Namibia

The economy is heavily dependent on the extraction and

processing of minerals for export. Mining accounts for 8% of GDP,

but provides more than 50% of foreign exchange earnings. 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 35-40% 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 one of the world's most unequal income

distributions, as shown by Namibia's GINI coefficient. The Namibian

economy is closely linked to South Africa with the Namibian dollar

pegged one-to-one to the South African rand. Until 2010, Namibia

drew 40% of its budget revenues from the Southern African Customs

Union (SACU). Increased payments from SACU put Namibia's budget into

surplus in 2007 for the first time since independence. SACU

allotments to Namibia increased in 2009, but will drop for 2010 and

2011 because South Africa went into recession during the global

economic crisis, reducing overall SACU income. Increased fish

production and mining of zinc, copper, uranium, and silver spurred

growth in 2003-08, but growth in recent years was undercut by poor

fish catches, higher costs of producing metals, and the global

recession.

Nauru

Revenues of this tiny island have traditionally come from

exports of phosphates now significantly depleted. An Australian

company in 2005 entered into an agreement intended to exploit

remaining supplies. 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. Reserves of phosphates may only last until 2010 at current

mining rates. In anticipation of the exhaustion of Nauru's phosphate

deposits, substantial amounts of phosphate income were 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 frozen wages and reduced overstaffed public service departments.

Nauru lost further revenue in 2008 with the closure of Australia's

refugee processing center, making it almost totally dependent on

food imports and foreign aid. Housing, hospitals, and other capital

plant is deteriorating. The cost to Australia of keeping the

government and economy afloat continues to climb. Few comprehensive

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

varying widely.

Navassa Island

Subsistence fishing and commercial trawling occur

within refuge waters.

Nepal

Nepal is among the poorest and least developed countries in

the world, with almost one-quarter of its population living below

the poverty line. Agriculture is the mainstay of the economy,

providing a livelihood for three-fourths of the population and

accounting for about one-third of GDP. Industrial activity mainly

involves the processing of agricultural products, including pulses,

jute, sugarcane, tobacco, and grain. Nepal has considerable scope

for exploiting its potential in hydropower, with an estimated 42,000

MW of feasible capacity, but political instability hampers foreign

investment. Additional challenges to Nepal's growth include its

landlocked geographic location, civil strife and labor unrest, and

its susceptibility to natural disaster.

Netherlands

The Netherlands 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 only 2% 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

has been one of the leading European nations for attracting foreign

direct investment and is one of the four largest investors in the

US. After 26 years of uninterrupted economic growth, the

Netherlands' economy - which is highly open and dependent on foreign

trade and financial services - was hard-hit by global economic

crisis. Dutch GDP contracted 3.9% in 2009, while exports declined

nearly 25% due to a sharp contraction in world demand. The Dutch

financial sector has also suffered, due in part to the high exposure

of some Dutch banks to U.S. mortgage-backed securities. In response

to turmoil in financial markets, the government nationalized two

banks and injected billions of dollars into a third, to prevent

further systemic risk. The government also sought to boost the

domestic economy by accelerating infrastructure programs, offering

corporate tax breaks for employers to retain workers, and expanding

export credit facilities. The stimulus programs and bank bailouts,

however, resulted in a government budget deficit of nearly 4.6% of

GDP in 2009 and 5.6% in 2010 that contrasts sharply with a surplus

of 0.7% of GDP in 2008. With unemployment weighing on private-sector

consumption, the government of Prime Minister Mark RUTTE is likely

to come under increased pressure to keep the budget deficit in check

while promoting economic recovery.

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 15% 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 some at the bottom of the ladder - and

broadened and deepened the technological capabilities of the

industrial sector. Per capita income rose for ten consecutive years

until 2007 in purchasing power parity terms, but fell in 2008-09.

Debt-driven consumer spending drove robust growth in the first half

of the decade, helping fuel a large balance of payments deficit that

posed a challenge for economic managers. Inflationary pressures

caused the central bank to raise its key rate steadily from January

2004 until it was among the highest in the OECD in 2007-08;

international capital inflows attracted to the high rates further

strengthened the currency and housing market, however, aggravating

the current account deficit. The economy fell into recession before

the start of the global financial crisis and contracted for five

consecutive quarters in 2008-09. In line with global peers, the

central bank cut interest rates aggressively and the government

developed fiscal stimulus measures. The economy posted a 1.7%

decline in 2009, but pulled out of recession late in the year, and

achieved 2.1% growth in 2010. Nevertheless, key trade sectors remain

vulnerable to weak external demand. The government plans to raise

productivity growth and develop infrastructure, while reining in

government spending.

