Solomon Islands
The bulk of the population depends on agriculture,
fishing, and forestry for at least part of their livelihood. Most
manufactured goods and petroleum products must be imported. The
islands are rich in undeveloped mineral resources such as lead,
zinc, nickel, and gold. However, severe ethnic violence, the closing
of key business enterprises, and an empty government treasury have
led to serious economic disarray, indeed near collapse. Tanker
deliveries of crucial fuel supplies (including those for electrical
generation) have become sporadic due to the government's inability
to pay and attacks against ships. Telecommunications are threatened
by the nonpayment of bills and by the lack of technical and
maintenance staff many of whom have left the country.
Somalia
Somalia's economic fortunes are being driven by its deep
political divisions. The northern area has declared its independence
as "Somaliland"; the central area, Puntland, is a self-declared
autonomous state; and the remaining southern portion is riddled with
the struggles of rival factions. Economic life continues, in part
because much activity is local and relatively easily protected.
Agriculture is the most important sector, with livestock normally
accounting for about 40% of GDP and about 65% of export earnings,
but Saudi Arabia's recent ban on Somali livestock, because of Rift
Valley Fever concerns, has severely hampered the sector. Nomads and
semi-nomads, who are dependent upon livestock for their livelihood,
make up a large portion of the population. Livestock, hides, fish,
charcoal, and bananas are Somalia's principal exports, while sugar,
sorghum, corn, qat, and machined goods are the principal imports.
Somalia's small industrial sector, based on the processing of
agricultural products, has largely been looted and sold as scrap
metal. Despite the seeming anarchy, Somalia's service sector has
managed to survive and grow. Telecommunication firms provide
wireless services in most major cities and offer the lowest
international call rates on the continent. In the absence of a
formal banking sector, money exchange services have sprouted
throughout the country, handling between $200 million and $500
million in remittances annually. Mogadishu's main market offers a
variety of goods from food to the newest electronic gadgets. Hotels
continue to operate, and security is provided by militias. The
ongoing civil disturbances and clan rivalries, however, have
interfered with any broad-based economic development and
international aid arrangements. In 2002 Somalia's overdue financial
obligations to the IMF continued to grow.
South Africa
South Africa is a middle-income, emerging market with
an abundant supply of natural resources; well-developed financial,
legal, communications, energy, and transport sectors; a stock
exchange that ranks among the 10 largest in the world; and a modern
infrastructure supporting an efficient distribution of goods to
major urban centers throughout the region. However, growth has not
been strong enough to lower South Africa's high unemployment rate;
and daunting economic problems remain from the apartheid era,
especially poverty and lack of economic empowerment among the
disadvantaged groups. High crime and HIV/AIDS infection rates also
deter investment. South African economic policy is fiscally
conservative, but pragmatic, focusing on targeting inflation and
liberalizing trade as means to increase job growth and household
income.
South Georgia and the South Sandwich Islands
Some fishing takes
place in adjacent waters. There is a potential source of income from
harvesting finfish and krill. The islands receive income from
postage stamps produced in the UK, sale of fishing licenses, and
harbor and landing fees from tourist vessels. Tourism from
specialized cruise ships is increasing rapidly.
Southern Ocean
Fisheries in 2000-01 (1 July to 30 June) landed
112,934 metric tons, of which 87% was krill and 11% Patagonian
toothfish. International agreements were adopted in late 1999 to
reduce illegal, unreported, and unregulated fishing, which in the
2000-01 season landed, by one estimate, 8,376 metric tons of
Patagonian and antarctic toothfish. In the 2000-01 antarctic summer
12,248 tourists, most of them seaborne, visited the Southern Ocean
and Antarctica, compared to 14,762 the previous year.
Spain
Spain's mixed capitalist economy supports a GDP that on a per
capita basis is 80% that of the four leading West European
economies. Its center-right government successfully worked to gain
admission to the first group of countries launching the European
single currency (the euro) on 1 January 1999. The AZNAR
administration has continued to advocate liberalization,
privatization, and deregulation of the economy and has introduced
some tax reforms to that end. Unemployment has been steadily falling
under the AZNAR administration but remains high at 11.7%. The
government intends to make further progress in changing labor laws
and reforming pension schemes, which are key to the sustainability
of both Spain's internal economic advances and its competitiveness
in a single currency area. A general strike in mid-2002 reduced
cooperation between labor and government. Growth of 2.4% in 2003 was
satisfactory given the background of a faltering European economy.
Adjusting to the monetary and other economic policies of an
integrated Europe - and reducing unemployment - will pose challenges
to Spain over the next few years.
Spratly Islands
Economic activity is limited to commercial fishing.
The proximity to nearby oil- and gas-producing sedimentary basins
suggests the potential for oil and gas deposits, but the region is
largely unexplored, and there are no reliable estimates of potential
reserves; commercial exploitation has yet to be developed.
Sri Lanka
In 1977, Colombo abandoned statist economic policies and
its import substitution trade policy for market-oriented policies
and export-oriented trade. Sri Lanka's most dynamic sectors now are
food processing, textiles and apparel, food and beverages,
telecommunications, and insurance and banking. By 1996 plantation
crops made up only 20% of exports (compared with 93% in 1970), while
textiles and garments accounted for 63%. GDP grew at an average
annual rate of 5.5% in the early 1990s until a drought and a
deteriorating security situation lowered growth to 3.8% in 1996. The
economy rebounded in 1997-2000 with average growth of 5.3%, but 2001
saw the first contraction in the country's history, -1.4%, due to a
combination of power shortages, severe budgetary problems, the
global slowdown, and continuing civil strife. Growth recovered to
3.2% in 2002. About 800,000 Sri Lankans work abroad, 90% in the
Middle East. They send home about $1 billion a year.
Sudan
Sudan has turned around a struggling economy with sound
economic policies and infrastructure investments, but it still faces
formidable economic problems, notably the low level of per capita
output. From 1997 to date, Sudan has been implementing IMF
macroeconomic reforms. In 1999 Sudan began exporting crude oil and
in the last quarter of 1999 recorded its first trade surplus, which,
along with monetary policy, has stabilized the exchange rate.
Increased oil production, revived light industry, and expanded
export processing zones helped maintain GDP growth at 5.1% in 2002.
Agriculture production remains Sudan's most important sector,
employing 80% of the work force and contributing 43% of GDP, but
most farms remain rain-fed and susceptible to drought. Chronic
domestic instability, lagging reforms, adverse weather, and weak
world agricultural prices - but, above all, the low starting point -
ensure that much of the population will remain at or below the
poverty line for years.
Suriname
The economy is dominated by the bauxite industry, which
accounts for more than 15% of GDP and 70% of export earnings.
Suriname's economic prospects for the medium term will depend on
renewed commitment to responsible monetary and fiscal policies and
to the introduction of structural reforms to liberalize markets and
promote competition. The government of Ronald VENETIAAN has begun an
austerity program, raised taxes, and attempted to control spending.
However, in 2002, President VENETIAAN agreed to a large pay raise
for civil servants, which threatens his earlier gains in stabilizing
the economy. The Dutch Government has agreed to restart the aid
flow, which will allow Suriname to access international development
financing. The short-term economic outlook depends on the
government's ability to control inflation and on the development of
projects in the bauxite and gold mining sectors.