China In late 1978 the Chinese leadership began moving the economy from a sluggish, inefficient, Soviet-style centrally planned economy to a more market-oriented system. Whereas the system operates within a political framework of strict Communist control, the economic influence of non-state organizations and individual citizens has been steadily increasing. The authorities switched to a system of household and village responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprises in services and light manufacturing, and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2004 stood as the second-largest economy in the world after the US, although in per capita terms the country is still poor. Agriculture and industry have posted major gains especially in coastal areas near Hong Kong and opposite Taiwan and in Shanghai, where foreign investment has helped spur output of both domestic and export goods. The leadership, however, often has experienced - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) and of capitalism (growing income disparities and rising unemployment). China thus has periodically backtracked, retightening central controls at intervals. The government has struggled to (a) sustain adequate jobs growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) keep afloat the large state-owned enterprises, many of which had been shielded from competition by subsidies and had been losing the ability to pay full wages and pensions. From 100 to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. At the same time, one demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table especially in the north. China continues to lose arable land because of erosion and economic development. As part of its effort to gradually slow the rapid economic growth seen in 2004, Beijing says it will reduce somewhat its spending on infrastructure in 2005, while continuing to focus on poverty relief and through rural tax reform. Accession to the World Trade Organization helps strengthen its ability to maintain strong growth rates but at the same time puts additional pressure on the hybrid system of strong political controls and growing market influences. China has benefited from a huge expansion in computer Internet use, with 94 million users at the end of 2004. Foreign investment remains a strong element in China's remarkable economic growth. Shortages of electric power and raw materials may affect industrial output in 2005. More power generating capacity is scheduled to come on line in 2006. In its rivalry with India as an economic power, China has a lead in the absorption of technology, the rising prominence in world trade, and the alleviation of poverty; India has one important advantage in its relative mastery of the English language, but the number of competent Chinese English-speakers is growing rapidly.
Christmas Island
Phosphate mining had been the only significant
economic activity, but in December 1987 the Australian Government
closed the mine. In 1991, the mine was reopened. With the support of
the government, a $34 million casino opened in 1993. The casino
closed in 1998. The Australian Government in 2001 agreed to support
the creation of a commercial space-launching site on the island,
projected to begin operations in the near future
Clipperton Island
Although 115 species of fish have been identified
in the territorial waters of Clipperton Island, the only economic
activity is tuna fishing.
Cocos (Keeling) Islands
Grown throughout the islands, coconuts are
the sole cash crop. Small local gardens and fishing contribute to
the food supply, but additional food and most other necessities must
be imported from Australia. There is a small tourist industry.
Colombia
Colombia's economy has been on a recovery trend during the
past two years despite a serious armed conflict. The economy
continues to improve thanks to austere government budgets, focused
efforts to reduce public debt levels, and an export-oriented growth
focus. Ongoing economic problems facing President URIBE range from
reforming the pension system to reducing high unemployment. New
exploration is needed to offset declining oil production. On the
positive side, several international financial institutions have
praised the economic reforms introduced by URIBE, which include
measures designed to reduce the public-sector deficit below 2.5% of
GDP. The government's economic policy and democratic security
strategy have engendered a growing sense of confidence in the
economy, particularly within the business sector. Coffee prices have
recovered from previous lows as the Colombian coffee industry
pursues greater market shares in developed countries such as the
United States.
Comoros
One of the world's poorest countries, Comoros is made up of
three islands that have inadequate transportation links, a young and
rapidly increasing population, and few natural resources. The low
educational level of the labor force contributes to a subsistence
level of economic activity, high unemployment, and a heavy
dependence on foreign grants and technical assistance. Agriculture,
including fishing, hunting, and forestry, contributes 40% to GDP,
employs 80% of the labor force, and provides most of the exports.
The country is not self-sufficient in food production; rice, the
main staple, accounts for the bulk of imports. The government -
which is hampered by internal political disputes - is struggling to
upgrade education and technical training, privatize commercial and
industrial enterprises, improve health services, diversify exports,
promote tourism, and reduce the high population growth rate.
Increased foreign support is essential if the goal of 4% annual GDP
growth is to be met. Remittances from 150,000 Comorans abroad help
supplement GDP.
Congo, Democratic Republic of the
The economy of the Democratic
Republic of the Congo - a nation endowed with vast potential wealth
- has declined drastically since the mid-1980s. The war, which began
in August 1998, dramatically reduced national output and government
revenue, increased external debt, and resulted in the deaths of
perhaps 3.5 million people from war, famine, and disease. Foreign
businesses curtailed operations due to uncertainty about the outcome
of the conflict, lack of infrastructure, and the difficult operating
environment. Conditions improved in late 2002 with the withdrawal of
a large portion of the invading foreign troops. Several IMF and
World Bank missions have met with the government to help it develop
a coherent economic plan, and President KABILA has begun
implementing reforms. Much economic activity lies outside the GDP
data. Economic stability, aided by international donors, improved in
2003-04, although an uncertain legal framework, corruption, and a
lack of openness in government policy continues to hamper growth. In
2005, renewed activity in the mining sector, the source of most
exports, could boost Kinshasa's fiscal position and GDP growth.
Congo, Republic of the
The economy is a mixture of village
agriculture and handicrafts, an industrial sector based largely on
oil, support services, and a government characterized by budget
problems and overstaffing. Oil has supplanted forestry as the
mainstay of the economy, providing a major share of government
revenues and exports. In the early 1980s, rapidly rising oil
revenues enabled the government to finance large-scale development
projects with GDP growth averaging 5% annually, one of the highest
rates in Africa. The government has mortgaged a substantial portion
of its oil earnings, contributing to a shortage of revenues. The 12
January 1994 devaluation of Franc Zone currencies by 50% resulted in
inflation of 61% in 1994, but inflation has subsided since. Economic
reform efforts continued with the support of international
organizations, notably the World Bank and the IMF. The reform
program came to a halt in June 1997 when civil war erupted. Denis
SASSOU-NGUESSO, who returned to power when the war ended in October
1997, publicly expressed interest in moving forward on economic
reforms and privatization and in renewing cooperation with
international financial institutions. However, economic progress was
badly hurt by slumping oil prices and the resumption of armed
conflict in December 1998, which worsened the republic's budget
deficit. The current administration presides over an uneasy internal
peace and faces difficult economic challenges of stimulating
recovery and reducing poverty.
Cook Islands
Like many other South Pacific island nations, the Cook
Islands' economic development is hindered by the isolation of the
country from foreign markets, the limited size of domestic markets,
lack of natural resources, periodic devastation from natural
disasters, and inadequate infrastructure. Agriculture provides the
economic base with major exports made up of copra and citrus fruit.
Manufacturing activities are limited to fruit processing, clothing,
and handicrafts. Trade deficits are offset by remittances from
emigrants and by foreign aid, overwhelmingly from New Zealand. In
the 1980s and 1990s, the country lived beyond its means, maintaining
a bloated public service and accumulating a large foreign debt.
Subsequent reforms, including the sale of state assets, the
strengthening of economic management, the encouragement of tourism,
and a debt restructuring agreement, have rekindled investment and
growth.
Coral Sea Islands
no economic activity