Tuvalu consists of a densely populated, scattered group of
nine coral atolls with poor soil. The country has no known mineral
resources and few exports and is almost entirely dependent upon
imported food and fuel. Subsistence farming and fishing are the
primary economic activities. Fewer than 1,000 tourists, on average,
visit Tuvalu annually. Job opportunities are scarce and public
sector workers make up most of those employed. About 15% of the
adult male population work as seamen on merchant ships abroad, and
remittances are a vital source of income contributing around $4
million in 2006. Substantial income is received annually from the
Tuvalu Trust Fund (TTF) an international trust fund established in
1987 by Australia, NZ, and the UK and supported also by Japan and
South Korea. Thanks to wise investments and conservative
withdrawals, this fund grew from an initial $17 million to an
estimated value of $77 million in 2006. The TFF contributed nearly
$9 million towards the government budget in 2006 and is an important
cushion for meeting shortfalls in the government's budget. The US
Government is also a major revenue source for Tuvalu because of
payments from a 1988 treaty on fisheries. In an effort to ensure
financial stability and sustainability, the government is pursuing
public sector reforms, including privatization of some government
functions and personnel cuts. Tuvalu also derives royalties from the
lease of its ".tv" Internet domain name with revenue of more than $2
million in 2006. A minor source of government revenue comes from the
sale of stamps and coins. With merchandise exports only a fraction
of merchandise imports, continued reliance must be placed on fishing
and telecommunications license fees, remittances from overseas
workers, official transfers, and income from overseas investments.
Growing income disparities and the vulnerability of the country to
climatic change are among leading concerns for the nation.
Uganda
Uganda has substantial natural resources, including fertile
soils, regular rainfall, sizable mineral deposits of copper, cobalt,
gold, and other minerals, and recently discovered oil. Agriculture
is the most important sector of the economy, employing over 80% of
the work force. Coffee accounts for the bulk of export revenues.
Since 1986, the government - with the support of foreign countries
and international agencies - has acted to rehabilitate and stabilize
the economy by undertaking currency reform, raising producer prices
on export crops, increasing prices of petroleum products, and
improving civil service wages. The policy changes are especially
aimed at dampening inflation and boosting production and export
earnings. During 1990-2001, the economy turned in a solid
performance based on continued investment in the rehabilitation of
infrastructure, improved incentives for production and exports,
reduced inflation, gradually improved domestic security, and the
return of exiled Indian-Ugandan entrepreneurs. Growth continues to
be solid, despite variability in the price of coffee, Uganda's
principal export, and a consistent upturn in Uganda's export
markets. In 2000, Uganda qualified for enhanced Highly Indebted Poor
Countries (HIPC) debt relief worth $1.3 billion and Paris Club debt
relief worth $145 million. These amounts combined with the original
HIPC debt relief added up to about $2 billion.
Ukraine
After Russia, the Ukrainian republic was far and away the
most important economic component of the former Soviet Union,
producing about four times the output of the next-ranking republic.
Its fertile black soil generated more than one-fourth of Soviet
agricultural output, and its farms provided substantial quantities
of meat, milk, grain, and vegetables to other republics. Likewise,
its diversified heavy industry supplied the unique equipment (for
example, large diameter pipes) and raw materials to industrial and
mining sites (vertical drilling apparatus) in other regions of the
former USSR. Shortly after independence was ratified in December
1991, the Ukrainian Government liberalized most prices and erected a
legal framework for privatization, but widespread resistance to
reform within the government and the legislature soon stalled reform
efforts and led to some backtracking. Output by 1999 had fallen to
less than 40% of the 1991 level. Ukraine's dependence on Russia for
energy supplies and the lack of significant structural reform have
made the Ukrainian economy vulnerable to external shocks. Ukraine
depends on imports to meet about three-fourths of its annual oil and
natural gas requirements. Ukraine concluded a deal with Russia in
January 2006 that almost doubled the price Ukraine pays for Russian
gas. Disputes with Russia over pricing have led to periodic gas
cut-offs. Outside institutions - particularly the IMF - have
encouraged Ukraine to quicken the pace and scope of reforms.
Ukrainian Government officials eliminated most tax and customs
privileges in a March 2005 budget law, bringing more economic
activity out of Ukraine's large shadow economy, but more
improvements are needed, including fighting corruption, developing
capital markets, and improving the legislative framework. Ukraine's
economy was buoyant despite political turmoil between the prime
minister and president until mid-2008. Real GDP growth exceeded 7%
in 2006-07, fueled by high global prices for steel - Ukraine's top
export - and by strong domestic consumption, spurred by rising
pensions and wages. The drop in steel prices and Ukraine's exposure
to the global financial crisis due to aggressive foreign borrowing
has lowered growth in 2008 and the economy probably will contract in
2009. Ukraine reached an agreement with the IMF for a $16.5 billion
standby arrangement in November 2008 to deal with the economic
crisis. However, political turmoil in Ukraine as well as
deteriorating external conditions are likely to hamper efforts for
economic recovery.
