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. In September 2003,
Swedish voters turned down entry into the euro system concerned
about the impact on the economy and sovereignty. 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 of employment. Until 2008, Sweden was in the
midst of a sustained economic upswing, boosted by increased domestic
demand and strong exports. This and robust finances 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. Despite strong
finances and underlying fundamentals, the Swedish economy slid into
recession in the third quarter of 2008 and growth continued downward
in the fourth as deteriorating global conditions reduced export
demand and consumption. On 3 February 2009, the Swedish Government
announced a $6 billon rescue package for the banking sector.
Switzerland
Switzerland is a peaceful, prosperous, and stable modern
market economy with low unemployment, a highly skilled labor force,
and a per capita GDP among the highest in the world. Switzerland's
economy benefits from a highly developed service sector led by
financial services and a manufacturing industry that specializes in
high-technology, knowledge-based production. The Swiss in recent
years have brought their economic practices largely into conformity
with the EU's to enhance their international competitiveness, but
some trade protectionism remains, particularly for its small
agricultural sector. 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. The global financial crisis
and resulting economic downturn could, however, put Switzerland in a
recession in 2009, particularly as global export demand stalls.
Switzerland's largest banks suffered significant losses in 2008 and
the country's largest bank accepted a government rescue deal in late
2008. The Swiss National Bank, beginning in October 2008, cut
interest rates on several consecutive occasions, effectively
instituting a zero-rate policy in a bid to boost the economy.
Syria
The Syrian economy grew by an estimated 2.4% in real terms in
2008 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%, then instituted 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 government guidance of investment and foreign trade. In
keeping with this trend, some large, state-owned banks and
industrial firms have been 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.
Recently opened cross-strait travel, transportation, and tourism
links are likely to increase Taiwan and China's economic
interdependence. In 2008 China overtook the US to become Taiwan's
second-largest source of imports, after Japan. China is also the
island's number one destination for foreign direct investment.
Growth fell to 0.1% in 2008 because of the global slowdown.
Tajikistan
Tajikistan has one of the lowest per capita GDPs among
the 15 former Soviet republics. Because of a lack of employment
opportunities in Tajikistan, nearly half of the labor force works
abroad, primarily in Russia, supporting families in Tajikistan
through remittances. The exact number of labor migrants is unknown,
but estimated at around 1 million. Less than 7% of the land area is
arable. Cotton is the most important crop, but this sector is
burdened with debt and 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. 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. A debt restructuring
agreement was reached with Russia in December 2002 including a $250
million write-off of Tajikistan's $300 million debt. 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. While,
Tajikistan has experienced steady economic growth since 1997, nearly
two-thirds of the population continues to live in poverty. Economic
growth reached 10.6% in 2004, but dropped below 8% in 2005-08, as
the effects of higher oil prices and then the international
financial crisis began to register - mainly in the form of lower
prices for key commodities and lower remittances from Tajiks working
in Russia, due to the declining economic conditions in that country.
Tanzania
Tanzania is in the bottom ten percent of the world's
economies in terms of per capita income. 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 7.1% in
2008.
Thailand
With a well-developed infrastructure, a free-enterprise
economy, and generally pro-investment policies, Thailand was one of
East Asia's best performers from 2002-04, averaging more than 6%
annual real GDP growth. However, overall economic growth has fallen
sharply - averaging 4.9% from 2005 to 2007 - as persistent political
crisis stalled infrastructure mega-projects, eroded investor and
consumer confidence, and damaged the country's international image.
The growth rate fell to 2.6% in 2008. Exports were the key economic
driver as foreign investment and consumer demand stalled. Export
growth from January 2005 to November 2008 averaged 17.5% annually.
Business uncertainty escalated, however, following the September
2006 coup when the military-installed government imposed capital
controls and considered far-reaching changes to foreign investment
rules and other business legislation. Although controversial capital
controls have since been lifted and business rules largely remain
unchanged, investor sentiment has not recovered. Moreover, the 2008
global financial crisis further darkened Thailand's economic
horizon. Continued political uncertainty will hamper resumption of
infrastructure mega-projects.
