Juan de Nova Island
Up to 12,000 tons of guano are mined per year.
Kazakhstan
Kazakhstan, the largest of the former Soviet republics in
territory, excluding Russia, possesses enormous fossil fuel reserves
as well as plentiful supplies of other minerals and metals. It also
has a large agricultural sector featuring livestock and grain.
Kazakhstan's industrial sector rests on the extraction and
processing of these natural resources and also on a growing
machine-building sector specializing in construction equipment,
tractors, agricultural machinery, and some defense items. The
breakup of the USSR in December 1991 and the collapse in demand for
Kazakhstan's traditional heavy industry products resulted in a
short-term contraction of the economy, with the steepest annual
decline occurring in 1994. In 1995-97, the pace of the government
program of economic reform and privatization quickened, resulting in
a substantial shifting of assets into the private sector. Kazakhstan
enjoyed double-digit growth in 2000-01 - and a solid 9.5% in 2002 -
thanks largely to its booming energy sector, but also to economic
reform, good harvests, and foreign investment. Growth remained at
the high 9% level in 2003 and 2004. The opening of the Caspian
Consortium pipeline in 2001, from western Kazakhstan's Tengiz
oilfield to the Black Sea, substantially raised export capacity. The
country has embarked upon an industrial policy designed to diversify
the economy away from overdependence on the oil sector, by
developing light industry. Additionally, the policy aims to reduce
the influence of foreign investment and foreign personnel; the
government has engaged in several disputes with foreign oil
companies over the terms of production agreements, and tensions
continue.
Kenya
The regional hub for trade and finance in East Africa, Kenya
has been hampered by corruption and by reliance upon several primary
goods whose prices have remained low. In 1997, the IMF suspended
Kenya's Enhanced Structural Adjustment Program due to the
government's failure to maintain reforms and curb corruption. A
severe drought from 1999 to 2000 compounded Kenya's problems,
causing water and energy rationing and reducing agricultural output.
As a result, GDP contracted by 0.2% in 2000. The IMF, which had
resumed loans in 2000 to help Kenya through the drought, again
halted lending in 2001 when the government failed to institute
several anticorruption measures. Despite the return of strong rains
in 2001, weak commodity prices, endemic corruption, and low
investment limited Kenya's economic growth to 1.2%. Growth lagged at
1.1% in 2002 because of erratic rains, low investor confidence,
meager donor support, and political infighting up to the elections.
In the key 27 December 2002 elections, Daniel Arap MOI's 24-year-old
reign ended, and a new opposition government took on the formidable
economic problems facing the nation. In 2003, progress was made in
rooting out corruption and encouraging donor support, with GDP
growth edging up to 1.7%. GDP grew a moderate 2.2% in 2004.
Kingman Reef
no economic activity
Kiribati
A remote country of 33 scattered coral atolls, Kiribati has
few natural resources. Commercially viable phosphate deposits were
exhausted at the time of independence from the UK in 1979. Copra and
fish now represent the bulk of production and exports. The economy
has fluctuated widely in recent years. Economic development is
constrained by a shortage of skilled workers, weak infrastructure,
and remoteness from international markets. Tourism provides more
than one-fifth of GDP. The financial sector is at an early stage of
development as is the expansion of private sector initiatives.
Foreign financial aid from UK, Japan, Australia, New Zealand, and
China equals 25%-50% of GDP. Remittances from workers abroad account
for more than $5 million each year.
Korea, North
North Korea, one of the world's most centrally planned
and isolated economies, faces desperate economic conditions.
Industrial capital stock is nearly beyond repair as a result of
years of underinvestment and spare parts shortages. Industrial and
power output have declined in parallel. The nation has suffered its
eleventh year of food shortages because of a lack of arable land,
collective farming, weather-related problems, and chronic shortages
of fertilizer and fuel. Massive international food aid deliveries
have allowed the regime to escape mass starvation since 1995, but
the population remains the victim of prolonged malnutrition and
deteriorating living conditions. Large-scale military spending eats
up resources needed for investment and civilian consumption. In July
2002, the government took limited steps toward a freer market
economy. In 2004, heightened political tensions with key donor
countries and general donor fatigue threatened the flow of
desperately needed food aid and fuel aid. Black market prices have
continued to rise following the increase in official prices and
wages in the summer of 2002, leaving some vulnerable groups, such as
the elderly and unemployed, less able to buy goods. In 2004, the
regime allowed private markets to sell a wider range of goods and
permitted private farming on an experimental basis in an effort to
boost agricultural output. Firm political control remains the
Communist government's overriding concern, which will constrain any
further loosening of economic regulations.
