Vietnam
Vietnam is a densely-populated, developing country that in
the last 30 years has had to recover from the ravages of war, the
loss of financial support from the old Soviet Bloc, and the
rigidities of a centrally planned economy. Substantial progress was
achieved from 1986 to 1997 in moving forward from an extremely low
level of development and significantly reducing poverty. Growth
averaged around 9% per year from 1993 to 1997. The 1997 Asian
financial crisis highlighted the problems in the Vietnamese economy
and temporarily allowed opponents of reform to slow progress towards
a market oriented economy. GDP growth of 8.5% in 1997 fell to 6% in
1998 and 5% in 1999. Growth then rose to 7% in 2000-04 even against
the background of global recession. Since 2001, however, Vietnamese
authorities have reaffirmed their commitment to economic
liberalization and international integration. They have moved to
implement the structural reforms needed to modernize the economy and
to produce more competitive, export-driven industries. However,
equitization of state-owned enterprises and reduction in the
proportion of non-performing loans has fallen behind schedule.
Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry
into force of the US-Vietnam Bilateral Trade in December 2001 have
led to even more rapid changes in Vietnam's trade and economic
regime. Vietnam's exports to the US doubled in 2002 and again in
2003. Vietnam is working toward accession to the WTO in 2005. Among
other benefits, accession will allow Vietnam to take advantage of
the phase out of the Agreement on Textiles and Clothing, which
eliminated quotas on textiles and clothing for WTO partners on 1
January 2005. Vietnam is working to promote job creation to keep up
with the country's high population growth rate. However, in 2004,
high levels of inflation prompted Vietnamese authorities to tighten
monetary and fiscal policies.
Virgin Islands
Tourism is the primary economic activity, accounting
for 80% of GDP and employment. The islands normally host 2 million
visitors a year. The manufacturing sector consists of petroleum
refining, textiles, electronics, pharmaceuticals, and watch
assembly. The agricultural sector is small, with most food being
imported. International business and financial services are a small
but growing component of the economy. One of the world's largest
petroleum refineries is at Saint Croix. The islands are subject to
substantial damage from storms. The government is working to improve
fiscal discipline, to support construction projects in the private
sector, to expand tourist facilities, to reduce crime, and to
protect the environment.
Wake Island
Economic activity is limited to providing services to
contractors located on the island. All food and manufactured goods
must be imported.
Wallis and Futuna
The economy is limited to traditional subsistence
agriculture, with about 80% labor force earnings from agriculture
(coconuts and vegetables), livestock (mostly pigs), and fishing.
About 4% of the population is employed in government. Revenues come
from French Government subsidies, licensing of fishing rights to
Japan and South Korea, import taxes, and remittances from expatriate
workers in New Caledonia.
West Bank
The West Bank - the larger of the two areas under the
Palestine Authority - has experienced a general decline in economic
growth and a degradation in economic conditions made worse since the
second intifadah began in September 2000. The downturn has been
largely the result of the Israeli closure policies - the imposition
of border closures in response to security incidents in Israel -
which disrupted labor and commodity market relationships. In 2001,
and even more severely in 2002, Israeli military measures in
Palestine Authority areas resulted in the destruction of much
capital plant, the disruption of administrative structure, and
widespread business closures. Including the Gaza Strip, the UN
estimates that more than 100,000 Palestinians out of the 125,000 who
used to work in Israeli settlements, or in joint industrial zones,
have lost their jobs. International aid of $2 billion to the West
Bank and Gaza strip in 2004 prevented the complete collapse of the
economy and allowed some reforms in the government's financial
operations. Meanwhile, unemployment has continued at more than half
the labor force. ARAFAT's death in 2004 leaves open more political
options that could affect the economy.
Western Sahara
Western Sahara depends on pastoral nomadism, fishing,
and phosphate mining as the principal sources of income for the
population. The territory lacks sufficient rainfall for sustainable
agricultural production, and most of the food for the urban
population must be imported. All trade and other economic activities
are controlled by the Moroccan Government. Moroccan energy interests
in 2001 signed contracts to explore for oil off the coast of Western
Sahara, which has angered the Polisario. Incomes and standards of
living in Western Sahara are substantially below the Moroccan level.
