Bhutan:
The economy, one of the world's smallest and least
developed, is based on agriculture and forestry, which provide the
main livelihood for more than 90% of the population. Agriculture
consists largely of subsistence farming and animal husbandry. Rugged
mountains dominate the terrain and make the building of roads and
other infrastructure difficult and expensive. The economy is closely
aligned with India's through strong trade and monetary links. The
industrial sector is technologically backward, with most production
of the cottage industry type. Most development projects, such as
road construction, rely on Indian migrant labor. Bhutan's hydropower
potential and its attraction for tourists are key resources. The
Bhutanese Government has made some progress in expanding the
nation's productive base and improving social welfare. Model
education, social, and environment programs in Bhutan are underway
with support from multilateral development organizations. Each
economic program takes into account the government's desire to
protect the country's environment and cultural traditions. Detailed
controls and uncertain policies in areas like industrial licensing,
trade, labor, and finance continue to hamper foreign investment.
Bolivia:
Bolivia, long one of the poorest and least developed Latin
American countries, has made considerable progress toward the
development of a market-oriented economy. Successes under President
SANCHEZ DE LOZADA (1993-97) included the signing of a free trade
agreement with Mexico and joining the Southern Cone Common Market
(Mercosur), as well as the privatization of the state airline,
telephone company, railroad, electric power company, and oil
company. His successor, Hugo BANZER Suarez has tried to further
improve the country's investment climate with an anticorruption
campaign. Growth slowed in 1999, in part due to tight government
budget policies, which limited needed appropriations for
anti-poverty programs, and the fallout from the Asian financial
crisis. In 2000, major civil disturbances in April, and again in
September and October, held down overall growth to 2.5%.
Bosnia and Herzegovina:
Bosnia and Herzegovina ranked next to The
Former Yugoslav Republic of Macedonia as the poorest republic in the
old Yugoslav federation. Although agriculture is almost all in
private hands, farms are small and inefficient, and the republic
traditionally is a net importer of food. Industry has been greatly
overstaffed, one reflection of the socialist economic structure of
Yugoslavia. TITO had pushed the development of military industries
in the republic with the result that Bosnia hosted a large share of
Yugoslavia's defense plants. The bitter interethnic warfare in
Bosnia caused production to plummet by 80% from 1990 to 1995,
unemployment to soar, and human misery to multiply. With an uneasy
peace in place, output recovered in 1996-98 at high percentage rates
from a low base; but output growth slowed appreciably in 1999 and
2000, and GDP remains far below the 1990 level. Economic data are of
limited use because, although both entities issue figures,
national-level statistics are not available. Moreover, official data
do not capture the large share of activity that occurs on the black
market. The marka - the national currency introduced in 1998 - has
gained wide acceptance, and the Central Bank of Bosnia and
Herzegovina has dramatically increased its reserve holdings.
Implementation of privatization, however, has been slower than
anticipated. Banking reform accelerated in early 2001 as all the
communist-era payments bureaus were shut down. The country receives
substantial amounts of reconstruction assistance and humanitarian
aid from the international community but will have to prepare for an
era of declining assistance.
Botswana:
Botswana has maintained one of the world's highest growth
rates since independence in 1966. Through fiscal discipline and
sound management, Botswana has transformed itself from one of the
poorest countries in the world to a middle-income country with a per
capita GDP of $6,600 in 2000. Diamond mining has fueled much of
Botswana's economic expansion and currently accounts for more than
one-third of GDP and for three-fourths of export earnings. Tourism,
subsistence farming, and cattle raising are other key sectors. The
government must deal with high rates of unemployment and poverty.
Unemployment officially is 19%, but unofficial estimates place it
closer to 40%. HIV/AIDS infection rates are the highest in the world
and threaten Botswana's impressive economic gains.
Bouvet Island:
no economic activity; declared a nature reserve
Brazil:
Possessing large and well-developed agricultural, mining,
manufacturing, and service sectors, Brazil's economy outweighs that
of all other South American countries and is expanding its presence
in world markets. In the late eighties and early nineties, high
inflation hindered economic activity and investment. "The Real
Plan", instituted in the spring of 1994, sought to break
inflationary expectations by pegging the real to the US dollar.