Timor-Leste
In late 1999, about 70% of the economic infrastructure
of Timor-Leste was laid waste by Indonesian troops and
anti-independence militias. Three hundred thousand people fled
westward. Over the next three years 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, refugees had returned or had settled in
Indonesia. The country continues to face great challenges in
rebuilding its infrastructure, strengthening the civil
administration, and generating jobs for young people entering the
work force. The development of oil and gas resources in offshore
waters has begun to supplement government revenues ahead of schedule
and above expectations. The technology-intensive industry, however,
has done little to create jobs for the unemployed because there are
no production facilities in Timor. Gas is piped to Australia. In
June 2005, the National Parliament unanimously approved the creation
of a Petroleum Fund to serve as a repository for all petroleum
revenues and preserve the value of Timor-Leste's petroleum wealth
for future generations. The Fund held assets of US$3.9 billion as of
October 2008. The economy is recovering from the mid-2006 outbreak
of violence and civil unrest, which disrupted both private and
public sector economic activity. The government in 2008 resettled
tens of thousands of an estimated 100,000 internally displaced
persons (IDPs) and planned for all IDPs to return home by early
2009. The underlying economic policy challenge the country faces
remains how best to use oil-and-gas wealth to lift the non-oil
economy onto a higher growth path and to reduce poverty.
Togo
This small, sub-Saharan economy is heavily dependent on both
commercial and subsistence agriculture, which provides employment
for 65% of the labor force. Some basic foodstuffs must still be
imported. Cocoa, coffee, and cotton generate about 40% of export
earnings with cotton being the most important cash crop. Togo is the
world's fourth-largest producer of phosphate. The government's
decade-long effort, supported by the World Bank and the IMF, to
implement economic reform measures, encourage foreign investment,
and bring revenues in line with expenditures has moved slowly.
Progress depends on follow through on privatization, increased
openness in government financial operations, progress toward
legislative elections, and continued support from foreign donors.
Togo is working with donors to write a Poverty Reduction and Growth
Facility (PRGF) that could eventually lead to a debt reduction plan.
Economic growth remains marginal due to declining cotton production,
underinvestment in phosphate mining, and strained relations with
donors.
Tokelau
Tokelau's small size (three villages), isolation, and lack
of resources greatly restrain economic development and confine
agriculture to the subsistence level. The people rely heavily on aid
from New Zealand - about $4 million annually - to maintain public
services with annual aid being substantially greater than GDP. The
principal sources of revenue come from sales of copra, postage
stamps, souvenir coins, and handicrafts. Money is also remitted to
families from relatives in New Zealand.
Tonga
Tonga has a small, open, South Pacific island economy. It has
a narrow export base in agricultural goods. Squash, vanilla beans,
and yams are the main crops. Agricultural exports, including fish,
make up two-thirds of total exports. The country must import a high
proportion of its food, mainly from New Zealand. The country remains
dependent on external aid and remittances from Tongan communities
overseas to offset its trade deficit. Tourism is the second-largest
source of hard currency earnings following remittances. Tonga had
41,000 visitors in 2004. The government is emphasizing the
development of the private sector, especially the encouragement of
investment, and is committing increased funds for health and
education. Tonga has a reasonably sound basic infrastructure and
well developed social services. High unemployment among the young, a
continuing upturn in inflation, pressures for democratic reform, and
rising civil service expenditures are major issues facing the
government.
Trinidad and Tobago
Trinidad and Tobago has earned a reputation as
an excellent investment site for international businesses and has
one of the highest growth rates and per capita incomes in Latin
America. Economic growth for the past seven years has averaged
slightly over 8%, significantly above the regional average of about
3.7% for that same period; however, it has slowed down this year to
about 5% and is expected to slow further with the global downturn.
Growth has been fueled by investments in liquefied natural gas
(LNG), petrochemicals, and steel. Additional petrochemical,
aluminum, and plastics projects are in various stages of planning.
Trinidad and Tobago is the leading Caribbean producer of oil and
gas, and its economy is heavily dependent upon these resources but
it also supplies manufactured goods, notably food and beverages, as
well as cement to the Caribbean region. Oil and gas account for
about 40% of GDP and 80% of exports, but only 5% of employment. The
country is also a regional financial center, and tourism is a
growing sector, although it is not proportionately as important as
in many other Caribbean islands. The economy benefits from a growing
trade surplus. The MANNING administration has benefited from fiscal
surpluses fueled by the dynamic export sector; however, declines in
oil and gas prices have reduced government revenues which will
challenge his government's commitment to maintaining high levels of
public investment.