World
Global output rose by 4.9% in 2004, led by China (9.1%),
Russia (6.7%), and India (6.2%). The other 14 successor nations of
the USSR and the other old Warsaw Pact nations again experienced
widely divergent growth rates; the three Baltic nations continued as
strong performers, in the 7% range of growth. Growth results posted
by the major industrial countries varied from a small gain in Italy
(1.3%) to a strong gain by the United States (4.4%). The developing
nations also varied in their growth results, with many countries
facing population increases that erode gains in output. Externally,
the nation-state, as a bedrock economic-political institution, is
steadily losing control over international flows of people, goods,
funds, and technology. Internally, the central government often
finds its control over resources slipping as separatist regional
movements - typically based on ethnicity - gain momentum, e.g., in
many of the successor states of the former Soviet Union, in the
former Yugoslavia, in India, in Iraq, in Indonesia, and in Canada.
Externally, the central government is losing decisionmaking powers
to international bodies, notably the European Union. In Western
Europe, governments face the difficult political problem of
channeling resources away from welfare programs in order to increase
investment and strengthen incentives to seek employment. The
addition of 75 million people each year to an already overcrowded
globe is exacerbating the problems of pollution, desertification,
underemployment, epidemics, and famine. Because of their own
internal problems and priorities, the industrialized countries
devote insufficient resources to deal effectively with the poorer
areas of the world, which, at least from an economic point of view,
are becoming further marginalized. The introduction of the euro as
the common currency of much of Western Europe in January 1999, while
paving the way for an integrated economic powerhouse, poses economic
risks because of varying levels of income and cultural and political
differences among the participating nations. The terrorist attacks
on the US on 11 September 2001 accentuate a further growing risk to
global prosperity, illustrated, for example, by the reallocation of
resources away from investment to anti-terrorist programs. The
opening of war in March 2003 between a US-led coalition and Iraq
added new uncertainties to global economic prospects. After the
coalition victory, the complex political difficulties and the high
economic cost of establishing domestic order in Iraq became major
global problems that continued into 2005.
Yemen
Yemen, one of the poorest countries in the Arab world, has
reported strong growth since 2000, but its economic fortunes depend
mostly on oil. Yemen has embarked on an IMF-supported structural
adjustment program designed to modernize and streamline the economy,
which has led to substantial foreign debt relief and restructuring.
Yemen has worked to maintain tight control over spending and to
implement additional components of the IMF program, but a high
population growth rate and internal political dissension complicate
the government's task. Plans include a diversification of the
economy, encouragement of tourism, and more efficient use of scarce
water resources.
Zambia
Despite progress in privatization and budgetary reform,
Zambia's economic growth remains somewhat below the 5% to 7% needed
to reduce poverty significantly. Privatization of government-owned
copper mines relieved the government from covering mammoth losses
generated by the industry and greatly improved the chances for
copper mining to return to profitability and spur economic growth.
Copper output increased in 2004 and is expected to increase again in
2005, due to higher copper prices and the opening of new mines. The
maize harvest was again good in 2004, helping boost GDP and
agricultural exports. Cooperation continues with international
bodies on programs to reduce poverty, including a new lending
arrangement with the IMF in the second quarter, 2004. A tighter
monetary policy will help cut inflation, but Zambia still has a
serious problem with fiscal discipline.
Zimbabwe
The government of Zimbabwe faces a wide variety of
difficult economic problems as it struggles with an unsustainable
fiscal deficit, an overvalued exchange rate, soaring inflation, and
bare shelves. Its 1998-2002 involvement in the war in the Democratic
Republic of the Congo, for example, drained hundreds of millions of
dollars from the economy. Badly needed support from the IMF has been
suspended because of the country's failure to meet budgetary goals.
Inflation rose from an annual rate of 32% in 1998 to 133% at the end
of 2004, while the exchange rate fell from 24 Zimbabwean dollars per
US dollar to 6,200 in the same time period. The government's land
reform program, characterized by chaos and violence, has badly
damaged the commercial farming sector, the traditional source of
exports and foreign exchange and the provider of 400,000 jobs.