Howland Island:
no economic activity
Hungary:
Hungary continues to demonstrate strong economic growth and
to work toward accession to the European Union. The private sector
accounts for over 80% of GDP. Foreign ownership of and investment in
Hungarian firms is widespread, with cumulative foreign direct
investment totaling $23 billion by 2000. Hungarian sovereign debt
was upgraded in 2000 to the second-highest rating among all the
Central European transition economies. Inflation - a top economic
concern in 2000 - is still high at almost 10%, pushed upward by
higher world oil and gas and domestic food prices. Economic reform
measures such as health care reform, tax reform, and local
government financing have not yet been addressed by the ORBAN
government.
Iceland:
Iceland's Scandinavian-type economy is basically
capitalistic, yet with an extensive welfare system, low
unemployment, and remarkably even distribution of income. In the
absence of other natural resources (except for abundant hydrothermal
and geothermal power), the economy depends heavily on the fishing
industry, which provides 70% of export earnings and employs 12% of
the work force. The economy remains sensitive to declining fish
stocks as well as to drops in world prices for its main exports:
fish and fish products, aluminum, and ferrosilicon. The center-right
government plans to continue its policies of reducing the budget and
current account deficits, limiting foreign borrowing, containing
inflation, revising agricultural and fishing policies, diversifying
the economy, and privatizing state-owned industries. The government
remains opposed to EU membership, primarily because of Icelanders'
concern about losing control over their fishing resources. Iceland's
economy has been diversifying into manufacturing and service
industries in the last decade, and new developments in software
production, biotechnology, and financial services are taking place.
The tourism sector is also expanding, with the recent trends in
ecotourism and whale watching. Growth has been remarkably steady
over the past five years at 4%-5%.
India:
India's economy encompasses traditional village farming,
modern agriculture, handicrafts, a wide range of modern industries,
and a multitude of support services. More than a third of the
population is too poor to be able to afford an adequate diet.
India's international payments position remained strong in 2000 with
adequate foreign exchange reserves, moderately depreciating nominal
exchange rates, and booming exports of software services. Growth in
manufacturing output slowed, and electricity shortages continue in
many regions.
Indian Ocean:
The Indian Ocean provides major sea routes connecting
the Middle East, Africa, and East Asia with Europe and the Americas.
It carries a particularly heavy traffic of petroleum and petroleum
products from the oilfields of the Persian Gulf and Indonesia. Its
fish are of great and growing importance to the bordering countries
for domestic consumption and export. Fishing fleets from Russia,
Japan, South Korea, and Taiwan also exploit the Indian Ocean, mainly
for shrimp and tuna. Large reserves of hydrocarbons are being tapped
in the offshore areas of Saudi Arabia, Iran, India, and western
Australia. An estimated 40% of the world's offshore oil production
comes from the Indian Ocean. Beach sands rich in heavy minerals and
offshore placer deposits are actively exploited by bordering
countries, particularly India, South Africa, Indonesia, Sri Lanka,
and Thailand.
Indonesia:
Indonesia, a vast polyglot nation, faces severe economic
problems, stemming from secessionist movements and the low level of
security in the regions, the lack of reliable legal recourse in
contract disputes, corruption, weaknesses in the banking system, and
strained relations with the IMF. Investor confidence will remain low
and few new jobs will be created under these circumstances. Growth
of 4.8% in 2000 is not sustainable, being attributable to favorable
short-term factors, including high world oil prices, a surge in
nonoil exports, and increased domestic demand for consumer durables.
Iran:
Iran's economy is a mixture of central planning, state
ownership of oil and other large enterprises, village agriculture,
and small-scale private trading and service ventures. President
KHATAMI has continued to follow the market reform plans of former
President RAFSANJANI and has indicated that he will pursue
diversification of Iran's oil-reliant economy although he has made
little progress toward that goal. The strong oil market in 1996
helped ease financial pressures on Iran and allowed for Tehran's
timely debt service payments. Iran's financial situation tightened
in 1997 and deteriorated further in 1998 because of lower oil
prices. The subsequent zoom in oil prices in 1999-2000 afforded Iran
fiscal breathing room but does not solve Iran's structural economic
problems, including the encouragement of foreign investment.
Iraq:
Iraq's economy is dominated by the oil sector, which has
traditionally provided about 95% of foreign exchange earnings. In
the 1980s, financial problems caused by massive expenditures in the
eight-year war with Iran and damage to oil export facilities by Iran
led the government to implement austerity measures, borrow heavily,
and later reschedule foreign debt payments; Iraq suffered economic
losses of at least $100 billion from the war. After the end of
hostilities in 1988, oil exports gradually increased with the
construction of new pipelines and restoration of damaged facilities.
Iraq's seizure of Kuwait in August 1990, subsequent international
economic sanctions, and damage from military action by an
international coalition beginning in January 1991 drastically
reduced economic activity. Although government policies supporting
large military and internal security forces and allocating resources
to key supporters of the regime have hurt the economy,
implementation of the UN's oil-for-food program in December 1996 has
helped improve conditions for the average Iraqi citizen. For the
first six, six-month phases of the program, Iraq was allowed to
export limited amounts of oil in exchange for food, medicine, and
some infrastructure spare parts. In December 1999, the UN Security
Council authorized Iraq to export under the program as much oil as
required to meet humanitarian needs. Oil exports are now more than
three-quarters their prewar level. Per capita food imports have
increased significantly, while medical supplies and health care
services are steadily improving. Per capita output and living
standards are still well below the prewar level, but any estimates
have a wide range of error.
Ireland:
Ireland is a small, modern, trade-dependent economy with
growth averaging a robust 9% in 1995-2000. Agriculture, once the
most important sector, is now dwarfed by industry, which accounts
for 38% of GDP and about 80% of exports and employs 28% of the labor
force. Although exports remain the primary engine for Ireland's
robust growth, the economy is also benefiting from a rise in
consumer spending and recovery in both construction and business
investment. Over the past decade, the Irish government has
implemented a series of national economic programs designed to curb
inflation, reduce government spending, increase labor force skills,
and promote foreign investment. Ireland joined in launching the euro
currency system in January 1999 along with 10 other EU nations. The
Irish economy is in danger of overheating, with the tight labor
market driving up wage demands and inflation.
Israel:
Israel has a technologically advanced market economy with
substantial government participation. It depends on imports of crude
oil, grains, raw materials, and military equipment. Despite limited
natural resources, Israel has intensively developed its agricultural
and industrial sectors over the past 20 years. Israel is largely
self-sufficient in food production except for grains. Cuts diamonds,
high-technology equipment, and agricultural products (fruits and
vegetables) are the leading exports. Israel usually posts sizable
current account deficits, which are covered by large transfer
payments from abroad and by foreign loans. Roughly half of the
government's external debt is owed to the US, which is its major
source of economic and military aid. The influx of Jewish immigrants
from the former USSR topped 750,000 during the period 1989-99,
bringing the population of Israel from the former Soviet Union to 1
million, one-sixth of the total population, and adding scientific
and professional expertise of substantial value for the economy's
future. The influx, coupled with the opening of new markets at the
end of the Cold War, energized Israel's economy, which grew rapidly
in the early 1990s. But growth began moderating in 1996 when the
government imposed tighter fiscal and monetary policies and the
immigration bonus petered out. Growth was a strong 5.9% in 2000. But
the outbreak of Palestinian unrest in late September and the
collapse of the BARAK Government - coupled with a cooling off in the
high-technology and tourist sectors - undercut the boom and
foreshadows a slowdown to 2%-3% in 2001.