Tunisia
Tunisia has a diverse economy, with important agricultural,
mining, tourism, and manufacturing sectors. Governmental control of
economic affairs while still heavy has gradually lessened over the
past decade with increasing privatization, simplification of the tax
structure, and a prudent approach to debt. Progressive social
policies also have helped raise living conditions in Tunisia
relative to the region. Real growth, which averaged almost 5% over
the past decade, declined to 4.7% in 2008 and probably will decline
further in 2009 because of economic contraction and slowing of
import demand in Europe - Tunisia's largest export market. However,
development of non-textile manufacturing, a recovery in agricultural
production, and strong growth in the services sector somewhat
mitigated the economic effect of slowing exports. Tunisia will need
to reach even higher growth levels to create sufficient employment
opportunities for an already large number of unemployed as well as
the growing population of university graduates. The challenges ahead
include: privatizing industry, liberalizing the investment code to
increase foreign investment, improving government efficiency,
reducing the trade deficit, and reducing socioeconomic disparities
in the impoverished south and west.
Turkey
Turkey's dynamic economy is a complex mix of modern industry
and commerce along with a traditional agriculture sector that still
accounts for about 30% of employment. It has a strong and rapidly
growing private sector, yet the state remains a major participant in
basic industry, banking, transport, and communication. The largest
industrial sector is textiles and clothing, which accounts for
one-third of industrial employment; it faces stiff competition in
international markets with the end of the global quota system.
However, other sectors, notably the automotive and electronics
industries, are rising in importance within Turkey's export mix.
Real GDP growth has exceeded 6% in many years, but this strong
expansion has been interrupted by sharp declines in output in 1994,
1999, and 2001. Due to global contractions, annual growth is
estimated to have fallen to 1.1% in 2008. Inflation fell to 7.7% in
2005 - a 30-year low - but climbed to over 10% in 2008. Despite the
strong economic gains from 2002-07, which were largely due to
renewed investor interest in emerging markets, IMF backing, and
tighter fiscal policy, the economy is still burdened by a high
current account deficit and high external debt. Further economic and
judicial reforms and prospective EU membership are expected to boost
foreign direct investment. The stock value of FDI stood at nearly
$130 billion at year-end 2008. Privatization sales are currently
approaching $21 billion. Oil began to flow through the
Baku-Tblisi-Ceyhan pipeline in May 2006, marking a major milestone
that will bring up to 1 million barrels per day from the Caspian to
market. In 2007 and 2008, Turkish financial markets weathered
significant domestic political turmoil, including turbulence sparked
by controversy over the selection of former Foreign Minister
Abdullah GUL as Turkey's 11th president and the possible closure of
the Justice and Development Party (AKP). Economic fundamentals are
sound, marked by moderate economic growth and foreign direct
investment. Nevertheless, the Turkish economy may be faced with more
negative economic indicators in 2009 as a result of the global
economic slowdown. In addition, Turkey's high current account
deficit leaves the economy vulnerable to destabilizing shifts in
investor confidence.
Turkmenistan
Turkmenistan is largely a desert country with intensive
agriculture in irrigated oases and sizeable gas and oil resources.
One-half of its irrigated land is planted in cotton; formerly it was
the world's 10th-largest producer. Poor harvests in recent years
have led to an almost 50% decline in cotton exports. With an
authoritarian ex-Communist regime in power and a tribally based
social structure, Turkmenistan has taken a cautious approach to
economic reform, hoping to use gas and cotton sales to sustain its
inefficient economy. Privatization goals remain limited. From
1998-2005, Turkmenistan suffered from the continued lack of adequate
export routes for natural gas and from obligations on extensive
short-term external debt. At the same time, however, total exports
rose by an average of roughly 15% per year from 2003-08, largely
because of higher international oil and gas prices. A new pipeline
to China, set to come online in late 2009 or early 2010, will give
Turkmenistan an additional export route for its gas. Overall
prospects in the near future are discouraging because of widespread
internal poverty, a poor educational system, government misuse of
oil and gas revenues, and Ashgabat's reluctance to adopt
market-oriented reforms. In the past, Turkmenistan's economic
statistics were state secrets. The new government has established a
State Agency for Statistics, but GDP numbers and other figures are
subject to wide margins of error. In particular, the rate of GDP
growth is uncertain. Since his election, President BERDIMUHAMEDOW
has sought to improve the health and education systems, unified the
country's dual currency exchange rate, ordered the redenomination of
the manat, reduced state subsidies for gasoline, increased Internet
access both in schools and Internet cafes, ordered an independent
audit of Turkmenistan's gas resources, and created a special tourism
zone on the Caspian Sea. Although foreign investment is encouraged,
numerous bureaucratic obstacles from the NYYZOW-era remain.
Turks and Caicos Islands
The Turks and Caicos economy is based on
tourism, offshore financial services, and fishing. Most capital
goods and food for domestic consumption are imported. The US is the
leading source of tourists, accounting for more than three-quarters
of the 175,000 visitors that arrived in 2004. Major sources of
government revenue also include fees from offshore financial
activities and customs receipts.