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 militias provide security. 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. Statistics on Somalia's GDP, growth, per
capita income, and inflation should be viewed skeptically.
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. Fees from fishing licenses and related
activities traditionally account for around 90% of South Georgia's
revenue (about $5.6 million in 2004). 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. Annual tourist
volume hovers around 3,000 arrivals.
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. The center-right government of former President AZNAR
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 continued to advocate
liberalization, privatization, and deregulation of the economy and
introduced some tax reforms to that end. Unemployment fell steadily
under the AZNAR administration but remains high at 11.7%. Growth of
2.4% in 2003 was satisfactory given the background of a faltering
European economy. Incoming President RODRIGUEZ ZAPATERO, whose party
won the election three days after the Madrid train bombings in
March, plans to reduce government intervention in business, combat
tax fraud, and support innovation, research and development, but
also intends to reintroduce labor market regulations that had been
scrapped by the AZNAR government. 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; 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. In 2003, plantation
crops made up only 15% 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
4.0% in 2002 and 5.2% in 2003. About 800,000 Sri Lankans work
abroad, 90% in the Middle East. They send home about $1 billion a
year. The struggle by the Tamil Tigers of the north and east for a
largely independent homeland continues to cast a shadow over the
economy.
Sudan
Sudan has turned around a struggling economy with sound
economic policies and infrastructure investments, yet it still faces
formidable economic problems, starting from its low level of per
capita output and extending to its devastating civil stife. 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
sustain GDP growth at 6.1% in 2003 and 7% in 2004. Agriculture
production remains Sudan's most important sector, employing 80% of
the work force and contributing 39% of GDP, but most farms remain
rain-fed and susceptible to drought. Chronic instability - including
the long-standing civil war between the Muslim north and the
Christian/pagan south, the ethnic purges in Darfur, adverse weather,
and weak world agricultural prices - 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.
Svalbard
Coal mining is the major economic activity on Svalbard. The
treaty of 9 February 1920 gives the 41 signatories equal rights to
exploit mineral deposits, subject to Norwegian regulation. Although
US, UK, Dutch, and Swedish coal companies have mined in the past,
the only companies still mining are Norwegian and Russian. The
settlements on Svalbard are essentially company towns. The Norwegian
state-owned coal company employs nearly 60% of the Norwegian
population on the island, runs many of the local services, and
provides most of the local infrastructure. There is also some
hunting of seal, reindeer, and fox.