Burma
Burma is a resource-rich country that suffers from government
controls, inefficient economic policies, and abject rural poverty.
The junta 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 and some of the liberalization
measures have been rescinded. Burma has been unable to achieve
monetary or fiscal stability, resulting in an economy that suffers
from serious macroeconomic imbalances - including inflation and
multiple official exchange rates that overvalue the Burmese kyat. In
addition, most overseas development assistance ceased after the
junta began to suppress the democracy movement in 1988 and
subsequently ignored the results of the 1990 legislative elections.
Economic sanctions against Burma by the United States - including a
ban on imports of Burmese products and a ban on provision of
financial services by US persons in response to the government of
Burma's attack in May 2003 on AUNG SAN SUU KYI and her convoy -
further slowed the inflow of foreign exchange. Official statistics
are inaccurate. Published statistics on foreign trade are greatly
understated because of the size of the black market and unofficial
border trade - often estimated to be one to two times the size of
the official economy. Though the Burmese government has good
economic relations with its neighbors, a better investment climate
and an improved political situation 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. As of January 2004, the largest private
banks remained moribund, leaving the private sector with little
formal access to credit.
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 450,000 refugees into Tanzania, and
displaced 140,000 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 and 1998 due
to the regional economic crisis, civil violence, and political
infighting, and foreign investment and tourism decreased. In 1999,
the first full year of peace in 30 years, the government made
progress on economic reforms. Growth resumed and remained about 5%
from 2000 to 2004. Economic growth has been largely driven by
expansion in the garment sector and tourism, but is expected to fall
in 2005 as growth in the garment sector stalls. Clothing exports
were fostered by a US-Cambodian Bilateral Textile Agreement signed
in 1999 which gave Cambodia a guaranteed quota of US textile imports
and established a bonus for improving working conditions and
enforcing Cambodian labor laws and international labor standards in
the industry. With the January 2005 expiration of a WTO Agreement on
Textiles and Clothing, Cambodia-based textile producers are in
direct competition with lower priced producing countries such as
China and India. Faced with the possibility that over the next five
years Cambodia may lose orders and some of the 250,000 well-paid
jobs the industry provides, Cambodia has committed itself to a
policy of continued support for high labor standards in an attempt
to maintain favor with buyers. Tourism growth remains strong, with
arrivals up 15% in 2004. 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. Fully 75% of the population remains engaged
in subsistence farming. Fear of renewed political instability and a
dysfunctional legal system coupled with extensive government
corruption discourage foreign investment. The Cambodian government
continues to work with bilateral and multilateral donors to address
the country's many pressing needs. In December 2004, official donors
pledged $504 million in aid for 2005 on the condition that the
Cambodian government begins taking steps to address rampant
corruption. The next donor pledging session is scheduled for
December 2005. 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. More than 50% of the population is 20 years
or younger.
Cameroon
Because of its oil resources and favorable agricultural
conditions, Cameroon has one of the best-endowed primary commodity
economies in sub-Saharan Africa. Still, it faces many of the serious
problems facing other underdeveloped countries, such as a top-heavy
civil service and a generally unfavorable climate for business
enterprise. Since 1990, the government has embarked on various IMF
and World Bank programs designed to spur business investment,
increase efficiency in agriculture, improve trade, and recapitalize
the nation's banks. In June 2000, the government completed an
IMF-sponsored, three-year structural adjustment program; however,
the IMF is pressing for more reforms, including increased budget
transparency, privatization, and poverty reduction programs.
International oil and cocoa prices have considerable impact on the
economy.
Canada
As an affluent, high-tech industrial society, newly entered
in the trillion dollar class, Canada closely resembles the US in its
market-oriented economic system, pattern of production, and affluent
living standards. Since World War II, the impressive growth of the
manufacturing, mining, and service sectors has transformed the
nation from a largely rural economy into one primarily industrial
and urban. The 1989 US-Canada Free Trade Agreement (FTA) and the
1994 North American Free Trade Agreement (NAFTA) (which includes
Mexico) touched off a dramatic increase in trade and economic
integration with the US. Given its great natural resources, skilled
labor force, and modern capital plant Canada enjoys solid economic
prospects. Solid fiscal management has produced a long-term budget
surplus which is substantially reducing the national debt, although
public debate continues over how to manage the rising cost of the
publicly funded healthcare system. Exports account for roughly a
third of GDP. Canada enjoys a substantial trade surplus with its
principal trading partner, the United States, which absorbs more
than 85% of Canadian exports.