United Arab Emirates
The UAE has an open economy with a high per
capita income and a sizable annual trade surplus. Successful efforts
at economic diversification have reduced the portion of GDP based on
oil and gas output to 25%. Since the discovery of oil in the UAE
more than 30 years ago, the UAE has undergone a profound
transformation from an impoverished region of small desert
principalities to a modern state with a high standard of living. The
government has increased spending on job creation and infrastructure
expansion and is opening up utilities to greater private sector
involvement. In April 2004, the UAE signed a Trade and Investment
Framework Agreement with Washington and in November 2004 agreed to
undertake negotiations toward a Free Trade Agreement with the US.
The country's Free Trade Zones - offering 100% foreign ownership and
zero taxes - are helping to attract foreign investors. Higher oil
revenue, strong liquidity, housing shortages, and cheap credit in
2005-07 led to a surge in asset prices (shares and real estate) and
consumer inflation. The global financial crisis and the resulting
tight international credit market and falling oil prices have
already begun to deflate asset prices and will result in slower
economic growth for 2009. Dependence on oil and a large expatriate
workforce are significant long-term challenges. The UAE's strategic
plan for the next few years focuses on diversification and creating
more opportunities for nationals through improved education and
increased private sector employment.
United Kingdom
The UK, a leading trading power and financial center,
is one of the quintet of trillion dollar economies of Western
Europe. Over the past two decades, the government has greatly
reduced public ownership and contained the growth of social welfare
programs. Agriculture is intensive, highly mechanized, and efficient
by European standards, producing about 60% of food needs with less
than 2% of the labor force. The UK has large coal, natural gas, and
oil resources, but its oil and natural gas reserves are declining
and the UK became a net importer of energy in 2005; energy
industries now contribute about 4% to GDP. Services, particularly
banking, insurance, and business services, account by far for the
largest proportion of GDP while industry continues to decline in
importance. Since emerging from recession in 1992, Britain's economy
enjoyed the longest period of expansion on record during which time
growth outpaced most of Western Europe. The global economic
slowdown, tight credit, and falling home prices, however, pushed
Britain back into recession in the latter half of 2008 and prompted
the BROWN government to implement a number of new measures to
stimulate the economy and stabilize the financial markets; these
include part-nationalizing the banking system, cutting taxes,
suspending public sector borrowing rules, and bringing forward
public spending on capital projects. The Bank of England
periodically coordinates interest rate moves with the European
Central Bank, but Britain remains outside the European Economic and
Monetary Union (EMU), and opinion polls show a majority of Britons
oppose joining the euro.
United States
The US has the largest and most technologically
powerful economy in the world, with a per capita GDP of $46,900. In
this market-oriented economy, private individuals and business firms
make most of the decisions, and the federal and state governments
buy needed goods and services predominantly in the private
marketplace. US business firms enjoy greater flexibility than their
counterparts in Western Europe and Japan in decisions to expand
capital plant, to lay off surplus workers, and to develop new
products. At the same time, they face higher barriers to enter their
rivals' home markets than foreign firms face entering US markets. US
firms are at or near the forefront in technological advances,
especially in computers and in medical, aerospace, and military
equipment; their advantage has narrowed since the end of World War
II. The onrush of technology largely explains the gradual
development of a "two-tier labor market" in which those at the
bottom lack the education and the professional/technical skills of
those at the top and, more and more, fail to get comparable pay
raises, health insurance coverage, and other benefits. Since 1975,
practically all the gains in household income have gone to the top
20% of households. The war in March-April 2003 between a US-led
coalition and Iraq, and the subsequent occupation of Iraq, required
major shifts in national resources to the military. Hurricane
Katrina caused extensive damage in the Gulf Coast region in August
2005, but had a small impact on overall GDP growth for the year.
Soaring oil prices between 2005 and the first half of 2008
threatened inflation and unemployment, as higher gasoline prices ate
into consumers' budgets. Imported oil accounts for about two-thirds
of US consumption. Long-term problems include inadequate investment
in economic infrastructure, rapidly rising medical and pension costs
of an aging population, sizable trade and budget deficits, and
stagnation of family income in the lower economic groups. The
merchandise trade deficit reached a record $819 billion in 2007 and
$821 billion in 2008. The global economic downturn, the sub-prime
mortgage crisis, investment bank failures, falling home prices, and
tight credit pushed the United States into a recession by mid-2008.
To help stabilize financial markets, the US Congress established a
$700 billion Troubled Asset Relief Program (TARP) in October 2008.