Korea, South
Since the early 1960s, South Korea has achieved an
incredible record of growth and integration into the high-tech
modern world economy. Four decades ago GDP per capita was comparable
with levels in the poorer countries of Africa and Asia. In 2004, it
joined the trillion dollar club of world economies. Today its GDP
per capita is 14 times North Korea's and equal to the lesser
economies of the European Union. This success through the late 1980s
was achieved by a system of close government/business ties,
including directed credit, import restrictions, sponsorship of
specific industries, and a strong labor effort. The government
promoted the import of raw materials and technology at the expense
of consumer goods and encouraged savings and investment over
consumption. The Asian financial crisis of 1997-99 exposed
longstanding weaknesses in South Korea's development model,
including high debt/equity ratios, massive foreign borrowing, and an
undisciplined financial sector. Growth plunged to a negative 6.9% in
1998, then strongly recovered to 9.5% in 1999 and 8.5% in 2000.
Growth fell back to 3.3% in 2001 because of the slowing global
economy, falling exports, and the perception that much-needed
corporate and financial reforms had stalled. Led by consumer
spending and exports, growth in 2002 was an impressive 7.0%, despite
anemic global growth. Economic growth fell to 3.1% in 2003 because
of a downturn in consumer spending and recovered to an estimated
4.6% in 2004 on the strength of rapid export growth. The government
plans to boost infrastructure spending in 2005. Moderate inflation,
low unemployment, an export surplus, and fairly equal distribution
of income characterize this solid economy.
Kuwait
Kuwait is a small, rich, relatively open economy with proved
crude oil reserves of about 96 billion barrels - 10% of world
reserves. Petroleum accounts for nearly half of GDP, 95% of export
revenues, and 80% of government income. Kuwait's climate limits
agricultural development. Consequently, with the exception of fish,
it depends almost wholly on food imports. About 75% of potable water
must be distilled or imported. Kuwait continues its discussions with
foreign oil companies to develop fields in the northern part of the
country.
Kyrgyzstan
Kyrgyzstan is a poor, mountainous country with a
predominantly agricultural economy. Cotton, tobacco, wool, and meat
are the main agricultural products, although only tobacco and cotton
are exported in any quantity. Industrial exports include gold,
mercury, uranium, and natural gas and electricity. Kyrgyzstan has
been fairly progressive in carrying out market reforms, such as an
improved regulatory system and land reform. Kyrgyzstan was the first
CIS country to be accepted into the World Trade Organization. With
fits and starts, inflation has been lowered to an estimated 7% in
2001, 2.1% in 2002, 4% in 2003, and 3.2% in 2004. Much of the
government's stock in enterprises has been sold. Drops in production
had been severe after the breakup of the Soviet Union in December
1991, but by mid-1995 production began to recover and exports began
to increase. Kyrgyzstan has distinguished itself by adopting
relatively liberal economic policies. The drop in output at the
Kumtor gold mine sparked a 0.5% decline in GDP in 2002, but GDP
growth bounced back to 6% in 2003 and 2004. The government has made
steady strides in controlling its substantial fiscal deficit and
aims to reduce the deficit to 3% of GDP in 2004. The government and
the international financial institutions have been engaged in a
comprehensive medium-term poverty reduction and economic growth
strategy. Further restructuring of domestic industry and success in
attracting foreign investment are keys to future growth.
Laos
The government of Laos - one of the few remaining official
Communist states - began decentralizing control and encouraging
private enterprise in 1986. The results, starting from an extremely
low base, were striking - growth averaged 6% in 1988-2004 except
during the short-lived drop caused by the Asian financial crisis
beginning in 1997. Despite this high growth rate, Laos remains a
country with a primitive infrastructure; it has no railroads, a
rudimentary road system, and limited external and internal
telecommunications. The government has sponsored major improvements
in the road system. Electricity is available in only a few urban
areas. Subsistence agriculture accounts for half of GDP and provides
80% of total employment. The economy will continue to benefit from
aid from the IMF and other international sources and from new
foreign investment in food processing and mining. In late 2004, Laos
gained Normal Trade Relations status with the US, allowing
Laos-based producers to face lower tariffs on their exports; this
may help spur growth.