Reunion:
The economy has traditionally been based on agriculture.
Sugarcane has been the primary crop for more than a century, and in
some years it accounts for 85% of exports. The government has been
pushing the development of a tourist industry to relieve high
unemployment, which amounts to more than 40% of the labor force. The
gap in Reunion between the well-off and the poor is extraordinary
and accounts for the persistent social tensions. The white and
Indian communities are substantially better off than other segments
of the population, often approaching European standards, whereas
minority groups suffer the poverty and unemployment typical of the
poorer nations of the African continent. The outbreak of severe
rioting in February 1991 illustrates the seriousness of
socioeconomic tensions. The economic well-being of Reunion depends
heavily on continued financial assistance from France.
Romania:
Romania, one of the poorest countries in Central and
Eastern Europe, began the transition from communism in 1989 with a
largely obsolete industrial base and a pattern of output unsuited to
the country's needs. Over the past decade economic restructuring has
lagged behind most other countries in the region. Consequently,
living standards have continued to fall - real wages are down over
40%. Corruption too has worsened. The EU ranks Romania last among
enlargement candidates, and the European Bank for Reconstruction and
Development (EBRD) rates Romania's transition progress the region's
worst. The country emerged in 2000 from a punishing three-year
recession thanks to strong demand in EU export markets. A new
government elected in November 2000 promises to promote economic
reform. Bucharest hopes to receive financial and technical
assistance from international financial institutions and Western
governments; negotiations over a new IMF standby agreement are to
begin early in 2001. If reform stalls, Romania's ability to borrow
from both public and private sources could quickly dry up, leading
to another financial crisis.
Russia:
A decade after the implosion of the Soviet Union in 1991,
Russia is still struggling to establish a modern market economy and
achieve strong economic growth. In contrast to its trading partners
in Central Europe - which were able to overcome the initial
production declines that accompanied the launch of market reforms
within three to five years - Russia saw its economy contract for
five years, as the executive and legislature dithered over the
implementation of many of the basic foundations of a market economy.
Russia achieved a slight recovery in 1997, but the government's
stubborn budget deficits and the country's poor business climate
made it vulnerable when the global financial crisis swept through in
1998. The crisis culminated in the August depreciation of the ruble,
a debt default by the government, and a sharp deterioration in
living standards for most of the population. The economy rebounded
in 1999 and 2000, buoyed by the competitive boost from the weak
ruble and a surging trade surplus fueled by rising world oil prices.
This recovery, along with a renewed government effort in 2000 to
advance lagging structural reforms, have raised business and
investor confidence over Russia's prospects in its second decade of
transition. Yet serious problems persist. Russia remains heavily
dependent on exports of commodities, particularly oil, natural gas,
metals, and timber, which account for over 80% of exports, leaving
the country vulnerable to swings in world prices. Russia's
agricultural sector remains beset by uncertainty over land ownership
rights, which has discouraged needed investment and restructuring.
Another threat is negative demographic trends, fueled by low birth
rates and a deteriorating health situation - including an alarming
rise in AIDS cases - that have contributed to a nearly 2% drop in
the population since 1992. Russia's industrial base is increasingly
dilapidated and must be replaced or modernized if the country is to
achieve sustainable economic growth. Other problems include
widespread corruption, capital flight, and brain drain.
Rwanda:
Rwanda is a rural country with about 90% of the population
engaged in (mainly subsistence) agriculture. It is the most densely
populated country in Africa; is landlocked; and has few natural
resources and minimal industry. Primary exports are coffee and tea.
The 1994 genocide decimated Rwanda's fragile economic base, severely
impoverished the population, particularly women, and eroded the
country's ability to attract private and external investment.
However, Rwanda has made significant progress in stabilizing and
rehabilitating its economy. GDP has rebounded, and inflation has
been curbed. In June 1998, Rwanda signed an Enhanced Structural
Adjustment Facility (ESAF) with the IMF. Rwanda has also embarked
upon an ambitious privatization program with the World Bank.
Continued growth in 2001 depends on the maintenance of international
aid levels and the strengthening of world prices of coffee and tea.
Saint Helena:
The economy depends largely on financial assistance
from the UK, which amounted to about $5 million in 1997 or almost
one-half of annual budgetary revenues. The local population earns
income from fishing, the raising of livestock, and sales of
handicrafts. Because there are few jobs, 25% of the work force has
left to seek employment on Ascension Island, on the Falklands, and
in the UK.
Saint Kitts and Nevis:
The economy has traditionally depended on the
growing and processing of sugarcane; decreasing world prices have
hurt the industry in recent years. Tourism, export-oriented
manufacturing, and offshore banking activity have assumed larger
roles. Most food is imported. The government has undertaken a
program designed to revitalize the faltering sugar sector. It is
also working to improve revenue collection in order to better fund
social programs. In 1997 some leaders in Nevis were urging
separation from Saint Kitts on the basis that Nevis was paying far
more in taxes than it was receiving in government services, but the
vote on cessation failed in August 1998. In late September 1998,
Hurricane Georges caused approximately $445 million in damages and
limited GDP growth for the year.
Saint Lucia:
The recent changes in the EU import preference regime
and the increased competition from Latin American bananas have made
economic diversification increasingly important in Saint Lucia.
Improvement in the construction sector and growth of the tourism
industry helped expand GDP in 1998-99. The agriculture sector
registered its fifth year of decline in 1997 primarily because of a
severe decline in banana production. The manufacturing sector is the
most diverse in the Eastern Caribbean, and the government is
beginning to develop regulations for the small offshore financial
sector.
Saint Pierre and Miquelon:
The inhabitants have traditionally earned
their livelihood by fishing and by servicing fishing fleets
operating off the coast of Newfoundland. The economy has been
declining, however, because of disputes with Canada over fishing
quotas and a steady decline in the number of ships stopping at Saint
Pierre. In 1992, an arbitration panel awarded the islands an
exclusive economic zone of 12,348 sq km to settle a longstanding
territorial dispute with Canada, although it represents only 25% of
what France had sought. The islands are heavily subsidized by France
to the great betterment of living standards. The government hopes an
expansion of tourism will boost economic prospects.
Saint Vincent and the Grenadines: Agriculture, dominated by banana production, is the most important sector of this lower-middle-income economy. The services sector, based mostly on a growing tourist industry, is also important. The government has been relatively unsuccessful at introducing new industries, and a high unemployment rate persists. The continuing dependence on a single crop represents the biggest obstacle to the islands' development; tropical storms wiped out substantial portions of crops in both 1994 and 1995. The tourism sector has considerable potential for development over the next decade. Recent growth has been stimulated by strong activity in the construction sector and an improvement in tourism. There is a small manufacturing sector and a small offshore financial sector whose particularly restrictive secrecy laws have caused some international concern.
Samoa:
The economy of Samoa has traditionally been dependent on
development aid, family remittances from overseas, and agricultural
exports. The country is vulnerable to devastating storms.
Agriculture employs two-thirds of the labor force, and furnishes 90%
of exports, featuring coconut cream, coconut oil, and copra. The
manufacturing sector mainly processes agricultural products. Tourism
is an expanding sector, accounting for 15% of GDP; about 85,000
tourists visited the islands in 2000. The Samoan Government has
called for deregulation of the financial sector, encouragement of
investment, and continued fiscal discipline. Observers point to the
flexibility of the labor market as a basic strength for future
economic advances. Foreign reserves are in a relatively healthy
state, the external debt is stable, and inflation is low.