Nauru
Revenues of this tiny island have come from exports of
phosphates, but reserves are expected to be exhausted within a few
years. Phosphate production has declined since 1989, as demand has
fallen in traditional markets and as the marginal cost of extracting
the remaining phosphate increases, making it less internationally
competitive. While phosphates have given Nauruans one of the highest
per capita incomes in the Third World, few other resources exist
with most necessities being imported, including fresh water from
Australia. The rehabilitation of mined land and the replacement of
income from phosphates are serious long-term problems. In
anticipation of the exhaustion of Nauru's phosphate deposits,
substantial amounts of phosphate income have been invested in trust
funds to help cushion the transition and provide for Nauru's
economic future. The government has been borrowing heavily from the
trusts to finance fiscal deficits. To cut costs the government has
called for a freeze on wages, a reduction of over-staffed public
service departments, privatization of numerous government agencies,
and closure of some overseas consulates. In recent years Nauru has
encouraged the registration of offshore banks and corporations. Tens
of billions of dollars have been channeled through their accounts.
Few comprehensive statistics on the Nauru economy exist, with
estimates of Nauru's GDP varying widely.
Navassa Island
no economic activity
Nepal
Nepal is among the poorest and least developed countries in
the world with 42% of its population living below the poverty line.
Agriculture is the mainstay of the economy, providing a livelihood
for over 80% of the population and accounting for 40% of GDP.
Industrial activity mainly involves the processing of agricultural
produce including jute, sugarcane, tobacco, and grain. Textile and
carpet production, accounting for about 80% of foreign exchange
earnings in recent years, contracted in 2001-02 due to the overall
slowdown in the world economy and pressures by Maoist insurgents on
factory owners and workers. Security concerns in the wake of the
Maoist conflict and the September 11, 2001 terrorist attacks in the
US have led to a decrease in tourism, another key source of foreign
exchange. Since 1991, the government has been moving forward with
economic reforms, e.g., by reducing business licenses and
registration requirements to simplify investment procedures,
reducing subsidies, privatizing state industries, and laying off
civil servants. Nepal has considerable scope for exploiting its
potential in hydropower and tourism, areas of recent foreign
investment interest. Prospects for foreign trade or investment in
other sectors will remain poor, however, because of the small size
of the economy, its technological backwardness, its remoteness, its
landlocked geographic location, and its susceptibility to natural
disaster. The international community's role of funding more than
60% of Nepal's development budget and more than 28% of total
budgetary expenditures will likely continue as a major ingredient of
growth.
Netherlands
The Netherlands is a prosperous and open economy
depending heavily on foreign trade. The economy is noted for stable
industrial relations, moderate unemployment and inflation, a sizable
current account surplus, and an important role as a European
transportation hub. Industrial activity is predominantly in food
processing, chemicals, petroleum refining, and electrical machinery.
A highly mechanized agricultural sector employs no more than 4% of
the labor force but provides large surpluses for the food-processing
industry and for exports. The Netherlands, along with 11 of its EU
partners, began circulating the euro currency on 1 January 2002. The
country continues to be one of the leading European nations for
attracting foreign direct investment. Economic growth slowed
considerably in 2001-03, as part of the global economic slowdown,
but for the four years before that, annual growth averaged nearly
4%, well above the EU average. The government is wrestling with a
deteriorating budget position, and is moving toward the EU 3% limit.
Netherlands Antilles
Tourism, petroleum refining, and offshore
finance are the mainstays of this small economy, which is closely
tied to the outside world. Although GDP has declined or remained
even in each of the past six years, the islands enjoy a high per
capita income and a well-developed infrastructure compared with
other countries in the region. Almost all consumer and capital goods
are imported, the US and Mexico being the major suppliers. Poor
soils and inadequate water supplies hamper the development of
agriculture.
