Saint Vincent and the Grenadines
Economic growth in this
lower-middle-income country hinges upon seasonal variations in the
agricultural and tourism sectors. Tropical storms wiped out
substantial portions of crops in 1994, 1995, and 2002, and tourism
in the Eastern Caribbean has suffered low arrivals following 11
September 2001. Saint Vincent is home to a small offshore banking
sector and has moved to adopt international regulatory standards.
Saint Vincent is also a large producer of marijuana and is being
used as a transshipment point for illegal narcotics from South
America.
Samoa
The economy of Samoa has traditionally been dependent on
development aid, family remittances from overseas, agriculture, and
fishing. The country is vulnerable to devastating storms.
Agriculture employs two-thirds of the labor force, and furnishes 90%
of exports, featuring coconut cream, coconut oil, and copra. The
manufacturing sector mainly processes agricultural products. The
decline of fish stocks in the area is a continuing problem. Tourism
is an expanding sector, accounting for 25% of GDP; about 88,000
tourists visited the islands in 2001. One factory in the Foreign
Trade Zone employs 3,000 people to make automobile electrical
harnesses for an assembly plant in Australia. The Samoan Government
has called for deregulation of the financial sector, encouragement
of investment, and continued fiscal discipline, meantime protecting
the environment. Observers point to the flexibility of the labor
market as a basic strength for future economic advances. Foreign
reserves are in a relatively healthy state, the external debt is
stable, and inflation is low.
San Marino
The tourist sector contributes over 50% of GDP. In 2000
more than 3 million tourists visited San Marino. The key industries
are banking, wearing apparel, electronics, and ceramics. Main
agricultural products are wine and cheeses. The per capita level of
output and standard of living are comparable to those of the most
prosperous regions of Italy, which supplies much of its food.
Sao Tome and Principe
This small poor island economy has become
increasingly dependent on cocoa since independence in 1975. Cocoa
production has substantially declined in recent years because of
drought and mismanagement, but strengthening prices helped boost
export earnings in 2003. Sao Tome has to import all fuels, most
manufactured goods, consumer goods, and a substantial amount of
food. Over the years, it has had difficulty servicing its external
debt and has relied heavily on concessional aid and debt
rescheduling. Sao Tome benefited from $200 million in debt relief in
December 2000 under the Highly Indebted Poor Countries (HIPC)
program, but lacking a formal poverty reduction program with the
IMF, it has not benefited from subsequent HIPC debt reductions. Sao
Tome's external debt stands at over $300 million. Considerable
potential exists for development of a tourist industry, and the
government has taken steps to expand facilities in recent years. The
government also has attempted to reduce price controls and
subsidies. Sao Tome is optimistic about the development of petroleum
resources in its territorial waters in the oil-rich Gulf of Guinea.
The first production license was sold to a consortium led by
US-based oil firms. Much of the 2005 budget is dependent upon the
sale of additional production licenses.
Saudi Arabia
This is an oil-based economy with strong government
controls over major economic activities. Saudi Arabia possesses 25%
of the world's proven petroleum reserves, ranks as the largest
exporter of petroleum, and plays a leading role in OPEC. The
petroleum sector accounts for roughly 75% of budget revenues, 45% of
GDP, and 90% of export earnings. About 40% of GDP comes from the
private sector. Roughly five and a half million foreign workers play
an important role in the Saudi economy, for example, in the oil and
service sectors. The government in 1999 announced plans to begin
privatizing the electricity companies, which follows the ongoing
privatization of the telecommunications company. The government is
encouraging private sector growth to lessen the kingdom's dependence
on oil and increase employment opportunities for the swelling Saudi
population. Priorities for government spending in the short term
include additional funds for education and for the water and sewage
systems. Economic reforms proceed cautiously because of deep-rooted
political and social conservatism.
Senegal
In January 1994, Senegal undertook a bold and ambitious
economic reform program with the support of the international donor
community. This reform began with a 50% devaluation of Senegal's
currency, the CFA franc, which was linked at a fixed rate to the
French franc. Government price controls and subsidies have been
steadily dismantled. After seeing its economy contract by 2.1% in
1993, Senegal made an important turnaround, thanks to the reform
program, with real growth in GDP averaging 5% annually during
1995-2003. Annual inflation had been pushed down to the low single
digits. As a member of the West African Economic and Monetary Union
(WAEMU), Senegal is working toward greater regional integration with
a unified external tariff and a more stable monetary policy. Senegal
still relies heavily upon outside donor assistance, however. Under
the IMF's Highly Indebted Poor Countries debt relief program,
Senegal will benefit from eradication of two-thirds of its
bilateral, multilateral, and private sector debt.
