Equatorial Guinea
The discovery and exploitation of large oil
reserves have contributed to dramatic economic growth in recent
years. Forestry, farming, and fishing are also major components of
GDP. Subsistence farming predominates. Although pre-independence
Equatorial Guinea counted on cocoa production for hard currency
earnings, the neglect of the rural economy under successive regimes
has diminished potential for agriculture-led growth (the government
has stated its intention to reinvest some oil revenue into
agriculture). A number of aid programs sponsored by the World Bank
and the IMF have been cut off since 1993, because of corruption and
mismanagement. No longer eligible for concessional financing because
of large oil revenues, the government has been trying to agree on a
"shadow" fiscal management program with the World Bank and IMF.
Businesses, for the most part, are owned by government officials and
their family members. Undeveloped natural resources include
titanium, iron ore, manganese, uranium, and alluvial gold. Growth
remained strong in 2005, led by oil. Equatorial Guinea now has the
second highest per capita income in the world, after Luxembourg.
Eritrea
Since independence from Ethiopia in 1993, Eritrea has faced
the economic problems of a small, desperately poor country. Like the
economies of many African nations, the economy is largely based on
subsistence agriculture, with 80% of the population involved in
farming and herding. The Ethiopian-Eritrea war in 1998-2000 severely
hurt Eritrea's economy. GDP growth fell to zero in 1999 and to
-12.1% in 2000. The May 2000 Ethiopian offensive into northern
Eritrea caused some $600 million in property damage and loss,
including losses of $225 million in livestock and 55,000 homes. The
attack prevented planting of crops in Eritrea's most productive
region, causing food production to drop by 62%. Even during the war,
Eritrea developed its transportation infrastructure, asphalting new
roads, improving its ports, and repairing war-damaged roads and
bridges. Since the war ended, the government has maintained a firm
grip on the economy, expanding the use of the military and
party-owned businesses to complete Eritrea's development agenda.
Erratic rainfall and the delayed demobilization of agriculturalists
from the military kept cereal production well below normal, holding
down growth in 2002-05. Eritrea's economic future depends upon its
ability to master social problems such as illiteracy, unemployment,
and low skills, as well as the willingness to open its economy to
private enterprise so that the diaspora's money and expertise can
foster economic growth.
Estonia
Estonia, as a new member of the World Trade Organization and
the European Union, has transitioned effectively to a modern market
economy with strong ties to the West, including the pegging of its
currency to the euro. The economy benefits from strong electronics
and telecommunications sectors and is greatly influenced by
developments in Finland, Sweden, and Germany, three major trading
partners. The current account deficit remains high; however, the
state budget is essentially in balance, and public debt is low.
Ethiopia
Ethiopia's poverty-stricken economy is based on
agriculture, accounting for half of GDP, 60% of exports, and 80% of
total employment. The agricultural sector suffers from frequent
drought and poor cultivation practices. Coffee is critical to the
Ethiopian economy with exports of some $156 million in 2002, but
historically low prices have seen many farmers switching to qat to
supplement income. The war with Eritrea in 1998-2000 and recurrent
drought have buffeted the economy, in particular coffee production.
In November 2001, Ethiopia qualified for debt relief from the Highly
Indebted Poor Countries (HIPC) initiative, and in December 2005 the
International Monetary Fund voted to forgive Ethiopia's debt to the
body. Under Ethiopia's land tenure system, the government owns all
land and provides long-term leases to the tenants; the system
continues to hamper growth in the industrial sector as entrepreneurs
are unable to use land as collateral for loans. Drought struck again
late in 2002, leading to a 2% decline in GDP in 2003. Normal weather
patterns late in 2003 helped agricultural and GDP growth recover in
2004-05.
Europa Island
no economic activity
European Union
Domestically, the European Union attempts to lower
trade barriers, adopt a common currency, and move toward convergence
of living standards. Internationally, the EU aims to bolster
Europe's trade position and its political and economic power.