The government used some of these funds to purchase equity in US
banks and other industrial corporations. In January 2009 the US
Congress passed and President Barack OBAMA signed a bill providing
an additional $787 billion fiscal stimulus - two-thirds on
additional spending and one-third on tax cuts - to create jobs and
to help the economy recover.
United States Pacific Island Wildlife Refuges
no economic activity
Uruguay
Uruguay's economy is characterized by an export-oriented
agricultural sector, a well-educated work force, and high levels of
social spending. After averaging growth of 5% annually during
1996-98, in 1999-2002 the economy suffered a major downturn,
stemming largely from the spillover effects of the economic problems
of its large neighbors, Argentina and Brazil. In 2001-02, Argentine
citizens made massive withdrawals of dollars deposited in Uruguayan
banks after bank deposits in Argentina were frozen, which led to a
plunge in the Uruguayan peso, a banking crisis, and a sharp economic
contraction. Real GDP fell in four years by nearly 20%, with 2002
the worst year. The unemployment rate rose, inflation surged, and
the burden of external debt doubled. Financial assistance from the
IMF helped stem the damage. Uruguay restructured its external debt
in 2003 without asking creditors to accept a reduction on the
principal. Economic growth for Uruguay resumed, and averaged 8%
annually during the period 2004-08.
Uzbekistan
Uzbekistan is a dry, landlocked country of which 11%
consists of intensely cultivated, irrigated river valleys. More than
60% of its population lives in densely populated rural communities.
Uzbekistan is now the world's second-largest cotton exporter and
fifth largest producer; it relies heavily on cotton production as
the major source of export earnings and has come under increasing
international criticism for the use of child labor in its annual
cotton harvest. Other major export earners include gold, natural
gas, and oil. Following independence in September 1991, the
government sought to prop up its Soviet-style command economy with
subsidies and tight controls on production and prices. While aware
of the need to improve the investment climate, the government still
sponsors measures that often increase, not decrease, its control
over business decisions. A sharp increase in the inequality of
income distribution has hurt the lower ranks of society since
independence. In 2003, the government accepted Article VIII
obligations under the IMF, providing for full currency
convertibility. However, strict currency controls and tightening of
borders have lessened the effects of convertibility and have also
led to some shortages that have further stifled economic activity.
The Central Bank often delays or restricts convertibility,
especially for consumer goods. Potential investment by Russia and
China in Uzbekistan's gas and oil industry, as well as increased
cooperation with South Korea in the realm of civil aviation, may
boost growth prospects. In November 2005, Russian President Vladimir
PUTIN and Uzbekistan President KARIMOV signed an "alliance," which
included provisions for economic and business cooperation. Russian
businesses have shown increased interest in Uzbekistan, especially
in mining, telecom, and oil and gas. In 2006, Uzbekistan took steps
to rejoin the Collective Security Treaty Organization (CSTO) and the
Eurasian Economic Community (EurASEC), which it subsequently left in
2008, both organizations dominated by Russia. Uzbek authorities have
accused US and other foreign companies operating in Uzbekistan of
violating Uzbek tax laws and have frozen their assets.
Vanuatu
This South Pacific island economy is based primarily on
small-scale agriculture, which provides a living for over 70% of the
population. Fishing, offshore financial services, and tourism, with
more than 167,000 visitors in 2007 are other mainstays of the
economy. Mineral deposits are negligible; the country has no known
petroleum deposits. A small light industry sector caters to the
local market. Tax revenues come mainly from import duties. Economic
development is hindered by dependence on relatively few commodity
exports, vulnerability to natural disasters, and long distances from
main markets and between constituent islands. In response to foreign
concerns, the government has promised to tighten regulation of its
offshore financial center. In mid-2002, the government stepped up
efforts to boost tourism through improved air connections, resort
development, and cruise ship facilities. Agriculture, especially
livestock farming, is a second target for growth. Australia and New
Zealand are the main suppliers of tourists and foreign aid.
Venezuela
Venezuela remains highly dependent on oil revenues, which
account for roughly 90% of export earnings, about 50% of the federal
budget revenues, and around 30% of GDP. A nationwide strike between
December 2002 and February 2003 had far-reaching economic
consequences - real GDP declined by around 9% in 2002 and 8% in 2003
- but economic output since then has recovered strongly. Fueled by
high oil prices, record government spending helped to boost GDP by
about 10% in 2006, 8% in 2007, and nearly 5% in 2008. This spending,
combined with recent minimum wage hikes and improved access to
domestic credit, has created a consumption boom but has come at the
cost of higher inflation - roughly 20% in 2007 and more than 30% in
2008. Imports also have jumped significantly. Declining oil prices
in the latter part of 2008 are expected to undermine the govenment's
ability to continue the high rate of spending. President Hugo CHAVEZ
in 2008 continued efforts to increase the government's contol of the
economy by nationalizing firms in the cement and steel sectors. In
2007, he nationalized firms in the petroleum, communications, and
electricity sectors. In July 2008, CHAVEZ implemented by decree a
number of laws that further consolidate and centralize authority
over the economy through his plan for "21st Century Socialism."
