Chile:
Chile has a market-oriented economy characterized by a high
level of foreign trade. During the early 1990s, Chile's reputation
as a role model for economic reform was strengthened when the
democratic government of Patricio AYLWIN - which took over from the
military in 1990 - deepened the economic reform initiated by the
military government. Growth in real GDP averaged 8% during 1991-97,
but fell to half that level in 1998 because of tight monetary
policies implemented to keep the current account deficit in check
and lower export earnings - the latter a product of the global
financial crisis. A severe drought exacerbated the recession in
1999, reducing crop yields and causing hydroelectric shortfalls and
electricity rationing, and Chile experienced negative economic
growth for the first time in more than 15 years. Despite the effects
of the recession, Chile maintained its reputation for strong
financial institutions and sound policy that have given it the
strongest sovereign bond rating in South America. By the end of
1999, exports and economic activity had begun to recover, and growth
rebounded to 5.5% in 2000. Unemployment remains stubbornly high,
however, putting pressure on President LAGOS to improve living
standards. Meanwhile, Chile has launched free trade negotiations
with the US.
China: In late 1978 the Chinese leadership began moving the economy from a sluggish Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state managers and enterprises has been steadily increasing. The authorities have switched to a system of household responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. In 2000, with its 1.26 billion people but a GDP of just $3,600 per capita, China stood as the second largest economy in the world after the US (measured on a purchasing power parity basis). Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods. On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and stepped-up inflation). Beijing thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) collect revenues due from provinces, businesses, and individuals; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises many of which had been shielded from competition by subsides and had been losing the ability to pay full wages and pensions. From 80 to 120 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining growth in living standards. Another long-term threat to continued rapid economic growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. Weakness in the global economy in 2001 could hamper growth in exports. Beijing will intensify efforts to stimulate growth through spending on infrastructure—such as water control and power grids—and poverty relief and through rural tax reform aimed at eliminating arbitrary local levies on farmers.
Christmas Island:
Phosphate mining had been the only significant
economic activity, but in December 1987 the Australian Government
closed the mine. In 1991, the mine was reopened by union workers.
With the support of the government, Australian-based Casinos Austria
International Ltd. built a $34 million casino on Christmas Island,
which opened in 1993. As of yearend 1999, gaming facilities at the
casino were temporarily closed but were expected to reopen in early
2000. Another economic prospect is the possible location of a
space-launching site on the island.
Clipperton Island:
Although 115 species of fish have been identified
in the territorial waters of Clipperton Island, the only economic
activity is tuna fishing.
Cocos (Keeling) Islands:
Grown throughout the islands, coconuts are
the sole cash crop. Copra and fresh coconuts are the major export
earners. Small local gardens and fishing contribute to the food
supply, but additional food and most other necessities must be
imported from Australia.
Colombia:
Colombia is poised for muted growth in the next several
years, marking continued recovery from the severe 1999 recession
when GDP fell by about 4%. President PASTRANA's well-respected
economic team is working to keep the economy on track, maintaining
low interest rates, for example. In accordance with its IMF loan
agreement, the administration also is taking steps to improve the
public sector's fiscal health. However, many challenges to improved
prosperity remain. Unemployment was stuck at a record 20% in 2000,
contributing to the extreme inequality in income distribution. Two
of Colombia's leading exports, oil and coffee, face an uncertain
future; new exploration is needed to offset declining oil
production, while coffee harvests and prices are depressed. The lack
of public security is a key concern for investors, making progress
in the government's peace negotiations with insurgent groups an
important driver of economic performance. Colombia is looking for
continued support from the international community to boost economic
and peace prospects.
Comoros:
One of the world's poorest countries, Comoros is made up of
three islands that have inadequate transportation links, a young and
rapidly increasing population, and few natural resources. The low
educational level of the labor force contributes to a subsistence
level of economic activity, high unemployment, and a heavy
dependence on foreign grants and technical assistance. Agriculture,
including fishing, hunting, and forestry, is the leading sector of
the economy. It contributes 40% to GDP, employs 80% of the labor
force, and provides most of the exports. The country is not
self-sufficient in food production; rice, the main staple, accounts
for the bulk of imports. The government is struggling to upgrade
education and technical training, to privatize commercial and
industrial enterprises, to improve health services, to diversify
exports, to promote tourism, and to reduce the high population
growth rate. Continued foreign support is essential if the goal of
4% annual GDP growth is to be met. Remittances from 150,000 Comorans
abroad help supplement GDP.
Congo, Democratic Republic of the:
The economy of the Democratic
Republic of the Congo - a nation endowed with vast potential wealth
- has declined drastically since the mid-1980s. The new government
instituted a tight fiscal policy that initially curbed inflation and
currency depreciation, but these small gains were quickly reversed
when the foreign-backed rebellion in the eastern part of the country
began in August 1998. The war has dramatically reduced national
output and government revenue and has increased external debt.
Foreign businesses have curtailed operations due to uncertainty
about the outcome of the conflict and because of increased
government harassment and restrictions. The war has intensified the
impact of such basic problems as an uncertain legal framework,
corruption, raging inflation, and lack of openness in government
economic policy and financial operations. A number of IMF and World
Bank missions have met with the government to help it develop a
coherent economic plan but associated reforms are on hold.
Congo, Republic of the:
The economy is a mixture of village
agriculture and handicrafts, an industrial sector based largely on
oil, support services, and a government characterized by budget
problems and overstaffing. Oil has supplanted forestry as the
mainstay of the economy, providing a major share of government
revenues and exports. In the early 1980s, rapidly rising oil
revenues enabled the government to finance large-scale development
projects with GDP growth averaging 5% annually, one of the highest
rates in Africa. Moreover, the government has mortgaged a
substantial portion of its oil earnings, contributing to the
government's shortage of revenues. The 12 January 1994 devaluation
of Franc Zone currencies by 50% resulted in inflation of 61% in
1994, but inflation has subsided since. Economic reform efforts
continued with the support of international organizations, notably
the World Bank and the IMF. The reform program came to a halt in
June 1997 when civil war erupted. Denis SASSOU-NGUESSO, who returned
to power when the war ended in October 1997, publicly expressed
interest in moving forward on economic reforms and privatization and
in renewing cooperation with international financial institutions.
However, economic progress was badly hurt by slumping oil prices and
the resumption of armed conflict in December 1998, which worsened
the Republic of the Congo's budget deficit. Even with the IMF's
renewed confidence and high world oil prices, Congo is unlikely to
realize growth of more than 5% in 2001-02. With the return to
fragile peace, the IMF approved a $14 million credit in November
2000 to aid post-conflict reconstruction.
Cook Islands:
Like many other South Pacific island nations, the Cook
Islands' economic development is hindered by the isolation of the
country from foreign markets, the limited size of domestic markets,
lack of natural resources, periodic devastation from natural
disasters, and inadequate infrastructure. Agriculture provides the
economic base with major exports made up of copra and citrus fruit.
Manufacturing activities are limited to fruit processing, clothing,
and handicrafts. Trade deficits are made up for by remittances from
emigrants and by foreign aid, overwhelmingly from New Zealand. In
the 1980s and 1990s, the country lived beyond its means, maintaining
a bloated public service and accumulating a large foreign debt.
Subsequent reforms, including the sale of state assets, the
strengthening of economic management, the encouragement of tourism,
and a debt restructuring agreement, have rekindled investment and
growth.