Coral Sea Islands:
no economic activity
Costa Rica:
Costa Rica's basically stable economy depends on
tourism, agriculture, and electronics exports. Poverty has been
substantially reduced over the past 15 years, and a strong social
safety net has been put into place. Foreign investors remain
attracted by the country's political stability and high education
levels, and tourism continues to bring in foreign exchange. However,
traditional export sectors have not kept pace. Low coffee prices and
an overabundance of bananas have hurt the agricultural sector. The
government continues to grapple with its large deficit and massive
internal debt and with the need to modernize the state-owned
electricity and telecommunications sector.
Cote d'Ivoire:
Cote d'Ivoire is among the world's largest producers
and exporters of coffee, cocoa beans, and palm oil. Consequently,
the economy is highly sensitive to fluctuations in international
prices for these products and to weather conditions. Despite
government attempts to diversify the economy, it is still largely
dependent on agriculture and related activities, which engage
roughly 68% of the population. After several years of lagging
performance, the Ivorian economy began a comeback in 1994, due to
the 50% devaluation of the CFA franc and improved prices for cocoa
and coffee, growth in nontraditional primary exports such as
pineapples and rubber, limited trade and banking liberalization,
offshore oil and gas discoveries, and generous external financing
and debt rescheduling by multilateral lenders and France. Moreover,
government adherence to donor-mandated reforms led to a jump in
growth to 5% annually in 1996-99. Growth was negative in 2000
because of the difficulty of meeting the conditions of international
donors, continued low prices of key exports, and post-coup
instability. In 2001-02, a moderate rebound in the cocoa market
could boost growth back above 3%; however, political instability
could impede growth again.
Croatia:
Before the dissolution of Yugoslavia, the Republic of
Croatia, after Slovenia, was the most prosperous and industrialized
area, with a per capita output perhaps one-third above the Yugoslav
average. Croatia faces considerable economic problems stemming from:
the legacy of longtime communist mismanagement of the economy;
damage during the internecine fighting to bridges, factories, power
lines, buildings, and houses; the large refugee and displaced
population, both Croatian and Bosnian; and the disruption of
economic ties. Stepped-up Western aid and investment, especially in
the tourist and oil industries, would help bolster the economy. The
economy emerged from its mild recession in 2000 with tourism the
main factor. Massive unemployment remains a key negative element.
The government's failure to press the economic reforms needed to
spur growth is largely the result of coalition politics and public
resistance, particularly from the trade unions, to measures that
would cut jobs, wages, or social benefits.
Cuba:
The government, the primary player in the economy, has
undertaken limited reforms in recent years to stem excess liquidity,
increase enterprise efficiency, and alleviate serious shortages of
food, consumer goods, and services, but prioritizing of political
control makes extensive reforms unlikely. Living standards for the
average Cuban, without access to dollars, remain at a depressed
level compared with 1990. The liberalized farmers' markets
introduced in 1994, sell above-quota production at market prices,
expand legal consumption alternatives, and reduce black market
prices. Income taxes and increased regulations introduced since 1996
have sharply reduced the number of legally self-employed from a high
of 208,000 in January 1996. Havana announced in 1995 that GDP
declined by 35% during 1989-93 as a result of lost Soviet aid and
domestic inefficiencies. The slide in GDP came to a halt in 1994
when Cuba reported growth in GDP of 0.7%. Cuba reported that GDP
increased by 2.5% in 1995 and 7.8% in 1996, before slowing down in
1997 and 1998 to 2.5% and 1.2% respectively. Growth recovered with a
6.2% increase in GDP in 1999 and a 5.6% increase in 2000. Much of
Cuba's recovery can be attributed to tourism revenues and foreign
investment. Growth in 2001 should continue at the same level as the
government balances the need for economic loosening against its
concern for firm political control.
