Guatemala:
The agricultural sector accounts for about one-fourth of
GDP, two-thirds of exports, and half of the labor force. Coffee,
sugar, and bananas are the main products. Former President ARZU
(1996-2000) worked to implement a program of economic liberalization
and political modernization. The 1996 signing of the peace accords,
which ended 36 years of civil war, removed a major obstacle to
foreign investment. In 1998, Hurricane Mitch caused relatively
little damage to Guatemala compared to its neighbors. Ongoing
challenges include increasing government revenues, negotiating
further assistance from international donors, and increasing the
efficiency and openness of both government and private financial
operations. Despite low international prices for Guatemala's main
commodities, the economy grew by 3% in 2000 and is forecast to grow
by 4% in 2001. Guatemala, along with Honduras and El Salvador,
recently concluded a free trade agreement with Mexico and has moved
to protect international property rights. However, the PORTILLO
administration has undertaken a review of privatizations under the
previous administration, thereby creating some uncertainty among
investors.
Guernsey:
Financial services - banking, fund management, insurance,
etc. - account for about 55% of total income in this tiny Channel
Island economy. Tourism, manufacturing, and horticulture, mainly
tomatoes and cut flowers, have been declining. Light tax and death
duties make Guernsey a popular tax haven. The evolving economic
integration of the EU nations is changing the rules of the game
under which Guernsey operates.
Guinea:
Guinea possesses major mineral, hydropower, and agricultural
resources, yet remains a poor underdeveloped nation. The country
possesses over 30% of the world's bauxite reserves and is the second
largest bauxite producer. The mining sector accounted for about 75%
of exports in 1999. Long-run improvements in government fiscal
arrangements, literacy, and the legal framework are needed if the
country is to move out of poverty. The government made encouraging
progress in budget management in 1997-99, and reform progress was
praised in the World Bank/IMF October 2000 assessment. However,
escalating fighting along the Sierra Leonean and Liberian borders
will cause major economic disruptions. In addition to direct defense
costs, the violence has led to a sharp decline in investor
confidence. Foreign mining companies have reduced expatriate staff,
while panic buying has created food shortages and inflation in local
markets. Real GDP growth is expected to fall to 2% in 2001.
Guinea-Bissau:
One of the 20 poorest countries in the world,
Guinea-Bissau depends mainly on farming and fishing. Cashew crops
have increased remarkably in recent years, and the country now ranks
sixth in cashew production. Guinea-Bissau exports fish and seafood
along with small amounts of peanuts, palm kernels, and timber. Rice
is the major crop and staple food. However, intermittent fighting
between Senegalese-backed government troops and a military junta
destroyed much of the country's infrastructure and caused widespread
damage to the economy in 1998; the civil war led to a 28% drop in
GDP that year, with partial recovery in 1999-2000. Before the war,
trade reform and price liberalization were the most successful part
of the country's structural adjustment program under IMF
sponsorship. The tightening of monetary policy and the development
of the private sector had also begun to reinvigorate the economy.
Because of high costs, the development of petroleum, phosphate, and
other mineral resources is not a near-term prospect. However,
unexploited offshore oil reserves could provide much-needed revenue
in the long run.
Guyana:
Severe drought and political turmoil contributed to Guyana's
negative growth of -1.8% for 1998 following six straight years of
growth of 5% or better. Growth came back to a positive 1.8% in 1999
and 3% in 2000. Underlying growth factors have included expansion in
the key agricultural and mining sectors, a more favorable atmosphere
for business initiative, a more realistic exchange rate, a moderate
inflation rate, and continued support by international
organizations. President JAGDEO, the former finance minister, is
taking steps to reform the economy, including drafting an investment
code and restructuring the inefficient and unresponsive public
sector. Problems include a shortage of skilled labor and a deficient
infrastructure. The government must persist in efforts to manage its
sizable external debt and attract new investment.
Haiti:
About 80% of the population lives in abject poverty. Nearly
70% of all Haitians depend on the agriculture sector, which consists
mainly of small-scale subsistence farming and employs about
two-thirds of the economically active work force. The country has
experienced little job creation since the former President PREVAL
took office in February 1996, although the informal economy is
growing. Following legislative elections in May 2000, fraught with
irregularities, international donors - including the US and EU -
suspended almost all aid to Haiti. This destabilized the Haitian
currency, the gourde, and, combined with a 40% fuel price hike in
September, caused widespread price increases. Prices appear to have
leveled off in January 2001.
Heard Island and McDonald Islands:
no economic activity
Holy See (Vatican City):
This unique, noncommercial economy is
supported financially by contributions (known as Peter's Pence) from
Roman Catholics throughout the world, the sale of postage stamps and
tourist mementos, fees for admission to museums, and the sale of
publications. The incomes and living standards of lay workers are
comparable to, or somewhat better than, those of counterparts who
work in the city of Rome.
Honduras:
Honduras, one of the poorest countries in the Western
Hemisphere, is banking on expanded trade privileges under the
Enhanced Caribbean Basin Initiative and on debt relief under the
Heavily Indebted Poor Countries (HIPC) initiative. While
reconstruction from 1998's Hurricane Mitch is at an advanced stage,
and the country has met most of its macroeconomic targets, it failed
to meet the IMF's goals to liberalize its energy and
telecommunications sectors. Economic growth has rebounded nicely
since the hurricane and should continue in 2001.
Hong Kong:
Hong Kong has a bustling free market economy highly
dependent on international trade. Natural resources are limited, and
food and raw materials must be imported. Indeed, imports and
exports, including reexports, each exceed GDP in dollar value. Even
before Hong Kong reverted to Chinese administration on 1 July 1997
it had extensive trade and investment ties with China. Per capita
GDP compares with the level in the four big countries of Western
Europe. GDP growth averaged a strong 5% in 1989-97. The widespread
Asian economic difficulties in 1998 hit this trade-dependent economy
quite hard, with GDP down 5%. The economy is undergoing a rapid
recovery, with growth of 10% in 2000 to be followed by projected
growth of 5% in 2001.