Faroe Islands:
The Faroese economy has had a strong performance
since 1994, mostly as a result of increasing fish landings and high
and stable export prices. Unemployment is falling and there are
signs of labor shortages in several sectors. The positive economic
development has helped the Faroese Home Rule Government produce
increasing budget surpluses which in turn help to reduce the large
public debt, most of it owed to Denmark. However, the total
dependence on fishing makes the Faroese economy extremely
vulnerable, and the present fishing efforts appear in excess of what
is required to ensure a sustainable level of fishing in the long
term. Oil finds close to the Faroese area give hope for deposits in
the immediate Faroese area, which may eventually lay the basis for a
more diversified economy and thus less dependence on Denmark and
Danish economic assistance. Aided by a substantial annual subsidy
(15% of GDP) from Denmark, the Faroese have a standard of living not
far below the Danes and other Scandinavians.
Fiji:
Fiji, endowed with forest, mineral, and fish resources, is one
of the most developed of the Pacific island economies, though still
with a large subsistence sector. Sugar exports and a growing tourist
industry are the major sources of foreign exchange. Sugar processing
makes up one-third of industrial activity. Roughly 300,000 tourists
visit each year, including thousands of Americans following the
start of regularly scheduled non-stop air service from Los Angeles.
Fiji's growth slowed in 1997 because the sugar industry suffered
from low world prices and rent disputes between farmers and
landowners. Drought in 1998 further damaged the sugar industry, but
its recovery in 1999 contributed to robust GDP growth. Long-term
problems include low investment and uncertain property rights. The
political turmoil in Fiji has had a severe impact with the economy
shrinking by 8% in 1999 and over 7,000 people losing their jobs. The
interim government's 2001 budget is an attempt to attract foreign
investment and restart economic activity. The government's ability
to manage the budget and fulfill predictions of 4% growth for 2001
will depend on a return to stability, a regaining of investor
confidence, and the absence of international sanctions (which could
cripple Fiji's sugar and textile industry).
Finland:
Finland has a highly industrialized, largely free-market
economy, with per capita output roughly that of the UK, France,
Germany, and Italy. Its key economic sector is manufacturing -
principally the wood, metals, engineering, telecommunications, and
electronics industries. Trade is important, with exports equaling
more than one-third of GDP. Except for timber and several minerals,
Finland depends on imports of raw materials, energy, and some
components for manufactured goods. Because of the climate,
agricultural development is limited to maintaining self-sufficiency
in basic products. Forestry, an important export earner, provides a
secondary occupation for the rural population. Rapidly increasing
integration with Western Europe - Finland was one of the 11
countries joining the euro monetary system (EMU) on 1 January 1999 -
will dominate the economic picture over the next several years.
Growth in 2001 will be bolstered by strong private consumption, yet
may be 1 or 2 points lower than in 2000, largely because of a
weakening in export demand.
France:
France is in the midst of transition, from an economy that
featured extensive government ownership and intervention to one that
relies more on market mechanisms. The government remains dominant in
some sectors, particularly power, public transport, and defense
industries, but it has been relaxing its control since the
mid-1980s. The Socialist-led government has sold off part of its
holdings in France Telecom, Air France, Thales, Thomson Multimedia,
and the European Aerospace and Defense Company (EADS). The
telecommunications sector is gradually being opened to competition.
France's leaders remain committed to a capitalism in which they
maintain social equity by means of laws, tax policies, and social
spending that reduce income disparity and the impact of free markets
on public health and welfare. The government has done little to cut
generous unemployment and retirement benefits which impose a heavy
tax burden and discourage hiring. It has also shied from measures
that would dramatically increase the use of stock options and
retirement investment plans; such measures would boost the stock
market and fast-growing IT firms as well as ease the burden on the
pension system, but would disproportionately benefit the rich. In
addition to the tax burden, the reduction of the work week to
35-hours has drawn criticism for lowering the competitiveness of
French companies.
French Guiana:
The economy is tied closely to that of France through
subsidies and imports. Besides the French space center at Kourou,
fishing and forestry are the most important economic activities. The
large reserves of tropical hardwoods, not fully exploited, support
an expanding sawmill industry which provides sawn logs for export.
Cultivation of crops is limited to the coastal area, where the
population is largely concentrated; rice and manioc are the major
crops. French Guiana is heavily dependent on imports of food and
energy. Unemployment is a serious problem, particularly among
younger workers.
