Eritrea

Since independence from Ethiopia on 24 May 1993, Eritrea has

faced the economic problems of a small, desperately poor country.

Like the economies of many African nations, the economy is largely

based on subsistence agriculture, with 80% of the population

involved in farming and herding. The Ethiopian-Eritrea war in

1998-2000 severely hurt Eritrea's economy. GDP growth fell to zero

in 1999 and to -12.1% in 2000. The May 2000 Ethiopian offensive into

northern Eritrea caused some $600 million in property damage and

loss, including losses of $225 million in livestock and 55,000

homes. The attack prevented planting of crops in Eritrea's most

productive region, causing food production to drop by 62%. Even

during the war, Eritrea developed its transportation infrastructure,

asphalting new roads, improving its ports, and repairing war damaged

roads and bridges. Since the war ended, the government has

maintained a firm grip on the economy, expanding the use of the

military and party-owned businesses to complete Eritrea's

development agenda. Erratic rainfall and the delayed demobilization

of agriculturalists from the military kept cereal production well

below normal, holding down growth in 2002-04. Eritrea's economic

future depends upon its ability to master social problems such as

illiteracy, unemployment, and low skills, and to open its economy to

private enterprise so the diaspora's money and expertise can foster

economic growth.

Estonia

Estonia, as a new member of the World Trade Organization and

the European Union, has transitioned effectively to a modern market

economy with strong ties to the West, including the pegging of its

currency to the euro. The economy benefits from strong electronics

and telecommunications sectors and is greatly influenced by

developments in Finland, Sweden, and Germany, three major trading

partners. The current account deficit remains high; however, the

state budget enjoyed a surplus of $130 million in 2003.

Ethiopia

Ethiopia's poverty-stricken economy is based on

agriculture, accounting for half of GDP, 60% of exports, and 80% of

total employment. The agricultural sector suffers from frequent

drought and poor cultivation practices. Coffee is critical to the

Ethiopian economy with exports of some $156 million in 2002, but

historically low prices have seen many farmers switching to qat to

supplement income. The war with Eritrea in 1998-2000 and recurrent

drought have buffeted the economy, in particular coffee production.

In November 2001, Ethiopia qualified for debt relief from the Highly

Indebted Poor Countries (HIPC) initiative. Under Ethiopia's land

tenure system, the government owns all land and provides long-term

leases to the tenants; the system continues to hamper growth in the

industrial sector as entrepreneurs are unable to use land as

collateral for loans. Drought struck again late in 2002, leading to

a 2% decline in GDP in 2003. Normal weather patterns late in 2003

helped agricultural and GDP growth recover in 2004.

Europa Island

no economic activity

European Union

Domestically, the European Union attempts to lower

trade barriers, adopt a common currency, and move toward convergence

of living standards. Internationally, the EU aims to bolster

Europe's trade position and its political and economic power.

Because of the great differences in per capita income (from $10,000

to $28,000) and historic national animosities, the European

Community faces difficulties in devising and enforcing common

policies. For example, both Germany and France since 2003 have

flouted the member states' treaty obligation to prevent their

national budgets from running more than a 3% deficit. In 2004, the

EU admitted 10 central and eastern European countries that are, in

general, less advanced technologically and economically than the

existing 15. Twelve EU member states introduced the euro as their

common currency on 1 January 1999. The UK, Sweden, and Denmark do

not now participate; the 10 new member states may choose to adopt

the euro when they meet the EU's fiscal and monetary criteria and

the member states so agree.

Falkland Islands (Islas Malvinas)

The economy was formerly based on

agriculture, mainly sheep farming, but today fishing contributes the

bulk of economic activity. In 1987 the government began selling

fishing licenses to foreign trawlers operating within the Falklands

exclusive fishing zone. These license fees total more than $40

million per year, which goes to support the island's health,

education, and welfare system. Squid accounts for 75% of the fish

taken. Dairy farming supports domestic consumption; crops furnish

winter fodder. Exports feature shipments of high-grade wool to the

UK and the sale of postage stamps and coins. The islands are now

self-financing except for defense. The British Geological Survey

announced a 200-mile oil exploration zone around the islands in

1993, and early seismic surveys suggest substantial reserves capable

of producing 500,000 barrels per day; to date no exploitable site

has been identified. An agreement between Argentina and the UK in

1995 seeks to defuse licensing and sovereignty conflicts that would

dampen foreign interest in exploiting potential oil reserves.

Tourism, especially eco-tourism, is increasing rapidly, with about

30,000 visitors in 2001. Another large source of income is interest

paid on money the government has in the bank. The British military

presence also provides a sizeable economic boost.

Faroe Islands

The Faroese economy has had a strong performance since

1994, mostly as a result of increasing fish landings and high and

stable export prices. Unemployment is minimal and there are signs of

labor shortages in several sectors. The positive economic

development has helped the Faroese Home Rule Government produce

increasing budget surpluses, which in turn has helped to reduce the

large public debt, most of it owed to Denmark. However, the total

dependence on fishing makes the Faroese economy extremely

vulnerable, and the present fishing efforts appear in excess of what

is a sustainable level of fishing in the long term. Oil finds close

to the Faroese area give hope for deposits in the immediate Faroese

area, which may eventually lay the basis for a more diversified

economy and thus lessen dependence on Danish economic assistance.

Aided by a substantial annual subsidy (15% of GDP) from Denmark, the

Faroese have a standard of living not far below the Danes and other

Scandinavians.

Fiji

Fiji, endowed with forest, mineral, and fish resources, is one

of the most developed of the Pacific island economies, though still

with a large subsistence sector. Sugar exports and a growing tourist

industry - with 300,000 to 400,000 tourists annually - are the major

sources of foreign exchange. Sugar processing makes up one-third of

industrial activity, but is inefficient. Long-term problems include

low investment, uncertain land ownership rights, and the

government's ability to manage its budget. Yet short-run economic

prospects are good, provided tensions do not again erupt between

indigenous Fijians and Indo-Fijians. Overseas remittances from

Fijians working in Kuwait and Iraq have increased significantly.

Finland

Finland has a highly industrialized, largely free-market

economy, with per capita output roughly that of the UK, France,

Germany, and Italy. Its key economic sector is manufacturing -

principally the wood, metals, engineering, telecommunications, and

electronics industries. Trade is important, with exports equaling

two-fifths of GDP. Finland excels in high-tech exports, e.g., mobile

phones. Except for timber and several minerals, Finland depends on

imports of raw materials, energy, and some components for

manufactured goods. Because of the climate, agricultural development

is limited to maintaining self-sufficiency in basic products.

Forestry, an important export earner, provides a secondary

occupation for the rural population. Rapidly increasing integration

with Western Europe - Finland was one of the 12 countries joining

the European Economic and Monetary Union (EMU) - will dominate the

economic picture over the next several years. Growth in 2003 was

held back by the global slowdown but picked up in 2004. High

unemployment remains a persistent problem.

France

France is in the midst of transition, from a well-to-do

modern economy that has featured extensive government ownership and

intervention to one that relies more on market mechanisms. The

government has partially or fully privatized many large companies,

banks, and insurers. It retains controlling stakes in several

leading firms, including Air France, France Telecom, Renault, and

Thales, and is dominant in some sectors, particularly power, public

transport, and defense industries. The telecommunications sector is

gradually being opened to competition. France's leaders remain

committed to a capitalism in which they maintain social equity by

means of laws, tax policies, and social spending that reduce income

disparity and the impact of free markets on public health and

welfare. The government has lowered income taxes and introduced

measures to boost employment and reform the pension system. In

addition, it is focusing on the problems of the high cost of labor

and labor market inflexibility resulting from the 35-hour workweek

and restrictions on lay-offs. The tax burden remains one of the

highest in Europe (43.8% of GDP in 2003). The lingering economic

slowdown and inflexible budget items have pushed the budget deficit

above the eurozone's 3%-of-GDP limit. Finance Minister Herve GAYMARD

has promised that the 2005 deficit will fall below 3%.

French Guiana

The economy is tied closely to the much larger French

economy through subsidies and imports. Besides the French space

center at Kourou (which accounts for 25% of GDP), fishing and

forestry are the most important economic activities. Forest and

woodland cover 90% of the country. The large reserves of tropical

hardwoods, not fully exploited, support an expanding sawmill

industry that provides sawn logs for export. Cultivation of crops is

limited to the coastal area, where the population is largely

concentrated; rice and manioc are the major crops. French Guiana is

heavily dependent on imports of food and energy. Unemployment is a

serious problem, particularly among younger workers.

French Polynesia

Since 1962, when France stationed military

personnel in the region, French Polynesia has changed from a

subsistence agricultural economy to one in which a high proportion

of the work force is either employed by the military or supports the

tourist industry. With the halt of French nuclear testing in 1996,

the military contribution to the economy fell sharply. Tourism

accounts for about one-fourth of GDP and is a primary source of hard

currency earnings. Other sources of income are pearl farming and

deep-sea commercial fishing. The small manufacturing sector

primarily processes agricultural products. The territory benefits

substantially from development agreements with France aimed

principally at creating new businesses and strengthening social

services.

French Southern and Antarctic Lands

Economic activity is limited to

servicing meteorological and geophysical research stations and

French and other fishing fleets. The fish catches landed on Iles

Kerguelen by foreign ships are exported to France and Reunion.

Gabon

Gabon enjoys a per capita income four times that of most of

sub-Saharan African nations. This has supported a sharp decline in

extreme poverty; yet because of high income inequality a large

proportion of the population remains poor. Gabon depended on timber

and manganese until oil was discovered offshore in the early 1970s.

The oil sector now accounts for 50% of GDP. Gabon continues to face

fluctuating prices for its oil, timber, and manganese exports.

Despite the abundance of natural wealth, poor fiscal management

hobbles the economy. Devaluation of its currency by 50% in January

1994 sparked a one-time inflationary surge, to 35%; the rate dropped

to 6% in 1996. The IMF provided a one-year standby arrangement in

1994-95, a three-year Enhanced Financing Facility (EFF) at near

commercial rates beginning in late 1995, and stand-by credit of $119

million in October 2000. Those agreements mandate progress in

privatization and fiscal discipline. France provided additional

financial support in January 1997 after Gabon had met IMF targets

for mid-1996. In 1997, an IMF mission to Gabon criticized the

government for overspending on off-budget items, overborrowing from

the central bank, and slipping on its schedule for privatization and

administrative reform. The rebound of oil prices in 1999-2000 helped

growth, but drops in production hampered Gabon from fully realizing

potential gains. In December 2000, Gabon signed a new agreement with

the Paris Club to reschedule its official debt. A follow-up

bilateral repayment agreement with the US was signed in December

2001. Gabon signed a 14 month Stand-By Arrangement with the IMF in

May 2004, and received Paris Club debt rescheduling later that year.

Short-term progress depends on an upbeat world economy and fiscal

and other adjustments in line with IMF policies.

Gambia, The

The Gambia has no significant mineral or natural

resource deposits and has a limited agricultural base. About 75% of

the population depends on crops and livestock for its livelihood.

Small-scale manufacturing activity features the processing of

peanuts, fish, and hides. Reexport trade normally constitutes a

major segment of economic activity, but a 1999 government-imposed

preshipment inspection plan, and instability of the Gambian dalasi

(currency) have drawn some of the reexport trade away from The

Gambia. The government's 1998 seizure of the private peanut firm

Alimenta eliminated the largest purchaser of Gambian groundnuts; the

following two marketing seasons saw substantially lower prices and

sales. Despite an announced program to begin privatizing key

parastatals, no plans have been made public that would indicate that

the government intends to follow through on its promises.

Unemployment and underemployment rates remain extremely high;

short-run economic progress depends on sustained bilateral and

multilateral aid, on responsible government economic management, on

continued technical assistance from the IMF and bilateral donors,

and on expected growth in the construction sector.

Gaza Strip

High population density, limited land access, and strict

internal and external controls have kept economic conditions in the

Gaza Strip - the smaller of the two areas under the Palestinian

Authority - even more degraded than in the West Bank. An anticipated

Israeli withdrawal from the Gaza Strip in 2005 may offer some

medium-term opportunities for economic growth. The beginning of the

second intifadah in September 2000 sparked an economic downturn,

largely the result of Israeli closure policies; these policies,

which were imposed in response to security interests in Israel,

disrupted labor and commodity relationships with the Gaza Strip. In

2001, and even more severely in 2003, Israeli military measures in

Palestinian Authority areas resulted in the destruction of much

capital plant, the disruption of administrative structure, and

widespread business closures. Including the West Bank, the UN

estimates that more than 100,000 Palestinians out of the 125,000 who

used to work in Israel or in joint industrial zones have lost their

jobs. International aid of $2 billion to Gaza Strip and the West

Bank in 2004 prevented the complete collapse of the economy and

allowed some reforms in the government's financial operations.

Meanwhile unemployment has continued at half the labor force.

ARAFAT's death in 2004 leaves open more political options that could

affect the economy.

Georgia

Georgia's main economic activities include the cultivation

of agricultural products such as citrus fruits, tea, hazelnuts, and

grapes; mining of manganese and copper; and output of a small

industrial sector producing alcoholic and nonalcoholic beverages,

metals, machinery, and chemicals. The country imports the bulk of

its energy needs, including natural gas and oil products. Its only

sizable internal energy resource is hydropower. Despite the severe

damage the economy has suffered due to civil strife, Georgia, with

the help of the IMF and World Bank, has made substantial economic

gains since 1995, achieving positive GDP growth and curtailing

inflation. However, the Georgian Government has suffered from

limited resources due to a chronic failure to collect tax revenues.

Georgia's new government is making progress in reforming the tax

code, enforcing taxes, and cracking down on corruption. Georgia also

suffers from energy shortages; it privatized the T'bilisi

electricity distribution network in 1998, but payment collection

rates remain low, both in T'bilisi and throughout the regions. The

country is pinning its hopes for long-term growth on its role as a

transit state for pipelines and trade. The construction on the

Baku-T'bilisi-Ceyhan oil pipeline and the Baku-T'bilisi-Erzerum gas

pipeline have brought much-needed investment and job opportunities.

Germany

Germany's affluent and technologically powerful economy -

the fifth largest in the world - has become one of the slowest

growing economies in the euro zone. A quick turnaround is not in the

offing in the foreseeable future. Growth in 2001-03 fell short of

1%, rising to 1.7% in 2004. The modernization and integration of the

eastern German economy continues to be a costly long-term process,

with annual transfers from west to east amounting to roughly $70

billion. Germany's aging population, combined with high

unemployment, has pushed social security outlays to a level

exceeding contributions from workers. Structural rigidities in the

labor market - including strict regulations on laying off workers

and the setting of wages on a national basis - have made

unemployment a chronic problem. Corporate restructuring and growing

capital markets are setting the foundations that could allow Germany

to meet the long-term challenges of European economic integration

and globalization, particularly if labor market rigidities are

further addressed. In the short run, however, the fall in government

revenues and the rise in expenditures have raised the deficit above

the EU's 3% debt limit.

Ghana

Well endowed with natural resources, Ghana has roughly twice

the per capita output of the poorer countries in West Africa. Even

so, Ghana remains heavily dependent on international financial and

technical assistance. Gold, timber, and cocoa production are major

sources of foreign exchange. The domestic economy continues to

revolve around subsistence agriculture, which accounts for 34% of

GDP and employs 60% of the work force, mainly small landholders.

Ghana opted for debt relief under the Heavily Indebted Poor Country

(HIPC) program in 2002. Priorities include tighter monetary and

fiscal policies, accelerated privatization, and improvement of

social services. Receipts from the gold sector helped sustain GDP

growth in 2004. Inflation should ease, but remain a major internal

problem.

Gibraltar

Self-sufficient Gibraltar benefits from an extensive

shipping trade, offshore banking, and its position as an

international conference center. The British military presence has

been sharply reduced and now contributes about 7% to the local

economy, compared with 60% in 1984. The financial sector, tourism

(almost 5 million visitors in 1998), shipping services fees, and

duties on consumer goods also generate revenue. The financial

sector, the shipping sector, and tourism each contribute 25%-30% of

GDP. Telecommunications accounts for another 10%. In recent years,

Gibraltar has seen major structural change from a public to a

private sector economy, but changes in government spending still

have a major impact on the level of employment.

Glorioso Islands

no economic activity

Greece

Greece has a capitalist economy with the public sector

accounting for about 40% of GDP and with per capita GDP 70% of the

leading euro-zone economies. Tourism provides 15% of GDP. Immigrants

make up nearly one-fifth of the work force, mainly in menial jobs.

Greece is a major beneficiary of EU aid, equal to about 3.3% of

annual GDP. The Greek economy grew by about 4.0% for the past two

years, largely because of an investment boom and infrastructure

upgrades for the 2004 Athens Olympic Games. Despite strong growth,

Greece has failed to meet the EU's Growth and Stability Pact budget

deficit criteria of 3% of GDP since 2000; public debt, inflation,

and unemployment are also above the eurozone average. Further

restructuring of the economy will need to include privatizing of

several state enterprises, undertaking pension and other reforms,

and minimizing bureaucratic inefficiencies.

Greenland

The economy remains critically dependent on exports of

fish and substantial support from the Danish Government, which

supplies about half of government revenues. The public sector,

including publicly-owned enterprises and the municipalities, plays

the dominant role in the economy. Despite several interesting

hydrocarbon and minerals exploration activities, it will take

several years before production can materialize. Tourism is the only

sector offering any near-term potential, and even this is limited

due to a short season and high costs.

Grenada

Grenada relies on tourism as its main source of foreign

exchange, especially since the construction of an international

airport in 1985. Strong performances in construction and

manufacturing, together with the development of an offshore

financial industry, have also contributed to growth in national

output.

Guadeloupe

The Caribbean economy depends on agriculture, tourism,

light industry, and services. It also depends on France for large

subsidies and imports. Tourism is a key industry, with most tourists

from the US; an increasingly large number of cruise ships visit the

islands. The traditional sugarcane crop is slowly being replaced by

other crops, such as bananas (which now supply about 50% of export

earnings), eggplant, and flowers. Other vegetables and root crops

are cultivated for local consumption, although Guadeloupe is still

dependent on imported food, mainly from France. Light industry

features sugar and rum production. Most manufactured goods and fuel

are imported. Unemployment is especially high among the young.

Hurricanes periodically devastate the economy.

Guam

The economy depends on US military spending, tourism, and the

export of fish and handicrafts. Total US grants, wage payments, and

procurement outlays amounted to $1 billion in 1998. Over the past 20

years, the tourist industry has grown rapidly, creating a

construction boom for new hotels and the expansion of older ones.

More than 1 million tourists visit Guam each year. The industry had

recently suffered setbacks because of the continuing Japanese

slowdown; the Japanese normally make up almost 90% of the tourists.

Most food and industrial goods are imported. Guam faces the problem

of building up the civilian economic sector to offset the impact of

military downsizing.

Guatemala

Guatemala is the largest and most populous of the Central

American countries with a GDP per capita roughly one-half that of

Brazil, Argentina, and Chile. The agricultural sector accounts for

about one-fourth of GDP, two-thirds of exports, and half of the

labor force. Coffee, sugar, and bananas are the main products. The

1996 signing of peace accords, which ended 36 years of civil war,

removed a major obstacle to foreign investment, but widespread

political violence and corruption scandals continue to dampen

investor confidence. The distribution of income remains highly

unequal, with perhaps 75% of the population below the poverty line.

Other ongoing challenges include increasing government revenues,

negotiating further assistance from international donors, upgrading

both government and private financial operations, curtailing drug

trafficking, and narrowing the trade deficit.

Guernsey

Financial services - banking, fund management, insurance -

account for about 55% of total income in this tiny, prosperous

Channel Island economy. Tourism, manufacturing, and horticulture,

mainly tomatoes and cut flowers, have been declining. Light tax and

death duties make Guernsey a popular tax haven. The evolving

economic integration of the EU nations is changing the environment

under which Guernsey operates.

Guinea

Guinea possesses major mineral, hydropower, and agricultural

resources, yet remains an underdeveloped nation. The country

possesses over 30% of the world's bauxite reserves and is the

second-largest bauxite producer. The mining sector accounted for

about 75% of exports in 1999. Long-run improvements in government

fiscal arrangements, literacy, and the legal framework are needed if

the country is to move out of poverty. Fighting along the Sierra

Leonean and Liberian borders, as well as refugee movements, have

caused major economic disruptions, aggravating a loss in investor

confidence. Foreign mining companies have reduced expatriate staff.

Panic buying has created food shortages and inflation and caused

riots in local markets. Guinea is not receiving multilateral aid.

The IMF and World Bank cut off most assistance in 2003. Growth rose

slightly in 2004, primarily due to increases in global demand and

commodity prices on world markets.

Guinea-Bissau

One of the 10 poorest countries in the world,

Guinea-Bissau depends mainly on farming and fishing. Cashew crops

have increased remarkably in recent years, and the country now ranks

sixth in cashew production. Guinea-Bissau exports fish and seafood

along with small amounts of peanuts, palm kernels, and timber. Rice

is the major crop and staple food. However, intermittent fighting

between Senegalese-backed government troops and a military junta

destroyed much of the country's infrastructure and caused widespread

damage to the economy in 1998; the civil war led to a 28% drop in

GDP that year, with partial recovery in 1999-2002. Before the war,

trade reform and price liberalization were the most successful part

of the country's structural adjustment program under IMF

sponsorship. The tightening of monetary policy and the development

of the private sector had also begun to reinvigorate the economy.

Because of high costs, the development of petroleum, phosphate, and

other mineral resources is not a near-term prospect. However,

unexploited offshore oil reserves could provide much-needed revenue

in the long run. The inequality of income distribution is one of the

most extreme in the world. The government and international donors

continue to work out plans to forward economic development from a

lamentably low base. In December 2003, the World Bank, IMF, and UNDP

were forced to step in to provide emergency budgetary support in the

amount of $107 million for 2004, representing over 80% of the total

national budget. Government drift and indecision, however, have

resulted in continued low growth in 2004.

Guyana

The Guyanese economy exhibited moderate economic growth in

2001-02, based on expansion in the agricultural and mining sectors,

a more favorable atmosphere for business initiatives, a more

realistic exchange rate, fairly low inflation, and the continued

support of international organizations. Growth then slowed in 2003

and came back gradually in 2004, buoyed largely by increased export

earnings. Chronic problems include a shortage of skilled labor and a

deficient infrastructure. The government is juggling a sizable

external debt against the urgent need for expanded public

investment. The bauxite mining sector should benefit in the near

term from restructuring and partial privatization.

Haiti

In this poorest country in the Western Hemisphere, 80% of the

population lives in abject poverty, and natural disasters frequently

sweep the nation. Two-thirds of all Haitians depend on the

agriculture sector, which consists mainly of small-scale subsistence

farming. Following legislative elections in May 2000, fraught with

irregularities, international donors - including the US and EU -

suspended almost all aid to Haiti. The economy shrank an estimated

1.2% in 2001, 0.9% in 2002, grew 0.4% in 2003, and shrank by 3.5% in

2004. Suspended aid and loan disbursements totaled more than $500

million at the start of 2003. Haiti also suffers from rampant

inflation, a lack of investment, and a severe trade deficit. In

early 2005 Haiti paid its arrears to the World Bank, paving the way

to reengagement with the Bank. The resumption of aid flows from all

donors is alleviating but not ending the nation's bitter economic

problems. Civil strife in 2004 combined with extensive damage from

flooding in southern Haiti in May 2004 and Tropical Storm Jeanne in

northwestern Haiti in September 2004 further impoverished Haiti.

Heard Island and McDonald Islands

No indigenous economic activity,

but the Australian Government allows limited fishing around the

islands.

Holy See (Vatican City)

This unique, noncommercial economy is

supported financially by an annual contribution from Roman Catholic

dioceses throughout the world (known as Peter's Pence); by the sale

of postage stamps, coins, medals, and tourist mementos; by fees for

admission to museums; and by the sale of publications. Investments

and real estate income also account for a sizable portion of

revenue. The incomes and living standards of lay workers are

comparable to those of counterparts who work in the city of Rome.

Honduras

Honduras, one of the poorest countries in the Western

Hemisphere with an extraordinarily unequal distribution of income

and massive unemployment, is banking on expanded trade under the

U.S.-Central America Free Trade Agreement (CAFTA) and on debt relief

under the Heavily Indebted Poor Countries (HIPC) initiative. The

country has met most of its macroeconomic targets, and began a

three-year IMF Poverty Reduction and Growth Facility (PGRF) program

in February 2004. Growth remains dependent on the economy of the US,

its largest trading partner, on commodity prices, particularly

coffee, and on reduction of the high crime rate.