Nicaragua

Nicaragua, the poorest country in Central America and the

second poorest in the Hemisphere, has widespread underemployment and

poverty. The US-Central America Free Trade Agreement (CAFTA) has

been in effect since April 2006 and has expanded export

opportunities for many agricultural and manufactured goods. Textiles

and apparel account for nearly 60% of Nicaragua's exports, but

increases in the minimum wage during the ORTEGA administration will

likely erode its comparative advantage in this industry. ORTEGA's

promotion of mixed business initiatives, owned by the Nicaraguan and

Venezuelan state oil firms, together with the weak rule of law,

could undermine the investment climate for domestic and

international private firms in the near-term. Nicaragua relies on

international economic assistance to meet internal- and

external-debt financing obligations. Foreign donors have curtailed

this funding, however, in response to November 2008 electoral fraud.

Managua has an IMF extended Credit Facility program, which could

help keep the government's fiscial deficit on target during the 2011

election year and encourage transparency in the use of Venezuelan

off-budget loans and assistance. In early 2004, Nicaragua secured

some $4.5 billion in foreign debt reduction under the Heavily

Indebted Poor Countries (HIPC) initiative, however, Managua still

struggles with a high public debt burden. Nicaragua is gradually

recovering from the global economic crisis as increased exports

drove positive growth in 2010. The economy is expected to grow at a

rate of about 3% in 2011.

Niger

Niger is a landlocked, Sub-Saharan nation, whose economy

centers on subsistence crops, livestock, and some of the world's

largest uranium deposits. Drought, desertification, and strong

population growth 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. In December 2005, Niger

received 100% multilateral debt relief from the IMF, which

translates into the forgiveness of approximately US $86 million in

debts to the IMF, excluding the remaining assistance under HIPC. In

2010, the Niger economy was recovering from the effects of a 2009

drought that reduced grain and cowpea production and decimated

livestock herds. The economy was also hurt when the international

community cut off non-humanitarian aid in response to TANDJA's moves

to extend his term as president. 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 has been hobbled by political instability,

corruption, inadequate infrastructure, and poor macroeconomic

management but in 2008 began pursuing economic reforms. Nigeria's

former military rulers failed to diversify the economy away from its

overdependence on the capital-intensive oil sector, which provides

95% of foreign exchange earnings and about 80% of budgetary

revenues. 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 November 2005, Abuja won Paris Club approval for a

debt-relief deal that eliminated $18 billion of debt in exchange for

$12 billion in payments - a total package worth $30 billion of

Nigeria's total $37 billion external debt. Since 2008 the government

has begun to show the political will to implement the

market-oriented reforms urged by the IMF, such as modernizing the

banking system, curbing inflation by blocking excessive wage

demands, and resolving regional disputes over the distribution of

earnings from the oil industry. GDP rose strongly in 2007-10 because

of increased oil exports and high global crude prices in 2010.

President JONATHAN has pledged to continue the economic reforms of

his predecessor with emphasis on infrastructure improvements.

Infrastructure is the main impediment to growth and in August 2010

JONATHAN unveiled a power sector blueprint that includes

privatization of the state-run electricity generation and

distribution facilities. The government also is working toward

developing stronger public-private partnerships for roads. Nigeria's

financial sector was hurt by the global financial and economic

crises and the Central Bank governor has taken measures to

strengthen that sector.

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

emigration to New Zealand. Efforts to increase GDP include the

promotion of tourism and financial services, although the

International Banking Repeal Act of 2002 resulted in the termination

of all offshore banking licenses. Economic aid from New Zealand in

FY08/09 was US$5.7 million. Niue suffered a devastating typhoon 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 the 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-majority-owned

enterprises. The country is richly endowed with natural resources -

petroleum, hydropower, fish, forests, and minerals - and is highly

dependent on the petroleum sector, which accounts for nearly half of

exports and over 30% of state revenue. Norway is the world's

second-largest gas exporter; its position as an oil exporter has

slipped to ninth-largest as production has begun to decline. Norway

opted to stay out of the EU during a referendum in November 1994;

nonetheless, as a member of the European Economic Area, it

contributes sizably to the EU budget. In anticipation of eventual

declines in oil and gas production, Norway saves almost all state

revenue from the petroleum sector in the world's second largest

sovereign wealth fund, valued at over $500 billion in 2010. After

lackluster growth of less than 1.5% in 2002-03, GDP growth picked up

to 2.5-6.2% in 2004-07, partly due to higher oil prices. Growth fell

to 1.8% in 2008, and the economy contracted by 1.4% in 2009 as a

result of the slowing world economy and the drop in oil prices.

