Belgium
This modern, private-enterprise economy has capitalized on
its central geographic location, highly developed transport network,
and diversified industrial and commercial base. Industry is
concentrated mainly in the populous Flemish area in the north. With
few natural resources, Belgium must import substantial quantities of
raw materials and export a large volume of manufactures, making its
economy unusually dependent on the state of world markets. Roughly
three-quarters of its trade is with other EU countries. Public debt
is nearly 100% of GDP. On the positive side, the government has
succeeded in balancing its budget, and income distribution is
relatively equal. Belgium began circulating the euro currency in
January 2002. Economic growth in 2001-03 dropped sharply because of
the global economic slowdown, with moderate recovery in 2004-05.
Belize
In this small, essentially private-enterprise economy the
tourism industry is the number one foreign exchange earner followed
by marine products, citrus, cane sugar, bananas, and garments. The
government's expansionary monetary and fiscal policies, initiated in
September 1998, led to sturdy GDP growth averaging nearly 5% in
1999-2005. Major concerns continue to be the sizable trade deficit
and foreign debt. A key short-term objective remains the reduction
of poverty with the help of international donors.
Benin
The economy of Benin remains underdeveloped and dependent on
subsistence agriculture, cotton production, and regional trade.
Growth in real output has averaged around 5% in the past six years,
but rapid population growth has offset much of this increase.
Inflation has subsided over the past several years. In order to
raise growth still further, Benin plans to attract more foreign
investment, place more emphasis on tourism, facilitate the
development of new food processing systems and agricultural
products, and encourage new information and communication
technology. Many of these proposals are included in Benin's
application to receive Millennium Challenge Account funding - for
which it was a finalist in 2004-05. The 2001 privatization policy
continues in telecommunications, water, electricity, and agriculture
in spite of government reluctance. The Paris Club and bilateral
creditors have eased the external debt situation, with Benin
benefiting from a G8 debt reduction announced in July 2005, while
pressing for more rapid structural reforms. Benin continues to be
hurt by Nigerian trade protection that bans imports of a growing
list of products from Benin and elsewhere, which has resulted in
increased smuggling and criminality in the border region.
Bermuda
Bermuda enjoys the highest per capita income in the world,
more than 50% higher than that of the US. Its economy is primarily
based on providing financial services for international business and
luxury facilities for tourists. A number of reinsurance companies
relocated to the island following 11 September 2001 and again after
Hurricane Katrina, contributing to the expansion of an already
robust international business sector. Bermuda's tourism industry -
which derives over 80% of its visitors from the US - continues to
struggle but remains the island's number two industry. Most capital
equipment and food must be imported. Bermuda's industrial sector is
small, although construction continues to be important; the average
cost of a house in June 2003 had risen to $976,000. Agriculture is
limited with only 20% of the land being arable.
Bhutan
The economy, one of the world's smallest and least developed,
is based on agriculture and forestry, which provide the main
livelihood for more than 90% of the population. Agriculture consists
largely of subsistence farming and animal husbandry. Rugged
mountains dominate the terrain and make the building of roads and
other infrastructure difficult and expensive. The economy is closely
aligned with India's through strong trade and monetary links and
dependence on India's financial assistance. The industrial sector is
technologically backward, with most production of the cottage
industry type. Most development projects, such as road construction,
rely on Indian migrant labor. Bhutan's hydropower potential and its
attraction for tourists are key resources. Model education, social,
and environment programs are underway with support from multilateral
development organizations. Each economic program takes into account
the government's desire to protect the country's environment and
cultural traditions. For example, the government, in its cautious
expansion of the tourist sector, encourages visits by upscale,
environmentally conscientious tourists. Detailed controls and
uncertain policies in areas like industrial licensing, trade, labor,
and finance continue to hamper foreign investment.
Bolivia
Bolivia, long one of the poorest and least developed Latin
American countries, reformed its economy after suffering a
disastrous economic crisis in the early 1980s. The reforms spurred
real GDP growth, which averaged 4% in the 1990s, and poverty rates
fell. Economic growth, however, lagged again beginning in 1999
because of a global slowdown and homegrown factors such as political
turmoil, civil unrest, and soaring fiscal deficits, all of which
hurt investor confidence. In 2003, violent protests against the
pro-foreign investment economic policies of President SANCHEZ DE
LOZADA led to his resignation and the cancellation of plans to
export Bolivia's newly discovered natural gas reserves to large
northern hemisphere markets. In 2005, the government passed a
controversial natural gas law that imposes on the oil and gas firms
significantly higher taxes as well as new contracts that give the
state control of their operations. Bolivian officials are in the
process of implementing the law; meanwhile, foreign investors have
stopped investing and have taken the first legal steps to secure
their investments. Real GDP growth in 2003-05 - helped by increased
demand for natural gas in neighboring Brazil - was positive, but
still below the levels seen during the 1990s. Bolivia's fiscal
position has improved in recent years, but the country remains
dependent on foreign aid from multilateral lenders and foreign
governments to meet budget shortfalls. In 2005, the G8 announced a
$2 billion debt-forgiveness plan over the next few decades that
should help reduce some fiscal pressures on the government in the
near term.