Hong Kong

Hong Kong has a free market, entrepot economy, highly

dependent on international trade. Natural resources are limited, and

food and raw materials must be imported. Gross imports and exports

(i.e., including reexports to and from third countries) each exceed

GDP in dollar value. Even before Hong Kong reverted to Chinese

administration on 1 July 1997, it had extensive trade and investment

ties with China. Hong Kong has been further integrating its economy

with China because China's growing openness to the world economy has

made manufacturing in China much more cost effective. Hong Kong's

reexport business to and from China is a major driver of growth. Per

capita GDP is comparable to that of the four big economies of

Western Europe. GDP growth averaged a strong 5% from 1989 to 1997,

but Hong Kong suffered two recessions in the past six years because

of the Asian financial crisis in 1998 and the global downturn in

2001 and 2002. Although the Severe Acute Respiratory Syndrome (SARS)

outbreak also battered Hong Kong's economy, a boom in tourism from

the mainland because of China's easing of travel restrictions, a

return of consumer confidence, and a solid rise in exports resulted

in the resumption of strong growth in late 2003 and in 2004.

Howland Island

no economic activity

Hungary

Hungary has made the transition from a centrally planned to

a market economy, with a per capita income one-half that of the Big

Four European nations. Hungary continues to demonstrate strong

economic growth and acceded to the European Union in May 2004. The

private sector accounts for over 80% of GDP. Foreign ownership of

and investment in Hungarian firms are widespread, with cumulative

foreign direct investment totaling more than $23 billion since 1989.

Hungarian sovereign debt was upgraded in 2000 and together with the

Czech Republic holds the highest rating among the Central European

transition economies; however, ratings agencies have expressed

concerns over Hungary's unsustainable budget and current account

deficits. Inflation has declined from 14% in 1998 to 7% in 2004.

Unemployment has persisted around the 6% level, but Hungary's labor

force participation rate of 57% is one of the lowest in the OECD.

Germany is by far Hungary's largest economic partner. Policy

challenges include cutting the public sector deficit to 3% of GDP by

2008, from about 5% in 2004, and orchestrating an orderly interest

rate reduction without sparking capital outflows.

Iceland

Iceland's Scandinavian-type economy is basically

capitalistic, yet with an extensive welfare system (including

generous housing subsidies), low unemployment, and remarkably even

distribution of income. In the absence of other natural resources

(except for abundant geothermal power), the economy depends heavily

on the fishing industry, which provides 70% of export earnings and

employs 8% of the work force. The economy remains sensitive to

declining fish stocks as well as to fluctuations in world prices for

its main exports: fish and fish products, aluminum, and

ferrosilicon. Government policies include reducing the budget and

current account deficits, limiting foreign borrowing, containing

inflation, revising agricultural and fishing policies, diversifying

the economy, and privatizing state-owned industries. The government

remains opposed to EU membership, primarily because of Icelanders'

concern about losing control over their fishing resources. Iceland's

economy has been diversifying into manufacturing and service

industries in the last decade, and new developments in software

production, biotechnology, and financial services are taking place.

The tourism sector is also expanding, with the recent trends in

ecotourism and whale watching. Growth had been remarkably steady in

1996-2001 at 3%-5%, but could not be sustained in 2002 in an

environment of global recession. Growth resumed in 2003, and

estimates call for strong growth until 2007, slowly dropping until

the end of the decade.

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, though two-thirds of the workforce is in

agriculture. The UPA government has committed to furthering economic

reforms and developing basic infrastructure to improve the lives of

the rural poor and boost economic performance. Government controls

on foreign trade and investment have been reduced in some areas, but

high tariffs (averaging 20% in 2004) and limits on foreign direct

investment are still in place. The government has indicated it will

do more to liberalize investment in civil aviation, telecom, and

insurance sectors in the near term. Privatization of

government-owned industries has proceeded slowly, and continues to

generate political debate; continued social, political, and economic

rigidities hold back needed initiatives. The economy has posted an

excellent average growth rate of 6.8% since 1994, reducing poverty

by about 10 percentage points. India is capitalizing on its large

numbers of well-educated people skilled in the English language to

become a major exporter of software services and software workers.

Despite strong growth, the World Bank and others worry about the

combined state and federal budget deficit, running at approximately

9% of GDP. The huge and growing population is the fundamental

social, economic, and environmental problem. In late December 2004,

a major tsunami took nearly 11,000 lives, left almost 6,000 missing,

destroyed $1.2 billion worth of property, and severely damaged the

fishing fleet.

Indian Ocean

The Indian Ocean provides major sea routes connecting

the Middle East, Africa, and East Asia with Europe and the Americas.

It carries a particularly heavy traffic of petroleum and petroleum

products from the oilfields of the Persian Gulf and Indonesia. Its

fish are of great and growing importance to the bordering countries

for domestic consumption and export. Fishing fleets from Russia,

Japan, South Korea, and Taiwan also exploit the Indian Ocean, mainly

for shrimp and tuna. Large reserves of hydrocarbons are being tapped

in the offshore areas of Saudi Arabia, Iran, India, and western

Australia. An estimated 40% of the world's offshore oil production

comes from the Indian Ocean. Beach sands rich in heavy minerals and

offshore placer deposits are actively exploited by bordering

countries, particularly India, South Africa, Indonesia, Sri Lanka,

and Thailand.

Indonesia

Indonesia, a vast polyglot nation, has restored financial

stability and pursued sober fiscal policies since the Asian

financial crisis, but many economic development problems remain,

including high unemployment, a fragile banking sector, endemic

corruption, inadequate infrastructure, a poor investment climate,

and unequal resource distribution among regions. Indonesia became a

net oil importer in 2004 due to declining production and lack of new

exploration investment. As a result, Jakarta is not reaping the

benefits of high world oil prices, and the cost of subsidizing

domestic fuel prices has placed an increasing strain on the budget.

Keys to future growth remain internal reform, building up the

confidence of international and domestic investors, and strong

global economic growth. In late December 2004, a major tsunami took

nearly 127,000 lives, left more than 93,000 missing and nearly

441,000 displaced, and destroyed $4.5 to $5.0 billion worth of

property.

Iran

Iran's economy is marked by a bloated, inefficient state

sector, over reliance on the oil sector, and statist policies that

create major distortions throughout. Most economic activity is

controlled by the state. Private sector activity is typically

small-scale - workshops, farming, and services. President KHATAMI

has continued to follow the market reform plans of former President

RAFSANJANI, with limited progress. Relatively high oil prices in

recent years have enabled Iran to amass some $30 billion in foreign

exchange reserves, but have not eased economic hardships such as

high unemployment and inflation. The proportion of the economy

devoted to the development of weapons of mass destruction remains a

contentious issue with leading Western nations.

Iraq

Iraq's economy is dominated by the oil sector, which has

traditionally provided about 95% of foreign exchange earnings.

Iraq's seizure of Kuwait in August 1990, subsequent international

economic sanctions, and damage from military action by an

international coalition beginning in January 1991 drastically

reduced economic activity. Although government policies supporting

large military and internal security forces and allocating resources

to key supporters of the regime hurt the economy, implementation of

the UN's oil-for-food program beginning in December 1996 helped

improve conditions for the average Iraqi citizen. Iraq was allowed

to export limited amounts of oil in exchange for food, medicine, and

some infrastructure spare parts. In December 1999, the UN Security

Council authorized Iraq to export under the program as much oil as

required to meet humanitarian needs. The drop in GDP in 2001-02 was

largely the result of the global economic slowdown and lower oil

prices. Per capita food imports increased significantly, while

medical supplies and health care services steadily improved. Per

capita output and living standards were still well below the

pre-1991 level, but any estimates have a wide range of error. The

military victory of the US-led coalition in March-April 2003

resulted in the shutdown of much of the central economic

administrative structure. Although a comparatively small amount of

capital plant was damaged during the hostilities, looting, insurgent

attacks, and sabotage have undermined efforts to rebuild the

economy. Despite continuing political uncertainty, the Iraqi Interim

Government (IG) has founded the institutions needed to implement

economic policy, and has successfully concluded a debt reduction

agreement with the Paris Club. The high percentage gain estimated

for GDP in 2004 is the result of starting from a low base.

Ireland

Ireland is a small, modern, trade-dependent economy with

growth averaging a robust 7% in 1995-2004. Agriculture, once the

most important sector, is now dwarfed by industry and services.

Industry accounts for 46% of GDP, about 80% of exports, and 29% of

the labor force. Although exports remain the primary engine for

Ireland's growth, the economy has also benefited from a rise in

consumer spending, construction, and business investment. Per capita

GDP is 10% above that of the four big European economies and the

second highest in the EU behind Luxembourg. Over the past decade,

the Irish Government has implemented a series of national economic

programs designed to curb price and wage inflation, reduce

government spending, increase labor force skills, and promote

foreign investment. Ireland joined in circulating the euro on 1

January 2002 along with 11 other EU nations.

Israel

Israel has a technologically advanced market economy with

substantial government participation. It depends on imports of crude

oil, grains, raw materials, and military equipment. Despite limited

natural resources, Israel has intensively developed its agricultural

and industrial sectors over the past 20 years. Israel imports

substantial quantities of grain, but is largely self-sufficient in

other agricultural products. Cut diamonds, high-technology

equipment, and agricultural products (fruits and vegetables) are the

leading exports. Israel usually posts sizable current account

deficits, which are covered by large transfer payments from abroad

and by foreign loans. Roughly half of the government's external debt

is owed to the US, which is its major source of economic and

military aid. The bitter Israeli-Palestinian conflict; difficulties

in the high-technology, construction, and tourist sectors; and

fiscal austerity in the face of growing inflation led to small

declines in GDP in 2001 and 2002. The economy grew at 1% in 2003,

with improvements in tourism and foreign direct investment. In 2004,

rising business and consumer confidence - as well as higher demand

for Israeli exports boosted GDP by 3.9%.

Italy

Italy has a diversified industrial economy with roughly the

same total and per capita output as France and the UK. This

capitalistic economy remains divided into a developed industrial

north, dominated by private companies, and a less developed,

welfare-dependent agricultural south, with 20% unemployment. Most

raw materials needed by industry and more than 75% of energy

requirements are imported. Over the past decade, Italy has pursued a

tight fiscal policy in order to meet the requirements of the

Economic and Monetary Unions and has benefited from lower interest

and inflation rates. The current government has enacted numerous

short-term reforms aimed at improving competitiveness and long-term

growth. Italy has moved slowly, however, on implementing needed

structural reforms, such as lightening the high tax burden and

overhauling Italy's rigid labor market and over-generous pension

system, because of the current economic slowdown and opposition from

labor unions. But the leadership faces a severe economic constraint:

the budget has breached the 3% EU deficit ceiling.

Jamaica

The Jamaican economy is heavily dependent on services, which

now account for 60% of GDP. The country continues to derive most of

its foreign exchange from tourism, remittances, and bauxite/alumina.

The global economic slowdown, particularly after the terrorist

attacks in the US on 11 September 2001, stunted economic growth; the

economy rebounded moderately in 2003-04, with brisk tourist seasons.

But the economy faces serious long-term problems: high interest

rates; increased foreign competition; a pressured, sometimes

sliding, exchange rate; a sizable merchandise trade deficit;

large-scale unemployment; and a growing internal debt, the result of

government bailouts to ailing sectors of the economy. The ratio of

debt to GDP is close to 150%. Inflation, previously a bright spot,

is expected to remain in the double digits. Uncertain economic

conditions have led to increased civil unrest, including gang

violence fueled by the drug trade. In 2004, the government faced the

difficult prospect of having to achieve fiscal discipline in order

to maintain debt payments while simultaneously attacking a serious

and growing crime problem which is hampering economic growth.

Attempts at deficit control were derailed by Hurricane Ivan in

September 2004, which required substantial government spending to

repair the damage. Despite the hurricane, tourism looks set to enjoy

solid growth for the foreseeable future.

Jan Mayen

Jan Mayen is a volcanic island with no exploitable natural

resources. Economic activity is limited to providing services for

employees of Norway's radio and meteorological stations on the

island.

Japan

Government-industry cooperation, a strong work ethic, mastery

of high technology, and a comparatively small defense allocation (1%

of GDP) helped Japan advance with extraordinary rapidity to the rank

of second most technologically-powerful economy in the world after

the US and third-largest economy after the US and China, measured on

a purchasing power parity (PPP) basis. (Using market exhange rates

rather than PPP rates, Japan's economy is larger than China's.) One

notable characteristic of the economy is the working together of

manufacturers, suppliers, and distributors in closely-knit groups

called keiretsu. A second basic feature has been the guarantee of

lifetime employment for a substantial portion of the urban labor

force. Both features are now eroding. Industry, the most important

sector of the economy, is heavily dependent on imported raw

materials and fuels. The tiny agricultural sector is highly

subsidized and protected, with crop yields among the highest in the

world. Usually self sufficient in rice, Japan must import about 50%

of its requirements of other grain and fodder crops. Japan maintains

one of the world's largest fishing fleets and accounts for nearly

15% of the global catch. For three decades overall real economic

growth had been spectacular: a 10% average in the 1960s, a 5%

average in the 1970s, and a 4% average in the 1980s. Growth slowed

markedly in the 1990s, averaging just 1.7%, largely because of the

after effects of overinvestment during the late 1980s and

contractionary domestic policies intended to wring speculative

excesses from the stock and real estate markets. From 2000 to 2003,

government efforts to revive economic growth met with little success

and were further hampered by the slowing of the US, European, and

Asian economies. In 2004, growth improved and the lingering fears of

deflation in prices and economic activity lessened. Japan's huge

government debt, which totals more than 160% of GDP, and the aging

of the population are two major long-run problems. A rise in taxes

could be viewed as endangering the revival of growth. Robotics

constitutes a key long-term economic strength with Japan possessing

410,000 of the world's 720,000 "working robots." Internal conflict

over the proper way to reform the ailing banking system continues.

Jarvis Island

no economic activity

Jersey

The Channel Island economy is based on international

financial services, agriculture, and tourism. In 1996 the finance

sector accounted for about 60% of the island's output. Potatoes,

cauliflower, tomatoes, and especially flowers are important export

crops, shipped mostly to the UK. The Jersey breed of dairy cattle is

known worldwide and represents an important export income earner.

Milk products go to the UK and other EU countries. Tourism accounts

for 24% of GDP. In recent years, the government has encouraged light

industry to locate in Jersey, with the result that an electronics

industry has developed alongside the traditional manufacturing of

knitwear. All raw material and energy requirements are imported, as

well as a large share of Jersey's food needs. Light taxes and death

duties make the island a popular tax haven. Living standards come

close to those of the UK.

Johnston Atoll

Economic activity is limited to providing services to

US military personnel and contractors located on the island. All

food and manufactured goods must be imported.

Jordan

Jordan is a small Arab country with inadequate supplies of

water and other natural resources such as oil. Debt, poverty, and

unemployment are fundamental problems, but King ABDALLAH, since

assuming the throne in 1999, has undertaken some broad economic

reforms in a long-term effort to improve living standards. Amman in

the past three years has worked closely with the IMF, practiced

careful monetary policy, and made substantial headway with

privatization. The government also has liberalized the trade regime

sufficiently to secure Jordan's membership in the WTO (2000), a free

trade accord with the US (2001), and an association agreement with

the EU (2001). These measures have helped improve productivity and

have put Jordan on the foreign investment map. Jordan imported most

of its oil from Iraq, but the US-led war in Iraq in 2003 made Jordan

more dependent on oil from other Gulf nations forcing the Jordanian

government to raise retail petroleum product prices and the sales

tax base. Jordan's export market, which is heavily dependent on

exports to Iraq, was also affected by the war but recovered quickly

while contributing to the Iraq recovery effort. The main challenges

facing Jordan are reducing dependence on foreign grants, reducing

the budget deficit, and creating investment incentives to promote

job creation.

Juan de Nova Island

Up to 12,000 tons of guano are mined per year.

Kazakhstan

Kazakhstan, the largest of the former Soviet republics in

territory, excluding Russia, possesses enormous fossil fuel reserves

as well as plentiful supplies of other minerals and metals. It also

has a large agricultural sector featuring livestock and grain.

Kazakhstan's industrial sector rests on the extraction and

processing of these natural resources and also on a growing

machine-building sector specializing in construction equipment,

tractors, agricultural machinery, and some defense items. The

breakup of the USSR in December 1991 and the collapse in demand for

Kazakhstan's traditional heavy industry products resulted in a

short-term contraction of the economy, with the steepest annual

decline occurring in 1994. In 1995-97, the pace of the government

program of economic reform and privatization quickened, resulting in

a substantial shifting of assets into the private sector. Kazakhstan

enjoyed double-digit growth in 2000-01 - and a solid 9.5% in 2002 -

thanks largely to its booming energy sector, but also to economic

reform, good harvests, and foreign investment. Growth remained at

the high 9% level in 2003 and 2004. The opening of the Caspian

Consortium pipeline in 2001, from western Kazakhstan's Tengiz

oilfield to the Black Sea, substantially raised export capacity. The

country has embarked upon an industrial policy designed to diversify

the economy away from overdependence on the oil sector, by

developing light industry. Additionally, the policy aims to reduce

the influence of foreign investment and foreign personnel; the

government has engaged in several disputes with foreign oil

companies over the terms of production agreements, and tensions

continue.

Kenya

The regional hub for trade and finance in East Africa, Kenya

has been hampered by corruption and by reliance upon several primary

goods whose prices have remained low. In 1997, the IMF suspended

Kenya's Enhanced Structural Adjustment Program due to the

government's failure to maintain reforms and curb corruption. A

severe drought from 1999 to 2000 compounded Kenya's problems,

causing water and energy rationing and reducing agricultural output.

As a result, GDP contracted by 0.2% in 2000. The IMF, which had

resumed loans in 2000 to help Kenya through the drought, again

halted lending in 2001 when the government failed to institute

several anticorruption measures. Despite the return of strong rains

in 2001, weak commodity prices, endemic corruption, and low

investment limited Kenya's economic growth to 1.2%. Growth lagged at

1.1% in 2002 because of erratic rains, low investor confidence,

meager donor support, and political infighting up to the elections.

In the key 27 December 2002 elections, Daniel Arap MOI's 24-year-old

reign ended, and a new opposition government took on the formidable

economic problems facing the nation. In 2003, progress was made in

rooting out corruption and encouraging donor support, with GDP

growth edging up to 1.7%. GDP grew a moderate 2.2% in 2004.

Kingman Reef

no economic activity

Kiribati

A remote country of 33 scattered coral atolls, Kiribati has

few natural resources. Commercially viable phosphate deposits were

exhausted at the time of independence from the UK in 1979. Copra and

fish now represent the bulk of production and exports. The economy

has fluctuated widely in recent years. Economic development is

constrained by a shortage of skilled workers, weak infrastructure,

and remoteness from international markets. Tourism provides more

than one-fifth of GDP. The financial sector is at an early stage of

development as is the expansion of private sector initiatives.

Foreign financial aid from UK, Japan, Australia, New Zealand, and

China equals 25%-50% of GDP. Remittances from workers abroad account

for more than $5 million each year.

Korea, North

North Korea, one of the world's most centrally planned

and isolated economies, faces desperate economic conditions.

Industrial capital stock is nearly beyond repair as a result of

years of underinvestment and spare parts shortages. Industrial and

power output have declined in parallel. The nation has suffered its

eleventh year of food shortages because of a lack of arable land,

collective farming, weather-related problems, and chronic shortages

of fertilizer and fuel. Massive international food aid deliveries

have allowed the regime to escape mass starvation since 1995, but

the population remains the victim of prolonged malnutrition and

deteriorating living conditions. Large-scale military spending eats

up resources needed for investment and civilian consumption. In July

2002, the government took limited steps toward a freer market

economy. In 2004, heightened political tensions with key donor

countries and general donor fatigue threatened the flow of

desperately needed food aid and fuel aid. Black market prices have

continued to rise following the increase in official prices and

wages in the summer of 2002, leaving some vulnerable groups, such as

the elderly and unemployed, less able to buy goods. In 2004, the

regime allowed private markets to sell a wider range of goods and

permitted private farming on an experimental basis in an effort to

boost agricultural output. Firm political control remains the

Communist government's overriding concern, which will constrain any

further loosening of economic regulations.

Korea, South

Since the early 1960s, South Korea has achieved an

incredible record of growth and integration into the high-tech

modern world economy. Four decades ago GDP per capita was comparable

with levels in the poorer countries of Africa and Asia. In 2004, it

joined the trillion dollar club of world economies. Today its GDP

per capita is 14 times North Korea's and equal to the lesser

economies of the European Union. This success through the late 1980s

was achieved by a system of close government/business ties,

including directed credit, import restrictions, sponsorship of

specific industries, and a strong labor effort. The government

promoted the import of raw materials and technology at the expense

of consumer goods and encouraged savings and investment over

consumption. The Asian financial crisis of 1997-99 exposed

longstanding weaknesses in South Korea's development model,

including high debt/equity ratios, massive foreign borrowing, and an

undisciplined financial sector. Growth plunged to a negative 6.9% in

1998, then strongly recovered to 9.5% in 1999 and 8.5% in 2000.

Growth fell back to 3.3% in 2001 because of the slowing global

economy, falling exports, and the perception that much-needed

corporate and financial reforms had stalled. Led by consumer

spending and exports, growth in 2002 was an impressive 7.0%, despite

anemic global growth. Economic growth fell to 3.1% in 2003 because

of a downturn in consumer spending and recovered to an estimated

4.6% in 2004 on the strength of rapid export growth. The government

plans to boost infrastructure spending in 2005. Moderate inflation,

low unemployment, an export surplus, and fairly equal distribution

of income characterize this solid economy.

Kuwait

Kuwait is a small, rich, relatively open economy with proved

crude oil reserves of about 96 billion barrels - 10% of world

reserves. Petroleum accounts for nearly half of GDP, 95% of export

revenues, and 80% of government income. Kuwait's climate limits

agricultural development. Consequently, with the exception of fish,

it depends almost wholly on food imports. About 75% of potable water

must be distilled or imported. Kuwait continues its discussions with

foreign oil companies to develop fields in the northern part of the

country.

Kyrgyzstan

Kyrgyzstan is a poor, mountainous country with a

predominantly agricultural economy. Cotton, tobacco, wool, and meat

are the main agricultural products, although only tobacco and cotton

are exported in any quantity. Industrial exports include gold,

mercury, uranium, and natural gas and electricity. Kyrgyzstan has

been fairly progressive in carrying out market reforms, such as an

improved regulatory system and land reform. Kyrgyzstan was the first

CIS country to be accepted into the World Trade Organization. With

fits and starts, inflation has been lowered to an estimated 7% in

2001, 2.1% in 2002, 4% in 2003, and 3.2% in 2004. Much of the

government's stock in enterprises has been sold. Drops in production

had been severe after the breakup of the Soviet Union in December

1991, but by mid-1995 production began to recover and exports began

to increase. Kyrgyzstan has distinguished itself by adopting

relatively liberal economic policies. The drop in output at the

Kumtor gold mine sparked a 0.5% decline in GDP in 2002, but GDP

growth bounced back to 6% in 2003 and 2004. The government has made

steady strides in controlling its substantial fiscal deficit and

aims to reduce the deficit to 3% of GDP in 2004. The government and

the international financial institutions have been engaged in a

comprehensive medium-term poverty reduction and economic growth

strategy. Further restructuring of domestic industry and success in

attracting foreign investment are keys to future growth.

Laos

The government of Laos - one of the few remaining official

Communist states - began decentralizing control and encouraging

private enterprise in 1986. The results, starting from an extremely

low base, were striking - growth averaged 6% in 1988-2004 except

during the short-lived drop caused by the Asian financial crisis

beginning in 1997. Despite this high growth rate, Laos remains a

country with a primitive infrastructure; it has no railroads, a

rudimentary road system, and limited external and internal

telecommunications. The government has sponsored major improvements

in the road system. Electricity is available in only a few urban

areas. Subsistence agriculture accounts for half of GDP and provides

80% of total employment. The economy will continue to benefit from

aid from the IMF and other international sources and from new

foreign investment in food processing and mining. In late 2004, Laos

gained Normal Trade Relations status with the US, allowing

Laos-based producers to face lower tariffs on their exports; this

may help spur growth.

