Papua New Guinea
Papua New Guinea is richly endowed with natural
resources, but exploitation has been hampered by rugged terrain and
the high cost of developing infrastructure. Agriculture provides a
subsistence livelihood for 85% of the population. Mineral deposits,
including oil, copper, and gold, account for 72% of export earnings.
The economy has faltered over the past three years but will probably
improve slightly in 2003. Former Prime Minister Mekere MORAUTA had
tried to restore integrity to state institutions, stabilize the
kina, restore stability to the national budget, privatize public
enterprises where appropriate, and ensure ongoing peace on
Bougainville. The government has had considerable success in
attracting international support, specifically gaining the backing
of the IMF and the World Bank in securing development assistance
loans. Significant challenges face Prime Minister Michael SOMARE,
including gaining further investor confidence, continuing efforts to
privatize government assets, and maintaining the support of members
of Parliament.
Paracel Islands
China announced plans in 1997 to open the islands
for tourism.
Paraguay
Paraguay has a market economy marked by a large informal
sector. The informal sector features both reexport of imported
consumer goods to neighboring countries as well as the activities of
thousands of microenterprises and urban street vendors. Because of
the importance of the informal sector, accurate economic measures
are difficult to obtain. A large percentage of the population
derives their living from agricultural activity, often on a
subsistence basis. The formal economy grew by an average of about 3%
annually in 1995-97; but GDP declined slightly in 1998, 1999, and
2000, rose slightly in 2001, only to fall again in 2002. On a per
capita basis, real income has stagnated at 1980 levels. Most
observers attribute Paraguay's poor economic performance to
political uncertainty, corruption, lack of progress on structural
reform, substantial internal and external debt, and deficient
infrastructure.
Peru
Thanks to foreign investment and the cooperation between the
government and the IMF and World Bank, growth was strong in 1994-97
and inflation was brought under control. In 1998, El Nino's impact
on agriculture, the financial crisis in Asia, and instability in
Brazilian markets undercut growth. The following year was again lean
year for Peru, with the aftermath of El Nino and the Asian financial
crisis working its way through the economy. Political instability
resulting from the presidential election and FUJIMORI's subsequent
departure from office limited growth in 2000. The downturn in the
global economy further curtailed growth in 2001. President TOLEDO,
who assumed the presidency in July 2001, has been working to
reinvigorate the economy and reduce unemployment. Economic growth in
2002 is estimated at 4.8%, led by construction in the retail and gas
sectors.
Philippines
In 1998, the Philippine economy - a mixture of
agriculture, light industry, and supporting services - deteriorated
as a result of spillover from the Asian financial crisis and poor
weather conditions. Growth fell to 0.6% in 1998 from 5% in 1997, but
recovered to about 3.3% in 1999, 4.5% in 2000, and 4.5% in 2001. In
2002, the Philippines recorded GDP growth of 4.4% but also incurred
a record budget deficit. As a result, the Philippines is burdened
with a public sector debt equal to more than 100% of GDP. Growth
eased to 3.8% in 2003. The government has promised economic reforms
including going forward with privatization, reforming the tax
system, and promoting additional trade integration within its
region. Considerable drive is required to update the educational
system and the road network.
Pitcairn Islands
The inhabitants of this tiny isolated economy exist
on fishing, subsistence farming, handicrafts, and postage stamps.
The fertile soil of the valleys produces a wide variety of fruits
and vegetables, including citrus, sugarcane, watermelons, bananas,
yams, and beans. Bartering is an important part of the economy. The
major sources of revenue are the sale of postage stamps to
collectors and the sale of handicrafts to passing ships.
Poland
Poland has steadfastly pursued a policy of economic
liberalization throughout the 1990s and today stands out as a
success story among transition economies. Even so, much remains to
be done. The privatization of small and medium state-owned companies
and a liberal law on establishing new firms has encouraged the
development of the private business sector, but legal and
bureaucratic obstacles alongside persistent corruption are hampering
its further development. Poland's agricultural sector remains
handicapped by structural problems, surplus labor, inefficient small
farms, and lack of investment. Restructuring and privatization of
"sensitive sectors" (e.g., coal, steel, railroads, and energy),
while recently initiated, have stalled due to a lack of political
will on the part of the government. Structural reforms in health
care, education, the pension system, and state administration have
resulted in larger than expected fiscal pressures. Further progress
in public finance depends mainly on privatization of Poland's
remaining state sector, the reduction of state employment, and an
overhaul of the tax code to incorporate the growing gray economy and
farmers most of whom pay no tax. The government's determination to
enter the EU has shaped most aspects of its economic policy and new
legislation; in June 2003, 77% of the voters approved membership,
now scheduled for May 2004. Improving Poland's export
competitiveness and containing the internal budget deficit are top
priorities. Due to political uncertainty, the zloty has recently
depreciated in relation to the euro and the dollar while currencies
of the other euro-zone aspirants have been appreciating. GDP per
capita equals that of the 3 Baltic states.
Portugal
Portugal has become a diversified and increasingly
service-based economy since joining the European Community in 1986.
Over the past decade, successive governments have privatized many
state-controlled firms and liberalized key areas of the economy,
including the financial and telecommunications sectors. The country
qualified for the European Monetary Union (EMU) in 1998 and began
circulating the euro on 1 January 2002 along with 11 other EU member
economies. Economic growth has been above the EU average for much of
the past decade, but fell back in 2001-03. GDP per capita stands at
70% of that of the leading EU economies. A poor educational system,
in particular, has been an obstacle to greater productivity and
growth. Portugal has been increasingly overshadowed by lower-cost
producers in Central Europe and Asia as a target for foreign direct
investment. The coalition government faces tough choices in its
attempts to boost Portugal's economic competitiveness and to keep
the budget deficit within the 3% EU ceiling.
Puerto Rico
Puerto Rico has one of the most dynamic economies in the
Caribbean region. A diverse industrial sector has far surpassed
agriculture as the primary locus of economic activity and income.
Encouraged by duty-free access to the US and by tax incentives, US
firms have invested heavily in Puerto Rico since the 1950s. US
minimum wage laws apply. Sugar production has lost out to dairy
production and other livestock products as the main source of income
in the agricultural sector. Tourism has traditionally been an
important source of income, with estimated arrivals of nearly 5
million tourists in 1999. Growth fell off in 2001-02, largely due to
the slowdown in the US economy.
Qatar
Oil and gas account for more than 55% of GDP, roughly 85% of
export earnings, and 70% of government revenues. Oil and gas have
given Qatar a per capita GDP comparable to that of the leading West
European industrial countries. Proved oil reserves of 14.5 billion
barrels should ensure continued output at current levels for 23
years. Production and export of natural gas are becoming
increasingly important to the economy. Qatar's proved reserves of
natural gas exceed 17.9 trillion cubic meters, more than 5% of the
world total and third largest in the world. Long-term goals feature
the development of offshore natural gas reserves. Since 2000, Qatar
has consistently posted trade surpluses largely because of high oil
prices and increased natural gas exports, and Qatar's economy is
expected to receive an added boost as it begins to increase liquid
natural gas exports.