Inflation was brought down to single digit annual figures, but not
fast enough to avoid substantial real exchange rate appreciation
during the transition phase of the "Real Plan". This appreciation
meant that Brazilian goods were now more expensive relative to goods
from other countries, which contributed to large current account
deficits. However, no shortage of foreign currency ensued because of
the financial community's renewed interest in Brazilian markets as
inflation rates stabilized and the debt crisis of the eighties faded
from memory. The maintenance of large current account deficits via
capital account surpluses became problematic as investors became
more risk averse to emerging market exposure as a consequence of the
Asian financial crisis in 1997 and the Russian bond default in
August 1998. After crafting a fiscal adjustment program and pledging
progress on structural reform, Brazil received a $41.5 billion
IMF-led international support program in November 1998. In January
1999, the Brazilian Central Bank announced that the real would no
longer be pegged to the US dollar. This devaluation helped moderate
the downturn in economic growth in 1999 that investors had expressed
concerns about over the summer of 1998. Brazil's debt to GDP ratio
for 1999 beat the IMF target and helped reassure investors that
Brazil will maintain tight fiscal and monetary policy even with a
floating currency. The economy continued to recover in 2000, with
inflation remaining in the single digits and expected growth for
2001 of 4.5%. Foreign direct investment set a record of more than
$30 billion in 2000.
British Indian Ocean Territory:
All economic activity is
concentrated on the largest island of Diego Garcia, where joint
UK-US defense facilities are located. Construction projects and
various services needed to support the military installations are
done by military and contract employees from the UK, Mauritius, the
Philippines, and the US. There are no industrial or agricultural
activities on the islands. When the Ilois return, they plan to
reestablish sugarcane production and fishing.
British Virgin Islands:
The economy, one of the most stable and
prosperous in the Caribbean, is highly dependent on tourism, which
generates an estimated 45% of the national income. An estimated
350,000 tourists, mainly from the US, visited the islands in 1997.
In the mid-1980s, the government began offering offshore
registration to companies wishing to incorporate in the islands, and
incorporation fees now generate substantial revenues. An estimated
250,000 companies were on the offshore registry by yearend 1997. The
adoption of a comprehensive insurance law in late 1994, which
provides a blanket of confidentiality with regulated statutory
gateways for investigation of criminal offenses, is expected to make
the British Virgin Islands even more attractive to international
business. Livestock raising is the most important agricultural
activity; poor soils limit the islands' ability to meet domestic
food requirements. Because of traditionally close links with the US
Virgin Islands, the British Virgin Islands has used the dollar as
its currency since 1959.
Brunei:
This small, wealthy economy is a mixture of foreign and
domestic entrepreneurship, government regulation and welfare
measures, and village tradition. Exports of crude oil and natural
gas account for over half of GDP. Per capita GDP is far above most
other Third World countries, and substantial income from overseas
investment supplements income from domestic production. The
government provides for all medical services and subsidizes rice and
housing. Brunei's leaders are concerned that steadily increased
integration in the world economy will undermine internal social
cohesion although it became a more prominent player by serving as
chairman for the 2000 APEC (Asian Pacific Economic Cooperation)
forum. Plans for the future include upgrading the labor force,
reducing unemployment, strengthening the banking and tourist
sectors, and, in general, a further widening of the economic base
beyond oil and gas.
Bulgaria:
Bulgaria, a former communist country struggling to enter
the European market economy, suffered a major economic downturn in
1996 and 1997, with triple digit inflation and GDP contraction of
10.6% and 6.9%. The current government - which took office in May
1997 after pre-term parliamentary elections - stabilized the economy
and promoted growth by implementing a currency board, practicing
sound financial policies, invigorating privatization, and pursuing
structural reforms. Additionally, strong assistance from
international financial institutions - most notably the IMF which
approved a three-year Extended Fund Facility worth approximately
$900 million in September 1998 - played a critical role in turning
the economy around. After several years of tumult, Bulgaria's
economy has stabilized. Its better-than-expected economic
performance in 1999 - despite the impact of the Kosovo conflict, the
1998 Russian financial crisis, and structural reforms - and strong
growth in 2000 portends solid growth over the next few years; this
assumes continued fiscal restraint, additional structural reforms,
aid from abroad, and prosperous times in the EU economy.