Latvia

Latvia's transitional economy recovered from the 1998 Russian

financial crisis, largely due to the government's budget stringency

and a gradual reorientation of exports toward EU countries,

lessening Latvia's trade dependency on Russia. The majority of

companies, banks, and real estate have been privatized, although the

state still holds sizable stakes in a few large enterprises. Latvia

officially joined the World Trade Organization in February 1999. EU

membership, a top foreign policy goal, came in May 2004. The current

account and internal government deficits remain major concerns, but

the government's efforts to increase efficiency in revenue

collection may lessen the budget deficit. A growing perception that

many of Latvia's banks facilitate illicit activity could damage the

country's vibrant financial sector.

Lebanon

The 1975-91 civil war seriously damaged Lebanon's economic

infrastructure, cut national output by half, and all but ended

Lebanon's position as a Middle Eastern entrepot and banking hub. In

the years since, Lebanon has rebuilt much of its war-torn physical

and financial infrastructure by borrowing heavily - mostly from

domestic banks. In an attempt to reduce the ballooning national

debt, the HARIRI government began an austerity program, reining in

government expenditures, increasing revenue collection, and

privatizing state enterprises. In November 2002, the government met

with international donors at the Paris II conference to seek

bilateral assistance in restructuring its massive domestic debt at

lower rates of interest. Substantial receipts from donor nations

stabilized government finances in 2003, but did little to reduce the

debt, which stood at nearly 180% of GDP. In 2004 the HARIRI

government issued Eurobonds in an effort to manage maturing debt,

and the KARAMI government has continued this practice. However,

privatization of state-owned enterprises had not occurred by the end

of 2004, as promised during the Paris II conference.

Lesotho

Small, landlocked, and mountainous, Lesotho relies on

remittances from miners employed in South Africa and customs duties

from the Southern Africa Customs Union for the majority of

government revenue, but the government has strengthened its tax

system to reduce dependency on customs duties. Completion of a major

hydropower facility in January 1998 now permits the sale of water to

South Africa, also generating royalties for Lesotho. As the number

of mineworkers has declined steadily over the past several years, a

small manufacturing base has developed based on farm products that

support the milling, canning, leather, and jute industries and a

rapidly growing apparel-assembly sector. The garment industry has

grown significantly, mainly due to Lesotho qualifying for the trade

benefits contained in the Africa Growth and Opportunity Act. The

economy is still primarily based on subsistence agriculture,

especially livestock, although drought has decreased agricultural

activity. The extreme inequality in the distribution of income

remains a major drawback. Lesotho has signed an Interim Poverty

Reduction and Growth Facility with the IMF.

Liberia

Civil war and government mismanagement have destroyed much

of Liberia's economy, especially the infrastructure in and around

Monrovia, while continued international sanctions on diamonds and

timber exports will limit growth prospects for the foreseeable

future. Many businessmen have fled the country, taking capital and

expertise with them. Some have returned, but many will not. Richly

endowed with water, mineral resources, forests, and a climate

favorable to agriculture, Liberia had been a producer and exporter

of basic products - primarily raw timber and rubber. Local

manufacturing, mainly foreign owned, had been small in scope. The

departure of the former president, Charles TAYLOR, to Nigeria in

August 2003, the establishment of the all-inclusive Transitional

Government, and the arrival of a UN mission are all necessary for

the eventual end of the political crisis, but thus far have done

little to encourage economic development. The reconstruction of

infrastructure and the raising of incomes in this ravaged economy

will largely depend on generous financial support and technical

assistance from donor countries.

Libya

The Libyan economy depends primarily upon revenues from the

oil sector, which contribute practically all export earnings and

about one-quarter of GDP. These oil revenues and a small population

give Libya one of the highest per capita GDPs in Africa, but little

of this income flows down to the lower orders of society. Libyan

officials in the past four years have made progress on economic

reforms as part of a broader campaign to reintegrate the country

into the international fold. This effort picked up steam after UN

sanctions were lifted in September 2003 and as Libya announced in

December 2003 that it would abandon programs to build weapons of

mass destruction. Almost all US unilateral sanctions against Libya

were removed in April 2004. Libya faces a long road ahead in

liberalizing the socialist-oriented economy, but initial steps -

including applying for WTO membership, reducing some subsidies, and

announcing plans for privatization - are laying the groundwork for a

transition to a more market-based economy. The non-oil manufacturing

and construction sectors, which account for about 20% of GDP, have

expanded from processing mostly agricultural products to include the

production of petrochemicals, iron, steel, and aluminum. Climatic

conditions and poor soils severely limit agricultural output, and

Libya imports about 75% of its food.

Liechtenstein

Despite its small size and limited natural resources,

Liechtenstein has developed into a prosperous, highly

industrialized, free-enterprise economy with a vital financial

service sector and living standards on a par with its large European

neighbors. The Liechtenstein economy is widely diversified with a

large number of small businesses. Low business taxes - the maximum

tax rate is 20% - and easy incorporation rules have induced many

holding or so-called letter box companies to establish nominal

offices in Liechtenstein, providing 30% of state revenues. The

country participates in a customs union with Switzerland and uses

the Swiss franc as its national currency. It imports more than 90%

of its energy requirements. Liechtenstein has been a member of the

European Economic Area (an organization serving as a bridge between

the European Free Trade Association (EFTA) and the EU) since May

1995. The government is working to harmonize its economic policies

with those of an integrated Europe.

Lithuania

Lithuania, the Baltic state that has conducted the most

trade with Russia, has slowly rebounded from the 1998 Russian

financial crisis. Unemployment dropped from 11% in 2003 to 8% in

2004. Growing domestic consumption and increased investment have

furthered recovery. Trade has been increasingly oriented toward the

West. Lithuania has gained membership in the World Trade

Organization and joined the EU in May 2004. Privatization of the

large, state-owned utilities, particularly in the energy sector, is

nearing completion. Overall, more than 80% of enterprises have been

privatized. Foreign government and business support have helped in

the transition from the old command economy to a market economy.

Luxembourg

This stable, high-income economy - in between France,

Belgium, and Germany - features solid growth, low inflation, and low

unemployment. The industrial sector, initially dominated by steel,

has become increasingly diversified to include chemicals, rubber,

and other products. Growth in the financial sector, which now

accounts for about 22% of GDP, has more than compensated for the

decline in steel. Most banks are foreign-owned and have extensive

foreign dealings. Agriculture is based on small family-owned farms.

The economy depends on foreign and cross-border workers for more

than 30% of its labor force. Although Luxembourg, like all EU

members, has suffered from the global economic slump, the country

enjoys an extraordinarily high standard of living.

Macau

Macau's well-to-do economy has remained one of the most open

in the world since its reversion to China in 1999. Apparel exports

and tourism are mainstays of the economy. Although the territory was

hit hard by the 1998 Asian financial crisis and the global downturn

in 2001, its economy grew 9.5% in 2002 and 15.6% in 2003. During the

first three quarters of 2004, Macau registered year-on-year GDP

increases of more than 20 percent. A rapid rise in the number of

mainland visitors because of China's easing of restrictions on

travel, increased public works expenditures, and significant

investment inflows associated with the liberalization of Macau's

gaming industry drove the recovery. The budget also returned to

surplus in 2002 because of the surge in visitors from China and a

hike in taxes on gambling profits, which generated about 70% of

government revenue. The three companies awarded gambling licenses

have pledged to invest $2.2 billion in the territory, which will

boost GDP growth. Much of Macau's textile industry may move to the

mainland as the Multi-Fiber Agreement is phased out. The territory

may have to rely more on gambling and trade-related services to

generate growth. Two new casinos were opened by new foreign gambling

licensees in 2004; development of new infrastructure and facilities

in preparation for Macau's hosting of the 2005 East Asian Games will

bolster the construction sector. The Closer Economic Partnership

Agreement (CEPA) between Macau and mainland China that came into

effect on 1 January 2004 offers many Macau-made products tariff-free

access to the mainland, and the range of products covered by CEPA

was to be expanded on 1 January 2005.

Macedonia

At independence in September 1991, Macedonia was the least

developed of the Yugoslav republics, producing a mere 5% of the

total federal output of goods and services. The collapse of

Yugoslavia ended transfer payments from the center and eliminated

advantages from inclusion in a de facto free trade area. An absence

of infrastructure, UN sanctions on the down-sized Yugoslavia, one of

its largest markets, and a Greek economic embargo over a dispute

about the country's constitutional name and flag hindered economic

growth until 1996. GDP subsequently rose each year through 2000.

However, the leadership's commitment to economic reform, free trade,

and regional integration was undermined by the ethnic Albanian

insurgency of 2001. The economy shrank 4.5% because of decreased

trade, intermittent border closures, increased deficit spending on

security needs, and investor uncertainty. Growth barely recovered in

2002 to 0.9%, then rose by a moderate 3.4% in 2003, and is estimated

at 1.3% in 2004. Unemployment at one-third of the workforce remains

a critical economic problem. Much of the extensive grey market

activity falls outside official statistics.

Madagascar

Having discarded past socialist economic policies,

Madagascar has since the mid 1990s followed a World Bank and IMF led

policy of privatization and liberalization. This strategy has placed

the country on a slow and steady growth path from an extremely low

level. Agriculture, including fishing and forestry, is a mainstay of

the economy, accounting for more than one-fourth of GDP and

employing 80% of the population. Exports of apparel have boomed in

recent years primarily due to duty-free access to the United States.

Deforestation and erosion, aggravated by the use of firewood as the

primary source of fuel are serious concerns. President RAVALOMANANA

has worked aggressively to revive the economy following the 2002

political crisis, which triggered a 12% drop in GDP that year.

Poverty reduction and combating corruption will be the centerpieces

of economic policy for the next few years.

Malawi

Landlocked Malawi ranks among the world's least developed

countries. The economy is predominately agricultural, with about 90%

of the population living in rural areas. Agriculture accounted for

nearly 40% of GDP and 88% of export revenues in 2001. The

performance of the tobacco sector is key to short-term growth as

tobacco accounts for over 50% of exports. The economy depends on

substantial inflows of economic assistance from the IMF, the World

Bank, and individual donor nations. In late 2000, Malawi was

approved for relief under the Heavily Indebted Poor Countries (HIPC)

program. The government faces strong challenges, including

developing a market economy, improving educational facilities,

facing up to environmental problems, dealing with the rapidly

growing problem of HIV/AIDS, and satisfying foreign donors that

fiscal discipline is being tightened. In 2005, the anticorruption

campaign championed by President MUTHARIKA may help encourage

investment and economic growth.

Malaysia

Malaysia, a middle-income country, transformed itself from

1971 through the late 1990's from a producer of raw materials into

an emerging multi-sector economy. Growth was almost exclusively

driven by exports - particularly of electronics. As a result,

Malaysia was hard hit by the global economic downturn and the slump

in the information technology (IT) sector in 2001 and 2002. GDP in

2001 grew only 0.5% due to an estimated 11% contraction in exports,

but a substantial fiscal stimulus package equal to US $1.9 billion

mitigated the worst of the recession and the economy rebounded in

2002 with a 4.1% increase. The economy grew 4.9% in 2003,

notwithstanding a difficult first half, when external pressures from

SARS and the Iraq War led to caution in the business community.

Growth topped 7% in 2004. Healthy foreign exchange reserves, low

inflation, and a small external debt are all strengths that make it

unlikely that Malaysia will experience a financial crisis similar to

the one in 1997. The economy remains dependent on continued growth

in the US, China, and Japan, top export destinations and key sources

of foreign investment.

Maldives

Tourism, Maldives' largest industry, accounts for 20% of

GDP and more than 60% of the Maldives' foreign exchange receipts.

Over 90% of government tax revenue comes from import duties and

tourism-related taxes. Fishing is a second leading sector. The

Maldivian Government began an economic reform program in 1989

initially by lifting import quotas and opening some exports to the

private sector. Subsequently, it has liberalized regulations to

allow more foreign investment. Agriculture and manufacturing

continue to play a lesser role in the economy, constrained by the

limited availability of cultivable land and the shortage of domestic

labor. Most staple foods must be imported. Industry, which consists

mainly of garment production, boat building, and handicrafts,

accounts for about 18% of GDP. Maldivian authorities worry about the

impact of erosion and possible global warming on their low-lying

country; 80% of the area is one meter or less above sea level. In

late December 2004, a major tsunami left more than 100 dead, 12,000

displaced, and property damage exceeding $300 million.

Mali

Mali is among the poorest countries in the world, with 65% of

its land area desert or semidesert and with a highly unequal

distribution of income. Economic activity is largely confined to the

riverine area irrigated by the Niger. About 10% of the population is

nomadic and some 80% of the labor force is engaged in farming and

fishing. Industrial activity is concentrated on processing farm

commodities. Mali is heavily dependent on foreign aid and vulnerable

to fluctuations in world prices for cotton, its main export, along

with gold. The government has continued its successful

implementation of an IMF-recommended structural adjustment program

that is helping the economy grow, diversify, and attract foreign

investment. Mali's adherence to economic reform and the 50%

devaluation of the African franc in January 1994 have pushed up

economic growth to a sturdy 5% average in 1996-2004. Worker

remittances and external trade routes have been jeopardized by

continued unrest in neighboring Cote d'Ivoire.

Malta

Major resources are limestone, a favorable geographic

location, and a productive labor force. Malta produces only about

20% of its food needs, has limited fresh water supplies, and has no

domestic energy sources. The economy is dependent on foreign trade,

manufacturing (especially electronics and textiles), and tourism.

Continued sluggishness in the European economy is holding back

exports, tourism, and overall growth.

Man, Isle of

Offshore banking, manufacturing, and tourism are key

sectors of the economy. The government's policy of offering

incentives to high-technology companies and financial institutions

to locate on the island has paid off in expanding employment

opportunities in high-income industries. As a result, agriculture

and fishing, once the mainstays of the economy, have declined in

their shares of GDP. Trade is mostly with the UK. The Isle of Man

enjoys free access to EU markets.

Marshall Islands

US Government assistance is the mainstay of this

tiny island economy. Agricultural production, primarily subsistence,

is concentrated on small farms; the most important commercial crops

are coconuts and breadfruit. Small-scale industry is limited to

handicrafts, tuna processing, and copra. The tourist industry, now a

small source of foreign exchange employing less than 10% of the

labor force, remains the best hope for future added income. The

islands have few natural resources, and imports far exceed exports.

Under the terms of the Amended Compact of Free Association, the US

will provide millions of dollars per year to the Marshall Islands

(RMI) through 2023, at which time a Trust Fund made up of US and RMI

contributions will begin perpetual annual payouts. Government

downsizing, drought, a drop in construction, the decline in tourism

and foreign investment due to the Asian financial difficulties, and

less income from the renewal of fishing vessel licenses have held

GDP growth to an average of 1% over the past decade.

Martinique

The economy is based on sugarcane, bananas, tourism, and

light industry. Agriculture accounts for about 6% of GDP and the

small industrial sector for 11%. Sugar production has declined, with

most of the sugarcane now used for the production of rum. Banana

exports are increasing, going mostly to France. The bulk of meat,

vegetable, and grain requirements must be imported, contributing to

a chronic trade deficit that requires large annual transfers of aid

from France. Tourism, which employs more than 11,000 people, has

become more important than agricultural exports as a source of

foreign exchange.

Mauritania

Half the population still depends on agriculture and

livestock for a livelihood, even though many of the nomads and

subsistence farmers were forced into the cities by recurrent

droughts in the 1970s and 1980s. Mauritania has extensive deposits

of iron ore, which account for nearly 40% of total exports. The

decline in world demand for this ore, however, has led to cutbacks

in production. The nation's coastal waters are among the richest

fishing areas in the world, but overexploitation by foreigners

threatens this key source of revenue. The country's first deepwater

port opened near Nouakchott in 1986. In the past, drought and

economic mismanagement resulted in a buildup of foreign debt. In

February 2000, Mauritania qualified for debt relief under the

Heavily Indebted Poor Countries (HIPC) initiative and in December

2001 received strong support from donor and lending countries at a

triennial Consultative Group review. In 2001, exploratory oil wells

in tracts 80 km offshore indicated potential extraction at current

world oil prices. A new investment code approved in December 2001

improved the opportunities for direct foreign investment. Ongoing

negotiations with the IMF involve problems of economic reforms and

fiscal discipline. Substantial oil production and exports probably

will not begin until 2006. Meantime the government emphasizes

reduction of poverty, improvement of health and education, and

promoting privatization of the economy.

Mauritius

Since independence in 1968, Mauritius has developed from a

low-income, agriculturally based economy to a middle-income

diversified economy with growing industrial, financial, and tourist

sectors. For most of the period, annual growth has been in the order

of 5% to 6%. This remarkable achievement has been reflected in more

equitable income distribution, increased life expectancy, lowered

infant mortality, and a much-improved infrastructure. Sugarcane is

grown on about 90% of the cultivated land area and accounts for 25%

of export earnings. The government's development strategy centers on

expanding local financial institutions and building a domestic

information telecommunications industry. Mauritius has attracted

more than 9,000 offshore entities, many aimed at commerce in India

and South Africa, and investment in the banking sector alone has

reached over $1 billion. Mauritius, with its strong textile sector,

has been well poised to take advantage of the Africa Growth and

Opportunity Act (AGOA).

Mayotte

Economic activity is based primarily on the agricultural

sector, including fishing and livestock raising. Mayotte is not

self-sufficient and must import a large portion of its food

requirements, mainly from France. The economy and future development

of the island are heavily dependent on French financial assistance,

an important supplement to GDP. Mayotte's remote location is an

obstacle to the development of tourism.

Mexico

Mexico has a free market economy that recently entered the

trillion dollar class. It contains a mixture of modern and outmoded

industry and agriculture, increasingly dominated by the private

sector. Recent administrations have expanded competition in

seaports, railroads, telecommunications, electricity generation,

natural gas distribution, and airports. Per capita income is

one-fourth that of the US; income distribution remains highly

unequal. Trade with the US and Canada has tripled since the

implementation of NAFTA in 1994. Mexico has 12 free trade agreements

with over 40 countries including, Guatemala, Honduras, El Salvador,

the European Free Trade Area, and Japan, putting more than 90% of

trade under free trade agreements. The government is cognizant of

the need to upgrade infrastructure, modernize the tax system and

labor laws, and provide incentives to invest in the energy sector,

but progress is slow.

Micronesia, Federated States of

Economic activity consists primarily

of subsistence farming and fishing. The islands have few mineral

deposits worth exploiting, except for high-grade phosphate. The

potential for a tourist industry exists, but the remote location, a

lack of adequate facilities, and limited air connections hinder

development. The Amended Compact of Free Association with the US

guarantees the Federated States of Micronesia (FSM) millions of

dollars in annual aid through 2023, and establishes a Trust Fund

into which the US and the FSM make annual contributions in order to

provide annual payouts to the FSM in perpetuity after 2023. The

country's medium-term economic outlook appears fragile due not only

to the reduction in US assistance but also to the slow growth of the

private sector. Geographical isolation and a poorly developed

infrastructure remain major impediments to long-term growth.

Midway Islands

The economy is based on providing support services

for the national wildlife refuge activities located on the islands.

All food and manufactured goods must be imported.

Moldova

Moldova remains one of the poorest countries in Europe

despite recent progress from its small economic base. It enjoys a

favorable climate and good farmland but has no major mineral

deposits. As a result, the economy depends heavily on agriculture,

featuring fruits, vegetables, wine, and tobacco. Moldova must import

almost all of its energy supplies from Russia. Energy shortages

contributed to sharp production declines after the breakup of the

Soviet Union in December 1991. As part of an ambitious reform effort

after independence, Moldova introduced a convertible currency, freed

prices, stopped issuing preferential credits to state enterprises,

backed steady land privatization, removed export controls, and freed

interest rates. The government entered into agreements with the

World Bank and the IMF to promote growth and reduce poverty. The

economy returned to positive growth of 2.1% in 2000, 6.1% in 2001,

7.2% in 2002, 6.3% in 2003, and 6.8% in 2004. Further reforms will

come slowly because of strong political forces backing government

controls. The economy remains vulnerable to higher fuel prices, poor

agricultural weather, and the skepticism of foreign investors.

Monaco

Monaco, bordering France on the Mediterranean coast, is a

popular resort, attracting tourists to its casino and pleasant

climate. In 2001, a major construction project extended the pier

used by cruise ships in the main harbor. The principality has

successfully sought to diversify into services and small,

high-value-added, nonpolluting industries. The state has no income

tax and low business taxes and thrives as a tax haven both for

individuals who have established residence and for foreign companies

that have set up businesses and offices. The state retains

monopolies in a number of sectors, including tobacco, the telephone

network, and the postal service. Living standards are high, roughly

comparable to those in prosperous French metropolitan areas. Monaco

does not publish national income figures; the estimates below are

extremely rough.

Mongolia

Economic activity in Mongolia has traditionally been based

on herding and agriculture. Mongolia has extensive mineral deposits;

copper, coal, molybdenum, tin, tungsten and gold account for a large

part of industrial production. Soviet assistance, at its height

one-third of GDP, disappeared almost overnight in 1990 and 1991 at

the time of the dismantlement of the USSR. The following decade saw

Mongolia endure both deep recession due to political inaction and

natural disasters, as well as economic growth due to reform

embracing free-market economics and extensive privatization of the

formerly state-run economy. Severe winters and summer droughts in

2000, 2001, and 2002 resulted in massive livestock die-off and zero

or negative GDP growth. This was compounded by falling prices for

Mongolia's primary sector exports and widespread opposition to

privatization. Growth improved from 2002 at 4% to 2003 at 5%, due

largely to high copper prices and new gold production, with the

government claiming a 10.6% growth rate for 2004 that is

unconfirmed. Mongolia's economy continues to be heavily impacted by

its neighbors. For example, Mongolia purchases 80% of its petroleum

products and a substantial amount of electric power from Russia,

leaving it vulnerable to price increases. China is Mongolia's chief

export partner and a main source of the "shadow" or "grey" economy.

The World Bank and other international financial institutions

estimate the grey economy to be at least equal to that of the

official economy. The actual size of this grey - largely cash -

economy is difficult to calculate since the money does not pass

through the hands of tax authorities or the banking sector.

Remittances from Mongolians working abroad both legally and

illegally constitute a sizeable portion. Money laundering is growing

as an accompanying concern. Mongolia settled its $11 billion debt

with Russia at the end of 2003 on very favorable terms. Mongolia,

which joined the World Trade Organization in 1997, seeks to expand

its participation and integration into Asian regional economic and

trade regimes.

Montserrat

Severe volcanic activity, which began in July 1995, has

put a damper on this small, open economy. A catastrophic eruption in

June 1997 closed the airports and seaports, causing further economic

and social dislocation. Two-thirds of the 12,000 inhabitants fled

the island. Some began to return in 1998, but lack of housing

limited the number. The agriculture sector continued to be affected

by the lack of suitable land for farming and the destruction of

crops. Prospects for the economy depend largely on developments in

relation to the volcano and on public sector construction activity.

The UK has launched a three-year $122.8 million aid program to help

reconstruct the economy. Half of the island is expected to remain

uninhabitable for another decade.

Morocco

Morocco faces problems typical for developing countries:

restraining government spending, reducing constraints on private

activity and foreign trade, and achieving sustainable growth.

Despite structural adjustment programs supported by the IMF, the

World Bank, and the Paris Club, the dirham is only fully convertible

for current account transactions. In 2004 Moroccan authorities

instituted measures to boost foreign direct investment and trade by

signing a free trade agreement with the US and selling government

shares in the state telecommunications company and in the largest

state-owned bank. Favorable rainfall over the past two years has

boosted agricultural output and GDP growth passed 4% in 2004. In

2005 the budget deficit is expected to rise sharply - from 1.9% of

GDP in 2004 - because of substantial increases in wages and oil

subsidies. Long-term challenges include preparing the economy for

freer trade with the US and European Union, improving education and

job prospects for Morocco's youth, and raising living standards.

Mozambique

At independence in 1975, Mozambique was one of the

world's poorest countries. Socialist mismanagement and a brutal

civil war from 1977-92 exacerbated the situation. In 1987, the

government embarked on a series of macroeconomic reforms designed to

stabilize the economy. These steps, combined with donor assistance

and with political stability since the multi-party elections in

1994, have led to dramatic improvements in the country's growth

rate. Inflation was reduced to single digits during the late 1990s

although it returned to double digits in 2000-03. Fiscal reforms,

including the introduction of a value-added tax and reform of the

customs service, have improved the government's revenue collection

abilities. In spite of these gains, Mozambique remains dependent

upon foreign assistance for much of its annual budget, and the

majority of the population remains below the poverty line.

Subsistence agriculture continues to employ the vast majority of the

country's workforce. A substantial trade imbalance persists although

the opening of the MOZAL aluminum smelter, the country's largest

foreign investment project to date has increased export earnings.