Cyprus:
Economic affairs are affected by the division of the
country. The Greek Cypriot economy is prosperous but highly
susceptible to external shocks. Erratic growth rates in the 1990s
reflect the economy's vulnerability to swings in tourist arrivals,
caused by political instability on the island and fluctuations in
economic conditions in Western Europe. Economic policy is focused on
meeting the criteria for admission to the EU. As in the Turkish
sector, water shortage is a growing problem, and several
desalination plants are planned. The Turkish Cypriot economy has
about one-fifth the population and one-third the per capita GDP of
the south. Because it is recognized only by Turkey, it has had much
difficulty arranging foreign financing, and foreign firms have
hesitated to invest there. It remains heavily dependent on
agriculture and government service, which together employ about half
of the work force. Moreover, the small, vulnerable economy has
suffered because the Turkish lira is legal tender. To compensate for
the economy's weakness, Turkey provides direct and indirect aid to
tourism, education, industry, etc.
Czech Republic:
Basically one of the most stable and prosperous of
the post-Communist states, the Czech Republic has been recovering
from recession since mid-1999. The economy grew about 2.5% in 2000
and should achieve somewhat higher growth in 2001. Growth is led by
exports to the EU, especially Germany, and foreign investment, while
domestic demand is reviving. Uncomfortably high fiscal and current
account deficits could be future problems. Unemployment is down to
8.7% as job creation continues in the rebounding economy; inflation
is up to 3.8% but still moderate. The EU put the Czech Republic just
behind Poland and Hungary in preparations for accession, which will
give further impetus and direction to structural reform. Moves to
complete banking, telecommunications and energy privatization will
add to foreign investment, while intensified restructuring among
large enterprises and banks and improvements in the financial sector
should strengthen output growth.
Denmark:
This thoroughly modern market economy features high-tech
agriculture, up-to-date small-scale and corporate industry,
extensive government welfare measures, comfortable living standards,
and high dependence on foreign trade. Denmark is a net exporter of
food and energy and has a comfortable balance of payments surplus.
The center-left coalition government has reduced the formerly high
unemployment rate and attained a budget surplus as well as followed
the previous government's policies of maintaining low inflation and
a stable currency. The coalition has lowered marginal income tax
rates and raised environmental taxes thus maintaining overall tax
revenues. Problems of bottlenecks, and longer term demographic
changes reducing the labor force, are being addressed through labor
market reforms. The government has been successful in meeting, and
even exceeding, the economic convergence criteria for participating
in the third phase (a common European currency) of the European
Monetary Union (EMU), but Denmark, in a September 2000 referendum,
reconfirmed its decision not to join the 11 other EU members in the
euro. Even so, the Danish currency remains pegged to the euro.
Djibouti:
The economy is based on service activities connected with
the country's strategic location and status as a free trade zone in
northeast Africa. Two-thirds of the inhabitants live in the capital
city, the remainder being mostly nomadic herders. Scanty rainfall
limits crop production to fruits and vegetables, and most food must
be imported. Djibouti provides services as both a transit port for
the region and an international transshipment and refueling center.
It has few natural resources and little industry. The nation is,
therefore, heavily dependent on foreign assistance to help support
its balance of payments and to finance development projects. An
unemployment rate of 40% to 50% continues to be a major problem.
Inflation is not a concern, however, because of the fixed tie of the
franc to the US dollar. Per capita consumption dropped an estimated
35% over the last seven years because of recession, civil war, and a
high population growth rate (including immigrants and refugees).
Faced with a multitude of economic difficulties, the government has
fallen in arrears on long-term external debt and has been struggling
to meet the stipulations of foreign aid donors. The year 2001 will
see only small growth as port activity should decrease now that
Ethiopia has more trade route options.
Dominica:
The economy depends on agriculture and is highly
vulnerable to climatic conditions, notably tropical storms.
Agriculture, primarily bananas, accounts for 21% of GDP and employs
40% of the labor force. Development of the tourist industry remains
difficult because of the rugged coastline, lack of beaches, and the
lack of an international airport. Hurricane Luis devastated the
country's banana crop in September 1995; tropical storms had wiped
out one-quarter of the crop in 1994 as well. The subsequent recovery
has been fueled by increases in construction, soap production, and
tourist arrivals. The government is attempting to develop an
offshore financial industry in order to diversify the island's
production base.