Games, and in part to an increased availability of credit,
which has sustained record levels of consumer spending. But growth
dropped to 2.9% in 2008, as a result of the world financial crisis
and tightening credit conditions. Greece violated the EU's Growth
and Stability Pact budget deficit criteria of no more than 3% of GDP
from 2001 to 2006, but finally met that criteria in 2007-08. Public
debt, inflation, and unemployment are above the euro-zone average,
but are falling. The Greek Government continues to grapple with
cutting government spending, reducing the size of the public sector,
and reforming the labor and pension systems, in the face of often
vocal opposition from the country's powerful labor unions and the
general public. The economy remains an important domestic political
issue in Greece and, while the ruling New Democracy government has
had some success in improving economic growth and reducing the
budget deficit, Athens faces long-term challenges in its effort to
continue its economic reforms, especially social security reform and
privatization.
Greenland
The economy remains critically dependent on exports of
shrimp and fish and on a substantial subsidy - about $700 million in
2008-09 - from the Danish Government, which supplies about 60% of
government revenues. The public sector, including publicly-owned
enterprises and the municipalities, plays the dominant role in the
economy. Several interesting hydrocarbon and mineral exploration
activities are ongoing and in 2007 a US firm signed an agreement
with the Greenland Home Rule government to study the feasibility of
building a multi-billion dollar aluminum smelter and hydropower
plant. Denmark plans to reduce its subsidies to Greenland as
revenues from oil exports come onstream.
Grenada
Grenada relies on tourism as its main source of foreign
exchange especially since the construction of an international
airport in 1985. Hurricanes Ivan (2004) and Emily (2005) severely
damaged the agricultural sector - particularly nutmeg and cocoa
cultivation - which had been a key driver of economic growth.
Grenada has rebounded from the devastating effects of the hurricanes
but is now saddled with the debt burden from the rebuilding process.
Public debt-to-GDP is nearly 110%, leaving the THOMAS administration
limited room to engage in public investments and social spending.
Strong performances in construction and manufacturing, together with
the development of tourism and an offshore financial industry, have
also contributed to growth in national output; however, economic
growth will likely slow in 2009 because of the global economic
slowdown's effects on tourism and remittances.
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 most populous of the Central American
countries with a GDP per capita roughly one-half that of Argentina,
Brazil, and Chile. The agricultural sector accounts for about
one-tenth of GDP, two-fifths of exports, and half of the labor
force. Coffee, sugar, and bananas are the main products, with sugar
exports benefiting from increased global demand for ethanol. The
1996 signing of peace accords, which ended 36 years of civil war,
removed a major obstacle to foreign investment, and Guatemala since
then has pursued important reforms and macroeconomic stabilization.
The Central American Free Trade Agreement (CAFTA) entered into force
in July 2006 and has since spurred increased investment in the
export sector, but concerns over security, the lack of skilled
workers and poor infrastructure continued to hamper foreign
participation. The distribution of income remains highly unequal
with more than half of the population below the national poverty
line. Other ongoing challenges include increasing government
revenues, negotiating further assistance from international donors,
curtailing drug trafficking and rampant crime, and narrowing the
trade deficit. Given Guatemala's large expatriate community in the
United States, it is the top remittance recipient in Central
America, with inflows serving as a primary source of foreign income
equivalent to nearly two-thirds of exports. Economic growth will
slow in 2009 as export demand from US and other Central American
markets drop and foreign investment slows amid the global slowdown.
Guernsey
Financial services - banking, fund management, insurance -
account for about 23% of employment and about 55% of total income in
this tiny, prosperous Channel Island economy. Tourism,
manufacturing, and horticulture, mainly tomatoes and cut flowers,
have been declining. Financial services, construction, retail, and
the public sector have been growing. Light tax and death duties make
Guernsey a popular tax haven. 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 has
almost half of the world's bauxite reserves. The mining sector
accounts for more than 70% of exports. Long-run improvements in
government fiscal arrangements, literacy, and the legal framework
are needed if the country is to move out of poverty. Investor
confidence has been sapped by rampant corruption, a lack of
electricity and other infrastructure, a lack of skilled workers, and
the political uncertainty because of the death of President Lansana
CONTE in December 2008. Guinea is trying to reengage with the IMF
and World Bank, which cut off most assistance in 2003, and is
working closely with technical advisors from the U.S. Treasury
Department, the World Bank and IMF, seeking to return to a fully
funded program. Growth rose slightly in 2006-08, primarily due to
increases in global demand and commodity prices on world markets,
but the standard of living fell. The Guinea franc depreciated
sharply as the prices for basic necessities like food and fuel rose
beyond the reach of most Guineans. Dissatisfaction with economic
conditions prompted nationwide strikes in February and June 2006.
Guinea-Bissau
One of the five 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
fifth 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. Offshore oil
prospecting is underway in several sectors but has not yet led to
commercially viable crude deposits. 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, resulted in continued low growth in
2002-06. Higher raw material prices boosted growth in 2007 and 2008.