Additional investment projects in titanium extraction and processing

and garment manufacturing should further close the import/export

gap. Mozambique's once substantial foreign debt has been reduced

through forgiveness and rescheduling under the IMF's Heavily

Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is

now at a manageable level.

Namibia

The economy is heavily dependent on the extraction and

processing of minerals for export. Mining accounts for 20% of GDP.

Rich alluvial diamond deposits make Namibia a primary source for

gem-quality diamonds. Namibia is the fourth-largest exporter of

nonfuel minerals in Africa, the world's fifth-largest producer of

uranium, and the producer of large quantities of lead, zinc, tin,

silver, and tungsten. The mining sector employs only about 3% of the

population while about half of the population depends on subsistence

agriculture for its livelihood. Namibia normally imports about 50%

of its cereal requirements; in drought years food shortages are a

major problem in rural areas. A high per capita GDP, relative to the

region, hides the great inequality of income distribution; nearly

one-third of Namibians had annual incomes of less than $1,400 in

constant 1994 dollars, according to a 1993 study. The Namibian

economy is closely linked to South Africa with the Namibian dollar

pegged to the South African rand. Privatization of several

enterprises in coming years may stimulate long-run foreign

investment. Mining of zinc, copper, and silver and increased fish

production led growth in 2003-04.

Nauru

Revenues of this tiny island have traditionally come from

exports of phosphates, but reserves are now depleted. Few other

resources exist with most necessities being imported, mainly from

Australia, its former occupier and later major source of support.

The rehabilitation of mined land and the replacement of income from

phosphates are serious long-term problems. In anticipation of the

exhaustion of Nauru's phosphate deposits, substantial amounts of

phosphate income have been invested in trust funds to help cushion

the transition and provide for Nauru's economic future. As a result

of heavy spending from the trust funds, the government faces virtual

bankruptcy. To cut costs the government has called for a freeze on

wages, a reduction of over-staffed public service departments,

privatization of numerous government agencies, and closure of some

overseas consulates. In recent years Nauru has encouraged the

registration of offshore banks and corporations. In 2004 the

deterioration in housing, hospitals, and other capital plant

continued, and the cost to Australia of keeping the government and

economy afloat has substantially mounted. Few comprehensive

statistics on the Nauru economy exist, with estimates of Nauru's GDP

varying widely.

Navassa Island

subsistence fishing and commercial trawling

activities within refuge waters

Nepal

Nepal is among the poorest and least developed countries in

the world with 40% of its population living below the poverty line.

Agriculture is the mainstay of the economy, providing a livelihood

for over 80% of the population and accounting for 40% of GDP.

Industrial activity mainly involves the processing of agricultural

produce including jute, sugarcane, tobacco, and grain. Security

concerns in the wake of the Maoist conflict have led to a decrease

in tourism, a key source of foreign exchange. Nepal has considerable

scope for exploiting its potential in hydropower and tourism, areas

of recent foreign investment interest. Prospects for foreign trade

or investment in other sectors will remain poor, however, because of

the small size of the economy, its technological backwardness, its

remoteness, its landlocked geographic location, its civil strife,

and its susceptibility to natural disaster.

Netherlands

The Netherlands has a prosperous and open economy, which

depends heavily on foreign trade. The economy is noted for stable

industrial relations, moderate unemployment and inflation, a sizable

current account surplus, and an important role as a European

transportation hub. Industrial activity is predominantly in food

processing, chemicals, petroleum refining, and electrical machinery.

A highly mechanized agricultural sector employs no more than 4% of

the labor force but provides large surpluses for the food-processing

industry and for exports. The Netherlands, along with 11 of its EU

partners, began circulating the euro currency on 1 January 2002. The

country continues to be one of the leading European nations for

attracting foreign direct investment. Economic growth slowed

considerably in 2001-04, as part of the global economic slowdown,

but for the four years before that, annual growth averaged nearly

4%, well above the EU average.

Netherlands Antilles

Tourism, petroleum refining, and offshore

finance are the mainstays of this small economy, which is closely

tied to the outside world. Although GDP has declined or grown

slightly in each of the past eight years, the islands enjoy a high

per capita income and a well-developed infrastructure compared with

other countries in the region. Almost all consumer and capital goods

are imported, the US and Mexico being the major suppliers. Poor

soils and inadequate water supplies hamper the development of

agriculture. Budgetary problems hamper reform of the health and

pension systems of an aging population.

New Caledonia

New Caledonia has about 25% of the world's known

nickel resources. Only a small amount of the land is suitable for

cultivation, and food accounts for about 20% of imports. In addition

to nickel, substantial financial support from France - equal to more

than one-fourth of GDP - and tourism are keys to the health of the

economy. Substantial new investment in the nickel industry, combined

with the recovery of global nickel prices, brightens the economic

outlook for the next several years.

New Zealand

Over the past 20 years the government has transformed

New Zealand from an agrarian economy dependent on concessionary

British market access to a more industrialized, free market economy

that can compete globally. This dynamic growth has boosted real

incomes (but left behind many at the bottom of the ladder),

broadened and deepened the technological capabilities of the

industrial sector, and contained inflationary pressures. Per capita

income has risen for six consecutive years and is now more than

$23,000 in purchasing power parity terms. New Zealand is heavily

dependent on trade - particularly in agricultural products - to

drive growth. Exports are equal to about 20% of GDP. Thus far the

economy has been resilient, and the Labor Government promises that

expenditures on health, education, and pensions will increase

proportionately to output.

Nicaragua

Nicaragua, one of the hemisphere's poorest countries,

faces low per capita income, massive unemployment, and huge external

debt. Distribution of income is one of the most unequal on the

globe. While the country has made progress toward macroeconomic

stability over the past few years, GDP annual growth has been far

too low to meet the country's needs. As a result of successful

performance under its International Monetary Fund policy program and

other efforts, Nicaragua qualified in early 2004 for some $4 billion

in foreign debt reduction under the Heavily Indebted Poor Countries

(HIPC) initiative. Even after this reduction, however, the

government continues to bear a significant foreign and domestic debt

burden. If ratified, the US-Central America Free Trade Agreement

(CAFTA) will provide an opportunity for Nicaragua to attract

investment, create jobs, and deepen economic development. While

President BOLANOS enjoys the support of the international financial

bodies, his internal political base is meager.

Niger

Niger is one of the poorest countries in the world, a

landlocked Sub-Saharan nation, whose economy centers on subsistence

crops, livestock, and some of the world's largest uranium deposits.

Drought cycles, desertification, a 3.3% population growth rate, and

the drop in world demand for uranium have undercut the economy.

Niger shares a common currency, the CFA franc, and a common central

bank, the Central Bank of West African States (BCEAO), with seven

other members of the West African Monetary Union. In December 2000,

Niger qualified for enhanced debt relief under the International

Monetary Fund program for Highly Indebted Poor Countries (HIPC) and

concluded an agreement with the Fund on a Poverty Reduction and

Growth Facility (PRGF). Debt relief provided under the enhanced HIPC

initiative significantly reduces Niger's annual debt service

obligations, freeing funds for expenditures on basic health care,

primary education, HIV/AIDS prevention, rural infrastructure, and

other programs geared at poverty reduction. Nearly half of the

government's budget is derived from foreign donor resources. Future

growth may be sustained by exploitation of oil, gold, coal, and

other mineral resources.

Nigeria

Oil-rich Nigeria, long hobbled by political instability,

corruption, inadequate infrastructure, and poor macroeconomic

management, is undertaking some reforms under the new civilian

administration. Nigeria's former military rulers failed to diversify

the economy away from overdependence on the capital-intensive oil

sector, which provides 20% of GDP, 95% of foreign exchange earnings,

and about 65% of budgetary revenues. The largely subsistence

agricultural sector has failed to keep up with rapid population

growth - Nigeria is Africa's most populous country - and the

country, once a large net exporter of food, now must import food.

Following the signing of an IMF stand-by agreement in August 2000,

Nigeria received a debt-restructuring deal from the Paris Club and a

$1 billion credit from the IMF, both contingent on economic reforms.

Nigeria pulled out of its IMF program in April 2002, after failing

to meet spending and exchange rate targets, making it ineligible for

additional debt forgiveness from the Paris Club. In the last year

the government has begun showing the political will to implement the

market-oriented reforms urged by the IMF, such as to modernize the

banking system, to curb inflation by blocking excessive wage

demands, and to resolve regional disputes over the distribution of

earnings from the oil industry. During 2003 the government began

deregulating fuel prices, announced the privatization of the

country's four oil refineries, and instituted the National Economic

Empowerment Development Strategy, a domestically designed and run

program modeled on the IMF's Poverty Reduction and Growth Facility

for fiscal and monetary management. GDP rose strongly in 2004.

Niue

The economy suffers from the typical Pacific island problems of

geographic isolation, few resources, and a small population.

Government expenditures regularly exceed revenues, and the shortfall

is made up by critically needed grants from New Zealand that are

used to pay wages to public employees. Niue has cut government

expenditures by reducing the public service by almost half. The

agricultural sector consists mainly of subsistence gardening,

although some cash crops are grown for export. Industry consists

primarily of small factories to process passion fruit, lime oil,

honey, and coconut cream. The sale of postage stamps to foreign

collectors is an important source of revenue. The island in recent

years has suffered a serious loss of population because of migration

of Niueans to New Zealand. Efforts to increase GDP include the

promotion of tourism and a financial services industry, although

former Premier LAKATANI announced in February 2002 that Niue will

shut down the offshore banking industry. Economic aid from New

Zealand in 2002 was about $2.6 million. Niue suffered a devastating

hurricane in January 2004, which decimated nascent economic

programs. While in the process of rebuilding, Niue has been

dependent on foreign aid.

Norfolk Island

Tourism, the primary economic activity, has steadily

increased over the years and has brought a level of prosperity

unusual among inhabitants of the Pacific islands. The agricultural

sector has become self-sufficient in the production of beef,

poultry, and eggs.

Northern Mariana Islands

The economy benefits substantially from

financial assistance from the US. The rate of funding has declined

as locally generated government revenues have grown. The key tourist

industry employs about 50% of the work force and accounts for

roughly one-fourth of GDP. Japanese tourists predominate. Annual

tourist entries have exceeded one-half million in recent years, but

financial difficulties in Japan have caused a temporary slowdown.

The agricultural sector is made up of cattle ranches and small farms

producing coconuts, breadfruit, tomatoes, and melons. Garment

production is by far the most important industry with employment of

17,500 mostly Chinese workers and sizable shipments to the US under

duty and quota exemptions.

Norway

The Norwegian economy is a prosperous bastion of welfare

capitalism, featuring a combination of free market activity and

government intervention. The government controls key areas, such as

the vital petroleum sector (through large-scale state enterprises).

The country is richly endowed with natural resources - petroleum,

hydropower, fish, forests, and minerals - and is highly dependent on

its oil production and international oil prices, with oil and gas

accounting for one-third of exports. Only Saudi Arabia and Russia

export more oil than Norway. Norway opted to stay out of the EU

during a referendum in November 1994; nonetheless, it contributes

sizably to the EU budget. The government has moved ahead with

privatization. With arguably the highest quality of life worldwide,

Norwegians still worry about that time in the next two decades when

the oil and gas will begin to run out. Accordingly, Norway has been

saving its oil-boosted budget surpluses in a Government Petroleum

Fund, which is invested abroad and now is valued at more than $150

billion. After lackluster growth of 1% in 2002 and 0.5% in 2003, GDP

growth picked up to 3.3% in 2004.

Oman

Oman is a middle-income economy in the Middle East with notable

oil and gas resources, a substantial trade surplus, and low

inflation. The government is privatizing its utilities and

diversifying its economy to attract foreign investment. Oman

continues to liberalize its markets and joined the World Trade

Organization (WTO) in November 2000. To reduce unemployment and

limit dependence on foreign countries, the government is encouraging

the replacement of expatriate workers with local people, i.e.,

Omanization. Training in information technology, business

management, and English support this objective. Industrial

development plans focus on gas resources, metal manufacturing,

petrochemicals, and international transshipment ports.

Pacific Ocean

The Pacific Ocean is a major contributor to the world

economy and particularly to those nations its waters directly touch.

It provides low-cost sea transportation between East and West,

extensive fishing grounds, offshore oil and gas fields, minerals,

and sand and gravel for the construction industry. In 1996, over 60%

of the world's fish catch came from the Pacific Ocean. Exploitation

of offshore oil and gas reserves is playing an ever-increasing role

in the energy supplies of the US, Australia, NZ, China, and Peru.

The high cost of recovering offshore oil and gas, combined with the

wide swings in world prices for oil since 1985, has led to

fluctuations in new drillings.

Pakistan

Pakistan, an impoverished and underdeveloped country, has

suffered from decades of internal political disputes, low levels of

foreign investment, and a costly, ongoing confrontation with

neighboring India. However, IMF-approved government policies,

bolstered by generous foreign assistance and renewed access to

global markets since 2001, have generated solid macroeconomic

recovery the last three years. The government has made substantial

macroeconomic reforms since 2000, although progress on more

politically sensitive reforms has slowed. For example, in the third

and final year of its $1.3 billion IMF Poverty Reduction and Growth

Facility, Islamabad has continued to require waivers for energy

sector reforms. While long-term prospects remain uncertain, given

Pakistan's low level of development, medium-term prospects for job

creation and poverty reduction are the best in nearly a decade.

Islamabad has raised development spending from about 2% of GDP in

the 1990s to 4% in 2003, a necessary step towards reversing the

broad underdevelopment of its social sector. GDP growth, spurred by

double-digit gains in industrial production over the past year, has

become less dependent on agriculture. Foreign exchange reserves

continued to reach new levels in 2004, supported by robust export

growth and steady worker remittances.

Palau

The economy consists primarily of tourism, subsistence

agriculture, and fishing. The government is the major employer of

the work force, relying heavily on financial assistance from the US.

Business and tourist arrivals numbered 63,000 in 2003. The

population enjoys a per capita income twice that of the Philippines

and much of Micronesia. Long-run prospects for the key tourist

sector have been greatly bolstered by the expansion of air travel in

the Pacific, the rising prosperity of leading East Asian countries,

and the willingness of foreigners to finance infrastructure

development.

Palmyra Atoll

no economic activity

Panama

Panama's dollarised economy rests primarily on a

well-developed services sector that accounts for four-fifths of GDP.

Services include operating the Panama Canal, banking, the Colon Free

Zone, insurance, container ports, flagship registry, and tourism. A

slump in Colon Free Zone and agricultural exports, the global

slowdown, and the withdrawal of US military forces held back

economic growth in 2000-03; growth picked up in 2004 led by

export-oriented services and a construction boom stimulated by tax

incentives. The government has been backing tax reforms, reform of

the social security program, new regional trade agreements, and

development of tourism. Unemployment remains high.

Papua New Guinea

Papua New Guinea is richly endowed with natural

resources, but exploitation has been hampered by rugged terrain and

the high cost of developing infrastructure. Agriculture provides a

subsistence livelihood for 85% of the population. Mineral deposits,

including oil, copper, and gold, account for 72% of export earnings.

The economy has improved over the past two years, following a

prolonged period of instability. Former Prime Minister Mekere

MORAUTA had tried to restore integrity to state institutions, to

stabilize the kina, restore stability to the national budget, to

privatize public enterprises where appropriate, and to ensure

ongoing peace on Bougainville. Australia annually supplies $240

million in aid, which accounts for 20% of the national budget.

Challenges face Prime Minister Michael SOMARE, including gaining

further investor confidence, continuing efforts to privatize

government assets, maintaining the support of members of Parliament,

and balancing relations with Australia, the former colonial ruler.

Paracel Islands

China announced plans in 1997 to open the islands

for tourism.

Paraguay

Landlocked Paraguay has a market economy marked by a large

informal sector. This sector features both reexport of imported

consumer goods to neighboring countries as well as the activities of

thousands of microenterprises and urban street vendors. Because of

the importance of the informal sector, accurate economic measures

are difficult to obtain. A large percentage of the population

derives their living from agricultural activity, often on a

subsistence basis. The formal economy grew by an average of about 3%

annually in 1995-97, but averaged near-zero growth in 1998-2001 and

contracted by 2.3 percent in 2002, in response to regional contagion

and an outbreak of hoof-and-mouth desease. On a per capita basis,

real income has stagnated at 1980 levels. Most observers attribute

Paraguay's poor economic performance to political uncertainty,

corruption, lack of progress on structural reform, substantial

internal and external debt, and deficient infrastructure. Aided by a

firmer exchange rate and perhaps a greater confidence in the

economic policy of the Duarte FRUTOS administration, the economy

rebounded in 2003 and 2004, posting modest growth each year.

Peru

Peru's economy reflects its varied geography - an arid coastal

region, the Andes further inland, and tropical lands bordering

Colombia and Brazil. Abundant mineral resources are found in the

mountainous areas, and Peru's coastal waters provide excellent

fishing grounds. However, overdependence on minerals and metals

subjects the economy to fluctuations in world prices, and a lack of

infrastructure deters trade and investment. After several years of

inconsistent economic performance, the Peruvian economy grew by an

average 4 percent per year during the period 2002-2004, with a

stable exchange rate and low inflation. Risk premiums on Peruvian

bonds on secondary markets reached historically low levels in late

2004, reflecting investor optimism regarding the government's

prudent fiscal policies and openness to trade and investment.

Despite the strong macroeconomic performance, the TOLEDO

administration remained unpopular in 2004, and unemployment and

poverty have stayed persistently high.

Philippines

The Philippines was less severely affected by the Asian

financial crisis of 1998 than its neighbors, aided in part by annual

remittances of $7-8 billion from overseas workers and no sustained

runup in asset prices or foreign borrowing prior to the crisis. From

a 0.6% decline in 1998, GDP expanded by 2.4% in 1999, and 4.4% in

2000, but slowed to 3.2% in 2001 in the context of a global economic

slowdown, an export slump, and political and security concerns. GDP

growth accelerated to 4.3% in 2002, 4.7% in 2003, and about 6% in

2004, reflecting the continued resilience of the service sector, and

improved exports and agricultural output. Nonetheless, it will take

a higher, sustained growth path to make appreciable progress in

poverty alleviation given the Philippines' high annual population

growth rate and unequal distribution of income. The Philippines also

faces higher oil prices, higher interest rates on its dollar

borrowings, and higher inflation. Fiscal constraints limit Manila's

ability to finance infrastructure and social spending. The

Philippines' consistently large budget deficit has produced a high

debt level and has forced Manila to spend a large portion of the

national government budget on debt service. Large, unprofitable

public enterprises, especially in the energy sector, contribute to

the government's debt because of slow progress on privatization.

Credit rating agencies are increasingly concerned about the

Philippines' ability to sustain the debt; legislative progress on

new revenue measures will weigh heavily on credit rating decisions.

Pitcairn Islands

The inhabitants of this tiny isolated economy exist

on fishing, subsistence farming, handicrafts, and postage stamps.

The fertile soil of the valleys produces a wide variety of fruits

and vegetables, including citrus, sugarcane, watermelons, bananas,

yams, and beans. Bartering is an important part of the economy. The

major sources of revenue are the sale of postage stamps to

collectors and the sale of handicrafts to passing ships. In October

2004, more than one-quarter of Pitcairn's labor force was arrested,

putting the economy in a bind, since their services were required as

lighter crew to load or unload passing ships.

Poland

Poland has steadfastly pursued a policy of economic

liberalization throughout the 1990s and today stands out as a

success story among transition economies. Even so, much remains to

be done, especially in bringing down unemployment. The privatization

of small and medium-sized state-owned companies and a liberal law on

establishing new firms has encouraged the development of the private

business sector, but legal and bureaucratic obstacles alongside

persistent corruption are hampering its further development.

Poland's agricultural sector remains handicapped by surplus labor,

inefficient small farms, and lack of investment. Restructuring and

privatization of "sensitive sectors" (e.g., coal, steel, railroads,

and energy), while recently initiated, have stalled. Reforms in

health care, education, the pension system, and state administration

have resulted in larger-than-expected fiscal pressures. Further

progress in public finance depends mainly on reducing losses in

Polish state enterprises, restraining entitlements, and overhauling

the tax code to incorporate the growing gray economy and farmers,

most of whom pay no tax. The government has introduced a package of

social and administrative spending cuts to reduce public spending by

about $17 billion through 2007. Additional reductions are under

discussion in the legislature but could be trumped by election-year

politics in 2005. Poland joined the EU in May 2004, and surging

exports to the EU contributed to Poland's strong growth in 2004,

though its competitiveness could be threatened by the zloty's

appreciation. GDP per capita roughly equals that of the three Baltic

states. Poland stands to benefit from nearly $13.5 billion in EU

funds, available through 2006. Farmers have already begun to reap

the rewards of membership via higher food prices and EU agricultural

subsidies.

Portugal

Portugal has become a diversified and increasingly

service-based economy since joining the European Community in 1986.

Over the past decade, successive governments have privatized many

state-controlled firms and liberalized key areas of the economy,

including the financial and telecommunications sectors. The country

qualified for the European Monetary Union (EMU) in 1998 and began

circulating the euro on 1 January 2002 along with 11 other EU member

economies. Economic growth had been above the EU average for much of

the past decade, but fell back in 2001-04. GDP per capita stands at

two-thirds that of the Big Four EU economies. A poor educational

system, in particular, has been an obstacle to greater productivity

and growth. Portugal has been increasingly overshadowed by

lower-cost producers in Central Europe and Asia as a target for

foreign direct investment. The government faces tough choices in its

attempts to boost Portugal's economic competitiveness while keeping

the budget deficit within the eurozone's 3%-of-GDP ceiling.

Puerto Rico

Puerto Rico has one of the most dynamic economies in the

Caribbean region. A diverse industrial sector has far surpassed

agriculture as the primary locus of economic activity and income.

Encouraged by duty-free access to the US and by tax incentives, US

firms have invested heavily in Puerto Rico since the 1950s. US

minimum wage laws apply. Sugar production has lost out to dairy

production and other livestock products as the main source of income

in the agricultural sector. Tourism has traditionally been an

important source of income, with estimated arrivals of nearly 5

million tourists in 1999. Growth fell off in 2001-03, largely due to

the slowdown in the US economy, and has recovered in 2004.

Qatar

Oil and gas account for more than 55% of GDP, roughly 85% of

export earnings, and 70% of government revenues. Oil and gas have

given Qatar a per capita GDP about 80% of that of the leading West

European industrial countries. Proved oil reserves of 16 billion

barrels should ensure continued output at current levels for 23

years. Qatar's proved reserves of natural gas exceed 14 trillion

cubic meters, more than 5% of the world total and third largest in

the world. Long-term goals feature the development of offshore

natural gas reserves to offset the ultimate decline in oil

production. In recent years, Qatar has consistently posted trade

surpluses largely because of high oil prices and increased natural

gas exports, becoming one of the world's fastest growing and highest

per-capita income countries.

Reunion

The economy has traditionally been based on agriculture, but

services now dominate. Sugarcane has been the primary crop for more

than a century, and in some years it accounts for 85% of exports.

The government has been pushing the development of a tourist

industry to relieve high unemployment, which amounts to one-third of

the labor force. The gap in Reunion between the well-off and the

poor is extraordinary and accounts for the persistent social

tensions. The white and Indian communities are substantially better

off than other segments of the population, often approaching

European standards, whereas minority groups suffer the poverty and

unemployment typical of the poorer nations of the African continent.

The outbreak of severe rioting in February 1991 illustrates the

seriousness of socioeconomic tensions. The economic well-being of

Reunion depends heavily on continued financial assistance from

France.

Romania

Romania began the transition from Communism in 1989 with a

largely obsolete industrial base and a pattern of output unsuited to

the country's needs. The country emerged in 2000 from a punishing

three-year recession thanks to strong demand in EU export markets.

Despite the global slowdown in 2001-02, strong domestic activity in

construction, agriculture, and consumption have kept growth above

4%. An IMF standby agreement, signed in 2001, has been accompanied

by slow but palpable gains in privatization, deficit reduction, and

the curbing of inflation. The IMF Board approved Romania's

completion of the standby agreement in October 2003, the first time

Romania has successfully concluded an IMF agreement since the 1989

revolution. In July 2004, the executive board of the IMF approved a

24-month standby agreement for $367 million. The Romanian

authorities do not intend to draw on this agreement, however,

viewing it simply as a precaution. Meanwhile, recent macroeconomic

gains have done little to address Romania's widespread poverty,

while corruption and red tape continue to handicap the business

environment.