Vietnam
Vietnam is a densely-populated developing country that in
the last 30 years has had to recover from the ravages of war, the
loss of financial support from the old Soviet Bloc, and the
rigidities of a centrally-planned economy. Since 2001, Vietnamese
authorities have reaffirmed their commitment to economic
liberalization and international integration. They have moved to
implement the structural reforms needed to modernize the economy and
to produce more competitive export-driven industries. Vietnam's
membership in the ASEAN Free Trade Area (AFTA) and entry into force
of the US-Vietnam Bilateral Trade Agreement in December 2001 have
led to even more rapid changes in Vietnam's trade and economic
regime. Vietnam's exports to the US increased 900% from 2001 to
2007. Vietnam joined the WTO in January 2007 following over a decade
long negotiation process. WTO membership has provided Vietnam an
anchor to the global market and reinforced the domestic economic
reform process. Among other benefits, accession allows Vietnam to
take advantage of the phase-out of the Agreement on Textiles and
Clothing, which eliminated quotas on textiles and clothing for WTO
partners on 1 January 2005. Agriculture's share of economic output
has continued to shrink from about 25% in 2000 to less than 20% in
2008. Deep poverty has declined significantly and is now smaller
than that of China, India, and the Philippines. Vietnam is working
to create jobs to meet the challenge of a labor force that is
growing by more than one-and-a-half million people every year. The
global financial crisis, however, will constrain Vietnam's ability
to create jobs and further reduce poverty. As global growth sharply
drops in 2009, Vietnam's export-oriented economy - exports were 68%
of GDP in 2007 - will suffer from lower exports, higher unemployment
and corporate bankruptcies, and decreased foreign investment.
Virgin Islands
Tourism is the primary economic activity, accounting
for 80% of GDP and employment. The islands hosted 2.6 million
visitors in 2005. The manufacturing sector consists of petroleum
refining, rum distilling, textiles, electronics, pharmaceuticals,
and watch assembly. One of the world's largest petroleum refineries
is at Saint Croix. The agricultural sector is small, with most food
being imported. International business and financial services are
small but growing components of the economy. The islands are
vulnerable to substantial damage from storms. The government is
working to improve fiscal discipline, to support construction
projects in the private sector, to expand tourist facilities, to
reduce crime, and to protect the environment.
Wake Island
Economic activity is limited to providing services to
military personnel and contractors located on the island. All food
and manufactured goods must be imported.
Wallis and Futuna
The economy is limited to traditional subsistence
agriculture, with about 80% of labor force earnings from agriculture
(coconuts and vegetables), livestock (mostly pigs), and fishing.
About 4% of the population is employed in government. Revenues come
from French Government subsidies, licensing of fishing rights to
Japan and South Korea, import taxes, and remittances from expatriate
workers in New Caledonia.
West Bank
The West Bank - the larger of the two areas comprising the
Palestinian Authority (PA) - has experienced a general decline in
economic conditions since the second intifada began in September
2000. The downturn has been largely a result of Israeli closure
policies - the imposition of closures and access restrictions in
response to security concerns in Israel - which disrupted labor and
trading relationships. In 2001, and even more severely in 2002,
Israeli military measures in PA areas resulted in the destruction of
capital, the disruption of administrative structures, and widespread
business closures. International aid of at least $1.14 billion to
the West Bank and Gaza Strip in 2004 prevented the complete collapse
of the economy and allowed some reforms in the government's
financial operations. In 2005, high unemployment and limited trade
opportunities - due to continued closures both within the West Bank
and externally - stymied growth. Israel's and the international
community's financial embargo of the PA when HAMAS ran the PA during
March 2006 - June 2007 interrupted the provision of PA social
services and the payment of PA salaries. Since then the FAYYAD
government in the West Bank has restarted salary payments and the
provision of services but would be unable to operate absent high
levels of international assistance.
Western Sahara
Western Sahara depends on pastoral nomadism, fishing,
and phosphate mining as the principal sources of income for the
population. The territory lacks sufficient rainfall for sustainable
agricultural production, and most of the food for the urban
population must be imported. Incomes in Western Sahara are
substantially below the Moroccan level. The Moroccan Government
controls all trade and other economic activities in Western Sahara.
Morocco and the EU signed a four-year agreement in July 2006
allowing European vessels to fish off the coast of Morocco,
including the disputed waters off the coast of Western Sahara.
Moroccan energy interests in 2001 signed contracts to explore for
oil off the coast of Western Sahara, which has angered the
Polisario. However, in 2006 the Polisario awarded similar
exploration licenses in the disputed territory, which would come
into force if Morocco and the Polisario resolve their dispute over
Western Sahara.