Norfolk Island
Tourism, the primary economic activity, has steadily
increased over the years and has brought a level of prosperity
unusual among inhabitants of the Pacific islands. The agricultural
sector has become self-sufficient in the production of beef,
poultry, and eggs.
Northern Mariana Islands
The economy benefits substantially from
financial assistance from the US. The rate of funding has declined
as locally generated government revenues have grown. The key tourist
industry employs about 50% of the work force and accounts for
roughly one-fourth of GDP. Japanese tourists predominate. Annual
tourist entries have exceeded one-half million in recent years, but
financial difficulties in Japan have caused a temporary slowdown.
The agricultural sector is made up of cattle ranches and small farms
producing coconuts, breadfruit, tomatoes, and melons. Garment
production is by far the most important industry with the employment
of 17,500 mostly Chinese workers and sizable shipments to the US
under duty and quota exemptions.
Norway
The Norwegian economy is a prosperous bastion of welfare
capitalism, featuring a combination of free market activity and
government intervention. The government controls key areas such as
the vital petroleum sector (through large-scale state enterprises).
The country is richly endowed with natural resources - petroleum,
hydropower, fish, forests, and minerals - and is highly dependent on
its oil production and international oil prices, with oil and gas
accounting for one-third of exports. Only Saudi Arabia and Russia
export more oil than Norway. Norway opted to stay out of the EU
during a referendum in November 1994; nonetheless, it contributes
sizably to the EU budget. The government has moved ahead with
privatization. Although Norwegian oil production peaked in 2000,
natural gas production is still rising. Norwegians realize that once
their gas production peaks they will eventually face declining oil
and gas revenues; accordingly, Norway has been saving its
oil-and-gas-boosted budget surpluses in a Government Petroleum Fund,
which is invested abroad and now is valued at more than $250
billion. After lackluster growth of 1% in 2002 and 0.5% in 2003, GDP
growth picked up to 3.3% in 2004 and to 3.7% in 2005.
Oman
Oman is a middle-income economy in the Middle East with notable
oil and gas resources, a substantial trade surplus, and low
inflation. Work on a new liquefied natural gas (LNG) facility
progressed in 2005 and will contribute to slightly higher oil and
gas exports in 2006. Oman continues to liberalize its markets and
joined the World Trade Organization (WTO) in November 2000. To
reduce unemployment and limit dependence on foreign labor, the
government is encouraging the replacement of foreign expatriate
workers with local workers. Training in information technology,
business management, and English support this objective. Industrial
development plans focus on gas resources, metal manufacturing,
petrochemicals, and international transshipment ports. In 2005, Oman
signed agreements with several foreign investors to boost oil
reserves, build and operate a power plant, and develop a second
mobile phone network in the country.
Pacific Ocean
The Pacific Ocean is a major contributor to the world
economy and particularly to those nations its waters directly touch.
It provides low-cost sea transportation between East and West,
extensive fishing grounds, offshore oil and gas fields, minerals,
and sand and gravel for the construction industry. In 1996, over 60%
of the world's fish catch came from the Pacific Ocean. Exploitation
of offshore oil and gas reserves is playing an ever-increasing role
in the energy supplies of the US, Australia, NZ, China, and Peru.
The high cost of recovering offshore oil and gas, combined with the
wide swings in world prices for oil since 1985, has led to
fluctuations in new drillings.
Pakistan
Pakistan, an impoverished and underdeveloped country, has
suffered from decades of internal political disputes, low levels of
foreign investment, and a costly, ongoing confrontation with
neighboring India. However, IMF-approved government policies,
bolstered by generous foreign assistance and renewed access to
global markets since 2001, have generated solid macroeconomic
recovery the last four years. The government has made substantial
macroeconomic reforms since 2000, although progress on more
politically sensitive reforms has slowed. For example, in the budget
for fiscal year 2006, Islamabad did not impose taxes on the
agriculture or real estate sectors, despite Pakistan's chronically
low tax-to-GDP ratio. While long-term prospects remain uncertain,
given Pakistan's low level of development, medium-term prospects for
job creation and poverty reduction are the best in more than a
decade. Islamabad has raised development spending from about 2% of
GDP in the 1990s to 4% in 2003, a necessary step towards reversing
the broad underdevelopment of its social sector. GDP growth, spurred
by double-digit gains in industrial production over the past year,
has become less dependent on agriculture, and remained above 7% in
2004 and 2005. Inflation remains the biggest threat to the economy,
jumping to more than 9% in 2005. The World Bank and Asian
Development Bank announced that they would provide US $1 billion
each in aid to help Pakistan rebuild areas hit by the October 2005
earthquake in Kashmir. Foreign exchange reserves continued to reach
new levels in 2005, supported by steady worker remittances. In the
near term, growth probably cannot be sustained at the 7% level;
however, massive international aid, increased government spending,
lower taxes, and pay increases for government workers will help
Pakistan maintain strong GDP growth over the longer term.
Palau
The economy consists primarily of tourism, subsistence
agriculture, and fishing. The government is the major employer of
the work force, relying heavily on financial assistance from the US.
Business and tourist arrivals numbered 63,000 in 2003. The
population enjoys a per capita income twice that of the Philippines
and much of Micronesia. Long-run prospects for the key tourist
sector have been greatly bolstered by the expansion of air travel in
the Pacific, the rising prosperity of leading East Asian countries,
and the willingness of foreigners to finance infrastructure
development.
Palmyra Atoll
no economic activity
Panama
Panama's dollarised economy rests primarily on a
well-developed services sector that accounts for three-fourths of
GDP. Services include operating the Panama Canal, banking, the Colon
Free Zone, insurance, container ports, flagship registry, and
tourism. A slump in the Colon Free Zone and agricultural exports,
the global slowdown, and the withdrawal of US military forces held
back economic growth in 2000-03; growth picked up in 2004 and 2005
led by export-oriented services and a construction boom stimulated
by tax incentives. The government has implemented tax reforms, as
well as social security reforms, and backs regional trade agreements
and development of tourism. Unemployment remains high.
Papua New Guinea
Papua New Guinea is richly endowed with natural
resources, but exploitation has been hampered by rugged terrain and
the high cost of developing infrastructure. Agriculture provides a
subsistence livelihood for 85% of the population. Mineral deposits,
including oil, copper, and gold, account for nearly two-thirds of
export earnings. The economy has improved over the past three years
because of high commodity prices following a prolonged period of
instability. The government of Prime Minister SOMARE has expended
much of its energy remaining in power and should be the first
government in decades to serve a full five-year term. The government
has also brought stability to the national budget thus far, largely
through expenditure control. Numerous challenges still face the
government including regaining investor confidence, restoring
integrity to state institutions, promoting economic efficiency by
privatizing moribund state institutions, and balancing relations
with Australia, the former colonial ruler. Other socio-cultural
challenges include the HIV/Aids epidemic, law and order, and land
tenure issues. Australia annually supplies $240 million in aid,
which accounts for nearly 20% of the national budget.