Guyana
The Guyanese economy exhibited moderate economic growth in
recent years and is based largely on agriculture and extractive
industries. The economy is heavily dependent upon the export of six
commodities - sugar, gold, bauxite, shrimp, timber, and rice - which
represent nearly 60% of the country's GDP and are highly susceptible
to adverse weather conditions and fluctuations in commodity prices.
Economic recovery since the 2005 flood-related contraction has been
buoyed by increases in remittances and foreign direct investment in
the sugar and rice industries as well as the mining sector. The
bauxite mining sector should benefit in the near term from
restructuring and partial privatization, and the state-owned sugar
industry will conduct efficiency increasing modernizations. Export
earnings from agriculture and mining have remained flat as rising
commodity prices have offset declining production, while the import
bill has risen, driven by higher energy costs. 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. In March 2007, the
Inter-American Development Bank, Guyana's principal donor, canceled
Guyana's nearly $470 million debt, equivalent to nearly 48% of GDP,
which along with other Highly Indebted Poor Country (HIPC) debt
forgiveness brought the debt-to-GDP ratio down from 183% in 2006 to
120% in 2007. Guyana became heavily indebted as a result of the
inward-looking, state-led development model pursued in the 1970s and
1980s. Guyana's entrance into the Caricom Single Market and Economy
(CSME) in January 2006 has broadened the country's export market,
primarily in the raw materials sector.
Haiti
Haiti is the poorest country in the Western Hemisphere with
80% of the population living under the poverty line and 54% in
abject poverty. Two-thirds of all Haitians depend on the
agricultural sector, mainly small-scale subsistence farming, and
remain vulnerable to damage from frequent natural disasters,
exacerbated by the country's widespread deforestation. While the
economy has recovered in recent years, registering positive growth
since 2005, four tropical storms in 2008 severely damaged the
transportation infrastructure and agricultural sector. US economic
engagement under the Haitian Hemispheric Opportunity through
Partnership Encouragement (HOPE) Act, passed in December 2006, has
boosted apparel exports and investment by providing tariff-free
access to the US. HOPE II, passed in October 2008, has further
improved the export environment for the apparel sector by extending
preferences to 2018; the apparel sector accounts for two-thirds of
Haitian exports and nearly one-tenth of GDP. Remittances are the
primary source of foreign exchange, equaling nearly a quarter of GDP
and more than twice the earnings from exports. Haiti suffers from
high inflation, a lack of investment because of insecurity and
limited infrastructure, and a severe trade deficit. In 2005, Haiti
paid its arrears to the World Bank, paving the way for reengagement
with the Bank. Haiti is expected to receive debt forgiveness for
about $525 million of its debt through the Highly-Indebted Poor
Country (HIPC) initiative by mid-2009. The government relies on
formal international economic assistance for fiscal sustainability.
Heard Island and McDonald Islands
The islands have no indigenous
economic activity, but the Australian Government allows limited
fishing in the surrounding waters.
Holy See (Vatican City)
The Holy See is supported financially by a
variety of sources, including investments, real estate income, and
donations from Catholic individuals, dioceses, and institutions;
these help fund the Roman Curia (Vatican bureaucracy), diplomatic
missions, and media outlets. The separate Vatican City State budget
includes the Vatican museums and post office and is supported
financially by the sale of stamps, coins, medals, and tourist
mementos; by fees for admission to museums; and by publications
sales. Moreover, an annual collection taken up in dioceses and
direct donations go to a non-budgetary fund known as Peter's Pence,
which is used directly by the Pope for charity, disaster relief, and
aid to churches in developing nations. The incomes and living
standards of lay workers are comparable to those of counterparts who
work in the city of Rome.
Honduras
Honduras, the second poorest country in Central America,
has an extraordinarily unequal distribution of income and high
unemployment. The economy relies heavily on a narrow range of
exports, notably bananas and coffee, making it vulnerable to natural
disasters and shifts in commodity prices; however, investments in
the maquila and non-traditional export sectors are slowly
diversifying the economy. Economic growth remains dependent on the
US economy its largest trading partner, and will decline in 2009 as
a result of reduction in export demand and tightening global credit
markets. Remittances represent over a quarter of GDP or nearly
three-quarters of exports. The US-Central America Free Trade
Agreement (CAFTA) came into force in 2006 and has helped foster
investment. Despite improvements in tax collections, the
government's fiscal deficit is growing due to increases in current
expenditures and financial losses from the state energy and
telephone companies.
Hong Kong
Hong Kong has a free market economy highly dependent on
international trade and finance, which has left it heavily exposed
to the global economic slowdown that began in 2008. The total value
of goods and services trade, including the sizable share of
reexports, was equivalent to 404% of GDP in 2007. The territory has
become increasingly integrated with mainland China over the past few
years through trade, tourism, and financial links. The mainland has
long been Hong Kong's largest trading partner, accounting for nearly
49% of Hong Kong's exports trade by value in 2008. As a result of
China's easing of travel restrictions, the number of mainland
tourists to the territory has surged from 4.5 million in 2001 to
16.9 million in 2008, when they outnumbered visitors from all other
countries combined. Hong Kong has also established itself as the
premier stock market for Chinese firms seeking to list abroad. More
than one-third of the firms listed on the Hong Kong Stock Exchange
are now mainland Chinese companies. They account for 60% of the
Exchange's market capitalization. During the past decade, as Hong
Kong's manufacturing industry moved to the mainland, its service
industry has grown rapidly and now accounts for more than 90% of the
territory's GDP. Hong Kong's natural resources are limited, and food
and raw materials must be imported. GDP growth averaged a strong 5%
from 1989 to 2007, but the global financial crisis caused a sharp
slowdown in the second half of 2008, pushing the territory into
recession. Hong Kong continues to link its currency closely to the
US dollar, maintaining an arrangement established in 1983.
