Ireland
Ireland is a small, modern, trade-dependent economy with
growth averaging a robust 7% in 1995-2004. Agriculture, once the
most important sector, is now dwarfed by industry and services.
Industry accounts for 46% of GDP, about 80% of exports, and 29% of
the labor force. Although exports remain the primary engine for
Ireland's growth, the economy has also benefited from a rise in
consumer spending, construction, and business investment. Per capita
GDP is 10% above that of the four big European economies and the
second highest in the EU behind Luxembourg. Over the past decade,
the Irish Government has implemented a series of national economic
programs designed to curb price and wage inflation, reduce
government spending, increase labor force skills, and promote
foreign investment. Ireland joined in circulating the euro on 1
January 2002 along with 11 other EU nations.
Israel
Israel has a technologically advanced market economy with
substantial government participation. It depends on imports of crude
oil, grains, raw materials, and military equipment. Despite limited
natural resources, Israel has intensively developed its agricultural
and industrial sectors over the past 20 years. Israel imports
substantial quantities of grain, but is largely self-sufficient in
other agricultural products. Cut diamonds, high-technology
equipment, and agricultural products (fruits and vegetables) are the
leading exports. Israel usually posts sizable current account
deficits, which are covered by large transfer payments from abroad
and by foreign loans. Roughly half of the government's external debt
is owed to the US, which is its major source of economic and
military aid. The bitter Israeli-Palestinian conflict; difficulties
in the high-technology, construction, and tourist sectors; and
fiscal austerity in the face of growing inflation led to small
declines in GDP in 2001 and 2002. The economy grew at 1% in 2003,
with improvements in tourism and foreign direct investment. In 2004,
rising business and consumer confidence - as well as higher demand
for Israeli exports boosted GDP by 3.9%.
Italy
Italy has a diversified industrial economy with roughly the
same total and per capita output as France and the UK. This
capitalistic economy remains divided into a developed industrial
north, dominated by private companies, and a less developed,
welfare-dependent agricultural south, with 20% unemployment. Most
raw materials needed by industry and more than 75% of energy
requirements are imported. Over the past decade, Italy has pursued a
tight fiscal policy in order to meet the requirements of the
Economic and Monetary Unions and has benefited from lower interest
and inflation rates. The current government has enacted numerous
short-term reforms aimed at improving competitiveness and long-term
growth. Italy has moved slowly, however, on implementing needed
structural reforms, such as lightening the high tax burden and
overhauling Italy's rigid labor market and over-generous pension
system, because of the current economic slowdown and opposition from
labor unions. But the leadership faces a severe economic constraint:
the budget has breached the 3% EU deficit ceiling.
Jamaica
The Jamaican economy is heavily dependent on services, which
now account for 60% of GDP. The country continues to derive most of
its foreign exchange from tourism, remittances, and bauxite/alumina.
The global economic slowdown, particularly after the terrorist
attacks in the US on 11 September 2001, stunted economic growth; the
economy rebounded moderately in 2003-04, with brisk tourist seasons.
But the economy faces serious long-term problems: high interest
rates; increased foreign competition; a pressured, sometimes
sliding, exchange rate; a sizable merchandise trade deficit;
large-scale unemployment; and a growing internal debt, the result of
government bailouts to ailing sectors of the economy. The ratio of
debt to GDP is close to 150%. Inflation, previously a bright spot,
is expected to remain in the double digits. Uncertain economic
conditions have led to increased civil unrest, including gang
violence fueled by the drug trade. In 2004, the government faced the
difficult prospect of having to achieve fiscal discipline in order
to maintain debt payments while simultaneously attacking a serious
and growing crime problem which is hampering economic growth.
Attempts at deficit control were derailed by Hurricane Ivan in
September 2004, which required substantial government spending to
repair the damage. Despite the hurricane, tourism looks set to enjoy
solid growth for the foreseeable future.
Jan Mayen
Jan Mayen is a volcanic island with no exploitable natural
resources. Economic activity is limited to providing services for
employees of Norway's radio and meteorological stations on the
island.