Bosnia and Herzegovina
Bosnia and Herzegovina ranked next to
Macedonia as the poorest republic in the old Yugoslav federation.
Although agriculture is almost all in private hands, farms are small
and inefficient, and the republic traditionally is a net importer of
food. Industry remains greatly overstaffed, a holdover from the
socialist economic structure of Yugoslavia. TITO had pushed the
development of military industries in the republic with the result
that Bosnia was saddled with a host of industrial firms with little
commercial potential. The interethnic warfare in Bosnia caused
production to plummet by 80% from 1992 to 1995 and unemployment to
soar. With an uneasy peace in place, output recovered in 1996-99 at
high percentage rates from a low base; but output growth slowed in
2000-02. Part of the lag in output was made up in 2003-05.
National-level statistics are limited and do not capture the large
share of black market activity. The konvertibilna marka (convertible
mark or BAM)- the national currency introduced in 1998 - is pegged
to the euro, and confidence in the currency and the banking sector
has increased. Implementation of privatization, however, has been
slow, and local entities only reluctantly support national-level
institutions. Banking reform accelerated in 2001 as all the
Communist-era payments bureaus were shut down; foreign banks,
primarily from Western Europe, now control most of the banking
sector. A sizeable current account deficit and high unemployment
rate remain the two most serious economic problems. The country
receives substantial amounts of reconstruction assistance and
humanitarian aid from the international community but will have to
prepare for an era of declining assistance.
Botswana
Botswana has maintained one of the world's highest economic
growth rates since independence in 1966. Through fiscal discipline
and sound management, Botswana has transformed itself from one of
the poorest countries in the world to a middle-income country with a
per capita GDP of $10,000 in 2005. Two major investment services
rank Botswana as the best credit risk in Africa. Diamond mining has
fueled much of the expansion and currently accounts for more than
one-third of GDP and for 70-80% of export earnings. Tourism,
financial services, subsistence farming, and cattle raising are
other key sectors. On the downside, the government must deal with
high rates of unemployment and poverty. Unemployment officially is
23.8%, but unofficial estimates place it closer to 40%. HIV/AIDS
infection rates are the second highest in the world and threaten
Botswana's impressive economic gains. An expected leveling off in
diamond mining production overshadows long-term prospects.
Bouvet Island
no economic activity; declared a nature reserve
Brazil
Characterized by large and well-developed agricultural,
mining, manufacturing, and service sectors, Brazil's economy
outweighs that of all other South American countries and is
expanding its presence in world markets. From 2001-03 real wages
fell and Brazil's economy grew, on average only 2.2% per year, as
the country absorbed a series of domestic and international economic
shocks. That Brazil absorbed these shocks without financial collapse
is a tribute to the resiliency of the Brazilian economy and the
economic program put in place by former President CARDOSO and
strengthened by President LULA DA SILVA. In 2004, Brazil enjoyed
more robust growth that yielded increases in employment and real
wages. The three pillars of the economic program are a floating
exchange rate, an inflation-targeting regime, and tight fiscal
policy, all reinforced by a series of IMF programs. The currency
depreciated sharply in 2001 and 2002, which contributed to a
dramatic current account adjustment; in 2003 to 2005, Brazil ran
record trade surpluses and recorded its first current account
surpluses since 1992. Productivity gains - particularly in
agriculture - also contributed to the surge in exports, and Brazil
in 2005 surpassed the previous year's record export level. While
economic management has been good, there remain important economic
vulnerabilities. The most significant are debt-related: the
government's largely domestic debt increased steadily from 1994 to
2003 - straining government finances - before falling as a
percentage of GDP in 2005, while Brazil's foreign debt (a mix of
private and public debt) is large in relation to Brazil's small (but
growing) export base. Another challenge is maintaining economic
growth over a period of time to generate employment and make the
government debt burden more manageable.