Russia

Russia ended 2004 with its sixth straight year of growth,

averaging 6.5% annually since the financial crisis of 1998. Although

high oil prices and a relatively cheap ruble are important drivers

of this economic rebound, since 2000 investment and consumer-driven

demand have played a noticeably increasing role. Real fixed capital

investments have averaged gains greater than 10% over the last five

years, and real personal incomes have realized average increases

over 12%. Russia has also improved its international financial

position since the 1998 financial crisis, with its foreign debt

declining from 90% of GDP to around 28%. Strong oil export earnings

have allowed Russia to increase its foreign reserves from only $12

billion to some $120 billion at yearend 2004. These achievements,

along with a renewed government effort to advance structural

reforms, have raised business and investor confidence in Russia's

economic prospects. Nevertheless, serious problems persist. Economic

growth slowed down in the second half of 2004 and the Russian

government forecasts growth of only 4.5% to 6.2% for 2005. Oil,

natural gas, metals, and timber account for more than 80% of

exports, leaving the country vulnerable to swings in world prices.

Russia's manufacturing base is dilapidated and must be replaced or

modernized if the country is to achieve broad-based economic growth.

Other problems include a weak banking system, a poor business

climate that discourages both domestic and foreign investors,

corruption, and widespread lack of trust in institutions. In

addition, a string of investigations launched against a major

Russian oil company, culminating with the arrest of its CEO in the

fall of 2003, have raised concerns by some observers that President

PUTIN is granting more influence to forces within his government

that desire to reassert state control over the economy.

Rwanda

Rwanda is a poor rural country with about 90% of the

population engaged in (mainly subsistence) agriculture. It is the

most densely populated country in Africa; landlocked with few

natural resources and minimal industry. Primary foreign exchange

earners are coffee and tea. The 1994 genocide decimated Rwanda's

fragile economic base, severely impoverished the population,

particularly women, and eroded the country's ability to attract

private and external investment. However, Rwanda has made

substantial progress in stabilizing and rehabilitating its economy

to pre-1994 levels, although poverty levels are higher now. GDP has

rebounded and inflation has been curbed. Export earnings, however,

have been hindered by low beverage prices, depriving the country of

much needed hard currency. Despite Rwanda's fertile ecosystem, food

production often does not keep pace with population growth,

requiring food imports. Rwanda continues to receive substantial aid

money and was approved for IMF-World Bank Heavily Indebted Poor

Country (HIPC) initiative debt relief in late 2000. Kigali's high

defense expenditures have caused tension between the government and

international donors and lending agencies. An energy shortage and

instability in neighboring states may slow growth in 2005, while the

lack of adequate transportation linkages to other countries

continues to handicap export growth.

Saint Helena

The economy depends largely on financial assistance

from the UK, which amounted to about $5 million in 1997 or almost

one-half of annual budgetary revenues. The local population earns

income from fishing, raising livestock, and sales of handicrafts.

Because there are few jobs, 25% of the work force has left to seek

employment on Ascension Island, on the Falklands, and in the UK.

Saint Kitts and Nevis

Sugar was the traditional mainstay of the

Saint Kitts economy until the 1970s. Although the crop still

dominates the agricultural sector, activities such as tourism,

export-oriented manufacturing, and offshore banking have assumed

larger roles in the economy. Tourism revenues are now the chief

source of the islands' foreign exchange. The opening of a 470-room

resort in February 2003 was expected to bring in much-needed revenue.

Saint Lucia

Changes in the EU import preference regime and the

increased competition from Latin American bananas have made economic

diversification increasingly important in Saint Lucia. The island

nation has been able to attract foreign business and investment,

especially in its offshore banking and tourism industries. The

manufacturing sector is the most diverse in the Eastern Caribbean

area, and the government is trying to revitalize the banana

industry. Economic fundamentals remain solid, even though

unemployment needs to be cut.

Saint Pierre and Miquelon

The inhabitants have traditionally earned

their livelihood by fishing and by servicing fishing fleets

operating off the coast of Newfoundland. The economy has been

declining, however, because of disputes with Canada over fishing

quotas and a steady decline in the number of ships stopping at Saint

Pierre. In 1992, an arbitration panel awarded the islands an

exclusive economic zone of 12,348 sq km to settle a longstanding

territorial dispute with Canada, although it represents only 25% of

what France had sought. The islands are heavily subsidized by France

to the great betterment of living standards. The government hopes an

expansion of tourism will boost economic prospects. Recent test

drilling for oil may pave the way for development of the energy

sector.

Saint Vincent and the Grenadines

Economic growth in this

lower-middle-income country hinges upon seasonal variations in the

agricultural and tourism sectors. Tropical storms wiped out

substantial portions of crops in 1994, 1995, and 2002, and tourism

in the Eastern Caribbean has suffered low arrivals following 11

September 2001. Saint Vincent is home to a small offshore banking

sector and has moved to adopt international regulatory standards.

Saint Vincent is also a large producer of marijuana and is being

used as a transshipment point for illegal narcotics from South

America.

Samoa

The economy of Samoa has traditionally been dependent on

development aid, family remittances from overseas, agriculture, and

fishing. The country is vulnerable to devastating storms.

Agriculture employs two-thirds of the labor force, and furnishes 90%

of exports, featuring coconut cream, coconut oil, and copra. The

manufacturing sector mainly processes agricultural products. The

decline of fish stocks in the area is a continuing problem. Tourism

is an expanding sector, accounting for 25% of GDP; about 88,000

tourists visited the islands in 2001. One factory in the Foreign

Trade Zone employs 3,000 people to make automobile electrical

harnesses for an assembly plant in Australia. The Samoan Government

has called for deregulation of the financial sector, encouragement

of investment, and continued fiscal discipline, meantime protecting

the environment. Observers point to the flexibility of the labor

market as a basic strength for future economic advances. Foreign

reserves are in a relatively healthy state, the external debt is

stable, and inflation is low.

San Marino

The tourist sector contributes over 50% of GDP. In 2000

more than 3 million tourists visited San Marino. The key industries

are banking, wearing apparel, electronics, and ceramics. Main

agricultural products are wine and cheeses. The per capita level of

output and standard of living are comparable to those of the most

prosperous regions of Italy, which supplies much of its food.

Sao Tome and Principe

This small poor island economy has become

increasingly dependent on cocoa since independence in 1975. Cocoa

production has substantially declined in recent years because of

drought and mismanagement, but strengthening prices helped boost

export earnings in 2003. Sao Tome has to import all fuels, most

manufactured goods, consumer goods, and a substantial amount of

food. Over the years, it has had difficulty servicing its external

debt and has relied heavily on concessional aid and debt

rescheduling. Sao Tome benefited from $200 million in debt relief in

December 2000 under the Highly Indebted Poor Countries (HIPC)

program, but lacking a formal poverty reduction program with the

IMF, it has not benefited from subsequent HIPC debt reductions. Sao

Tome's external debt stands at over $300 million. Considerable

potential exists for development of a tourist industry, and the

government has taken steps to expand facilities in recent years. The

government also has attempted to reduce price controls and

subsidies. Sao Tome is optimistic about the development of petroleum

resources in its territorial waters in the oil-rich Gulf of Guinea.

The first production license was sold to a consortium led by

US-based oil firms. Much of the 2005 budget is dependent upon the

sale of additional production licenses.

Saudi Arabia

This is an oil-based economy with strong government

controls over major economic activities. Saudi Arabia possesses 25%

of the world's proven petroleum reserves, ranks as the largest

exporter of petroleum, and plays a leading role in OPEC. The

petroleum sector accounts for roughly 75% of budget revenues, 45% of

GDP, and 90% of export earnings. About 40% of GDP comes from the

private sector. Roughly five and a half million foreign workers play

an important role in the Saudi economy, for example, in the oil and

service sectors. The government in 1999 announced plans to begin

privatizing the electricity companies, which follows the ongoing

privatization of the telecommunications company. The government is

encouraging private sector growth to lessen the kingdom's dependence

on oil and increase employment opportunities for the swelling Saudi

population. Priorities for government spending in the short term

include additional funds for education and for the water and sewage

systems. Economic reforms proceed cautiously because of deep-rooted

political and social conservatism.

Senegal

In January 1994, Senegal undertook a bold and ambitious

economic reform program with the support of the international donor

community. This reform began with a 50% devaluation of Senegal's

currency, the CFA franc, which was linked at a fixed rate to the

French franc. Government price controls and subsidies have been

steadily dismantled. After seeing its economy contract by 2.1% in

1993, Senegal made an important turnaround, thanks to the reform

program, with real growth in GDP averaging 5% annually during

1995-2003. Annual inflation had been pushed down to the low single

digits. As a member of the West African Economic and Monetary Union

(WAEMU), Senegal is working toward greater regional integration with

a unified external tariff and a more stable monetary policy. Senegal

still relies heavily upon outside donor assistance, however. Under

the IMF's Highly Indebted Poor Countries debt relief program,

Senegal will benefit from eradication of two-thirds of its

bilateral, multilateral, and private sector debt.

Serbia and Montenegro

MILOSEVIC-era mismanagement of the economy, an

extended period of economic sanctions, and the damage to

Yugoslavia's infrastructure and industry during the NATO airstrikes

in 1999 left the economy only half the size it was in 1990. After

the ousting of former Federal Yugoslav President MILOSEVIC in

October 2000, the Democratic Opposition of Serbia (DOS) coalition

government implemented stabilization measures and embarked on an

aggressive market reform program. After renewing its membership in

the IMF in December 2000, a down-sized Yugoslavia continued to

reintegrate into the international community by rejoining the World

Bank (IBRD) and the European Bank for Reconstruction and Development

(EBRD). A World Bank-European Commission sponsored Donors'

Conference held in June 2001 raised $1.3 billion for economic

restructuring. An agreement rescheduling the country's $4.5 billion

Paris Club government debts was concluded in November 2001 - it

wrote off 66% of the debt - and the London Club of private creditors

forgave $1.7 billion of debt, just over half the total owed, in July

2004. The smaller republic of Montenegro severed its economy from

federal control and from Serbia during the MILOSEVIC era and

continues to maintain its own central bank, uses the euro instead of

the Yugoslav dinar as official currency, collects customs tariffs,

and manages its own budget. Kosovo's economy continues to transition

to a market-based system, and is largely dependent on the

international community and the diaspora for financial and technical

assistance. The euro and the Yugoslav dinar are both accepted

currencies in Kosovo. While maintaining ultimate oversight, UNMIK

continues to work with the European Union and Kosovo's local

provisional government to accelerate economic growth, lower

unemployment, and attract foreign investment to help Kosovo

integrate into regional economic structures. The complexity of

Serbia and Montenegro political relationships, slow progress in

privatization, legal uncertainty over property rights, scarcity of

foreign-investment and a substantial foreign trade deficit are

holding back the economy. Arrangements with the IMF, especially

requirements for fiscal discipline, are an important element in

policy formation. Severe unemployment remains a key political

economic problem for this entire region.

Seychelles

Since independence in 1976, per capita output in this

Indian Ocean archipelago has expanded to roughly seven times the old

near-subsistence level. Growth has been led by the tourist sector,

which employs about 30% of the labor force and provides more than

70% of hard currency earnings, and by tuna fishing. In recent years

the government has encouraged foreign investment in order to upgrade

hotels and other services. At the same time, the government has

moved to reduce the dependence on tourism by promoting the

development of farming, fishing, and small-scale manufacturing. A

sharp drop illustrated the vulnerability of the tourist sector in

1991-92 due largely to the Gulf war, and once again following the 11

September 2001 terrorist attacks on the US. Growth slowed in

1998-2002, and fell in 2003, due to sluggish tourist and tuna

sectors, but resumed in 2004, erasing a persistent budget deficit.

Tight controls on exchange rates and the scarcity of foreign

exchange have impaired short-term economic prospects. The black

market value of the Seychelles rupee is half the official exchange

rate; without a devaluation of the currency the tourist sector may

remain sluggish as vacationers seek cheaper destinations such as

Comoros, Mauritius, and Madagascar.

Sierra Leone

Sierra Leone is an extremely poor African nation with

tremendous inequality in income distribution. While it possesses

substantial mineral, agricultural, and fishery resources, its

economic and social infrastructure is not well developed, and

serious social disorders continue to hamper economic development.

About two-thirds of the working-age population engages in

subsistence agriculture. Manufacturing consists mainly of the

processing of raw materials and of light manufacturing for the

domestic market. Plans to reopen bauxite and rutile mines shut down

during an 11 year civil war have not been implemented due to lack of

foreign investment. Alluvial diamond mining remains the major source

of hard currency earnings. The fate of the economy depends upon the

maintenance of domestic peace and the continued receipt of

substantial aid from abroad, which is essential to offset the severe

trade imbalance and supplement government revenues. International

financial institutions contributed over $600 million in development

aid and budgetary support in 2003.

Singapore

Singapore, a highly developed and successful free market

economy, enjoys a remarkably open and corruption-free environment,

stable prices, and a per capita GDP equal to that of the Big 4 West

European countries. The economy depends heavily on exports,

particularly in electronics and manufacturing. It was hard hit in

2001-03 by the global recession, by the slump in the technology

sector, and by an outbreak of Severe Acute Respiratory Syndrome in

2003, which curbed tourism and consumer spending. The government

hopes to establish a new growth path that will be less vulnerable to

the external business cycle and will continue efforts to establish

Singapore as Southeast Asia's financial and high-tech hub. Fiscal

stimulus, low interest rates, a surge in exports, and internal

flexibility led to vigorous growth in 2004, with real GDP rising by

8 percent, by far the economy's best performance since 2000.

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. Slovakia's economic growth exceeded expectations

in 2001-04, despite the general European slowdown. Unemployment, at

an unacceptable 15% in 2003-04, remains the economy's Achilles heel.

Slovakia joined the EU on 1 May 2004.

Slovenia

Slovenia, with its historical ties to Western Europe,

enjoys a GDP per capita substantially higher than that of the other

transitioning economies of Central Europe. In March 2004, Slovenia

became the first transition country to graduate from borrower status

to donor partner at the World Bank. Privatization of the economy

proceeded at an accelerated pace in 2002-04. Despite lackluster

performance in Europe in 2001-04, Slovenia maintained moderate

growth. Structural reforms to improve the business environment have

allowed for greater foreign participation in Slovenia's economy and

have helped to lower unemployment. Further measures to curb

inflation are still needed. Corruption and the high degree of

coordination between government, business, and central bank policy

were issues of concern in the run-up to Slovenia's 1 May 2004

accession to the European Union. In mid-2004 Slovenia agreed to

adopt the euro by 2007 and, therefore, must keep its debt levels,

budget deficits, interest rates, and inflation levels within the

EU's Maastrict criteria.

Solomon Islands

The bulk of the population depends on agriculture,

fishing, and forestry for at least part of their 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 has enabled a return

to law and order, a new period of economic stability, and modest

growth as the economy rebuilds.

Somalia

Somalia's economic fortunes are driven by its deep political

divisions. The northwestern area has declared its independence as

the "Republic of Somaliland"; the northeastern region of Puntland is

a semi-autonomous state; and the remaining southern portion is

riddled with the struggles of rival factions. Economic life

continues, in part because much activity is local and relatively

easily protected. Agriculture is the most important sector, with

livestock normally accounting for about 40% of GDP and about 65% of

export earnings, but Saudi Arabia's recent ban on Somali livestock,

because of Rift Valley Fever concerns, has severely hampered the

sector. Nomads and semi-nomads, 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. Despite the seeming anarchy,

Somalia's service sector has managed to survive and grow.

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 militias provide security.

The ongoing civil disturbances and clan rivalries, however, have

interfered with any broad-based economic development and

international aid arrangements. In 2004 Somalia's overdue financial

obligations to the IMF continued to grow. Statistics on Somalia's

GDP, growth, per capita income, and inflation should be viewed

skeptically. In late December 2004, a major tsunami took an

estimated 150 lives and caused destruction of properity 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 ranks among the 10 largest in the world; and a modern

infrastructure supporting an efficient distribution of goods to

major urban centers throughout the region. However, growth has not

been strong enough to lower South Africa's high unemployment rate;

and daunting economic problems remain from the apartheid era,

especially poverty and lack of economic empowerment among the

disadvantaged groups. South African economic policy is fiscally

conservative, but pragmatic, focusing on targeting inflation and

liberalizing trade as 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 2000-01 (1 July to 30 June) landed

112,934 metric tons, of which 87% was krill and 11% Patagonian

toothfish. 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 2000-01 antarctic summer

12,248 tourists, most of them seaborne, visited the Southern Ocean

and Antarctica, compared to 14,762 the previous year.

Spain

The Spanish economy boomed from 1986 to 1990, averaging five

percent 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 80% that of the four leading West European economies. The

center-right government of former President 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 10.4%. Growth of 2.5% in 2003 and 2.6% in 2004

was satisfactory given the background of a faltering European

economy. The socialist president, RODRIGUEZ ZAPATERO, has initiated

economic and social reforms that are generally popular among the

masses of people but that are anathema to religious and other

conservative elements. Adjusting to the monetary and other economic

policies of an integrated Europe, reducing unemployment, and

absorbing widespread social changes will pose challenges to Spain

over the next few years.

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 market-oriented policies

and export-oriented trade. Sri Lanka's most dynamic sectors now are

food processing, textiles and apparel, food and beverages,

telecommunications, and insurance and banking. In 2003, plantation

crops made up only 15% of exports (compared with 93% in 1970), while

textiles and garments accounted for 63%. GDP grew at an average

annual rate of 5.5% in the early 1990s until a drought and a

deteriorating security situation lowered growth to 3.8% in 1996. The

economy rebounded in 1997-2000 with average growth of 5.3%, but 2001

saw the first contraction in the country's history, -1.4%, due to a

combination of power shortages, severe budgetary problems, the

global slowdown, and continuing civil strife. Growth recovered to

4.0% in 2002 and to 5.2% in both 2003 and 2004. About 800,000 Sri

Lankans work abroad, 90% in the Middle East. They send home about $1

billion a year. The struggle by the Tamil Tigers of the north and

east for a largely independent homeland continues to cast a shadow

over the economy. 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.

Sudan

Sudan has turned around a struggling economy with sound

economic policies and infrastructure investments, but it still faces

formidable economic problems, starting from its low level of per

capita output. From 1997 to date, Sudan has been implementing IMF

macroeconomic reforms. In 1999, Sudan began exporting crude oil and

in the last quarter of 1999 recorded its first trade surplus, which,

along with monetary policy, has stabilized the exchange rate.

Increased oil production, revived light industry, and expanded

export processing zones helped sustain GDP growth at 6.4% in 2004.

Agriculture production remains Sudan's most important sector,

employing 80% of the work force, contributing 39% of GDP, and

accounting for most of GDP growth, but most farms remain rain-fed

and susceptible to drought. Chronic instability - including the

long-standing civil war between the Muslim north and the

Christian/pagan south, adverse weather, and weak world agricultural

prices - ensure that much of the population will remain at or below

the poverty line for years.

Suriname

The economy is dominated by the alumina industry, which

accounts for more than 15% of GDP and 70% of export earnings.

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. The government of Ronald VENETIAAN has begun an

austerity program, raised taxes, and attempted to control spending.

While - in 2002 - President VENETIAAN agreed to a large pay raise

for civil servants, threatening his earlier gains in stabilizing the

economy, he has not repeated this promise in the run-up to the May

2005 elections. The Dutch Government has agreed to restart the aid

flow, which will allow Suriname to access international development

financing, but plans to phase out funds over the next five years.

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. 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 and Mearsk.

Svalbard

Coal mining is the major economic activity on Svalbard. The

treaty of 9 February 1920 gives 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 more than 80% of the population. The manufacturing sector

has diversified since the mid-1980s. Sugar and wood pulp remain

important foreign exchange earners. 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 about nine-tenths of its imports and

to which it sends nearly three-quarters of its exports. Customs

duties from the Southern African Customs Union and worker

remittances from South Africa substantially supplement domestically

earned income. The government is trying to improve the atmosphere

for foreign investment. 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 2004

because of drought, and more than one-third of the adult population

was infected by HIV/AIDS.

Sweden

Aided by peace and neutrality for the whole 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 2% of GDP and

2% of the jobs. The government's commitment to fiscal discipline

resulted in a substantial budgetary surplus in 2001, which was cut

by more than half in 2002, due to the global economic slowdown,

declining revenue, and increased spending. The Swedish central bank

(the Riksbank) focuses on price stability with its inflation target

of 2%. Growth remained sluggish in 2003, but picked up in 2004.

Presumably because of generous sicktime benefits, Swedish workers

report in sick more often than other Europeans. On 14 September

2003, Swedish voters turned down entry into the euro system,

concerned about the impact on democracy 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 safe haven 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 dropped in 2001 to

about 0.8%, to 0.2% in 2002, and to -0.3% in 2003, with a small rise

to 1.8% in 2004. Even so, unemployment has remained at less than

half the EU average.

Syria

Real GDP growth rose to 2.3 percent in 2004, a slight increase

from 2003 when the predominantly statist economy suffered from

disruptions caused by the war in Iraq and other developments in the

region. Annual real GDP growth has averaged 2.3 percent for the last

seven years. The Government of Syria has implemented modest economic

reforms in the last few years, including cutting interest rates,

opening private banks, consolidating some of the multiple exchange

rates, and raising prices on some subsidized foodstuffs.

Nevertheless, the economy remains highly controlled by the

government. Long run economic constraints include declining oil

production and exports and pressure on water supplies caused by

rapid population growth, industrial expansion, and increased water

pollution.

Taiwan

Taiwan has a dynamic capitalist economy with gradually

decreasing guidance of investment and foreign trade by government

authorities. In keeping with this trend, some large government-owned

banks and industrial firms are being privatized. Exports have

provided the primary impetus for industrialization. The trade

surplus is substantial, and foreign reserves are the world's third

largest. Agriculture contributes less than 2% to GDP, down from 32%

in 1952. Taiwan is a major investor throughout Southeast Asia. China

has overtaken the US to become Taiwan's largest export market.

Because of its conservative financial approach and its

entrepreneurial strengths, Taiwan suffered little compared with many

of its neighbors from the Asian financial crisis in 1998. The global

economic downturn, combined with problems in policy coordination by

the administration and bad debts in the banking system, pushed

Taiwan into recession in 2001, the first year of negative growth

ever recorded. Unemployment also reached record levels. Output

recovered moderately in 2002 in the face of continued global

slowdown, fragile consumer confidence, and bad bank loans; and the

essentially vibrant economy pushed ahead in 2003-04. Growing

economic ties with China are a dominant long-term factor, e.g.,

exports to China of parts and equipment for the assembly of goods

for export to developed countries.

Tajikistan

Tajikistan has one of the lowest per capita GDPs among

the 15 former Soviet republics. Only 5% to 6% of the land area is

arable. Cotton is the most important crop. Mineral resources, varied

but limited in amount, 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. Even though 60% of its

people continue to live in abject poverty, Tajikistan has

experienced steady economic growth since 1997. Continued

privatization of medium and large state-owned enterprises will

further increase productivity. Tajikistan's economic situation,

however, remains fragile due to uneven implementation of structural

reforms, weak governance, widespread unemployment, and the external

debt burden. A debt restructuring agreement was reached with Russia

in December 2002, including an interest rate of 4%, a 3-year grace

period, and a US $49.8 million credit to the Central Bank of

Tajikistan.

Tanzania

Tanzania is one of the poorest countries in the world. The

economy depends heavily on agriculture, which accounts for almost

half 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 International Monetary Fund, and bilateral

donors have provided funds to rehabilitate Tanzania's out-of-date

economic infrastructure and to alleviate poverty. Growth in

1991-2002 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 6% in 2004.

Thailand

Thailand has a well developed infrastructure, a

free-enterprise economy, and welcomes foreign investment. Thailand

has fully recovered from the 1997-98 Asian Financial Crisis and was

one of East Asia's best performers in 2002-04. Increased consumption

and investment spending and strong export growth pushed GDP growth

up to 6.9% in 2003 and 6.1% in 2004 despite a sluggish global

economy. The highly popular government's expansionist policy,

including major support of village economic development, has raised

concerns about fiscal discipline and the health of financial

institutions. Bangkok has pursued preferential trade agreements with

a variety of partners in an effort to boost exports and maintain

high growth, and in 2004 began negotiations on a Free Trade

Agreement with the US. In late December 2004, a major tsunami took

8,500 lives in Thailand and caused massive destruction of property

in the southern provinces of Krabi, Phangnga, and Phuket.

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, but production

fell an estimated 22% in 2002 due to power shortages and the cost of

developing new deposits. 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

following through on privatization, increased openness in government

financial operations, progress toward legislative elections, and

continued support from foreign 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, a small, open, South Pacific island economy, has a

narrow export base in agricultural goods. Squash, coconuts, bananas,

and vanilla beans are the main crops, and agricultural exports make

up two-thirds of total exports. The country must import a high

proportion of its food, mainly from New Zealand. Tourism is the

second largest source of hard currency earnings following

remittances. The country remains dependent on external aid and

remittances from Tongan communities overseas to offset its trade

deficit. 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, and rising civil service expenditures are major issues

facing the government.

