Arctic Ocean:
Economic activity is limited to the exploitation of
natural resources, including petroleum, natural gas, fish, and seals.
Argentina:
Argentina benefits from rich natural resources, a highly
literate population, an export-oriented agricultural sector, and a
diversified industrial base. However, when President Carlos MENEM
took office in 1989, the country had piled up huge external debts,
inflation had reached 200% per month, and output was plummeting. To
combat the economic crisis, the government embarked on a path of
trade liberalization, deregulation, and privatization. In 1991, it
implemented radical monetary reforms which pegged the peso to the US
dollar and limited the growth in the monetary base by law to the
growth in reserves. Inflation fell sharply in subsequent years. In
1995, the Mexican peso crisis produced capital flight, the loss of
banking system deposits, and a severe, but short-lived, recession; a
series of reforms to bolster the domestic banking system followed.
Real GDP growth recovered strongly, reaching 8% in 1997. In 1998,
international financial turmoil caused by Russia's problems and
increasing investor anxiety over Brazil produced the highest
domestic interest rates in more than three years, halving the growth
rate of the economy. Conditions worsened in 1999 with GDP falling by
3%. President Fernando DE LA RUA, who took office in December 1999,
sponsored tax increases and spending cuts to reduce the deficit,
which had ballooned to 2.5% of GDP in 1999. Growth in 2000 was a
disappointing 0.8%, as both domestic and foreign investors remained
skeptical of the government's ability to pay debts and maintain its
fixed exchange rate with the US dollar. One bright spot at the start
of 2001 was the IMF's offer of $13.7 billion in support.
Armenia:
Under the old Soviet central planning system, Armenia had
developed a modern industrial sector, supplying machine tools,
textiles, and other manufactured goods to sister republics in
exchange for raw materials and energy. Since the implosion of the
USSR in December 1991, Armenia has switched to small-scale
agriculture away from the large agroindustrial complexes of the
Soviet era. The agricultural sector has long-term needs for more
investment and updated technology. The privatization of industry has
been at a slower pace, but has been given renewed emphasis by the
current administration. Armenia is a food importer, and its mineral
deposits (gold, bauxite) are small. The ongoing conflict with
Azerbaijan over the ethnic Armenian-dominated region of
Nagorno-Karabakh and the breakup of the centrally directed economic
system of the former Soviet Union contributed to a severe economic
decline in the early 1990s. By 1994, however, the Armenian
Government had launched an ambitious IMF-sponsored economic program
that has resulted in positive growth rates in 1995-2000. Armenia
also managed to slash inflation and to privatize most small- and
medium-sized enterprises. The chronic energy shortages Armenia
suffered in recent years have been largely offset by the energy
supplied by one of its nuclear power plants at Metsamor. Armenia's
severe trade imbalance, importing three times its exports, has been
offset somewhat by international aid, domestic restructuring of the
economy, and foreign direct investment.
Aruba:
Tourism is the mainstay of the Aruban economy, although
offshore banking and oil refining and storage are also important.
The rapid growth of the tourism sector over the last decade has
resulted in a substantial expansion of other activities.
Construction has boomed, with hotel capacity five times the 1985
level. In addition, the reopening of the country's oil refinery in
1993, a major source of employment and foreign exchange earnings,
has further spurred growth. Aruba's small labor force and less than
1% unemployment rate have led to a large number of unfilled job
vacancies, despite sharp rises in wage rates in recent years.
Ashmore and Cartier Islands:
no economic activity
Atlantic Ocean:
The Atlantic Ocean provides some of the world's most
heavily trafficked sea routes, between and within the Eastern and
Western Hemispheres. Other economic activity includes the
exploitation of natural resources, e.g., fishing, the dredging of
aragonite sands (The Bahamas), and production of crude oil and
natural gas (Caribbean Sea, Gulf of Mexico, and North Sea).
Australia:
Australia has a prosperous Western-style capitalist
economy, with a per capita GDP at the level of the four dominant
West European economies. Rich in natural resources, Australia is a
major exporter of agricultural products, minerals, metals, and
fossil fuels. Commodities account for 57% of the value of total
exports, so that a downturn in world commodity prices can have a big
impact on the economy. The government is pushing for increased
exports of manufactured goods, but competition in international
markets continues to be severe. While Australia has suffered from
the low growth and high unemployment characterizing the OECD
countries in the early 1990s and during the recent financial
problems in East Asia, the economy has expanded at a solid 4% annual
growth pace in the last five years. Canberra's emphasis on reforms
is a key factor behind the economy's resilience to the regional
crisis and its stronger than expected growth rate. Growth in 2001
will depend on key international commodity prices, the extent of
recovery in nearby Asian economies, and the strength of US and
European markets.
Austria:
Austria with its well-developed market economy and high
standard of living is closely tied to other EU economies, especially
Germany's. Membership in the EU has drawn an influx of foreign
investors attracted by Austria's access to the single European
market and proximity to EU aspirant economies. In 2000, Austria
moved to further cut government spending and raise taxes to meet EMU
deficit targets after facing unexpected difficulties in reducing the
public deficit. To meet increased competition from both EU and
Central European countries, Austria will need to emphasize
knowledge-based sectors of the economy and continue to deregulate
the service sector. Growth is expected to remain at about 3% in 2001.
Azerbaijan:
Azerbaijan's most prominent products are oil, cotton,
and natural gas. Azerbaijan's oil production declined through 1997
but has registered an increase every year since. Negotiation of 19
production-sharing arrangements (PSAs) with foreign firms, which
have thus far committed $60 billion to oil field development, should
generate the funds needed to spur future industrial development. Oil
production under the first of these PSAs, with the Azerbaijan
International Operating Company, began in November 1997. Azerbaijan
shares all the formidable problems of the former Soviet republics in
making the transition from a command to a market economy, but its
considerable energy resources brighten its long-term prospects. Baku
has only recently begun making progress on economic reform, and old
economic ties and structures are slowly being replaced. An obstacle
to economic progress, including stepped up foreign investment, is
the continuing conflict with Armenia over the Nagorno-Karabakh
region. Trade with Russia and the other former Soviet republics is
declining in importance while trade is building up with Turkey,
Iran, UAE, and the nations of Europe. Long-term prospects will
depend on world oil prices, the location of new pipelines in the
region, and Azerbaijan's ability to manage its oil wealth.
Bahamas, The:
The Bahamas is a stable, developing nation with an
economy heavily dependent on tourism and offshore banking. Tourism
alone accounts for more than 60% of GDP and directly or indirectly
employs 40% of the archipelago's labor force. Moderate growth in
tourism receipts and a boom in construction of new hotels, resorts,
and residences led to an increase of the country's GDP by an
estimated 3% in 1998, 6% in 1999, and 4.5% in 2000. Manufacturing
and agriculture together contribute only 10% of GDP and show little
growth, despite government incentives aimed at those sectors.
Overall growth prospects in the short run will depend heavily on the
fortunes of the tourism sector and continued sturdy growth in the
US, which accounts for the majority of tourist visitors.