Because of the great differences in per capita income (from $15,000
to $56,000) and historic national animosities, the European
Community faces difficulties in devising and enforcing common
policies. For example, since 2003 Germany and France have flouted
the member states' treaty obligation to prevent their national
budgets from running more than a 3% deficit. In 2004, the EU
admitted 10 central and eastern European countries that are, in
general, less advanced technologically and economically than the
other 15. Twelve EU member states introduced the euro as their
common currency on 1 January 1999, but the UK, Sweden, and Denmark
do not participate. The 10 new member states may choose to adopt the
euro when they meet the EU's fiscal and monetary criteria and the
other euro states so agree.
Falkland Islands (Islas Malvinas) The economy was formerly based on agriculture, mainly sheep farming, but today fishing contributes the bulk of economic activity. In 1987 the government began selling fishing licenses to foreign trawlers operating within the Falkland Islands' exclusive fishing zone. These license fees total more than $40 million per year, which goes to support the island's health, education, and welfare system. Squid accounts for 75% of the fish taken. Dairy farming supports domestic consumption; crops furnish winter fodder. Exports feature shipments of high-grade wool to the UK and the sale of postage stamps and coins. The islands are now self-financing except for defense. The British Geological Survey announced a 200-mile oil exploration zone around the islands in 1993, and early seismic surveys suggest substantial reserves capable of producing 500,000 barrels per day; to date, no exploitable site has been identified. An agreement between Argentina and the UK in 1995 seeks to defuse licensing and sovereignty conflicts that would dampen foreign interest in exploiting potential oil reserves. Tourism, especially eco-tourism, is increasing rapidly, with about 30,000 visitors in 2001. Another large source of income is interest paid on money the government has in the bank. The British military presence also provides a sizeable economic boost.
Faroe Islands
The Faroese economy has had a strong performance since
1994, mostly as a result of increasing fish landings and high and
stable export prices. Unemployment is minimal and there are signs of
labor shortages in several sectors. The positive economic
development has helped the Faroese Home Rule Government produce
increasing budget surpluses, which in turn have helped reduce the
large public debt, most of it owed to Denmark. However, the total
dependence on fishing makes the Faroese economy extremely
vulnerable, and the present fishing efforts appear in excess of what
is a sustainable level of fishing in the long term. Oil finds close
to the Faroese area give hope for deposits in the immediate Faroese
area, which may eventually lay the basis for a more diversified
economy and thus lessen dependence on Danish economic assistance.
Aided by a substantial annual subsidy (about 15% of GDP) from
Denmark, the Faroese have a standard of living not far below the
Danes and other Scandinavians.
Fiji
Fiji, endowed with forest, mineral, and fish resources, is one
of the most developed of the Pacific island economies, though still
with a large subsistence sector. Sugar exports, remittances from
Fijians working abroad, and a growing tourist industry - with
300,000 to 400,000 tourists annually - are the major sources of
foreign exchange. Fiji's sugar has special access to European Union
markets, but will be harmed by the EU's decision to cut sugar
subsidies. Sugar processing makes up one-third of industrial
activity but is not efficient. Long-term problems include low
investment, uncertain land ownership rights, and the government's
ability to manage its budget. Yet, because of a tourist boom,
short-run economic prospects are good, provided tensions do not
again erupt between indigenous Fijians and Indo-Fijians. Overseas
remittances from Fijians working in Kuwait and Iraq have increased
significantly.
Finland
Finland has a highly industrialized, largely free-market
economy with per capita output roughly that of the UK, France,
Germany, and Italy. Its key economic sector is manufacturing -
principally the wood, metals, engineering, telecommunications, and
electronics industries. Trade is important; exports equal two-fifths
of GDP. Finland excels in high-tech exports, e.g., mobile phones.
Except for timber and several minerals, Finland depends on imports
of raw materials, energy, and some components for manufactured
goods. Because of the climate, agricultural development is limited
to maintaining self-sufficiency in basic products. Forestry, an
important export earner, provides a secondary occupation for the
rural population. Rapidly increasing integration with Western Europe
- Finland was one of the 12 countries joining the European Economic
and Monetary Union (EMU) - will dominate the economic picture over
the next several years. High unemployment remains a persistent
problem.