Guinea-Bissau
One of the 10 poorest countries in the world,
Guinea-Bissau depends mainly on farming and fishing. Cashew crops
have increased remarkably in recent years, and the country now ranks
sixth in cashew production. Guinea-Bissau exports fish and seafood
along with small amounts of peanuts, palm kernels, and timber. Rice
is the major crop and staple food. However, intermittent fighting
between Senegalese-backed government troops and a military junta
destroyed much of the country's infrastructure and caused widespread
damage to the economy in 1998; the civil war led to a 28% drop in
GDP that year, with partial recovery in 1999-2002. Before the war,
trade reform and price liberalization were the most successful part
of the country's structural adjustment program under IMF
sponsorship. The tightening of monetary policy and the development
of the private sector had also begun to reinvigorate the economy.
Because of high costs, the development of petroleum, phosphate, and
other mineral resources is not a near-term prospect. However,
offshore oil prospecting has begun and could lead to much-needed
revenue in the long run. The inequality of income distribution is
one of the most extreme in the world. The government and
international donors continue to work out plans to forward economic
development from a lamentably low base. In December 2003, the World
Bank, IMF, and UNDP were forced to step in to provide emergency
budgetary support in the amount of $107 million for 2004,
representing over 80% of the total national budget. Government drift
and indecision, however, have resulted in continued low growth in
2002-05.
Guyana
The Guyanese economy exhibited moderate economic growth in
2001-02, based on expansion in the agricultural and mining sectors,
a more favorable atmosphere for business initiatives, a more
realistic exchange rate, fairly low inflation, and the continued
support of international organizations. Growth slowed in 2003 and
came back gradually in 2004, buoyed largely by increased export
earnings; it slowed again in 2005. Chronic problems include a
shortage of skilled labor and a deficient infrastructure. The
government is juggling a sizable external debt against the urgent
need for expanded public investment. The bauxite mining sector
should benefit in the near term from restructuring and partial
privatization. Export earnings from agriculture and mining have
fallen sharply, while the import bill has risen, driven by higher
energy prices. Guyana's entrance into the Caricom Single Market and
Economy (CSME) in January 2006 might broaden the country's export
market, primarily in the raw materials sector.
Haiti
In this poorest country in the Western Hemisphere, 80% of the
population lives in abject poverty. Two-thirds of all Haitians
depend on the agriculture sector, mainly small-scale subsistence
farming, and remain vulnerable to damage from frequent natural
disasters, exacerbated by the country's widespread deforestation.
The economy grew 1.5% in 2005, the highest growth rate since 1999.
Haiti suffers from rampant inflation, a lack of investment, and a
severe trade deficit. In early 2005, Haiti paid its arrears to the
World Bank, paving the way for reengagement with the Bank. The
government is reliant on formal international economic assistance
for fiscal sustainability. Remittances are the primary source of
foreign exchange, equaling nearly a quarter of GDP in 2005.
Heard Island and McDonald Islands
No indigenous economic activity,
but the Australian Government allows limited fishing around the
islands.
Holy See (Vatican City)
This unique, noncommercial economy is
supported financially by an annual contribution from Roman Catholic
dioceses throughout the world (known as Peter's Pence); by the sale
of postage stamps, coins, medals, and tourist mementos; by fees for
admission to museums; and by the sale of publications. Investments
and real estate income also account for a sizable portion of
revenue. The incomes and living standards of lay workers are
comparable to those of counterparts who work in the city of Rome.
Honduras
Honduras, one of the poorest countries in the Western
Hemisphere with an extraordinarily unequal distribution of income
and massive unemployment, is banking on expanded trade under the
US-Central America Free Trade Agreement (CAFTA) and on debt relief
under the Heavily Indebted Poor Countries (HIPC) initiative. The
country has met most of its macroeconomic targets, and began a
three-year IMF Poverty Reduction and Growth Facility (PGRF) program
in February 2004. Growth remains dependent on the economy of the US,
its largest trading partner, on continued exports of non-traditional
agricultural products (such as melons, chiles, tilapia, and shrimp),
and on reduction of the high crime rate.
Hong Kong
Hong Kong has a free market, entrepot economy, highly
dependent on international trade. Natural resources are limited, and
food and raw materials must be imported. Gross imports and exports
(i.e., including reexports to and from third countries) each exceed
GDP in dollar value. Even before Hong Kong reverted to Chinese
administration on 1 July 1997, it had extensive trade and investment
ties with China. Hong Kong has been further integrating its economy
with China because China's growing openness to the world economy has
made manufacturing in China much more cost effective. Hong Kong's
reexport business to and from China is a major driver of growth. Per
capita GDP is comparable to that of the four big economies of
Western Europe. GDP growth averaged a strong 5% from 1989 to 2005,
but Hong Kong suffered two recessions in the past eight years
because of the Asian financial crisis in 1997-1998 and the global
downturn in 2001-2002. Although the Severe Acute Respiratory
Syndrome (SARS) outbreak in 2003 also battered Hong Kong's economy,
a solid rise in exports, a boom in tourism from the mainland because
of China's easing of travel restrictions, and a return of consumer
confidence resulted in the resumption of strong growth from late
2003 through 2005.
Howland Island
no economic activity
Hungary
Hungary has made the transition from a centrally planned to
a market economy, with a per capita income about 60% of the EU-25
average. Hungary continues to demonstrate strong economic growth and
acceded to the EU in May 2004. The private sector accounts for over
80% of GDP. Foreign ownership of and investment in Hungarian firms
are widespread, with cumulative foreign direct investment totaling
more than $34 billion between 1990 and 2003. Several private sector
analysts and sovereign ratings agencies have expressed concerns over
Hungary's unsustainable budget and current account deficits.
Inflation has declined from 14% in 1998 to 3.5% in 2005.
Unemployment in 2005 rose to 7.1%, its highest point since 1999;
Hungary's labor force participation rate of 57% is one of the lowest
in the Organization for Economic Cooperation and Development (OECD).
Germany is by far Hungary's largest economic partner. Policy
challenges include cutting the public sector deficit to 3% of GDP by
2008, from about 6.1% in 2005, and orchestrating an orderly interest
rate reduction without sparking capital outflows.
Iceland
Iceland's Scandinavian-type economy is basically
capitalistic, yet with an extensive welfare system (including
generous housing subsidies), low unemployment, and remarkably even
distribution of income. In the absence of other natural resources
(except for abundant geothermal power), the economy depends heavily
on the fishing industry, which provides 70% of export earnings and
employs 4% of the work force. The economy remains sensitive to
declining fish stocks as well as to fluctuations in world prices for
its main exports: fish and fish products, aluminum, and
ferrosilicon. Government policies include reducing the current
account deficit, limiting foreign borrowing, containing inflation,
revising agricultural and fishing policies, and diversifying the
economy. The government remains opposed to EU membership, primarily
because of Icelanders' concern about losing control over their
fishing resources. Iceland's economy has been diversifying into
manufacturing and service industries in the last decade, and new
developments in software production, biotechnology, and financial
services are taking place. The tourism sector is also expanding,
with the recent trends in ecotourism and whale watching. Growth had
been remarkably steady in 1996-2001 at 3%-5%, but could not be
sustained in 2002 in an environment of global recession. Growth
resumed in 2003, and estimates call for strong growth until 2007,
slowly dropping until the end of the decade.