Dominican Republic:
The Dominican economy experienced dramatic
growth over the last decade, even though the economy was hit hard by
Hurricane Georges in 1998. Although the country has long been viewed
primarily as an exporter of sugar, coffee, and tobacco, in recent
years the service sector has overtaken agriculture as the economy's
largest employer, due to growth in tourism and free trade zones. The
country suffers from marked income inequality; the poorest half of
the population receives less than one-fifth of GNP, while the
richest ten percent enjoy 40% of national income. In December 2000,
the new MEJIA administration passed broad new tax legislation which
it hopes will provide enough revenue to offset rising oil prices and
to service foreign debt.
Ecuador:
Ecuador has substantial oil resources and rich agricultural
areas. Because the country exports primary products such as oil,
bananas, and shrimp, fluctuations in world market prices can have a
substantial domestic impact. Ecuador joined the World Trade
Organization in 1996, but has failed to comply with many of its
accession commitments. In recent years, growth has been uneven due
to ill-conceived fiscal stabilization measures. The aftermath of El
Nino and depressed oil market of 1997-98 drove Ecuador's economy
into a free-fall in 1999. The beginning of 1999 saw the banking
sector collapse, which helped precipitate an unprecedented default
on external loans later that year. Continued economic instability
drove a 70% depreciation of the currency throughout 1999, which
eventually forced a desperate government to "dollarize" the currency
regime in 2000. The move stabilized the currency, but did not stave
off the ouster of the government. The new president, Gustavo NOBOA
has yet to complete negotiations for a long sought IMF accord. He
will find it difficult to push through the reforms necessary to make
"dollarization" work in the long run.
Egypt:
A series of IMF arrangements - along with massive external
debt relief resulting from Egypt's participation in the Gulf war
coalition - helped Egypt improve its macroeconomic performance
during the 1990s. Sound fiscal and monetary policies through the
mid-1990s helped to tame inflation, slash budget deficits, and build
up foreign reserves, while structural reforms such as privatization
and new business legislation prompted increased foreign investment.
By mid-1998, however, the pace of structural reform slackened, and
lower combined hard currency earnings resulted in pressure on the
Egyptian pound and sporadic US dollar shortages. External payments
were not in crisis, but Cairo's attempts to curb demand for foreign
exchange convinced some investors and currency traders that
government financial operations lacked transparency and
coordination. Monetary pressures have since eased, however, with the
1999-2000 higher oil prices, a rebound in tourism, and a series of
mini-devaluations of the pound. The development of a gas export
market is a major plus factor in future growth.
El Salvador:
El Salvador is a struggling Central American economy
which has been suffering from a weak tax collection system, factory
closings, the aftermaths of Hurricane Mitch of 1998 and the
devastating earthquakes of early 2001, and weak world coffee prices.
On the bright side, in recent years inflation has fallen to single
digit levels, and total exports have grown substantially. The trade
deficit has been offset by remittances (an estimated $1.6 billion in
2000) from Salvadorans living abroad and by external aid. As of 1
January 2001, the US dollar was made legal tender alongside the
colon.
Equatorial Guinea:
The discovery and exploitation of large oil
reserves have contributed to dramatic economic growth in recent
years. Forestry, farming, and fishing are also major components of
GDP. Subsistence farming predominates. Although pre-independence
Equatorial Guinea counted on cocoa production for hard currency
earnings, the deterioration of the rural economy under successive
brutal regimes has diminished potential for agriculture-led growth.
A number of aid programs sponsored by the World Bank and the IMF
have been cut off since 1993 because of the government's gross
corruption and mismanagement. Businesses, for the most part, are
owned by government officials and their family members. Undeveloped
natural resources include titanium, iron ore, manganese, uranium,
and alluvial gold. The country responded favorably to the
devaluation of the CFA franc in January 1994. Boosts in production
and high world oil prices stimulated growth in 2000, with oil
accounting for 90% of greatly increased exports.
Eritrea:
With independence from Ethiopia on 24 May 1993, Eritrea
faced the economic problems of a small, desperately poor country.
