Tonga
Tonga, a small, open, South Pacific island economy, has a
narrow export base in agricultural goods. Squash, coconuts, bananas,
and vanilla beans are the main crops, and agricultural exports make
up two-thirds of total exports. The country must import a high
proportion of its food, mainly from New Zealand. Tourism is the
second-largest source of hard currency earnings following
remittances. The country remains dependent on external aid and
remittances from Tongan communities overseas to offset its trade
deficit. The government is emphasizing the development of the
private sector, especially the encouragement of investment, and is
committing increased funds for health and education. Tonga has a
reasonably sound basic infrastructure and well-developed social
services. High unemployment among the young and the continuing
upturn in inflation are major issues facing the government.
Trinidad and Tobago
Trinidad and Tobago, the leading Caribbean
producer of oil and gas, has earned a reputation as an excellent
investment site for international businesses. Tourism is a growing
sector, although not proportionately as important as in many other
Caribbean islands. The economy benefits from low inflation and a
growing trade surplus. Prospects for growth in 2004 are good as
prices for oil, petrochemicals, and liquified natural gas are
expected to remain high, and foreign direct investment continues to
grow to support expanded capacity in the energy sector. The
government is coping with a rise in violent crime.
Tromelin Island
no economic activity
Tunisia
Tunisia has a diverse economy, with important agricultural,
mining, energy, tourism, and manufacturing sectors. Governmental
control of economic affairs while still heavy has gradually lessened
over the past decade with increasing privatization, simplification
of the tax structure, and a prudent approach to debt. Real growth,
averaging 5% for the latter half of the last decade, slowed to a
15-year low of 1.9% in 2002 because of agricultural drought, slow
investment, and lackluster tourism. Better rains in 2003, however,
pushed GDP growth up to an estimated 6 percent, and tourism also
recovered after the end of combat operations in Iraq. GDP growth
remained at 6% in 2004. Tunisia has agreed to gradually remove
barriers to trade with the European Union over the next decade.
Broader privatization, further liberalization of the investment code
to increase foreign investment, improvements in government
efficiency, and reduction of the trade deficit are among the
challenges for the future.
Turkey
Turkey's dynamic economy is a complex mix of modern industry
and commerce along with a traditional agriculture sector that in
2001 still accounted for 40% of employment. It has a strong and
rapidly growing private sector, yet the state still plays a major
role in basic industry, banking, transport, and communication. The
largest industrial sector is textiles and clothing, which accounts
for one-third of industrial employment; it faces stiff competition
in international markets with the end of the global quota system.
However, other sectors, notably the automotive and electonics
industries, are rising in importance within Turkey's export mix. In
recent years the economic situation has been marked by erratic
economic growth and serious imbalances. Real GNP growth has exceeded
6% in many years, but this strong expansion has been interrupted by
sharp declines in output in 1994, 1999, and 2001. Meanwhile, the
public sector fiscal deficit has regularly exceeded 10% of GDP - due
in large part to the huge burden of interest payments, which
accounted for more than 40% of central government spending in 2003.
Inflation, in recent years in the high double-digit range, fell to
11.3% in 2004. Perhaps because of these problems, foreign direct
investment in Turkey remains low - less than $1 billion annually.
Results in 2002-04 improved, because of strong financial support
from the IMF and tighter fiscal policy. A major political and
economic issue over the next decade is whether or not Turkey will
become a member of the EU.
Turkmenistan
Turkmenistan is largely desert country with intensive
agriculture in irrigated oases and large gas and oil resources.
One-half of its irrigated land is planted in cotton, making it at
one time the world's tenth-largest producer. Poor harvests in recent
years have led to a nearly 46% decline in cotton exports. With an
authoritarian ex-Communist regime in power and a tribally based
social structure, Turkmenistan has taken a cautious approach to
economic reform, hoping to use gas and cotton sales to sustain its
inefficient economy. Privatization goals remain limited. In
1998-2003, Turkmenistan suffered from the continued lack of adequate
export routes for natural gas and from obligations on extensive
short-term external debt. At the same time, however, total exports
rose by 38% in 2003, largely because of higher international oil and
gas prices. Overall prospects in the near future are discouraging
because of widespread internal poverty, the burden of foreign debt,
and the unwillingness of the government to adopt market-oriented
reforms. However, Turkmenistan's cooperation with the international
community in transporting humanitarian aid to Afghanistan may
foreshadow a change in the atmosphere for foreign investment, aid,
and technological support. Turkmenistan's economic statistics are
state secrets, and GDP and other figures are subject to wide margins
of error. In particular, the 20% rate of GDP growth is a guess.
Turks and Caicos Islands
The Turks and Caicos economy is based on
tourism, fishing, and offshore financial services. Most capital
goods and food for domestic consumption are imported. The US is the
leading source of tourists, accounting for more than half of the
93,000 visitors in the late 1990s. Major sources of government
revenue include fees from offshore financial activities and customs
receipts. Tourism fell by 6% in 2002.
