Puerto Rico
Puerto Rico has one of the most dynamic economies in the
Caribbean region. A diverse industrial sector has far surpassed
agriculture as the primary locus of economic activity and income.
Encouraged by duty-free access to the US and by tax incentives, US
firms have invested heavily in Puerto Rico since the 1950s. US
minimum wage laws apply. Sugar production has lost out to dairy
production and other livestock products as the main source of income
in the agricultural sector. Tourism has traditionally been an
important source of income, with estimated arrivals of nearly 5
million tourists in 1999. Growth fell off in 2001-03, largely due to
the slowdown in the US economy, and has recovered in 2004.
Qatar
Oil and gas account for more than 55% of GDP, roughly 85% of
export earnings, and 70% of government revenues. Oil and gas have
given Qatar a per capita GDP about 80% of that of the leading West
European industrial countries. Proved oil reserves of 16 billion
barrels should ensure continued output at current levels for 23
years. Qatar's proved reserves of natural gas exceed 14 trillion
cubic meters, more than 5% of the world total and third largest in
the world. Long-term goals feature the development of offshore
natural gas reserves to offset the ultimate decline in oil
production. In recent years, Qatar has consistently posted trade
surpluses largely because of high oil prices and increased natural
gas exports, becoming one of the world's fastest growing and highest
per-capita income countries.
Reunion
The economy has traditionally been based on agriculture, but
services now dominate. Sugarcane has been the primary crop for more
than a century, and in some years it accounts for 85% of exports.
The government has been pushing the development of a tourist
industry to relieve high unemployment, which amounts to one-third of
the labor force. The gap in Reunion between the well-off and the
poor is extraordinary and accounts for the persistent social
tensions. The white and Indian communities are substantially better
off than other segments of the population, often approaching
European standards, whereas minority groups suffer the poverty and
unemployment typical of the poorer nations of the African continent.
The outbreak of severe rioting in February 1991 illustrates the
seriousness of socioeconomic tensions. The economic well-being of
Reunion depends heavily on continued financial assistance from
France.
Romania
Romania began the transition from Communism in 1989 with a
largely obsolete industrial base and a pattern of output unsuited to
the country's needs. The country emerged in 2000 from a punishing
three-year recession thanks to strong demand in EU export markets.
Despite the global slowdown in 2001-02, strong domestic activity in
construction, agriculture, and consumption have kept growth above
4%. An IMF standby agreement, signed in 2001, has been accompanied
by slow but palpable gains in privatization, deficit reduction, and
the curbing of inflation. The IMF Board approved Romania's
completion of the standby agreement in October 2003, the first time
Romania has successfully concluded an IMF agreement since the 1989
revolution. In July 2004, the executive board of the IMF approved a
24-month standby agreement for $367 million. The Romanian
authorities do not intend to draw on this agreement, however,
viewing it simply as a precaution. Meanwhile, recent macroeconomic
gains have done little to address Romania's widespread poverty,
while corruption and red tape continue to handicap the business
environment.
Russia
Russia ended 2004 with its sixth straight year of growth,
averaging 6.5% annually since the financial crisis of 1998. Although
high oil prices and a relatively cheap ruble are important drivers
of this economic rebound, since 2000 investment and consumer-driven
demand have played a noticeably increasing role. Real fixed capital
investments have averaged gains greater than 10% over the last five
years, and real personal incomes have realized average increases
over 12%. Russia has also improved its international financial
position since the 1998 financial crisis, with its foreign debt
declining from 90% of GDP to around 28%. Strong oil export earnings
have allowed Russia to increase its foreign reserves from only $12
billion to some $120 billion at yearend 2004. These achievements,
along with a renewed government effort to advance structural
reforms, have raised business and investor confidence in Russia's
economic prospects. Nevertheless, serious problems persist. Economic
growth slowed down in the second half of 2004 and the Russian
government forecasts growth of only 4.5% to 6.2% for 2005. Oil,
natural gas, metals, and timber account for more than 80% of
exports, leaving the country vulnerable to swings in world prices.
Russia's manufacturing base is dilapidated and must be replaced or
modernized if the country is to achieve broad-based economic growth.
Other problems include a weak banking system, a poor business
climate that discourages both domestic and foreign investors,
corruption, and widespread lack of trust in institutions. In
addition, a string of investigations launched against a major
Russian oil company, culminating with the arrest of its CEO in the
fall of 2003, have raised concerns by some observers that President
PUTIN is granting more influence to forces within his government
that desire to reassert state control over the economy.
Rwanda
Rwanda is a poor rural country with about 90% of the
population engaged in (mainly subsistence) agriculture. It is the
most densely populated country in Africa; landlocked with few
natural resources and minimal industry. Primary foreign exchange
earners are coffee and tea. The 1994 genocide decimated Rwanda's
fragile economic base, severely impoverished the population,
particularly women, and eroded the country's ability to attract
private and external investment. However, Rwanda has made
substantial progress in stabilizing and rehabilitating its economy
to pre-1994 levels, although poverty levels are higher now. GDP has
rebounded and inflation has been curbed. Export earnings, however,
have been hindered by low beverage prices, depriving the country of
much needed hard currency. Despite Rwanda's fertile ecosystem, food
production often does not keep pace with population growth,
requiring food imports. Rwanda continues to receive substantial aid
money and was approved for IMF-World Bank Heavily Indebted Poor
Country (HIPC) initiative debt relief in late 2000. Kigali's high
defense expenditures have caused tension between the government and
international donors and lending agencies. An energy shortage and
instability in neighboring states may slow growth in 2005, while the
lack of adequate transportation linkages to other countries
continues to handicap export growth.
Saint Helena
The economy depends largely on financial assistance
from the UK, which amounted to about $5 million in 1997 or almost
one-half of annual budgetary revenues. The local population earns
income from fishing, raising livestock, and sales of handicrafts.
Because there are few jobs, 25% of the work force has left to seek
employment on Ascension Island, on the Falklands, and in the UK.
Saint Kitts and Nevis
Sugar was the traditional mainstay of the
Saint Kitts economy until the 1970s. Although the crop still
dominates the agricultural sector, activities such as tourism,
export-oriented manufacturing, and offshore banking have assumed
larger roles in the economy. Tourism revenues are now the chief
source of the islands' foreign exchange. The opening of a 470-room
resort in February 2003 was expected to bring in much-needed revenue.
Saint Lucia
Changes in the EU import preference regime and the
increased competition from Latin American bananas have made economic
diversification increasingly important in Saint Lucia. The island
nation has been able to attract foreign business and investment,
especially in its offshore banking and tourism industries. The
manufacturing sector is the most diverse in the Eastern Caribbean
area, and the government is trying to revitalize the banana
industry. Economic fundamentals remain solid, even though
unemployment needs to be cut.
Saint Pierre and Miquelon
The inhabitants have traditionally earned
their livelihood by fishing and by servicing fishing fleets
operating off the coast of Newfoundland. The economy has been
declining, however, because of disputes with Canada over fishing
quotas and a steady decline in the number of ships stopping at Saint
Pierre. In 1992, an arbitration panel awarded the islands an
exclusive economic zone of 12,348 sq km to settle a longstanding
territorial dispute with Canada, although it represents only 25% of
what France had sought. The islands are heavily subsidized by France
to the great betterment of living standards. The government hopes an
expansion of tourism will boost economic prospects. Recent test
drilling for oil may pave the way for development of the energy
sector.