Serbia and Montenegro
MILOSEVIC-era mismanagement of the economy, an
extended period of economic sanctions, and the damage to
Yugoslavia's infrastructure and industry during the NATO airstrikes
in 1999 left the economy only half the size it was in 1990. After
the ousting of former Federal Yugoslav President MILOSEVIC in
October 2000, the Democratic Opposition of Serbia (DOS) coalition
government implemented stabilization measures and embarked on an
aggressive market reform program. After renewing its membership in
the IMF in December 2000, a down-sized Yugoslavia continued to
reintegrate into the international community by rejoining the World
Bank (IBRD) and the European Bank for Reconstruction and Development
(EBRD). A World Bank-European Commission sponsored Donors'
Conference held in June 2001 raised $1.3 billion for economic
restructuring. An agreement rescheduling the country's $4.5 billion
Paris Club government debts was concluded in November 2001 - it
wrote off 66% of the debt - and the London Club of private creditors
forgave $1.7 billion of debt, just over half the total owed, in July
2004. The smaller republic of Montenegro severed its economy from
federal control and from Serbia during the MILOSEVIC era and
continues to maintain its own central bank, uses the euro instead of
the Yugoslav dinar as official currency, collects customs tariffs,
and manages its own budget. Kosovo's economy continues to transition
to a market-based system, and is largely dependent on the
international community and the diaspora for financial and technical
assistance. The euro and the Yugoslav dinar are both accepted
currencies in Kosovo. While maintaining ultimate oversight, UNMIK
continues to work with the European Union and Kosovo's local
provisional government to accelerate economic growth, lower
unemployment, and attract foreign investment to help Kosovo
integrate into regional economic structures. The complexity of
Serbia and Montenegro political relationships, slow progress in
privatization, legal uncertainty over property rights, scarcity of
foreign-investment and a substantial foreign trade deficit are
holding back the economy. Arrangements with the IMF, especially
requirements for fiscal discipline, are an important element in
policy formation. Severe unemployment remains a key political
economic problem for this entire region.
Seychelles
Since independence in 1976, per capita output in this
Indian Ocean archipelago has expanded to roughly seven times the old
near-subsistence level. Growth has been led by the tourist sector,
which employs about 30% of the labor force and provides more than
70% of hard currency earnings, and by tuna fishing. In recent years
the government has encouraged foreign investment in order to upgrade
hotels and other services. At the same time, the government has
moved to reduce the dependence on tourism by promoting the
development of farming, fishing, and small-scale manufacturing. A
sharp drop illustrated the vulnerability of the tourist sector in
1991-92 due largely to the Gulf war, and once again following the 11
September 2001 terrorist attacks on the US. Growth slowed in
1998-2002, and fell in 2003, due to sluggish tourist and tuna
sectors, but resumed in 2004, erasing a persistent budget deficit.
Tight controls on exchange rates and the scarcity of foreign
exchange have impaired short-term economic prospects. The black
market value of the Seychelles rupee is half the official exchange
rate; without a devaluation of the currency the tourist sector may
remain sluggish as vacationers seek cheaper destinations such as
Comoros, Mauritius, and Madagascar.
Sierra Leone
Sierra Leone is an extremely poor African nation with
tremendous inequality in income distribution. While it possesses
substantial mineral, agricultural, and fishery resources, its
economic and social infrastructure is not well developed, and
serious social disorders continue to hamper economic development.
About two-thirds of the working-age population engages in
subsistence agriculture. Manufacturing consists mainly of the
processing of raw materials and of light manufacturing for the
domestic market. Plans to reopen bauxite and rutile mines shut down
during an 11 year civil war have not been implemented due to lack of
foreign investment. Alluvial diamond mining remains the major source
of hard currency earnings. The fate of the economy depends upon the
maintenance of domestic peace and the continued receipt of
substantial aid from abroad, which is essential to offset the severe
trade imbalance and supplement government revenues. International
financial institutions contributed over $600 million in development
aid and budgetary support in 2003.
Singapore
Singapore, a highly developed and successful free market
economy, enjoys a remarkably open and corruption-free environment,
stable prices, and a per capita GDP equal to that of the Big 4 West
European countries. The economy depends heavily on exports,
particularly in electronics and manufacturing. It was hard hit in
2001-03 by the global recession, by the slump in the technology
sector, and by an outbreak of Severe Acute Respiratory Syndrome in
2003, which curbed tourism and consumer spending. The government
hopes to establish a new growth path that will be less vulnerable to
the external business cycle and will continue efforts to establish
Singapore as Southeast Asia's financial and high-tech hub. Fiscal
stimulus, low interest rates, a surge in exports, and internal
flexibility led to vigorous growth in 2004, with real GDP rising by
8 percent, by far the economy's best performance since 2000.