Tuvalu
Tuvalu consists of a densely populated, scattered group of
nine coral atolls with poor soil. The country has no known mineral
resources and few exports. Subsistence farming and fishing are the
primary economic activities. Fewer than 1,000 tourists, on average,
visit Tuvalu annually. Government revenues largely come from the
sale of stamps and coins and worker remittances. About 1,000
Tuvaluans work in Nauru in the phosphate mining industry. Nauru has
begun repatriating Tuvaluans, however, as phosphate resources
decline. Substantial income is received annually from an
international trust fund established in 1987 by Australia, NZ, and
the UK and supported also by Japan and South Korea. Thanks to wise
investments and conservative withdrawals, this Fund has grown from
an initial $17 million to over $35 million in 1999. The US
government is also a major revenue source for Tuvalu, because of
payments from a 1988 treaty on fisheries. In an effort to reduce its
dependence on foreign aid, the government is pursuing public sector
reforms, including privatization of some government functions and
personnel cuts of up to 7%. In 1998, Tuvalu began deriving revenue
from use of its area code for "900" lines and in 2000, from the
lease of its ".tv" Internet domain name. Royalties from these new
technology sources could increase substantially over the next
decade. With merchandise exports only a fraction of merchandise
imports, continued reliance must be placed on fishing and
telecommunications license fees, remittances from overseas workers,
official transfers, and investment income from overseas assets.
Uganda
Uganda has substantial natural resources, including fertile
soils, regular rainfall, and sizable mineral deposits of copper and
cobalt. Agriculture is the most important sector of the economy,
employing over 80% of the work force. Coffee accounts for the bulk
of export revenues. Since 1986, the government - with the support of
foreign countries and international agencies - has acted to
rehabilitate and stabilize the economy by undertaking currency
reform, raising producer prices on export crops, increasing prices
of petroleum products, and improving civil service wages. The policy
changes are especially aimed at dampening inflation and boosting
production and export earnings. During 1990-2001, the economy turned
in a solid performance based on continued investment in the
rehabilitation of infrastructure, improved incentives for production
and exports, reduced inflation, gradually improved domestic
security, and the return of exiled Indian-Ugandan entrepreneurs.
Corruption within the government and slippage in the government's
determination to press reforms raise doubts about the continuation
of strong growth. In 2000, Uganda qualified for enhanced Highly
Indebted Poor Countries (HIPC) debt relief worth $1.3 billion and
Paris Club debt relief worth $145 million. These amounts combined
with the original HIPC debt relief added up to about $2 billion.
Growth for 2001-02 was solid despite continued decline in the price
of coffee, Uganda's principal export. Solid growth in 2003 reflected
an upturn in Uganda's export markets.
Ukraine
After Russia, the Ukrainian republic was far and away the
most important economic component of the former Soviet Union,
producing about four times the output of the next-ranking republic.
Its fertile black soil generated more than one-fourth of Soviet
agricultural output, and its farms provided substantial quantities
of meat, milk, grain, and vegetables to other republics. Likewise,
its diversified heavy industry supplied the unique equipment (for
example, large diameter pipes) and raw materials to industrial and
mining sites (vertical drilling apparatus) in other regions of the
former USSR. Ukraine depends on imports of energy, especially
natural gas, to meet some 85% of its annual energy requirements.
Shortly after independence in December 1991, the Ukrainian
Government liberalized most prices and erected a legal framework for
privatization, but widespread resistance to reform within the
government and the legislature soon stalled reform efforts and led
to some backtracking. Output by 1999 had fallen to less than 40% of
the 1991 level. Loose monetary policies pushed inflation to
hyperinflationary levels in late 1993. Ukraine's dependence on
Russia for energy supplies and the lack of significant structural
reform have made the Ukrainian economy vulnerable to external
shocks. President KUCHMA had pledged to reduce the number of
government agencies, streamline the regulatory process, create a
legal environment to encourage entrepreneurs, and enact a
comprehensive tax overhaul. Reforms in the more politically
sensitive areas of structural reform and land privatization are
still lagging. Outside institutions - particularly the IMF - have
encouraged Ukraine to quicken the pace and scope of reforms. GDP in
2000 showed strong export-based growth of 6% - the first growth
since independence - and industrial production grew 12.9%. The
economy continued to expand in 2001 as real GDP rose 9% and
industrial output grew by over 14%. Growth of 4.6% in 2002 was more
moderate, in part a reflection of faltering growth in the developed
world. In general, growth has been undergirded by strong domestic
demand, low inflation, and solid consumer and investor confidence.
Growth was a sturdy 9.3% in 2003 and a remarkable 12% in 2004,
despite a loss of momentum in needed economic reforms.