Japan
Government-industry cooperation, a strong work ethic, mastery
of high technology, and a comparatively small defense allocation (1%
of GDP) helped Japan advance with extraordinary rapidity to the rank
of second most technologically-powerful economy in the world after
the US and third-largest economy after the US and China, measured on
a purchasing power parity (PPP) basis. (Using market exhange rates
rather than PPP rates, Japan's economy is larger than China's.) One
notable characteristic of the economy is the working together of
manufacturers, suppliers, and distributors in closely-knit groups
called keiretsu. A second basic feature has been the guarantee of
lifetime employment for a substantial portion of the urban labor
force. Both features are now eroding. Industry, the most important
sector of the economy, is heavily dependent on imported raw
materials and fuels. The tiny agricultural sector is highly
subsidized and protected, with crop yields among the highest in the
world. Usually self sufficient in rice, Japan must import about 50%
of its requirements of other grain and fodder crops. Japan maintains
one of the world's largest fishing fleets and accounts for nearly
15% of the global catch. For three decades overall real economic
growth had been spectacular: a 10% average in the 1960s, a 5%
average in the 1970s, and a 4% average in the 1980s. Growth slowed
markedly in the 1990s, averaging just 1.7%, largely because of the
after effects of overinvestment during the late 1980s and
contractionary domestic policies intended to wring speculative
excesses from the stock and real estate markets. From 2000 to 2003,
government efforts to revive economic growth met with little success
and were further hampered by the slowing of the US, European, and
Asian economies. In 2004, growth improved and the lingering fears of
deflation in prices and economic activity lessened. Japan's huge
government debt, which totals more than 160% of GDP, and the aging
of the population are two major long-run problems. A rise in taxes
could be viewed as endangering the revival of growth. Robotics
constitutes a key long-term economic strength with Japan possessing
410,000 of the world's 720,000 "working robots." Internal conflict
over the proper way to reform the ailing banking system continues.
Jarvis Island
no economic activity
Jersey
The Channel Island economy is based on international
financial services, agriculture, and tourism. In 1996 the finance
sector accounted for about 60% of the island's output. Potatoes,
cauliflower, tomatoes, and especially flowers are important export
crops, shipped mostly to the UK. The Jersey breed of dairy cattle is
known worldwide and represents an important export income earner.
Milk products go to the UK and other EU countries. Tourism accounts
for 24% of GDP. In recent years, the government has encouraged light
industry to locate in Jersey, with the result that an electronics
industry has developed alongside the traditional manufacturing of
knitwear. All raw material and energy requirements are imported, as
well as a large share of Jersey's food needs. Light taxes and death
duties make the island a popular tax haven. Living standards come
close to those of the UK.
Johnston Atoll
Economic activity is limited to providing services to
US military personnel and contractors located on the island. All
food and manufactured goods must be imported.
Jordan
Jordan is a small Arab country with inadequate supplies of
water and other natural resources such as oil. Debt, poverty, and
unemployment are fundamental problems, but King ABDALLAH, since
assuming the throne in 1999, has undertaken some broad economic
reforms in a long-term effort to improve living standards. Amman in
the past three years has worked closely with the IMF, practiced
careful monetary policy, and made substantial headway with
privatization. The government also has liberalized the trade regime
sufficiently to secure Jordan's membership in the WTO (2000), a free
trade accord with the US (2001), and an association agreement with
the EU (2001). These measures have helped improve productivity and
have put Jordan on the foreign investment map. Jordan imported most
of its oil from Iraq, but the US-led war in Iraq in 2003 made Jordan
more dependent on oil from other Gulf nations forcing the Jordanian
government to raise retail petroleum product prices and the sales
tax base. Jordan's export market, which is heavily dependent on
exports to Iraq, was also affected by the war but recovered quickly
while contributing to the Iraq recovery effort. The main challenges
facing Jordan are reducing dependence on foreign grants, reducing
the budget deficit, and creating investment incentives to promote
job creation.