Hungary
Hungary has made the transition from a centrally planned to
a market economy, with a per capita income nearly two-thirds that of
the EU-25 average. The private sector accounts for more than 80% of
GDP. Foreign ownership of and investment in Hungarian firms is
widespread, with cumulative foreign direct investment totaling more
than $200 billion since 1989. The government's IMF-mandated
austerity measures, imposed since late 2006, have reduced the budget
deficit from over 9% of GDP in 2006 to 3.3% in 2008. Hungary's
impending inability to service its short-term debt - brought on by
the global credit crunch in late 2008 - led Budapest to seek and
receive an IMF-arranged financial assistance package worth over $25
billion. The global financial crisis, declining exports, and low
domestic consumption and fixed asset accumulation, dampened by
government austerity measures, will result in a negative growth rate
of about -1.5% to -2.5% in 2009.
Iceland
Iceland's Scandinavian-type social-market economy combines a
capitalist structure and free-market principles with an extensive
welfare system, including generous housing subsidies. Prior to the
2008 crisis, Iceland had achieved high growth, low unemployment, and
a remarkably even distribution of income. Government economic
priorities have included stabilizing the krona, reducing the current
account deficit, containing inflation, restructuring the financial
sector, and diversifying the economy. The economy depends heavily on
the fishing industry, which provides 40% of export earnings, more
than 12% of GDP, and employs 7% of the work force. It remains
sensitive to declining fish stocks as well as to fluctuations in
world prices for its main exports: fish and fish products, aluminum,
and ferrosilicon. Iceland's economy has been diversifying into
manufacturing and service industries in the last decade, with new
developments in software production, biotechnology, and tourism.
Abundant geothermal sources have attracted substantial foreign
investment in the aluminum and hydropower sectors and boosted
economic growth, although the financial crisis has put several
investment projects on hold. Much of Iceland's economic growth in
recent years came as the result of a boom in domestic demand
following the rapid expansion of the country's financial sector.
Domestic banks expanded aggressively in foreign markets, and
consumers and businesses borrowed heavily in foreign-currency loans,
following the privatization of the sector in the early 2000s.
Worsening global financial conditions throughout 2008 resulted in a
sharp depreciation of the krona vis-a-vis other major currencies.
The foreign exposure of Icelandic banks, whose loans and other
assets totaled more than 10 times the country's GDP, became
unsustainable. Iceland's three largest banks collapsed in late 2008.
The country negotiated over $10 billion in loans from the IMF and
other countries to stabilize its currency and financial sector, and
to guarantee foreign deposits in Icelandic banks. A protracted
recession is expected in 2009 and 2010 with GDP likely to contract
and unemployment likely to surpass 10%. The collapse of the
financial system has led to a major shift in opinion in favor of
joining the EU and adopting the euro. Previous opposition to this
move stemmed from Icelanders' concern about losing control of their
fishing resources. Iceland's coalition government collapsed in
January 2009 following protests over growing joblessness and losses
to personal savings.
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 more than half of India's
output with less than one third of its labor force. Slightly more
than half of the work force is in agriculture, leading the United
Progressive Alliance (UPA) government to articulate a rural economic
development program that includes creating basic infrastructure to
improve the lives of the rural poor and boost economic performance.
The government has reduced controls on foreign trade and investment.
Higher limits on foreign direct investment were permitted in a few
key sectors, such as telecommunications. However, tariff spikes in
sensitive categories, including agriculture, and incremental
progress on economic reforms still hinder foreign access to India's
vast and growing market. Privatization of government-owned
industries remains stalled and continues to generate political
debate; populist pressure from within the UPA government had
restrained needed initiatives. The economy has posted an average
growth rate of more than 7% in the decade since 1997, reducing
poverty by about 10 percentage points. India achieved 9.6% GDP
growth in 2006, 9.0% in 2007, and 6.6% in 2008, significantly
expanding manufactures through late 2008. India also 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. Strong growth combined with easy consumer credit,
a real estate boom, and fast-rising commodity prices fueled
inflation concerns from mid-2006 to August 2008. Rising tax revenues
from better tax administration and economic expansion helped New
Delhi make progress in reducing its fiscal deficit for three
straight years before skyrocketing global commodity prices more than
doubled the cost of government energy and fertilizer subsidies. The
ballooning subsidies, amidst slowing growth, brought the return of a
large fiscal deficit in 2008. In the long run, the huge and growing
population is the fundamental social, economic, and environmental
problem.