Cape Verde
This island economy suffers from a poor natural resource
base, including serious water shortages exacerbated by cycles of
long-term drought. The economy is service-oriented, with commerce,
transport, tourism, and public services accounting for 72% of GDP.
Although nearly 70% of the population lives in rural areas, the
share of agriculture in GDP in 2004 was only 12%, of which fishing
accounted for 1.5%. About 82% of food must be imported. The fishing
potential, mostly lobster and tuna, is not fully exploited. Cape
Verde annually runs a high trade deficit, financed by foreign aid
and remittances from emigrants; remittances supplement GDP by more
than 20%. Economic reforms are aimed at developing the private
sector and attracting foreign investment to diversify the economy.
Future prospects depend heavily on the maintenance of aid flows, the
encouragement of tourism, remittances, and the momentum of the
government's development program.
Cayman Islands
With no direct taxation, the islands are a thriving
offshore financial center. More than 40,000 companies were
registered in the Cayman Islands as of 1998, including almost 600
banks and trust companies; banking assets exceed $500 billion. A
stock exchange was opened in 1997. Tourism is also a mainstay,
accounting for about 70% of GDP and 75% of foreign currency
earnings. The tourist industry is aimed at the luxury market and
caters mainly to visitors from North America. Total tourist arrivals
exceeded 1.2 million in 1997, with 600,000 from the US. About 90% of
the islands' food and consumer goods must be imported. The
Caymanians enjoy one of the highest outputs per capita and one of
the highest standards of living in the world.
Central African Republic
Subsistence agriculture, together with
forestry, remains the backbone of the economy of the Central African
Republic (CAR), with more than 70% of the population living in
outlying areas. The agricultural sector generates half of GDP.
Timber has accounted for about 16% of export earnings and the
diamond industry, for 54%. Important constraints to economic
development include the CAR's landlocked position, a poor
transportation system, a largely unskilled work force, and a legacy
of misdirected macroeconomic policies. Factional fighting between
the government and its opponents remains a drag on economic
revitalization, with GDP growth at only 0.5% in 2004. Distribution
of income is extraordinarily unequal. Grants from France and the
international community can only partially meet humanitarian needs.
Chad
Chad's primarily agricultural economy will continue to be
boosted by major oilfield and pipeline projects that began in 2000.
Over 80% of Chad's population relies on subsistence farming and
livestock raising for its livelihood. Cotton, cattle, and gum arabic
provide the bulk of Chad's export earnings; Chad began to export oil
in 2004. Chad's economy has long been handicapped by its landlocked
position, high energy costs, and a history of instability. Chad
relies on foreign assistance and foreign capital for most public and
private sector investment projects. A consortium led by two US
companies has been investing $3.7 billion to develop oil reserves
estimated at 1 billion barrels in southern Chad. Oil production came
on stream in late 2003.
Chile
Chile has a market-oriented economy characterized by a high
level of foreign trade. During the early 1990s, Chile's reputation
as a role model for economic reform was strengthened when the
democratic government of Patricio AYLWIN - which took over from the
military in 1990 - deepened the economic reform initiated by the
military government. Growth in real GDP averaged 8% during 1991-97,
but fell to half that level in 1998 because of tight monetary
policies implemented to keep the current account deficit in check
and because of lower export earnings - the latter a product of the
global financial crisis. A severe drought exacerbated the recession
in 1999, reducing crop yields and causing hydroelectric shortfalls
and electricity rationing, and Chile experienced negative economic
growth for the first time in more than 15 years. Despite the effects
of the recession, Chile maintained its reputation for strong
financial institutions and sound policy that have given it the
strongest sovereign bond rating in South America. By the end of
1999, exports and economic activity had begun to recover, and growth
rebounded to 4.2% in 2000. Growth fell back to 3.1% in 2001 and 2.1%
in 2002, largely due to lackluster global growth and the devaluation
of the Argentine peso. Chile's economy began a slow recovery in
2003, growing 3.2% and accelerated to 5.8% in 2004. GDP growth
benefited from high copper prices, solid export earnings
(particularly forestry, fishing, and mining), and stepped-up foreign
direct investment. Unemployment, however, remains stubbornly high.
Chile deepened its longstanding commitment to trade liberalization
with the signing of a free trade agreement with the US, which took
effect on 1 January 2004.