Bouvet Island
no economic activity; declared a nature reserve
Brazil
Possessing large and well-developed agricultural, mining,
manufacturing, and service sectors, Brazil's economy outweighs that
of all other South American countries and is expanding its presence
in world markets. From 2001-03 real wages fell and Brazil's economy
grew, on average, only 1.1% per year, as the country absorbed a
series of domestic and international economic shocks. That Brazil
absorbed these shocks without financial collapse is a tribute to the
resiliency of the Brazilian economy and the economic program put in
place by former President CARDOSO and strengthened by President Lula
DA SILVA. The three pillars of the economic program are a floating
exchange rate, an inflation-targeting regime, and tight fiscal
policy, which have been reinforced by a series of IMF programs. The
currency depreciated sharply in 2001 and 2002, which contributed to
a dramatic current account adjustment: in 2003, Brazil ran a record
trade surplus and recorded the first current account surplus since
1992. While economic management has been good, there remain
important economic vulnerabilities. The most significant are
debt-related: the government's largely domestic debt increased
steadily from 1994 to 2003, straining government finances, while
Brazil's foreign debt (a mix of private and public debt) is large in
relation to Brazil's modest (but growing) export base. Another
challenge is maintaining economic growth over a period of time to
generate employment and make the government debt burden more
manageable.
British Indian Ocean Territory All economic activity is concentrated on the largest island of Diego Garcia, where joint UK-US defense facilities are located. Construction projects and various services needed to support the military installations are done by military and contract employees from the UK, Mauritius, the Philippines, and the US. There are no industrial or agricultural activities on the islands. When the Ilois return, they plan to reestablish sugarcane production and fishing.
British Virgin Islands
The economy, one of the most stable and
prosperous in the Caribbean, is highly dependent on tourism,
generating an estimated 45% of the national income. An estimated
350,000 tourists, mainly from the US, visited the islands in 1998.
Tourism suffered in 2002 because of the lackluster US economy. In
the mid-1980s, the government began offering offshore registration
to companies wishing to incorporate in the islands, and
incorporation fees now generate substantial revenues. Roughly
400,000 companies were on the offshore registry by yearend 2000. The
adoption of a comprehensive insurance law in late 1994, which
provides a blanket of confidentiality with regulated statutory
gateways for investigation of criminal offenses, is expected to make
the British Virgin Islands even more attractive to international
business. Livestock raising is the most important agricultural
activity; poor soils limit the islands' ability to meet domestic
food requirements. Because of traditionally close links with the US
Virgin Islands, the British Virgin Islands has used the dollar as
its currency since 1959.
Brunei
This small, wealthy economy encompasses a mixture of foreign
and domestic entrepreneurship, government regulation, welfare
measures, and village tradition. Crude oil and natural gas
production account for nearly half of GDP. Per capita GDP is far
above most other Third World countries, and substantial income from
overseas investment supplements income from domestic production. The
government provides for all medical services and subsidizes rice and
housing. Brunei's leaders are concerned that steadily increased
integration in the world economy will undermine internal social
cohesion, although it became a more prominent player by serving as
chairman for the 2000 APEC (Asian Pacific Economic Cooperation)
forum. Plans for the future include upgrading the labor force,
reducing unemployment, strengthening the banking and tourist
sectors, and, in general, further widening the economic base beyond
oil and gas.
Bulgaria
Bulgaria, a former communist country striving to enter the
European Union, has experienced macroeconomic stability and strong
growth since a major economic downturn in 1996 led to the fall of
the then socialist government. As a result, the government became
committed to economic reform and responsible fiscal planning. A $300
million stand-by agreement negotiated with the IMF at the end of
2001 has supported government efforts to overcome high rates of
poverty and unemployment.
Burkina Faso
One of the poorest countries in the world, landlocked
Burkina Faso has few natural resources, a fragile soil, and a highly
unequal distribution of income. About 90% of the population is
engaged in (mainly subsistence) agriculture, which is vulnerable to
variations in rainfall. Cotton is the key crop. Industry remains
dominated by unprofitable government-controlled corporations.
