Norfolk Island
Tourism, the primary economic activity, has steadily
increased over the years and has brought a level of prosperity
unusual among inhabitants of the Pacific islands. The agricultural
sector has become self-sufficient in the production of beef,
poultry, and eggs.

Northern Mariana Islands
The economy benefits substantially from
financial assistance from the US. The rate of funding has declined
as locally generated government revenues have grown. The key tourist
industry employs about 50% of the work force and accounts for
roughly one-fourth of GDP. Japanese tourists predominate. Annual
tourist entries have exceeded one-half million in recent years, but
financial difficulties in Japan have caused a temporary slowdown.
The agricultural sector is made up of cattle ranches and small farms
producing coconuts, breadfruit, tomatoes, and melons. Garment
production is by far the most important industry with employment of
17,500 mostly Chinese workers and sizable shipments to the US under
duty and quota exemptions.

Norway
The Norwegian economy is a prosperous bastion of welfare
capitalism, featuring a combination of free market activity and
government intervention. The government controls key areas, such as
the vital petroleum sector (through large-scale state enterprises).
The country is richly endowed with natural resources - petroleum,
hydropower, fish, forests, and minerals - and is highly dependent on
its oil production and international oil prices, with oil and gas
accounting for one-third of exports. Only Saudi Arabia and Russia
export more oil than Norway. Norway opted to stay out of the EU
during a referendum in November 1994. The government has moved ahead
with privatization. With arguably the highest quality of life
worldwide, Norwegians still worry about that time in the next two
decades when the oil and gas begin to run out. Accordingly, Norway
has been saving its oil-boosted budget surpluses in a Government
Petroleum Fund, which is invested abroad and now is valued at more
than $43 billion. GDP growth was a lackluster 1% in 2002 and 0.5% in
2003 against the background of a faltering European economy.

Oman
Oman is a small, well-off middle Eastern economy with large oil
and gas resources, a substantial trade surplus, and low inflation.
The government is moving ahead with privatization of its utilities,
the development of a body of commercial law to facilitate foreign
investment, and increased budgetary outlays. Oman continues to
liberalize its markets and joined the World Trade Organization (WTO)
in November 2000. In order to reduce unemployment and limit
dependence on foreign countries, the government is encouraging the
replacement of expatriate workers with local people, i.e., the
process of Omanization. Training in information technology, business
management, and English support this objective. Industrial
development plans focus on gas resources.

Pacific Ocean
The Pacific Ocean is a major contributor to the world
economy and particularly to those nations its waters directly touch.
It provides low-cost sea transportation between East and West,
extensive fishing grounds, offshore oil and gas fields, minerals,
and sand and gravel for the construction industry. In 1996, over 60%
of the world's fish catch came from the Pacific Ocean. Exploitation
of offshore oil and gas reserves is playing an ever-increasing role
in the energy supplies of the US, Australia, NZ, China, and Peru.
The high cost of recovering offshore oil and gas, combined with the
wide swings in world prices for oil since 1985, has led to
fluctuations in new drillings.

Pakistan
Pakistan, an impoverished and underdeveloped country, has
suffered from decades of internal political disputes, low levels of
foreign investment, and a costly, ongoing confrontation with
neighboring India. However, IMF-approved government policies,
bolstered by generous foreign assistance and renewed access to
global markets since late 2001, have generated solid macroeconomic
recovery the last two years. The government has made substantial
inroads in macroeconomic reform since 2000, although progress on
more politically sensitive reforms has slowed. For example, in the
third and final year of its $1.3 billion IMF Poverty Reduction and
Growth Facility, Islamabad has continued to require waivers for
energy sector reforms. While long-term prospects remain uncertain,
given Pakistan's low level of development, medium-term prospects for
job creation and poverty reduction are the best in nearly a decade.
Islamabad has raised development spending from about 2% of GDP in
the 1990s to 4% in 2003, a necessary step towards reversing the
broad underdevelopment of its social sector. GDP growth is heavily
dependent on rain-fed crops, and last year's end to a four-year
drought should support moderate agricultural growth for the next few
years. Foreign exchange reserves continued to reach new levels in
2003, supported by robust export growth and steady worker
remittances.

Palau
The economy consists primarily of tourism, subsistence
agriculture and fishing. The government is the major employer of the
work force, relying heavily on financial assistance from the US.
Business and tourist arrivals numbered 50,000 in FY00/01. The
population enjoys a per capita income twice that of the Philippines
and much of Micronesia. Long-run prospects for the key tourist
sector have been greatly bolstered by the expansion of air travel in
the Pacific, the rising prosperity of leading East Asian countries,
and the willingness of foreigners to finance infrastructure
development.

Palmyra Atoll
no economic activity

Panama
Panama's dollarised economy rests primarily on a
well-developed services sector that accounts for three-fourths of
GDP. Services include operating the Panama Canal, banking, the Colon
Free Zone, insurance, container ports, flagship registry, and
tourism. A slump in Colon Free Zone and agricultural exports, the
global slowdown, and the withdrawal of US military forces held back
economic growth in 2000-03. The government has been backing public
works programs, tax reforms, new regional trade agreements, and
development of tourism in order to stimulate growth. Unemployment
remains at an unacceptably high level.

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 four years. Former Prime
Minister Mekere MORAUTA had tried to restore integrity to state
institutions, to stabilize the kina, restore stability to the
national budget, to privatize public enterprises where appropriate,
and to 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. Challenges face Prime
Minister Michael SOMARE, including curbing inflation, gaining
further investor confidence, continuing efforts to privatize
government assets, maintaining the support of members of Parliament,
and balancing relations with Australia, the former colonial ruler.