The economy is largely based on subsistence agriculture, with 80% of
the population involved in farming and herding. The small industrial
sector consists mainly of light industries with outmoded
technologies. Domestic output (GDP) is substantially augmented by
worker remittances from abroad. Government revenues come from custom
duties and taxes on income and sales. Road construction is a top
domestic priority. In the long term, Eritrea may benefit from the
development of offshore oil, offshore fishing, and tourism.
Eritrea's economic future depends on its ability to master
fundamental social and economic problems, e.g., by reducing
illiteracy, promoting job creation, expanding technical training,
attracting foreign investment, and streamlining the bureaucracy.
Eritrea's agriculture over the last two years was severely weakened
by war and drought, and many farmlands must wait to be demined.
Another major difficulty is the ports, which prior to the war were
Ethiopia's preferred outlets but since have seen trade dry up.
Estonia:
In 2000, Estonia rebounded from the Russian financial
crisis by scaling back its budget and reorienting trade away from
Russian markets into EU member states. After GDP shrank 1.1% in
1999, the economy made a strong recovery in 2000, with growth
estimated at 6.4% - the highest in Central and Eastern Europe.
Estonia joined the World Trade Organization in November 1999 - the
second Baltic state to join - and continues its EU accession talks.
For 2001, Estonians predict GDP to grow around 6%, inflation of
between 4.2%-5.3%, and a balanced budget. Substantial gains were
made in completing privatization of Estonia's few remaining large,
state-owned companies in 2000, and this momentum is expected to
continue in 2001. Estonia hopes to join the EU during the next round
of enlargement tentatively set for 2004.
Ethiopia:
Ethiopia's economy is based on agriculture, which accounts
for half of GDP, 90% of exports, and 80% of total employment. The
agricultural sector suffers from frequent periods of drought and
poor cultivation practices, and as many as 4.6 million people need
food assistance annually. Coffee is critical to the Ethiopian
economy, and Ethiopia earned $267 million in 1999 by exporting
105,000 metric tons. According to current estimates, coffee
contributes 10% of Ethiopia's GDP. More than 15 million people (25%
of the population) derive their livelihood from the coffee sector.
Other exports include live animals, hides, gold, and qat. In
December 1999, Ethiopia signed a $1.4 billion joint venture deal to
develop a huge natural gas field in the Somali Regional State. The
war with Eritrea forced the government to spend scarce resources on
the military and to scale back ambitious development plans. Foreign
investment has declined significantly. Government taxes imposed in
late 1999 to raise money for the war depressed an already weak
economy. The war forced the government to improve roads and other
parts of the previously neglected infrastructure, but only certain
regions of the nation benefited. Recovery from the war is mostly
contingent on natural factors. A drought has continued into the end
of 2000 and food relief is expected to be needed through mid-2001 at
least. Ethiopia may receive Highly Indebted Poor Countries (HIPC)
debt relief by the end of the year.
Europa Island:
no economic activity
Falkland Islands (Islas Malvinas): The economy was formerly based on agriculture, mainly sheep farming, but today fishing contributes the bulk of economic activity. In 1987 the government began selling fishing licenses to foreign trawlers operating within the Falklands exclusive fishing zone. These license fees total more than $40 million per year, which goes to support the island's health, education, and welfare system. Squid accounts for 75% of the fish taken. Dairy farming supports domestic consumption; crops furnish winter fodder. Exports feature shipments of high-grade wool to the UK and the sale of postage stamps and coins. To encourage tourism, the Falkland Islands Development Corporation has built three lodges for visitors attracted by the abundant wildlife and trout fishing. The islands are now self-financing except for defense. The British Geological Survey announced a 200-mile oil exploration zone around the islands in 1993, and early seismic surveys suggest substantial reserves capable of producing 500,000 barrels per day; to date no exploitable site has been identified. An agreement between Argentina and the UK in 1995 seeks to defuse licensing and sovereignty conflicts that would dampen foreign interest in exploiting potential oil reserves.