Following the African franc currency devaluation in January 1994 the
government updated its development program in conjunction with
international agencies, and exports and economic growth have
increased. Maintenance of macroeconomic progress depends on
continued low inflation, reduction in the trade deficit, and reforms
designed to encourage private investment. The internal crisis in
neighboring Cote d'Ivoire continues to hurt trade and industrial
prospects and deepens the need for international assistance.
Burma
Burma is a resource-rich country that suffers from government
controls and abject rural poverty. The military regime took steps in
the early 1990s to liberalize the economy after decades of failure
under the "Burmese Way to Socialism", but those efforts have since
stalled. Burma has been unable to achieve monetary or fiscal
stability, resulting in an economy that suffers from serious
macroeconomic imbalances - including a steep inflation rate and an
official exchange rate that overvalues the Burmese kyat by more than
100 times the market rate. In addition, most overseas development
assistance ceased after the junta suppressed the democracy movement
in 1988 and subsequently ignored the results of the 1990 election. A
crisis in the private banking sector in early 2003 followed by
economic moves against Burma by the United States, the European
Union, and Japan - including a US ban on imports from Burma and a
Japanese freeze on new bilateral economic aid - further weakened the
Burmese economy. Burma is data poor, and official statistics are
often dated and inaccurate. Published estimates of Burma's foreign
trade are greatly understated because of the size of the black
market and border trade - often estimated to be one to two times the
official economy. Better relations with foreign countries and
relaxed controls at home are needed to promote foreign investment,
exports, and tourism. In February 2003, a major banking crisis hit
the country's 20 private banks, shutting them down and disrupting
the economy. In July and August 2003, the United States imposed a
ban on all Burmese imports and a ban on provision of financial
services, hampering Burma's ability to obtain foreign exchange. As
of January 2004, the largest private banks remained moribund,
leaving the private sector with little formal access to credit
outside of government contracts.
Burundi
Burundi is a landlocked, resource-poor country with an
underdeveloped manufacturing sector. The economy is predominantly
agricultural with roughly 90% of the population dependent on
subsistence agriculture. Economic growth depends on coffee and tea
exports, which account for 90% of foreign exchange earnings. The
ability to pay for imports, therefore, rests primarily on weather
conditions and international coffee and tea prices. The Tutsi
minority, 14% of the population, dominates the government and the
coffee trade at the expense of the Hutu majority, 85% of the
population. Since October 1993 an ethnic-based war has resulted in
more than 200,000 deaths, forced 800,000 refugees into Tanzania, and
displaced 525,000 others internally. Doubts about the prospects for
sustainable peace continue to impede development. Only one in two
children go to school, and approximately one in ten adults has
HIV/AIDS. Food, medicine, and electricity remain in short supply.
Cambodia
Cambodia's economy slowed dramatically in 1997-1998 due to
the regional economic crisis, civil violence, and political
infighting. Foreign investment and tourism fell off. In 1999, the
first full year of peace in 30 years, progress was made on economic
reforms. Growth resumed and has remained about 5.0% during
2000-2003. Tourism was Cambodia's fastest growing industry, with
arrivals up 34% in 2000 and up another 40% in 2001 before the 11
September 2001 terrorist attacks in the US. Cambodia expects 1
million foreign tourists in 2004. Economic growth has been largely
driven by expansion in the clothing sector and tourism. Clothing
exports were fostered by the U.S.-Cambodian Bilateral Textile
Agreement signed in 1999. Even given Cambodia's recent growth, the
long-term development of the economy after decades of war remains a
daunting challenge. The population lacks education and productive
skills, particularly in the poverty-ridden countryside, which
suffers from an almost total lack of basic infrastructure. Fear of
renewed political instability and a dysfunctional legal system
coupled with government corruption discourage foreign investment.
The Cambodian government continues to work with bilateral and
multilateral donors to address the country's many pressing needs.
The major economic challenge for Cambodia over the next decade will
be fashioning an economic environment in which the private sector
can create enough jobs to handle Cambodia's demographic imbalance.
About 60% of the population is 20 years or younger; most of these
citizens will seek to enter the workforce over the course of the
next 10 years.