Trinidad and Tobago

Trinidad and Tobago, the leading Caribbean

producer of oil and gas, has earned a reputation as an excellent

investment site for international businesses. Tourism is a growing

sector, although not proportionately as important as in many other

Caribbean islands. The economy benefits from low inflation and a

growing trade surplus. Prospects for growth in 2004 are good as

prices for oil, petrochemicals, and liquified natural gas are

expected to remain high, and foreign direct investment continues to

grow to support expanded capacity in the energy sector. The

government is coping with a rise in violent crime.

Tromelin Island

no economic activity

Tunisia

Tunisia has a diverse economy, with important agricultural,

mining, energy, 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 slowed to a 15-year low of 1.9%

in 2002 because of agricultural drought and lackluster tourism.

Better rains in 2003 and 2004, however, helped push GDP growth above

5% for these years. Tourism also recovered after the end of combat

operations in Iraq. Tunisia is gradually removing barriers to trade

with the European Union. Broader privatization, further

liberalization of the investment code to increase foreign

investment, improvements in government efficiency, and reduction of

the trade deficit are among the challenges ahead.

Turkey

Turkey's dynamic economy is a complex mix of modern industry

and commerce along with a traditional agriculture sector that in

2004 still accounted for more than 35% of employment. It has a

strong and rapidly growing private sector, yet the state still plays

a major role 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. In recent years the economic situation has been marked

by erratic economic growth and serious imbalances. Real GNP growth

has exceeded 6% in many years, but this strong expansion has been

interrupted by sharp declines in output in 1994, 1999, and 2001.

Inflation, in recent years in the high double-digit range, fell to

9.3% by 2004 - a 30-year low. Despite these strong economic gains in

2002-04, which were largely due to renewed investor interest in

emerging markets, IMF backing, and tighter fiscal policy, the

economy is still plagued with high debt and deficits. The public

sector fiscal deficit exceeds 6% of GDP - due in large part to the

huge burden of interest payments, which accounted for more than 40%

of central government spending in 2004, and to populist spending.

Foreign direct investment (FDI) in Turkey remains low - averaging

less than $1 billion annually, but further economic and judicial

reforms and prospective EU membership are expected to boost FDI. A

major political and economic issue over the next decade is whether

or not Turkey will become a member of the EU.

Turkmenistan

Turkmenistan is largely desert country with intensive

agriculture in irrigated oases and large gas and oil resources.

One-half of its irrigated land is planted in cotton; formerly it was

the world's tenth-largest producer. Poor harvests in recent years

have led to a nearly 46% 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. In

1998-2004, 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 perhaps 30% in 2003 and 19% in 2004, largely because of

higher international oil and gas prices. Overall prospects in the

near future are discouraging because of widespread internal poverty,

the burden of foreign debt, the government's irrational use of oil

and gas revenues, and its unwillingness to adopt market-oriented

reforms. Turkmenistan's economic statistics are state secrets, and

GDP and other figures are subject to wide margins of error. In

particular, the rate of GDP growth is uncertain.

Turks and Caicos Islands

The Turks and Caicos economy is based on

tourism, fishing, and offshore financial services. Most capital

goods and food for domestic consumption are imported. The US is the

leading source of tourists, accounting for more than half of the

annual 93,000 visitors in the late 1990s. Major sources of

government revenue also include fees from offshore financial

activities and customs receipts.

Tuvalu

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. Subsistence farming and fishing are the

primary economic activities. Fewer than 1,000 tourists, on average,

visit Tuvalu annually. Government revenues largely come from the

sale of stamps and coins and worker remittances. About 1,000

Tuvaluans work in Nauru in the phosphate mining industry. Nauru has

begun repatriating Tuvaluans, however, as phosphate resources

decline. Substantial income is received annually from 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 has grown from

an initial $17 million to over $35 million in 1999. The US

government is also a major revenue source for Tuvalu because of

payments from a 1988 treaty on fisheries. In an effort to reduce its

dependence on foreign aid, the government is pursuing public sector

reforms, including privatization of some government functions and

personnel cuts of up to 7%. In 1998, Tuvalu began deriving revenue

from use of its area code for "900" lines and in 2000, from the

lease of its ".tv" Internet domain name. Royalties from these new

technology sources could increase substantially over the next

decade. 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.

Uganda

Uganda has substantial natural resources, including fertile

soils, regular rainfall, and sizable mineral deposits of copper and

cobalt. 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.

Corruption within the government and slippage in the government's

determination to press reforms raise doubts about the continuation

of strong growth. 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.

Growth for 2001-02 was solid despite continued decline in the price

of coffee, Uganda's principal export. Solid growth in 2003-04

reflected an upturn in Uganda's export markets.

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. Ukraine depends on imports of energy, especially

natural gas, to meet some 85% of its annual energy requirements.

Shortly after independence 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. Loose monetary policies pushed inflation to

hyperinflationary levels in late 1993. Ukraine's dependence on

Russia for energy supplies and the lack of significant structural

reform have made the Ukrainian economy vulnerable to external

shocks. Ukrainian government officials have taken some steps to

reform the country's Byzantine tax code, such as the implementation

of lower tax rates aimed at bringing more economic activity out of

Ukraine's large shadow economy, but more improvements are needed,

including closing tax loopholes and eliminating tax privileges and

exemptions. Reforms in the more politically sensitive areas of

structural reform and land privatization are still lagging. Outside

institutions - particularly the IMF - have encouraged Ukraine to

quicken the pace and scope of reforms. GDP in 2000 showed strong

export-based growth of 6% - the first growth since independence -

and industrial production grew 12.9%. The economy continued to

expand in 2001 as real GDP rose 9% and industrial output grew by

over 14%. Growth of 4.6% in 2002 was more moderate, in part a

reflection of faltering growth in the developed world. In general,

growth has been undergirded by strong domestic demand, low

inflation, and solid consumer and investor confidence. Growth was a

sturdy 9.3% in 2003 and a remarkable 12% in 2004, despite a loss of

momentum in needed economic reforms.

United Arab Emirates

The UAE has an open economy with a high per

capita income and a sizable annual trade surplus. Its wealth is

based on oil and gas output (about 30% of GDP), and the fortunes of

the economy fluctuate with the prices of those commodities. 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. At present levels of production, oil and gas reserves

should last for more than 100 years. The government has increased

spending on job creation and infrastructure expansion and is opening

up its utilities to greater private sector involvement. In April

2004, the UAE signed a Trade and Investment Framework Agreement

(TIFA) with Washington and in November 2004 agreed to undertake

negotiations toward a Free Trade Agreement (FTA) with the US.

United Kingdom

The UK, a leading trading power and financial center,

is one of the quartet 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 reserves; primary energy production accounts for 10% of GDP, one

of the highest shares of any industrial nation. Services,

particularly banking, insurance, and business services, account by

far for the largest proportion of GDP while industry continues to

decline in importance. GDP growth slipped in 2001-03 as the global

downturn, the high value of the pound, and the bursting of the "new

economy" bubble hurt manufacturing and exports. Output recovered in

2004, to 3.2% growth. The economy is one of the strongest in Europe;

inflation, interest rates, and unemployment remain low. The

relatively good economic performance has complicated the BLAIR

government's efforts to make a case for Britain to join the European

Economic and Monetary Union (EMU). Critics point out that the

economy is doing well outside of EMU, and they cite public opinion

polls that continue to show a majority of Britons opposed to the

euro. Meantime, the government has been speeding up the improvement

of education, transport, and health services, at a cost in higher

taxes.

United States

The US has the largest and most technologically

powerful economy in the world, with a per capita GDP of $40,100. 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 considerably 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 entry in their rivals' home markets than the barriers to entry of

foreign firms in 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

response to the terrorist attacks of 11 September 2001 showed the

remarkable resilience of the economy. 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. The rise in GDP in 2004 was undergirded by substantial

gains in labor productivity. The economy suffered from a sharp

increase in energy prices in the second half of 2004. 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.

Uruguay

Uruguay's well-to-do economy is characterized by an

export-oriented agricultural sector, a well-educated workforce, 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. For

instance, in 2001-02 massive withdrawals by Argentina of dollars

deposited in Uruguayan banks led to a plunge in the Uruguyan peso

and a massive rise in unemployment. Total GDP in these four years

dropped by nearly 20%, with 2002 the worst year due to the serious

banking crisis. Unemployment rose to nearly 20% in 2002, inflation

surged, and the burden of external debt doubled. Cooperation with

the IMF limited the damage. The debt swap with private creditors

carried out in 2003, which extended the maturity dates on nearly

half of Uruguay's $11.3 billion in public debt, substantially

alleviated the country's amortization burden in the coming years and

restored public confidence. The economy grew about 10% in 2004 as a

result of high commodity prices for Uruguayan exports, the weakness

of the dollar against the euro, growth in the region, low

international interest rates, and greater export competitiveness.

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, a

large producer of gold and oil, and a regionally significant

producer of chemicals and machinery. Following independence in

December 1991, the government sought to prop up its Soviet-style

command economy with subsidies and tight controls on production and

prices. Uzbekistan responded to the negative external conditions

generated by the Asian and Russian financial crises by emphasizing

import substitute industrialization and by tightening export and

currency controls within its already largely closed economy. The

government, while aware of the need to improve the investment

climate, sponsors measures that often increase, not decrease, the

government's 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 the

obligations of Article VIII under the International Monetary Fund

(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.

Vanuatu

This South Pacific island economy is based primarily on

small-scale agriculture, which provides a living for 65% of the

population. Fishing, offshore financial services, and tourism, with

about 50,000 visitors in 2004, 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. GDP growth rose less than

3% on average in the 1990s. 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. 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 continues to be highly dependent on the

petroleum sector, accounting for roughly one-third of GDP, around

80% of export earnings, and over half of government operating

revenues. A disastrous two-month national oil strike from December

2002 to February 2003, temporarily halted economic activity. The

economy remained in depression in 2003, declining by 9.2% after an

8.9% fall in 2002. Despite continued domestic instability, output

recovered strongly in 2004, aided by high oil prices. Both inflation

and unemployment remain fundamental problems.

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. Substantial progress was

achieved from 1986 to 1997 in moving forward from an extremely low

level of development and significantly reducing poverty. Growth

averaged around 9% per year from 1993 to 1997. The 1997 Asian

financial crisis highlighted the problems in the Vietnamese economy

and temporarily allowed opponents of reform to slow progress towards

a market oriented economy. GDP growth of 8.5% in 1997 fell to 6% in

1998 and 5% in 1999. Growth then rose to 7% in 2000-04 even against

the background of global recession. Since 2001, however, 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. However,

equitization of state-owned enterprises and reduction in the

proportion of non-performing loans has fallen behind schedule.

Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry

into force of the US-Vietnam Bilateral Trade in December 2001 have

led to even more rapid changes in Vietnam's trade and economic

regime. Vietnam's exports to the US doubled in 2002 and again in

2003. Vietnam is working toward accession to the WTO in 2005. Among

other benefits, accession will allow 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. Vietnam is working to promote job creation to keep up

with the country's high population growth rate. However, in 2004,

high levels of inflation prompted Vietnamese authorities to tighten

monetary and fiscal policies.

Virgin Islands

Tourism is the primary economic activity, accounting

for 80% of GDP and employment. The islands normally host 2 million

visitors a year. The manufacturing sector consists of petroleum

refining, textiles, electronics, pharmaceuticals, and watch

assembly. The agricultural sector is small, with most food being

imported. International business and financial services are a small

but growing component of the economy. One of the world's largest

petroleum refineries is at Saint Croix. The islands are subject 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

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% 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 under the

Palestine Authority - has experienced a general decline in economic

growth and a degradation in economic conditions made worse since the

second intifadah began in September 2000. The downturn has been

largely the result of the Israeli closure policies - the imposition

of border closures in response to security incidents in Israel -

which disrupted labor and commodity market relationships. In 2001,

and even more severely in 2002, Israeli military measures in

Palestine Authority areas resulted in the destruction of much

capital plant, the disruption of administrative structure, and

widespread business closures. Including the Gaza Strip, the UN

estimates that more than 100,000 Palestinians out of the 125,000 who

used to work in Israeli settlements, or in joint industrial zones,

have lost their jobs. International aid of $2 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. Meanwhile, unemployment has continued at more than half

the labor force. ARAFAT's death in 2004 leaves open more political

options that could affect the economy.

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. All trade and other economic activities

are controlled by the Moroccan Government. Moroccan energy interests

in 2001 signed contracts to explore for oil off the coast of Western

Sahara, which has angered the Polisario. Incomes and standards of

living in Western Sahara are substantially below the Moroccan level.

World

Global output rose by 4.9% in 2004, led by China (9.1%),

Russia (6.7%), and India (6.2%). The other 14 successor nations of

the USSR and the other old Warsaw Pact nations again experienced

widely divergent growth rates; the three Baltic nations continued as

strong performers, in the 7% range of growth. Growth results posted

by the major industrial countries varied from a small gain in Italy

(1.3%) to a strong gain by the United States (4.4%). The developing

nations also varied in their growth results, with many countries

facing population increases that erode gains in output. Externally,

the nation-state, as a bedrock economic-political institution, is

steadily losing control over international flows of people, goods,

funds, and technology. Internally, the central government often

finds its control over resources slipping as separatist regional

movements - typically based on ethnicity - gain momentum, e.g., in

many of the successor states of the former Soviet Union, in the

former Yugoslavia, in India, in Iraq, in Indonesia, and in Canada.

Externally, the central government is losing decisionmaking powers

to international bodies, notably the European Union. In Western

Europe, governments face the difficult political problem of

channeling resources away from welfare programs in order to increase

investment and strengthen incentives to seek employment. The

addition of 75 million people each year to an already overcrowded

globe is exacerbating the problems of pollution, desertification,

underemployment, epidemics, and famine. Because of their own

internal problems and priorities, the industrialized countries

devote insufficient resources to deal effectively with the poorer

areas of the world, which, at least from an economic point of view,

are becoming further marginalized. The introduction of the euro as

the common currency of much of Western Europe in January 1999, while

paving the way for an integrated economic powerhouse, poses economic

risks because of varying levels of income and cultural and political

differences among the participating nations. The terrorist attacks

on the US on 11 September 2001 accentuate a further growing risk to

global prosperity, illustrated, for example, by the reallocation of

resources away from investment to anti-terrorist programs. The

opening of war in March 2003 between a US-led coalition and Iraq

added new uncertainties to global economic prospects. After the

coalition victory, the complex political difficulties and the high

economic cost of establishing domestic order in Iraq became major

global problems that continued into 2005.

Yemen

Yemen, one of the poorest countries in the Arab world, has

reported strong growth since 2000, but its economic fortunes depend

mostly on oil. Yemen has embarked on an IMF-supported structural

adjustment program designed to modernize and streamline the economy,

which has led to substantial foreign debt relief and restructuring.

Yemen has worked to maintain tight control over spending and to

implement additional components of the IMF program, but a high

population growth rate and internal political dissension complicate

the government's task. Plans include a diversification of the

economy, encouragement of tourism, and more efficient use of scarce

water resources.

Zambia

Despite progress in privatization and budgetary reform,

Zambia's economic growth remains somewhat below the 5% to 7% needed

to reduce poverty significantly. Privatization of government-owned

copper mines relieved the government from covering mammoth losses

generated by the industry and greatly improved the chances for

copper mining to return to profitability and spur economic growth.

Copper output increased in 2004 and is expected to increase again in

2005, due to higher copper prices and the opening of new mines. The

maize harvest was again good in 2004, helping boost GDP and

agricultural exports. Cooperation continues with international

bodies on programs to reduce poverty, including a new lending

arrangement with the IMF in the second quarter, 2004. A tighter

monetary policy will help cut inflation, but Zambia still has a

serious problem with fiscal discipline.

Zimbabwe

The government of Zimbabwe faces a wide variety of

difficult economic problems as it struggles with an unsustainable

fiscal deficit, an overvalued exchange rate, soaring inflation, and

bare shelves. Its 1998-2002 involvement in the war in the Democratic

Republic of the Congo, for example, drained hundreds of millions of

dollars from the economy. Badly needed support from the IMF has been

suspended because of the country's failure to meet budgetary goals.

Inflation rose from an annual rate of 32% in 1998 to 133% at the end

of 2004, while the exchange rate fell from 24 Zimbabwean dollars per

US dollar to 6,200 in the same time period. The government's land

reform program, characterized by chaos and violence, has badly

damaged the commercial farming sector, the traditional source of

exports and foreign exchange and the provider of 400,000 jobs.

This page was last updated on 20 October, 2005

======================================================================

@2117 Pipelines (km)

Afghanistan

gas 387 km (2004)

Albania

gas 339 km; oil 207 km (2004)

Algeria

condensate 1,344 km; gas 85,946 km; liquid petroleum gas

2,213 km; oil 6,496 km (2004)

Angola

gas 214 km; liquid natural gas 14 km; liquid petroleum gas 30

km; oil 837 km; refined products 56 km (2004)

Argentina

gas 27,166 km; liquid petroleum gas 41 km; oil 3,668 km;

refined products 2,945 km; unknown (oil/water) 13 km (2004)

Armenia

gas 1,871 km (2004)

Australia

condensate/gas 492 km; gas 28,680 km; liquid petroleum gas

240 km; oil 4,773 km; oil/gas/water 110 km (2004)

Austria

gas 2,722 km; oil 663 km; refined products 149 km (2004)

Azerbaijan

gas 4,451 km; oil 1,518 km (2004)

Bahrain

gas 20 km; oil 53 km (2004)

Bangladesh

gas 2,012 km (2004)

Belarus

gas 5,223 km; oil 2,443 km; refined products 1,686 km (2004)

Belgium

gas 1,485 km; oil 158 km; refined products 535 km (2004)

Bolivia

gas 4,860 km; liquid petroleum gas 47 km; oil 2,457 km;

refined products 1,589 km; unknown (oil/water) 247 km (2004)

Brazil

condensate/gas 244 km; gas 10,739 km; liquid petroleum gas

341 km; oil 5,212 km; refined products 4,755 km (2004)

Brunei

gas 665 km; oil 439 km (2004)

Bulgaria

gas 2,425 km; oil 339 km; refined products 156 km (2004)

Burma

gas 2,056 km; oil 558 km (2004)

Cameroon

gas 90 km; liquid petroleum gas 9 km; oil 1,120 km (2004)

Canada

crude and refined oil 23,564 km; liquid petroleum gas 74,980

km (2003)

Chad

oil 205 km (2004)

Chile

gas 2,583 km; gas/lpg 42 km; liquid petroleum gas 539 km; oil

1,003 km; refined products 757 km (2004)

China

gas 15,890 km; oil 14,478 km; refined products 3,280 km (2004)

Colombia

gas 4,360 km; oil 6,134 km; refined products 3,140 km (2004)

Congo, Democratic Republic of the

gas 54 km; oil 71 km (2004)

Congo, Republic of the

gas 53 km; oil 646 km (2004)

Costa Rica

refined products 242 km (2004)

Cote d'Ivoire

condensate 107 km; gas 223 km; oil 104 km (2004)

Croatia

gas 1,340 km; oil 583 km (2004)

Cuba

gas 49 km; oil 230 km (2004)

Czech Republic

gas 7,020 km; oil 547 km; refined products 94 km

(2004)

Denmark

condensate 12 km; gas 3,892 km; oil 455 km; oil/gas/water 2

km; unknown (oil/water) 64 km (2004)

Ecuador

extra heavy crude 578 km; gas 71 km; oil 1,386 km; refined

products 1,185 km (2004)

Egypt

condensate 289 km; condensate/gas 94 km; gas 6,115 km; liquid

petroleum gas 852 km; oil 5,032 km; oil/gas/water 36 km; refined

products 246 km (2004)

Equatorial Guinea

condensate 37 km; gas 39 km; liquid natural gas 4

km; oil 24 km (2004)

Estonia

gas 859 km (2004)

Finland

gas 694 km (2004)

France

gas 14,232 km; oil 3,024 km; refined products 4,889 km (2004)

Gabon

gas 210 km; oil 1,385 km (2004)

Georgia

gas 1,697 km; oil 1,027 km; refined products 232 km (2004)

Germany

condensate 325 km; gas 25,293 km; oil 3,540 km; refined

products 3,827 km (2004)

Ghana

refined products 74 km (2004)

Greece

gas 1,166 km; oil 94 km (2004)

Guatemala

oil 480 km (2004)

Hungary

gas 4,397 km; oil 990 km; refined products 335 km (2004)

India

gas 6,171 km; liquid petroleum gas 1,195 km; oil 5,613 km;

refined products 5,567 km (2004)

Indonesia

condensate 850 km; condensate/gas 128 km; gas 8,506 km;

oil 7,472 km; oil/gas/water 66 km; refined products 1,329 km (2004)

Iran

condensate/gas 212 km; gas 16,998 km; liquid petroleum gas 570

km; oil 8,256 km; refined products 7,808 km (2004)

Iraq

gas 1,739 km; oil 5,418 km; refined products 1,343 km (2004)

Ireland

gas 1,795 km (2004)

Israel

gas 140 km; oil 1,509 km (2004)

Italy

gas 17,335 km; oil 1,136 km (2004)

Japan

gas 2,719 km; oil 170 km; oil/gas/water 60 km (2004)

Jordan

gas 10 km; oil 743 km (2004)

Kazakhstan

condensate 18 km; gas 10,370 km; oil 10,158 km; refined

products 1,187 km (2004)

Kenya

refined products 752 km (2004)

Korea, North

oil 154 km (2004)

Korea, South

gas 1,433 km; refined products 827 km (2004)

Kuwait

gas 169 km; oil 540 km; refined products 57 km (2004)

Kyrgyzstan

gas 367 km; oil 13 km (2004)

Laos

refined products 540 km (2004)

Latvia

gas 1,097 km; oil 409 km; refined products 415 km (2004)

Lebanon

oil 209 km (2004)

Libya

condensate 225 km; gas 3,611 km; oil 7,252 km (2004)

Liechtenstein

gas 20 km (2004)

Lithuania

gas 1,696 km; oil 331 km; refined products 109 km (2004)

Luxembourg

gas 155 km (2004)

Macedonia

gas 268 km; oil 120 km (2004)

Malaysia

condensate 279 km; gas 5,047 km; oil 1,841 km; refined

products 114 km (2004)

Mexico

crude oil 28,200 km; petroleum products 10,150 km; natural

gas 13,254 km; petrochemical 1,400 km (2003)

Moldova

gas 606 km (2004)

Morocco

gas 695 km; oil 285 km (2004)

Mozambique

gas 649 km; refined products 292 km (2004)

Netherlands

condensate 325 km; gas 6,998 km; oil 590 km; refined

products 716 km (2004)

New Zealand

gas 2,213 km; liquid petroleum gas 79 km; oil 160 km;

refined products 304 km (2004)

Nicaragua

oil 54 km (2004)

Nigeria

condensate 105 km; gas 1,896 km; oil 3,638 km; refined

products 3,626 km (2004)

Norway

condensate 411 km; gas 6,199 km; oil 2,213 km; oil/gas/water

746 km; unknown (oil/water) 38 km (2004)

Oman

gas 3,754 km; oil 3,212 km (2004)

Pakistan

gas 9,945 km; oil 1,821 km (2004)

Papua New Guinea

oil 264 km (2004)

Peru

gas 388 km; oil 1,557 km; refined products 13 km (2004)

Philippines

gas 565 km; oil 135 km; refined products 100 km (2004)

Poland

gas 13,552 km; oil 1,772 km (2004)

Portugal

gas 1,099 km; oil 8 km; refined products 174 km (2004)

Qatar

condensate 319 km; condensate/gas 209 km; gas 1,024 km; liquid

petroleum gas 87 km; oil 702 km; oil/gas/water 41 km (2004)

Romania

gas 3,508 km; oil 2,427 km (2004)

Russia

condensate 122 km; gas 150,007 km; oil 75,539 km; refined

products 13,771 km (2004)

Saudi Arabia

condensate 212 km; gas 1,780 km; liquid petroleum gas

1,191 km; oil 5,068 km; refined products 1,162 km (2004)

Senegal

gas 564 km (2004)

Serbia and Montenegro

gas 3,177 km; oil 393 km (2004)

Singapore

gas 139 km (2004)

Slovakia

gas 6,769 km; oil 449 km (2004)