Oman

Oman is a middle-income economy that is heavily dependent on

dwindling oil resources. Because of declining reserves, Muscat has

actively pursued a development plan that focuses on diversification,

industrialization, and privatization, with the objective of reducing

the oil sector's contribution to GDP to 9% by 2020. Tourism and

gas-based industries are key components of the government's

diversification strategy. By using enhanced oil recovery techniques,

Oman succeeded in increasing oil production, giving the country more

time to diversify, and the increase in global oil prices thoughout

2010 provides the government greater financial resources to invest

in non-oil sectors.

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 and low levels

of foreign investment. Between 2001-07, however, poverty levels

decreased by 10%, as Islamabad steadily raised development spending.

Between 2004-07, GDP growth in the 5-8% range was spurred by gains

in the industrial and service sectors - despite severe electricity

shortfalls - but growth slowed in 2008-09 and unemployment rose.

Inflation remains the top concern among the public, climbing from

7.7% in 2007 to more than 13% in 2010. In addition, the Pakistani

rupee has depreciated since 2007 as a result of political and

economic instability. The government agreed to an International

Monetary Fund Standby Arrangement in November 2008 in response to a

balance of payments crisis, but during 2009-10 its current account

strengthened and foreign exchange reserves stabilized - largely

because of lower oil prices and record remittances from workers

abroad. Record floods in July-August 2010 lowered agricultural

output and contributed to a jump in inflation, and reconstruction

costs will strain the limited resources of the government. Textiles

account for most of Pakistan's export earnings, but Pakistan's

failure to expand a viable export base for other manufactures has

left the country vulnerable to shifts in world demand. Other long

term challenges include expanding investment in education,

healthcare, and electricity production, and reducing dependence on

foreign donors.

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.

The Compact of Free Association with the US, entered into after the

end of the UN trusteeship on 1 October 1994, provided Palau with up

to $700 million in US aid for the following 15 years in return for

furnishing military facilities. Business and tourist arrivals

numbered 85,000 in 2007. The population enjoys a per capita income

roughly 50% higher than 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.

Panama

Panama's dollarized economy rests primarily on a

well-developed services sector that accounts for three-quarters of

GDP. Services include operating the Panama Canal, banking, the Colon

Free Zone, insurance, container ports, flagship registry, and

tourism. Economic growth will be bolstered by the Panama Canal

expansion project that began in 2007 and is scheduled to be

completed by 2014 at a cost of $5.3 billion - about 25% of current

GDP. The expansion project will more than double the Canal's

capacity, enabling it to accommodate ships that are now too large to

transverse the transoceanic crossway, and should help to reduce the

unemployment rate. The United States and China are the top users of

the Canal. Panama also plans to construct a metro system in Panama

City, valued at $1.2 billion and scheduled to be completed by 2014.

Panama's aggressive infrastructure development projects will likely

lead the economy to continued growth in 2011. Strong economic

performance has not translated into broadly shared prosperity as

Panama has the second worst income distribution in Latin America.

About 30% of the population lives in poverty, however, during

TORRIJOS's term poverty was reduced from 40% to 30% and unemployment

dropped from 12% to 6%. Not a CAFTA signatory, Panama in December

2006 independently negotiated a free trade agreement with the US,

which, when implemented, will help promote the country's economic

growth. Seeking removal from the Organization of Economic

Development's gray-list of tax havens, Panama has also recently

signed various double taxation treaties with other nations.

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 copper, gold, and oil, account for nearly two-thirds of

export earnings. Natural gas reserves amount to an estimated 227

billion cubic meters. A consortium led by a major American oil

company is constructing a liquefied natural gas (LNG) production

facility that could begin exporting in 2013 or 2014. As the largest

investment project in the country's history, it has the potential to

double GDP in the near-term and triple Papua New Guinea's export

revenue. The government faces the challenge of ensuring transparency

and accountability for revenues flowing from this and other large

LNG projects. The government of Prime Minister SOMARE has expended

much of its energy remaining in power. He was the first prime

minister ever to serve a full five-year term. The government has

brought stability to the national budget, largely through

expenditure control; however, it relaxed spending constraints in

2006 and 2007 as elections approached. Numerous challenges still

face the government, including providing physical security for

foreign investors, regaining investor confidence, restoring

integrity to state institutions, promoting economic efficiency by

privatizing moribund state institutions, and balancing relations

with Australia, its former colonial ruler. Other socio-cultural

challenges could upend the economy including an HIV/AIDS epidemic,

with the highest infection rate in all of East Asia and the Pacific,

and chronic law and order and land tenure issues. The global

financial crisis had little impact because of continued high demand

for Papua New Guinea's commodities exports.

Paracel Islands

The islands have the potential for oil and gas

development. Waters around the islands support commercial fishing,

but the islands themselves are not populated on a permanent basis.