New Caledonia
New Caledonia has about 25% of the world's known
nickel resources. Only a small amount of the land is suitable for
cultivation, and food accounts for about 20% of imports. In addition
to nickel, substantial financial support from France - equal to more
than one-fourth of GDP - and tourism are keys to the health of the
economy. Substantial new investment in the nickel industry, combined
with the recovery of global nickel prices, brightens the economic
outlook for the next several years.
New Zealand
Since 1984 the government has accomplished major
economic restructuring, transforming New Zealand from an agrarian
economy dependent on concessionary British market access to a more
industrialized, free market economy that can compete globally. This
dynamic growth has boosted real incomes (but left behind many at the
bottom of the ladder), broadened and deepened the technological
capabilities of the industrial sector, and contained inflationary
pressures. While per capita incomes have been rising, however, they
remain below the level of the four largest EU economies, and there
is some government concern that New Zealand is not closing the gap.
New Zealand is heavily dependent on trade - particularly in
agricultural products - to drive growth, and it has been affected by
the global economic slowdown and the slump in commodity prices. Thus
far the New Zealand economy has been relatively resilient, although
growth may slow to 2.5% in 2003.
Nicaragua
Nicaragua, one of the hemisphere's poorest countries,
faces low per capita income, flagging socio-economic indicators, and
huge external debt. Distribution of income is one of the most
unequal on the globe. While the country has made progress toward
macroeconomic stability over the past few years, a banking crisis
and scandal has shaken the economy. Nicaragua will continue to be
dependent on international aid and debt relief under the Heavily
Indebted Poor Countries (HIPC) initiative. Donors have made aid
conditional on the openness of government financial operation,
poverty alleviation, and human rights. Nicaragua met the conditions
for additional debt service relief in December 2000. Growth should
move up moderately in 2003 because of increased private investment
and exports.
Niger
Niger is a poor, landlocked Sub-Saharan nation, whose economy
centers on subsistence agriculture, animal husbandry, and reexport
trade, and increasingly less on uranium, because of declining world
demand. The 50% devaluation of the West African franc in January
1994 boosted exports of livestock, cowpeas, onions, and the products
of Niger's small cotton industry. The government relies on bilateral
and multilateral aid - which was suspended following the April 1999
coup d'etat - for operating expenses and public investment. In
2000-01, the World Bank approved a structural adjustment loan of
$105 million to help support fiscal reforms. However, reforms could
prove difficult given the government's bleak financial situation.
The IMF approved a $73 million poverty reduction and growth facility
for Niger in 2000 and announced $115 million in debt relief under
the Heavily Indebted Poor Countries (HIPC) initiative. Further
disbursements of aid occurred in 2002. Future growth may be
sustained by exploitation of oil, gold, coal, and other mineral
resources.
Nigeria
The oil-rich Nigerian economy, long hobbled by political
instability, corruption, and poor macroeconomic management, is
undergoing substantial reform under the new civilian administration.
Nigeria's former military rulers failed to diversify the economy
away from overdependence on the capital-intensive oil sector, which
provides 20% of GDP, 95% of foreign exchange earnings, and about 65%
of budgetary revenues. The largely subsistence agricultural sector
has failed to keep up with rapid population growth, and Nigeria,
once a large net exporter of food, now must import food. Following
the signing of an IMF stand-by agreement in August 2000, Nigeria
received a debt-restructuring deal from the Paris Club and a $1
billion credit from the IMF, both contingent on economic reforms.
The agreement was allowed to expire by the IMF in November 2001,
however, and Nigeria apparently received much less multilateral
assistance than expected in 2002. Nonetheless, increases in foreign
oil investment and oil production kept growth at 3% in 2002. The
government lacks the strength to implement the market-oriented
reforms urged by the IMF, such as modernization of the banking
system; to curb inflation by blocking excessive wage demands; and to
resolve regional disputes over the distribution of earnings from the
oil industry. When the uncertainties in the global economy are added
in, estimates of Nigeria's prospects for 2003 must have a wide
margin of error.