Slovenia

gas 2,526 km; oil 11 km (2004)

South Africa

condensate 100 km; gas 1,052 km; oil 847 km; refined

products 1,354 km (2004)

Spain

gas 7,306 km; oil 730 km; refined products 3,512 km (2004)

Sudan

gas 156 km; oil 2,365 km; refined products 810 km (2004)

Suriname

oil 51 km (2004)

Sweden

gas 798 km (2004)

Switzerland

gas 1,831 km; oil 94 km; refined products 7 km (2004)

Syria

gas 2,300 km; oil 2,183 km (2004)

Taiwan

condensate 25 km; gas 435 km (2004)

Tajikistan

gas 541 km; oil 38 km (2004)

Tanzania

gas 29 km; oil 866 km (2004)

Thailand

gas 3,112 km; refined products 265 km (2004)

Trinidad and Tobago

condensate 253 km; gas 1,117 km; oil 478 km

(2004)

Tunisia

gas 3,059 km; oil 1,203 km; refined products 345 km (2004)

Turkey

gas 3,177 km; oil 3,562 km (2004)

Turkmenistan

gas 6,549 km; oil 1,395 km (2004)

Ukraine

gas 20,069 km; oil 4,540 km; refined products 4,169 km (2004)

United Arab Emirates

condensate 469 km; gas 2,655 km; liquid

petroleum gas 300 km; oil 2,936 km; oil/gas/water 5 km (2004)

United Kingdom

condensate 370 km; gas 21,446 km; liquid petroleum

gas 59 km; oil 6,420 km; oil/gas/water 63 km; refined products 4,474

km (2004)

United States

petroleum products 244,620 km; natural gas 548,665 km

(2003)

Uruguay

gas 192 km (2004)

Uzbekistan

gas 9,149 km; oil 869 km; refined products 33 km (2004)

Venezuela

extra heavy crude 992 km; gas 5,262 km; oil 7,360 km;

refined products 1,681 km; unknown (oil/water) 141 km (2004)

Vietnam

condensate/gas 432 km; gas 210 km; oil 3 km; refined

products 206 km (2004)

Yemen

gas 88 km; oil 1,174 km (2004)

Zambia

oil 771 km (2004)

Zimbabwe

refined products 261 km (2004)

This page was last updated on 20 October, 2005

======================================================================

@2118 Political parties and leaders

Afghanistan

note - includes only political parties approved by the

Ministry of Justice: Afghan Millat [Anwarul Haq AHADI]; De

Afghanistan De Solay Ghorzang Gond [Shahnawaz TANAI]; De Afghanistan

De Solay Mili Islami Gond [Shah Mahmood Polal ZAI]; Harakat-e-Islami

Afghanistan [Mohammad Asif MOHSINEE];

Hezb-e-Aarman-e-Mardum-e-Afghanistan [Iihaj Saraj-u-din ZAFAREE];

Hezb-e-Aazadee Afghanistan [Abdul MALIK]; Hezb-e-Adalat-e-Islami

Afghanistan [Mohammad Kabeer MARZBAN]; Hezb-e-Afghanistan-e-Wahid

[Mohammad Wasil RAHEEMEE]; Hezb-e-Afghan Watan Islami Gond [leader

NA]; Hezb-e-Congra-e-Mili Afghanistan [Latif PEDRAM];

Hezb-e-Falah-e-Mardum-e-Afghanistan [Mohammad ZAREEF];

Hezb-e-Libral-e-Aazadee Khwa-e-Mardum-e-Afghanistan [Ajmal SOHAIL];

Hezb-e-Hambastagee Mili Jawanan-e-Afghanistan [Mohammad Jamil

KARZAI]; Hezb-e-Hamnbatagee-e-Afghanistan [Abdul Khaleq NEMAT];

Hezb-e-Harakat-e-Mili Wahdat-e-Afghanistan [Mohammad Nadir AATASH];

Hezb-e-Harak-e-Islami Mardum-e-Afghanistan [Ilhaj Said Hssain

ANWARY]; Hezb-e-Ifazat Az Uqoq-e-Bashar Wa Inkishaf-e-Afghanistan

[Baryalai NASRATEE]; Hezb-e-Istiqlal-e-Afghanistan [Dr. Gh. Farooq

NIJZRABEE]; Hezb-e-Jamhoree Khwahan [Sibghatullah SANJAR];

Hezb-e-Kar Wa Tawsiha-e-Afghanistan [Zulfiar OMID]; Hezb-e-Mili

Afghanistan [Abdul Rasheed AARYAN]; Hezb-e-Mili

Wahdat-e-Aqwam-e-Islami Afghanistan [Mohammad Shah KHOGYANEE];

Hezb-e-Nuhzhat-e-Mili Afghanistan [Ahmad Wali MASOUD];

Hezb-e-Paiwand-e-Mili Afghanistan [Said Mansoor NADIRI];

Hezb-e-Rastakhaiz-e-Islami Mardum-e-Afghanistan [Said ZAHIR];

Hezb-e-Refah-e-Mardum-e-Afghanistan [Mia Gul WASEEQ];

Hezb-e-Risalat-e-Mardum-e-Afghanistan [Noor Aqa ROEEN];

Hezb-e-Sahadat-e-Mardum-e-Afghanistan [Mohammad Zubair PAIROZ];

Hezb-e-Sahadat-e-Mili Wa Islami Afghanistan [Mohammad Usman

SALIGZADA]; Hezb-e-Sulh-e-Mili Islami Aqwam-e-Afghanistan [Abdul

Qahir SHARYATEE]; Hezb-e-Sulh Wa Wahdat-e-Mili Afghanistan [Abdul

Qadir IMAMEE]; Hezb-e-Tafahum-e-Wa Democracy Afghanistan [Ahamad

SHAHEEN]; Hezb-e-Wahdat-e-Islami Afghanistan [Mohammad Karim

KHALILI]; Hezb-e-Wahdat-e-Islami Mardum-e-Afghanistan [Ustad

Mohammad MOHAQQEQ]; Hezb-e-Wahdat-e-Mili Afghanistan [Abdul Rasheed

Jalili]; Jamahat-ul-Dahwat ilal Qurhan-wa-Sunat-ul-Afghanistan

[Mawlawee Samiullah NAJEEBEE]; Jombesh-e Milli [Abdul Rashid

DOSTAM]; Mahaz-e-Mili Islami Afghanistan [Said Ahmad GAILANEE];

Majmah-e-Mili Fahaleen-e-Sulh-e-Afghanistan [Shams ul Haq Noor

SHAMS]; Nuhzat-e-Aazadee Wa democracy Afghanistan [Abdul Raqeeb

Jawid KUHISTANEE]; Nuhzat-e-Hambastagee Mili Afghanistan [Peer Said

Ishaq GAILANEE]; Sazman-e-Islami Afghanistan-e-Jawan [Siad Jawad

HUSSAINEE]; Tahreek Wahdat-e-Mili [Sultan Mahmood DHAZI] (30 Sep

2004)

Albania

Agrarian Environmentalist Party or PAA [Lufter XHUVELI];

Christian Democratic Party or PDK [Nikolle LESI]; Communist Party of

Albania or PKSH [Hysni MILLOSHI]; Democratic Alliance Party or PAD

[Neritan CEKA]; Democratic Party or PD [Sali BERISHA]; Legality

Movement Party or PLL [Ekrem SPAHIU]; Liberal Union Party or PBL

[Arjan STAROVA]; National Front Party (Balli Kombetar) or PBK

[Adriatik ALIMADHI]; New Democratic Party or PDR [Genc POLLO]; Party

of National Unity or PUK [Idajet BEQIRI]; Renewed Democratic Party

or PDR [Dashamir SHEHI]; Republican Party or PR [Fatmir MEDIU];

Social Democracy Party or PDS [Paskal MILO]; Social Democratic Party

or PSD [Skender GJINUSHI]; Socialist Movement for Integration or LSI

[Ilir META]; Socialist Party or PS (formerly the Albanian Party of

Labor) [Fatos NANO]; Union for Human Rights Party or PBDNJ [Vangjel

DULE]

Algeria

Algerian National Front or FNA [Moussa TOUATI]; Democratic

National Rally or RND [Ahmed OUYAHIA, chairman]; Islamic Salvation

Front or FIS (outlawed April 1992) [Ali BELHADJ and Dr. Abassi

MADANI, Rabeh KEBIR (self-exiled in Germany)]; National Entente

Movement or MEN [Ali BOUKHAZNA]; National Liberation Front or FLN

[Abdelaziz BELKHADEM, secretary general (also serves as Foreign

Minister)]; National Reform Movement or Islah (formerly MRN)

[Abdellah DJABALLAH]; National Renewal Party or PRA [Yacine

TERKMANE]; Progressive Republican Party [Khadir DRISS]; Rally for

Culture and Democracy or RCD [Said SAADI, secretary general];

Renaissance Movement or EnNahda Movement [Fatah RABEI]; Socialist

Forces Front or FFS [Hocine Ait AHMED, secretary general

(self-exiled in Switzerland)]; Social Liberal Party or PSL [Ahmed

KHELIL]; Society of Peace Movement or MSP [Boujerra SOLTANI];

Workers Party or PT [Louisa HANOUN]

note: a law banning political parties based on religion was enacted

in March 1997

American Samoa

Democratic Party [Oreta M. TOGAFAU]; Republican Party

[Tautai A. F. FAALEVAO]

Andorra

Andorran Democratic Center Party or CDA (formerly Democratic

Party or PD) [leader NA]; Liberal Party of Andorra or PLA (formerly

Liberal Union or UL) [Albert PINTAT]; Social Democratic Party or PS

(formerly part of National Democratic Group or AND) [Mariona

GONZALEZ REOLIT]

Angola

Liberal Democratic Party or PLD [Analia de Victoria PEREIRA];

National Front for the Liberation of Angola or FNLA [disputed

leadership: Lucas NGONDA, Holden ROBERTO]; National Union for the

Total Independence of Angola or UNITA [Isaias SAMAKUVA], largest

opposition party has engaged in years of armed resistance; Popular

Movement for the Liberation of Angola or MPLA [Jose Eduardo DOS

SANTOS], ruling party in power since 1975; Social Renewal Party or

PRS [disputed leadership: Eduardo KUANGANA, Antonio MUACHICUNGO]

note: about a dozen minor parties participated in the 1992 elections

but only won a few seats and have little influence in the National

Assembly

Anguilla

Anguilla United Movement or AUM [Hubert HUGHES]; The

Anguilla United Front or AUF [Osbourne FLEMING, Victor BANKS], a

coalition of the Anguilla Democratic Party or ADP and the Anguilla

National Alliance or ANA; Anguilla Progressive Party or APP [Roy

ROGERS]; Anguilla Strategic Alternative or ANSA [Edison BAIRD]

Antigua and Barbuda

Antigua Labor Party or ALP [Lester Bryant BIRD];

Barbuda People's Movement or BPM [Thomas H. FRANK]; United

Progressive Party or UPP [Baldwin SPENCER] (a coalition of three

opposition parties - United National Democratic Party or UNDP,

Antigua Caribbean Liberation Movement or ACLM, and Progressive Labor

Movement or PLM)

Argentina

Action for the Republic or AR [Domingo CAVALLO];

Alternative for a Republic of Equals or ARI [Elisa CARRIO]; Federal

Recreate Movement or RECREAR [Ricardo LOPEZ MURPHY]; Front for a

Country in Solidarity or Frepaso (a four-party coalition) [Dario

Pedro ALESSANDRO]; Interbloque Federal or IF (a broad coalition of

approximately 12 parties including RECREAR) [leader NA];

Justicialist Party or PJ (Peronist umbrella political organization)

[leader NA]; Radical Civic Union or UCR [Angel ROZAS]; Socialist

Party or PS [Ruben GIUSTINIANI]; Union For All [Patricia BULLRICH];

several provincial parties

Armenia

Agro-Industrial Party [Vladimir BADALIAN]; Armenia Party

[Myasnik MALKHASYAN]; Armenian National Movement or ANM [Alex

ARZUMANYAN, chairman]; Armenian Ramkavar Liberal Party or HRAK

[Harutyun MIRZAKHANYAN, chairman]; Armenian Revolutionary Federation

("Dashnak" Party) or ARF [Vahan HOVHANISSIAN]; Democratic Party

[Aram SARKISYAN]; Justice Bloc (comprised of the Democratic Party,

National Democratic Party, National Democratic Union, and the

People's Party) [Stepan DEMIRCHYAN]; National Democratic Party

[Shavarsh KOCHARIAN]; National Democratic Union or NDU [Vazgen

MANUKIAN]; National Unity Party [Artashes GEGAMIAN, chairman];

People's Party of Armenia [Stepan DEMIRCHYAN]; Republic Party

[Albert BAZEYAN and Aram SARKISYAN, chairmen]; Republican Party or

RPA [Andranik MARKARYAN]; Rule of Law Party [Artur BAGDASARIAN,

chairman]; Union of Constitutional Rights [Hrant KHACHATURYAN];

United Labor Party [Gurgen ARSENIAN]

Aruba

Aliansa/Aruban Social Movement or MSA [Robert WEVER]; Aruban

Liberal Organization or OLA [Glenbert CROES]; Aruban Patriotic

Movement or MPA [Monica ARENDS-KOCK]; Aruban Patriotic Party or PPA

[Benny NISBET]; Aruban People's Party or AVP [Mike EMAN]; People's

Electoral Movement Party or MEP [Nelson O. ODUBER]; Real Democracy

or PDR [Andin BIKKER]; RED [Rudy LAMPE]; Workers Political Platform

or PTT [Gregorio WOLFF]

Australia

Australian Democrats [Lyn ALLISON]; Australian Labor Party

[Kim BEAZLEY]; Australian Progressive Alliance [Meg LEES];

Australian Greens [Bob BROWN]; Liberal Party [John Winston HOWARD];

The Nationals [Mark VAILE]; One Nation Party [Len HARRIS]; Family

First Party [Steve FIELDING]

Austria

Alliance for the Future of Austria or BZOe [Joerg HAIDER];

Austrian People's Party or OeVP [Wolfgang SCHUESSEL]; Freedom Party

of Austria or FPOe [Heinz Christian STRACHE]; Social Democratic

Party of Austria or SPOe [Alfred GUSENBAUER]; The Greens [Alexander

VAN DER BELLEN]

Azerbaijan

Azerbaijan Popular Front or APF [Ali KARIMLI, leader of

"Reform" faction; Mirmahmud MIRALI-OGLU, leader of "Classic"

faction]; Civic Solidarity Party or CSP [Sabir RUSTAMKHANLY]; Civic

Union Party [Ayaz MUTALIBOV]; Communist Party of Azerbaijan or CPA

[Ramiz AHMADOV]; Compatriot Party [Mais SAFARLI]; Democratic Party

for Azerbaijan or DPA [Rasul QULIYEV, chairman]; Justice Party

[Ilyas ISMAILOV]; Liberal Party of Azerbaijan [Lala Shovkat

HACIYEVA]; Musavat [Isa GAMBAR, chairman]; New Azerbaijan Party or

NAP [vacant]; Party for National Independence of Azerbaijan or PNIA

[Etibar MAMMADLI, chairman]; Social Democratic Party of Azerbaijan

or SDP [Araz ALIZADE and Ayaz MUTALIBOV]

note: opposition parties regularly factionalize and form new parties

Bahamas, The

Free National Movement or FNM [Tommy TURNQUEST];

Progressive Liberal Party or PLP [Perry CHRISTIE]

Bahrain

political parties prohibited but politically oriented

societies are allowed

Bangladesh

Awami League or AL [Sheikh HASINA]; Bangladesh Communist

Party or BCP [Saifuddin Ahmed MANIK]; Bangladesh Nationalist Party

or BNP [Khaleda ZIA, chairperson]; Islami Oikya Jote or IOJ [Mufti

Fazlul Haq AMINI]; Jamaat-e-Islami or JI [Motiur Rahman NIZAMI];

Jatiya Party or JP (Ershad faction) [Hussain Mohammad ERSHAD];

Jatiya Party (Manzur faction) [Naziur Rahman MANZUR]

Barbados

Barbados Labor Party or BLP [Owen ARTHUR]; Democratic Labor

Party or DLP [Clyde Mascoll]

Belarus

Pro-government parties: Agrarian Party or AP [leader NA];

Belarusian Communist Party or KPB [leader NA]; Belarusian Patriotic

Movement (Belarusian Patriotic Party) or BPR [Anatoliy BARANKEVICH,

chairman]; Liberal Democratic Party of Belarus [Sergei GAYDUKEVICH];

Social-Sports Party [leader NA]; Opposition parties: Belarusian

Popular Front or BNF [Vintsuk VYACHORKA]; Belarusian Social-Democrat

Party Narodnaya Gromada or BSDP NG [Nikolay STATKEVICH, chairman];

Belarusian Social-Democratic Party Hromada [Stanislav SHUSHKEVICH,

chairman]; United Civic Party or UCP [Anatol LEBEDKO]; Party of

Communists Belarusian or PKB [Sergei KALYAKIN, chairman]; Women's

Party "Nadezhda" [Valentina MATUSEVICH, chairperson]

note: the opposition Belarusian Party of Labor [Aleksandr

BUKHVOSTOV] was liquidated in August 2004, but remains active

Belgium

Flemish parties: Christian Democrats and Flemish or CD & V

[Jo VANDEURZEN]; Flemish Liberal Democrats or VLD [Bart SOMERS];

GROEN! (formerly AGALEV, Flemish Greens) [Vera DUA]; New Flemish

Alliance or NVA [Bart DE WEVER]; Socialist Party.Alternative or SP.A

[Caroline GENNEZ]; Spirit [Geert LAMBERT] (new party now associated

with SP.A); Vlaams Belang (Flemish Interest) or VB [Frank VANHECKE]

Francophone parties: Ecolo (Francophone Greens) [Jean-Michel JAVAUX,

Evelyne HUYTEBROECK, Claude BROUIR]; Humanist and Democratic Center

of CDH [Joelle MILQUET]; National Front or FN [Daniel FERET];

Reformist Movement or MR [Didier REYNDERS]; Socialist Party or PS

[Elio DI RUPO]; other minor parties

Belize

People's United Party or PUP [Said MUSA]; United Democratic

Party or UDP [Dean BARROW, party leader; Douglas SINGH, party

chairman]

Benin

African Congress for Renewal or DUNYA [Saka SALEY]; African

Movement for Democracy and Progress or MADEP [Sefou FAGBOHOUN];

Alliance of the Social Democratic Party or PSD [Bruno AMOUSSOU];

Coalition of Democratic Forces [Gatien HOUNGBEDJI]; Democratic

Renewal Party or PRD [Adrien HOUNGBEDJI]; Front for Renewal and

Development or FARD-ALAFIA [Jerome Sakia KINA]; Impulse for Progress

and Democracy or IPD [Bertin BORNA]; Key Force or FC [leader NA];

Presidential Movement (UBF, MADEP, FC, IDP, and four small parties);

Renaissance Party du Benin or PRB [Nicephore SOGLO]; The Star

Alliance (Alliance E'toile) [Sacca LAFIA]; Union of Tomorrow's Benin

or UBF [Bruno AMOUSSOU]

note: approximately 20 additional minor parties

Bermuda

Progressive Labor Party or PLP [William Alexander SCOTT];

United Bermuda Party or UBP [Grant GIBBONS]

Bhutan

no legal parties

Bolivia

Bolivian Socialist Falange or FSB [Romel PANTOJA]; Civic

Solidarity Union or UCS [Johnny FERNANDEZ]; Free Bolivia Movement or

MBL [Franz BARRIOS]; Marshal of Ayacucho Institutional Vanguard or

VIMA [Freddy ZABALA]; Movement of the Revolutionary Left or MIR

[Jaime PAZ Zamora]; Movement Toward Socialism or MAS [Evo MORALES];

Movement Without Fear or MSM [Juan DEL GRANADO]; Nationalist

Democratic Action or ADN [Jorge Fernando QUIROGA Ramirez];

Nationalist Revolutionary Movement or MNR [leader NA]; New

Republican Force or NFR [Manfred REYES-VILLA]; Pachakuti Indigenous

Movement or MIP [Felipe QUISPE]; Socialist Party or PS [Jeres

JUSTINIANO]

Bosnia and Herzegovina

Alliance of Independent Social Democrats or

SNSD [Milorad DODIK]; Bosnian Party or BOSS [Mirnes AJANOVIC]; Civic

Democratic Party or GDS [Ibrahim SPAHIC]; Croatian Democratic Union

of Bosnia and Herzegovina or HDZ-BH [Barisa COLAK]; Croat Christian

Democratic Union of Bosnia and Herzegovina or HKDU [Mijo

IVANIC-LONIC]; Croat Party of Rights or HSP [Zdravko HRISTIC]; Croat

Peasants Party or HSS [Marko TADIC]; Democratic National Union or

DNZ [Fikret ABDIC]; Liberal Democratic Party or LDS [Rasim KADIC];

New Croat Initiative or NHI [Kresimir ZUBAK]; Party for Bosnia and

Herzegovina or SBiH [Safet HALILOVIC]; Party of Democratic Action or

SDA [Sulejman TIHIC]; Party of Democratic Progress or PDP [Mladen

IVANIC]; Serb Democratic Party or SDS [Dragan CAVIC - acting]; Serb

Radical Party of the Republika Srpska or SRS-RS [Milanko MIHAJLICA];

Serb Radical Party-Dr. Vojislav Seselj or SRS-VS [Radislav

KANJERIC]; Social Democratic Party of BIH or SDP [Zlatko

LAGUMDZIJA]; Social Democratic Union or SDU [Miro LAZOVIC];

Socialist Party of Republika Srpska or SPRS [Petar DJOKIC]

Botswana

Botswana Democratic Party or BDP [Festus G. MOGAE];

Botswana National Front or BNF [Otswoletse MOUPO]; Botswana Congress

Party or BCP [Otlaadisa KOOSALETSE]; Botswana Alliance Movement or

BAM [Ephraim Lepetu SETSHWAELO]

note: a number of minor parties joined forces in 1999 to form the

BAM but did not capture any parliamentary seats; the BAM parties

are: the United Action Party [Ephraim Lepetu SETSHWAELO]; the

Independence Freedom Party or IFP [Motsamai MPHO]; and the Botswana

Progressive Union [D. K. KWELE]

Brazil

Brazilian Democratic Movement Party or PMDB [Federal Deputy

Michel TEMER]; Brazilian Labor Party or PTB [Federal Deputy Roberto

JEFFERSON]; Brazilian Social Democracy Party or PSDB [Senator

Eduardo AZAREDO]; Brazilian Socialist Party or PSB [Federal Deputy

Miguel ARRAES]; Communist Party of Brazil or PCdoB [Renato RABELO];

Democratic Labor Party or PDT [Carlos LUPI]; Democratic Socialist

Party or PSD [Pedro Miguel SANTANA LOPES]; Green Party or PV [Jose

Luiz de Franca PENNA]; Liberal Front Party or PFL [Senator Jorge

BORNHAUSEN]; Liberal Party or PL [Federal Deputy Valdemar COSTA

Neto]; National Order Reconstruction Party or PRONA [Federal Deputy

Dr. Eneas CARNEIRO]; Popular Socialist Party or PPS [Federal Deputy

Roberto FREIRE]; Progressive Party or PP [Federal Deputy Pedro

CORREA]; Social Christian Party or PSC [Vitor Jorge ABDALA NOSSEIS];

Worker's Party or PT [Jose GENOINO]

British Virgin Islands

Concerned Citizens Movement or CCM [Ethlyn

SMITH]; National Democratic Party or NDP [Orlando SMITH]; United

Party or UP [Gregory MADURO]; Virgin Islands Party or VIP [Ralph T.