French Polynesia:
Since 1962, when France stationed military
personnel in the region, French Polynesia has changed from a
subsistence economy to one in which a high proportion of the work
force is either employed by the military or supports the tourist
industry. Tourism accounts for about one-fourth of GDP and is a
primary source of hard currency earnings. The small manufacturing
sector primarily processes agricultural products. The territory
benefited from a five-year (1994-98) development agreement with
France aimed principally at creating new jobs.
French Southern and Antarctic Lands:
Economic activity is limited to
servicing meteorological and geophysical research stations and
French and other fishing fleets. The fish catches landed on Iles
Kerguelen by foreign ships are exported to France and Reunion.
Gabon:
Gabon enjoys a per capita income four times that of most
nations of sub-Saharan Africa. This has supported a sharp decline in
extreme poverty; yet because of high income inequality a large
proportion of the population remains poor. Gabon depended on timber
and manganese until oil was discovered offshore in the early 1970s.
The oil sector now accounts for 50% of GDP. Gabon continues to face
fluctuating prices for its oil, timber, manganese, and uranium
exports. Despite the abundance of natural wealth, the economy is
hobbled by poor fiscal management. In 1992, the fiscal deficit
widened to 2.4% of GDP, and Gabon failed to settle arrears on its
bilateral debt, leading to a cancellation of rescheduling agreements
with official and private creditors. Devaluation of its Francophone
currency by 50% on 12 January 1994 sparked a one-time inflationary
surge, to 35%; the rate dropped to 6% in 1996. The IMF provided a
one-year standby arrangement in 1994-95, a three-year Enhanced
Financing Facility (EFF) at near commercial rates beginning in late
1995, and stand-by credit of $119 million in October 2000. Those
agreements mandate progress in privatization and fiscal discipline.
France provided additional financial support in January 1997 after
Gabon had met IMF targets for mid-1996. In 1997, an IMF mission to
Gabon criticized the government for overspending on off-budget
items, overborrowing from the central bank, and slipping on its
schedule for privatization and administrative reform. The rebound of
oil prices in 1999-2000 helped growth, but drops in production
hampered Gabon from fully realizing potential gains. An expected
decline in oil output may lead to contraction in GDP in 2001-02.
Gambia, The:
The Gambia has no important mineral or other natural
resources and has a limited agricultural base. About 75% of the
population depends on crops and livestock for its livelihood.
Small-scale manufacturing activity features the processing of
peanuts, fish, and hides. Reexport trade normally constitutes a
major segment of economic activity, but a 1999 government-imposed
preshipment inspection plan, instability of the Gambian dalasi, and
the stable political situation in Senegal have drawn some of the
reexport trade away from Banjul. The government's 1998 seizure of
the private peanut firm Alimenta eliminated the largest purchaser of
Gambian groundnuts; the following two marketing seasons have seen
significantly lower prices and sales. A decline in tourism from 1999
to 2000 has also held back growth. Unemployment and underemployment
rates are extremely high. Shortrun economic progress remains highly
dependent on sustained bilateral and multilateral aid, on
responsible government economic management as forwarded by IMF
technical help and advice, and on expected growth in the
construction sector.
Gaza Strip:
Economic output in the Gaza Strip - which comes under
the responsibility of the Palestinian Authority since the Cairo
Agreement of May 1994 - declined perhaps one-third between 1992 and
1996. The downturn was largely the result of Israeli closure
policies - the imposition of generalized border closures in response
to security incidents in Israel - which disrupted previously
established labor and commodity market relationships between Israel
and the WBGS (West Bank and Gaza Strip). The most serious negative
social effect of this downturn was the emergence of high
unemployment; unemployment in the WBGS during the 1980s was
generally under 5%; by 1995 it had risen to over 20%. Since 1997
Israel's use of comprehensive closures has decreased and, in 1998,
Israel implemented new policies to reduce the impact of closures and
other security procedures on the movement of Palestinian goods and
labor. These changes fueled an almost three-year long economic
recovery in the West Bank and Gaza Strip; real GDP grew by 5% in
1998 and 6% in 1999. Recovery was upended in the last quarter of
2000 with the outbreak of Palestinian violence, which triggered
tight Israeli closures of Palestinian self-rule areas and a severe
disruption of trade and labor movements.