O'NEAL]

Brunei

National Development Party (NDP) [Yassin AFFENDI]; National

Unity Party of Brunei (PPKB) [leader NA]; People's Awareness Party

(PAKAR) [leader NA]

note: parties are small and inactive (2005)

Bulgaria

Attack National Union [Volen Siderov]; ATAKA (Attack

Coalition) (coalition of parties headed by the Attack National

Union); Bulgarian Agrarian National Union-People's Union or BANU

[Anastasia MOZER]; Bulgarian People's Union or BPU (coalition of

UFD, IMRO, and BANU); Bulgarian Socialist Party or BSP [Sergei

STANISHEV]; Coalition for Bulgaria or CfB (coalition of parties

dominated by BSP) [Sergei STANISHEV]; Democrats for a Strong

Bulgaria or DSB [Ivan KOSTOV]; Internal Macedonian Revolutionary

Organization or IMRO [Krasimir KARAKACHANOV]; Movement for Rights

and Freedoms or MRF [Ahmed DOGAN]; National Movement for Simeon II

or NMS2 [Simeon SAXE-COBURG-GOTHA]; New Time [Emil KOSHLUKOV]; Union

of Democratic Forces or UDF [Nadezhda MIKHAYLOVA]; Union of Free

Democrats or UFD [Stefan SOFIYANSKI]; United Democratic Forces or

UtDF (a coalition of center-right parties dominated by UDF)

Burkina Faso

African Democratic Rally-Alliance for Democracy and

Federation or RDA-ADF [Herman YAMEOGO]; Confederation for Federation

and Democracy or CFD [Amadou Diemdioda DICKO]; Congress for

Democracy and Progress or CDP [Roch Marc-Christian KABORE]; Movement

for Tolerance and Progress or MTP [Nayabtigungou Congo KABORE];

Party for African Independence or PAI [Philippe OUEDRAOGO]; Party

for Democracy and Progress or PDP [Joseph KI-ZERBO]; Socialist Party

or PS [leader NA]; Union of Greens for the Development of Burkina

Faso or UVDB [Ram OVEDRAGO]

Burma

National League for Democracy or NLD [AUNG SHWE, chairman,

AUNG SAN SUU KYI, general secretary]; National Unity Party or NUP

(pro-government) [THA KYAW]; Shan Nationalities League for Democracy

or SNLD [KHUN HTUN OO]; and other smaller parties

Burundi

the three national, mainstream, governing parties are: Unity

for National Progress or UPRONA [Jean-Baptiste MANWANGARI, secretary

general]; Burundi Democratic Front or FRODEBU [Jean MINANI,

president]; National Council for the Defense of Democracy, Front for

the Defense of Democracy of CNDD-FDD [Pierre NKURUNZIZA, president]

note: a multiparty system was introduced after 1998, included are:

National Resistance Movement for the Rehabilitation of the Citizen

or MRC-Rurenzangemero [Epitace BANYAGANAKANDI]; Party for National

Redress or PARENA [Jean-Baptiste BAGAZA]

Cambodia

Cambodian Pracheachon Party (Cambodian People's Party) or

CPP [CHEA SIM]; National United Front for an Independent, Neutral,

Peaceful, and Cooperative Cambodia or FUNCINPEC [Prince NORODOM

Ranariddh]; Sam Rangsi Party or SRP [SAM RANGSI]

Cameroon

Cameroonian Democratic Union or UDC [Adamou NDAM NJOYA];

Democratic Rally of the Cameroon People or RDCP [Paul BIYA];

Movement for the Defense of the Republic or MDR [Dakole DAISSALA];

Movement for the Liberation and Development of Cameroon or MLDC

[leader Marcel YONDO]; Movement for the Youth of Cameroon or MYC

[Dieudonne TINA]; National Union for Democracy and Progress or UNDP

[Maigari BELLO BOUBA]; Social Democratic Front or SDF [John FRU

NDI]; Union of Cameroonian Populations or UPC [Augustin Frederic

KODOCK]

Canada

Bloc Quebecois [Gilles DUCEPPE]; Conservative Party of Canada

(a merger of the Canadian Alliance and the Progressive Conservative

Party) [Stephen HARPER]; Green Party [Jim HARRIS]; Liberal Party

[Paul MARTIN]; New Democratic Party [Jack LAYTON]

Cape Verde

African Party for Independence of Cape Verde or PAICV

[Jose Maria Pereira NEVES, chairman]; Democratic Alliance for Change

or ADM [Dr. Eurico MONTEIRO] (a coalition of PCD, PTS, and UCID);

Democratic Christian Party or PDC [Manuel RODRIGUES, chairman];

Democratic Renovation Party or PRD [Jacinto SANTOS, president];

Movement for Democracy or MPD [Agostinho LOPES, president]; Party

for Democratic Convergence or PCD [Dr. Eurico MONTEIRO, president];

Party of Work and Solidarity or PTS [Isaias RODRIGUES, president];

Social Democratic Party or PSD [Joao ALEM, president]

Cayman Islands

no national teams (loose groupings of political

organizations) were formed for the 2000 elections; United Democratic

Party or UDP [leader McKeeva BUSH]; People's Progressive Movement or

PPM [leader Kurt TIBBETTS]

Central African Republic

Alliance for Democracy and Progress or ADP

[Jacques MBOLIEDAS]; Central African Democratic Assembly or RDC

[Andre KOLINGBA]; Civic Forum or FC [Gen. Timothee MALENDOMA];

Democratic Forum for Modernity or FODEM [Charles MASSI]; Liberal

Democratic Party or PLD [Nestor KOMBO-NAGUEMON]; Movement for

Democracy and Development or MDD [David DACKO]; Movement for the

Liberation of the Central African People or MLPC [the party of

deposed president, Ange-Felix PATASSE]; Patriotic Front for Progress

or FPP [Abel GOUMBA]; People's Union for the Republic or UPR [Pierre

Sammy MAKFOY]; National Unity Party or PUN [Jean-Paul NGOUPANDE];

Social Democratic Party or PSD [Enoch LAKOUE]

Chad

Federation Action for the Republic or FAR [Ngarlejy YORONGAR];

National Rally for Development and Progress or RNDP [Mamadou BISSO];

National Union for Democracy and Renewal or UNDR [Saleh KEBZABO];

Patriotic Salvation Movement or MPS [Mahamat Saleh AHMAT, chairman];

Rally for Democracy and Progress or RDP [Lol Mahamat CHOUA]; Union

for Renewal and Democracy or URD [Gen. Wadal Abdelkader KAMOUGUE];

Viva Rally for Development and Progress or Viva RNDP [Delwa Kassire

COUMAKOYE]

Chile

Alliance for Chile ("Alianza") or APC (including National

Renewal or RN [Sebastian PINERA] and Independent Democratic Union or

UDI [Pablo LONGUEIRA]); Coalition of Parties for Democracy

("Concertacion") or CPD (including Christian Democratic Party or PDC

[Adolfo ZALDIVAR], Socialist Party or PS [Gonzalo MARTNER], Party

for Democracy or PPD [Victor BARRUETO], Radical Social Democratic

Party or PRSD [Orlando CANTUARIAS]); Communist Party or PC [Gladys

MARIN]

China

Chinese Communist Party or CCP [HU Jintao, General Secretary

of the Central Committee]; eight registered small parties controlled

by CCP

Christmas Island

none

Cocos (Keeling) Islands

none

Colombia

Colombian Communist Party or PCC [Jaime CAICEDO];

Conservative Party or PSC [Carlos HOLGUIN Sardi]; Democratic Pole or

PDI [Samuel MORENO Rojas]; Liberal Party or PL [Juan Fernando CRISTO]

note: Colombia has about 60 formally recognized political parties,

most of which do not have a presence in either house of Congress

Comoros

Forces pour l'Action Republicaine or FAR [Col. Abdourazak

ABDULHAMID]; Forum pour la Redressement National or FRN (alliance of

12 parties); Front Democratique or FD [Moustoifa Said CHEIKH]; Front

National pour la Justice or FNJ (Islamic party in opposition) [Ahmed

RACHID]; Movement des Citoyens pour la Republique or MCR [Mahamoud

MRADABI]; Mouvement Populaire Anjouanais or MPA (Anjouan separatist

movement) [leader NA]; Mouvement pour la Democratie et le Progress

or MDP-NGDC [Abbas DJOUSSOUF]; Movement pour le Socialisme et la

Democratie or MSD (splinter group of FD) [Abdou SOEFOU]; Parti

Comorien pour la Democratie et le Progress or PCDP [Ali MROUDJAE];

Rassemblement National pour le Development or RND (party of the

government) [Omar TAMOU, Abdoulhamid AFFRAITANE]

Congo, Democratic Republic of the

Democratic Social Christian Party

or PDSC [Andre BO-BOLIKO]; Forces for Renovation for Union and

Solidarity or FONUS [Joseph OLENGHANKOY]; National Congolese

Lumumbist Movement or MNC [Francois LUMUMBA]; Popular Movement of

the Revolution or MPR (three factions: MPR-Fait Prive [Catherine

NZUZI wa Mbombo]; MPR/Vunduawe [Felix VUNDUAWE]; MPR/Mananga

[MANANGA Dintoka Mpholo]); Unified Lumumbast Party or PALU [Antoine

GIZENGA]; Union for Democracy and Social Progress or UDPS [Etienne

TSHISEKEDI wa Mulumba]; Union of Federalists and Independent

Republicans or UFERI (two factions: UFERI [Lokambo OMOKOKO];

UFERI/OR [Adolph Kishwe MAYA])

Congo, Republic of the

the most important of the many parties are

the Democratic and Patriotic Forces or FDP (an alliance of

Convention for Alternative Democracy, Congolese Labor Party or PCT,

Liberal Republican Party, National Union for Democracy and Progress,

Patriotic Union for the National Reconstruction, and Union for the

National Renewal) [Denis SASSOU-NGUESSO, president]; Congolese

Movement for Democracy and Integral Development or MCDDI [Michel

MAMPOUYA]; Pan-African Union for Social Development or UPADS [Martin

MBERI]; Rally for Democracy and Social Progress or RDPS [Jean-Pierre

Thystere TCHICAYA, president]; Rally for Democracy and the Republic

or RDR [Raymond Damasge NGOLLO]; Union for Democracy and Republic or

UDR [leader NA]; Union of Democratic Forces or UFD [Sebastian EBAO]

Cook Islands

Cook Islands People's Party or CIP [Geoffrey HENRY];

Democratic Alliance Party or DAP [Terepai MAOATE]; New Alliance

Party or NAP [Norman GEORGE]; Cook Islands National Party or CIN

[Teariki HEATHER]; Demo Party Tumu [Robert WOONTON]

Costa Rica

Authentic Member from Heredia [Jose SALAS]; Citizen

Action Party or PAC [Otton SOLIS]; Costa Rican Renovation Party or

PRC [Justo OROZCO]; Democratic Force Party or PFD [Juan Carlos

CHAVES Mora]; Democratic National Alliance [Emilia RODRIGUEZ];

General Union Party or PUGEN [Carlos Alberto FERNANDEZ Vega];

Homeland First [Juan Jose VARGAS]; Independent Worker Party or PIO

[Jose Alberto CUBERO Carmona]; Libertarian Movement Party or PML

[Otto GUEVARA Guth]; National Christian Alliance Party or ANC

[Victor GONZALEZ]; National Integration Party or PIN [Walter MUNOZ

Cespedes]; National Liberation Party or PLN [Francisco Antonio

PACHECO]; National Patriotic Party or PPN [Daniel Enrique REYNOLDS

Vargas]; National Rescue Party or PRN [Carlos VARGAS Solano];

Patriotic Union [Humberto ARCE]; Popular Vanguard [Trino BARRANTES

Araya]; Social Christian Unity Party or PUSC [Lorena VASQUEZ Badilla]

Cote d'Ivoire

Citizen's Democratic Union or UDCY [Eg Theodore MEL];

Democratic Party of Cote d'Ivoire-African Democratic Rally or

PDCI-RDA [Henri Konan BEDIE]; Ivorian Popular Front or FPI [Laurent

GBAGBO]; Ivorian Worker's Party or PIT [Francis WODIE]; Rally of the

Republicans or RDR [Alassane OUATTARA]; Union for Democracy and

Peace or UDPCI [Paul Akoto YAO]; over 20 smaller parties

Croatia

Croatian Bloc or HB [Ivic PASALIC]; Croatian Christian

Democratic Union or HKDU [Anto KOVACEVIC]; Croatian Democratic Union

or HDZ [Ivo SANADER]; Croatian Party of Rights or HSP [Anto DJAPIC];

Croatian Peasant Party or HSS [Zlatko TOMCIC]; Croatian Pensioner

Party or HSU [Vladimir JORDAN]; Croatian People's Party or HNS

[Vesna PUSIC] (in 2005 party merged with Libra to become Croatian

People's Party-Liberal Democrats or NS-LD [Vesna PUSIC]); Croatian

Social Liberal Party or HSLS [Ivan CEHOK]; Croatian True Revival

Party or HIP [Miroslav TUDJMAN]; Democratic Centre or DC [Vesna

SKARE-OZBOLT]; Independent Democratic Serb Party or SDSS [Vojislav

STANIMIROVIC]; Istrian Democratic Assembly or IDS [Ivan JAKOVCIC];

Liberal Party or LS [Zlatko BENASIC]; Party of Liberal Democrats or

Libra [Jozo RADOS] (in 2005 merged with HNS); Social Democratic

Party of Croatia or SDP [Ivica RACAN]

Cuba

only party - Cuban Communist Party or PCC [Fidel CASTRO Ruz,

first secretary]

Cyprus

Republic of Cyprus: Democratic Party or DIKO [Tassos

PAPADOPOULOS]; Democratic Rally or DISY [Nikos ANASTASIADHIS];

Fighting Democratic Movement or ADIK [Dinos MIKHAILIDIS]; Green

Party of Cyprus [George PERDIKIS]; New Horizons [Nikolaus KOUTSOU];

Restorative Party of the Working People or AKEL (Communist Party)

[Dimitrios CHRISTOFIAS]; Social Democrats Movement or KISOS

(formerly United Democratic Union of Cyprus or EDEK) [Yiannakis

OMIROU]; United Democrats Movement or EDE [George VASSILIOU]; north

Cyprus: Democratic Party or DP [Serder DENKTASH]; National Birth

Party or UDP [Enver EMIN]; National Unity Party or UBP [Dervis

EROGLU]; Our Party or BP [Okyay SADIKOGLU]; Patriotic Unity Movement

or YBH [Alpay DURDURAN]; Peace and Democratic Movement [Mustafa

AKINCI]; Republican Turkish Party or CTP [Mehmet ALI TALAT]

Czech Republic

Caucus SNK [Josef ZOSER]; Christian and Democratic

Union-Czechoslovak People's Party or KDU-CSL [Miroslav KALOUSEK,

chairman]; Civic Democratic Alliance or ODA [Jirina NOVAKOVA,

chairman]; Civic Democratic Party or ODS [Mirek TOPOLANEK,

chairman]; Communist Party of Bohemia and Moravia or KSCM [Miroslav

GREBENICEK, chairman]; Communist Party of Czechoslovakia or KSC

[Miroslav STEPAN, chairman]; Czech National Social Party of CSNS

[Jaroslav ROVNY, chairman]; Czech Social Democratic Party or CSSD

[Stanislav GROSS, acting chairman]; European Democrats [Jan KASL];

Freedom Union-Democratic Union or US-DEU [Hana Marvanova,

chairwoman]; Open Democracy [Sona PAUKRTOVA, chairwoman]

Denmark

Center Democratic Party [Mimi JAKOBSEN]; Christian Democrats

(was Christian People's Party) [Marianne KARLSMOSE]; Conservative

Party (sometimes known as Conservative People's Party) [Bendt

BENDTSEN]; Danish People's Party [Pia KJAERSGAARD]; Liberal Party

[Anders Fogh RASMUSSEN]; Social Democratic Party [Helle

THORNING-SCHMIDT]; Social Liberal Party (sometimes called the

Radical Left) [Marianne JELVED, leader; Soren BALD, chairman];

Socialist People's Party [Villy SOEVNDAL]; Red-Green Unity List

(bloc includes Left Socialist Party, Communist Party of Denmark,

Socialist Workers' Party) [collective leadership]

Djibouti

Democratic National Party or PND [ADEN Robleh Awaleh];

Democratic Renewal Party or PRD [Abdillahi HAMARITEH]; Djibouti

Development Party or PDD [Mohamed Daoud CHEHEM]; Front pour la

Restauration de l'Unite Democratique or FRUD [Ali Mohamed DAOUD];

People's Progress Assembly or RPP (governing party) [Ismail Omar

GUELLEH]; Peoples Social Democratic Party or PPSD [Moumin Bahdon

FARAH]; Republican Alliance for Democracy or ARD [Ahmed Dini AHMED];

Union for Democracy and Justice or UDJ [leader NA]

Dominica

Dominica Freedom Party or DFP [Charles SAVARIN]; Dominica

Labor Party or DLP [Roosevelt SKERRIT]; United Workers Party or UWP

[Edison JAMES]

Dominican Republic

Dominican Liberation Party or PLD [Leonel

FERNANDEZ Reyna]; Dominican Revolutionary Party or PRD [Vicente

Sanchez BARET]; Social Christian Reformist Party or PRSC [Enrique

ATUN]

East Timor

Associacao Social-Democrata Timorense or ASDT [Francisco

Xavier do AMARAL]; Christian Democratic Party of Timor or PDC

[Antonio XIMENES]; Christian Democratic Union of Timor or UDC

[Vicente da Silva GUTERRES]; Democratic Party or PD [Fernando de

ARAUJO]; Liberal Party or PL [leader NA]; Maubere Democratic Party

or PDM [leader NA]; People's Party of Timor or PPT [Jacob XAVIER];

Revolutionary Front of Independent East Timor or FRETILIN [Lu OLO];

Social Democrat Party of East Timor or PSD [Mario CARRASCALAO];

Socialist Party of Timor or PST [leader Avelino COELHO]; Sons of the

Mountain Warriors (also known as Association of Timorese Heroes) or

KOTA [Clementino dos Reis AMARAL]; Timor Democratic Union or UDT

[Joao CARRASCALAO]; Timor Labor Party or PTT [Paulo Freitas DA

SILVA]; Timorese Nationalist Party or PNT [Abilio ARAUJO]; Timorese

Popular Democratic Association or APODETI [Frederico Almeida-Santos

DA COSTA]

Ecuador

Concentration of Popular Forces or CFP [Averroes BUCARAM];

Democratic Left or ID [Guillermo LANDAZURI]; National Action

Institutional Renewal Party or PRIAN [Alvaro NOBOA]; Pachakutik

Movement [Gilberto TALAHUA]; Patriotic Society Party or PSP [Lucio

GUTIERREZ Borbua]; Popular Democracy or DP [Dr. Juan Manuel

FUERTES]; Popular Democratic Movement or MPD [Gustavo TERAN Acosta];

Radical Alfarista Front or FRA [Fabian ALARCON, director]; Roldosist

Party or PRE [Abdala BUCARAM Ortiz, director]; Social Christian

Party or PSC [Leon FEBRES CORDERO]; Socialist Party - Broad Front or

PS-FA [Victor GRANDA]

Egypt

Al-Ahrar Party [Helmi SALEM]; Nasserist Arab Democratic Party

or Nasserists [Dia' al-din DAWUD]; National Democratic Party or NDP

[Mohammed Hosni MUBARAK (governing party)]; National Progressive

Unionist Grouping or Tagammu [Rifaat EL-SAID]; New Wafd Party or NWP

[No'man GOMAA]

note: formation of political parties must be approved by the

government

El Salvador

Christian Democratic Party or PDC [Rodolfo PARKER];

Democratic Convergence or CD (formerly United Democratic Center or

CDU) [Ruben ZAMORA, secretary general]; Democratic Party or PD

[Jorge MELENDEZ]; Farabundo Marti National Liberation Front or FMLN

[Medardo GONZALEZ]; Liberal Democratic Party or PLD [Kirio Waldo

SALGADO, president]; National Action Party or PAN [Gustavo Rogelio

SALINAS, secretary general]; National Conciliation Party or PCN

[Ciro CRUZ ZEPEDA, president]; National Republican Alliance or ARENA

[Elias Antonio SACA Gonzalez]; Social Christian Union or USC (formed

by the merger of Christian Social Renewal Party or PRSC and Unity

Movement or MU) [Abraham RODRIGUEZ, president]; Social Democratic

Party or PSD [Juan MEDRANO]

Equatorial Guinea

Convergence Party for Social Democracy or CPDS

[Placido MIKO Abogo]; Democratic Party for Equatorial Guinea or PDGE

(ruling party) [Teodoro OBIANG NGUEMA MBASOGO]; Party for Progress

of Equatorial Guinea or PPGE [Severo MOTO]; Popular Action of

Equatorial Guinea or APGE [Miguel Esono EMAN]; Popular Union or UP

[Andres Moises Bda ADA]; Progressive Democratic Alliance or ADP

[Victorino Bolekia BONAY]; Union of Independent Democrats of UDI

[Daniel OYONO]

Eritrea

People's Front for Democracy and Justice or PFDJ, the only

party recognized by the government [ISAIAS Afworki]; note - a

National Assembly committee drafted a law on political parties in

January 2001, but the full National Assembly has not yet debated or

voted on it

Estonia

Center Party of Estonia (Keskerakond) [Edgar SAVISAAR,

chairman]; Estonian People's Union (Rahvaliit) [Villu REILJAN,

chairman]; Estonian Reform Party (Reformierakond) [Andrus ANSIP];

Estonian United Russian People's Party or EUVRP [Yevgeniy TOMBERG,

chairman]; Pro Patria Union (Isamaaliit) [Tunne KELAM, chairman];

Res Publica [Juhan PARTS, chairman]; Social Democratic Party

(formerly People's Party Moodukad or Moderates) [Ivari PADAR,

chairman]; Social Liberals (group of 8 parliamentarians, former

Center Party members) [Peeter Kreitzberg]

Ethiopia

Afar National Democratic Party or ANDP [leader NA];

Benishangul Gumuz People's Democratic Unity Front or BGPDUF

[Mulualem BESSE]; Coalition for Unity and Democracy or CUD [HAILU

Shawil]; Ethiopian People's Revolutionary Democratic Front or EPRDF

[MELES Zenawi] (an alliance of ANDM, OPDO, SEPDF, and TPLF); Gurage

Nationalities' Democratic Movement or GNDM [leader NA]; United

Ethopian Democratic Forces or UEDF [MERARA Gudina]; dozens of small

parties

European Union

Group of the Alliance of Liberals and Democrats for

Europe or ALDE [Graham R. WATSON]; Independence/Democracy Group or

IND/DEM [Jens-Peter BONDE and Nigel FARAGE]; Group of

Greens/European Free Alliance or Greens/EFA [Monica FRASSONI and

Daniel Marc COHN-BENDIT]; Socialist Group in the European Parliament

or PES [Martin SCHULZ]; Confederal Group of the European United

Left-Nordic Green Left or EUL/NGL [Francis WURTZ]; European People's

Party-European Democrats or EPP-ED [Hans-Gert POETTERING]; Union for

Europe of the Nations Group or UEN [Brian CROWLEY and Cristiana

MUSCARDINI]

Falkland Islands (Islas Malvinas)

none; all independents

Faroe Islands

Center Party [Jenis A. RANA]; Independence Party [Kari

P. HOJGAARD]; People's Party [Anfinn KALLSBERG]; Republican Party

[Hogni HOYDAL]; Social Democratic Party [Joannes EIDESGAARD]; Union

Party [Kaj Oeo JOHANNESEN]

Fiji

Bai Kei Viti Party or BKV [Ratu Tevita MOMOEDONU]; Conservative

Alliance Party/Matanitu Vanua or MV [Ratu Rakuita VAKALALABURE];

Dodonu Ni Taukei Party or DNT [Fereti S. DEWA]; Fiji Democratic

Party or FDP [Felipe BOLE] (a merger of the Christian Democrat

Alliance or VLV [Poesci Waqalevu BUNE], Fijian Association Party or

FAP [Adi Kuini SPEED], Fijian Political Party or SVT (primarily

Fijian) [Felipe BOLE], and New Labor Unity Party or NLUP [Tupeni

BABA]); Fiji Labor Party or FLP [Mahendra CHAUDRHRY]; General Voters

Party or GVP [leader NA] (became part of United General Party);

Girmit Heritage Party or GHP [leader NA]; Justice and Freedom Party

or AIM [leader NA]; Lio 'On Famor Rotuma Party or LFR [leader NA];

National Federation Party or NFP (primarily Indian) [Pramond RAE];

Nationalist Vanua Takolavo Party or NVTLP [Saula TELAWA]; Party of

National Unity or PANU [Meli BOGILEKA]; Party of the Truth or POTT

[leader NA]; United Fiji Party/Sogosogo Duavata ni Lewenivanua or

SDL [Laisenia QARASE]; United General Party or UGP [Millis Mick

BEDDOES]

Finland

Center Party or Kesk [Matti VANHANEN]; Christian Democrats

or KD [Paivi RASANEN]; Green League or VIHR [Tarja CRONBERG]; Left

Alliance or VAS composed of People's Democratic League and

Democratic Alternative [Suvi-Anne SIIMES]; National Coalition

(conservative) Party or Kok [Jyrki KATAINEN]; Social Democratic

Party or SDP [Eero HEINALUOMA]; Swedish People's Party or SFP

[Jan-Erik ENESTAM]