The 2006 CIA World Factbook

by United States. Central Intelligence Agency

Sao Tome and Principe
This small, poor island economy has become
increasingly dependent on cocoa since independence in 1975. Cocoa
production has substantially declined in recent years because of
drought and mismanagement, but strengthening prices helped boost
export earnings in 2003. Sao Tome has to import all fuels, most
manufactured goods, consumer goods, and a substantial amount of
food. Over the years, it has had difficulty servicing its external
debt and has relied heavily on concessional aid and debt
rescheduling. Sao Tome benefited from $200 million in debt relief in
December 2000 under the Highly Indebted Poor Countries (HIPC)
program, and is expected to benefit from an additional round of HIPC
debt relief in early 2006, to help bring down the country's $300
million debt burden. In August 2005, Sao Tome signed on to a new
3-year IMF Poverty Reduction and Growth Facility (PRGF) program
worth $4.3 million. Considerable potential exists for development of
a tourist industry, and the government has taken steps to expand
facilities in recent years. The government also has attempted to
reduce price controls and subsidies. Sao Tome is optimistic about
the development of petroleum resources in its territorial waters in
the oil-rich Gulf of Guinea, which are being jointly developed in a
60-40 split with Nigeria. The first production licenses were sold in
2004, though a dispute over licensing with Nigeria delayed Sao
Tome's receipt of more than $20 million in signing bonuses for
almost a year. Real GDP growth reached 6% in 2004, and also probably
in 2005, as a result of increases in public expenditures and
oil-related capital investment.

Saudi Arabia
This is an oil-based economy with strong government
controls over major economic activities. Saudi Arabia possesses 25%
of the world's proven petroleum reserves, ranks as the largest
exporter of petroleum, and plays a leading role in OPEC. The
petroleum sector accounts for roughly 75% of budget revenues, 45% of
GDP, and 90% of export earnings. About 40% of GDP comes from the
private sector. Roughly 5.5 million foreign workers play an
important role in the Saudi economy, particularly, in the oil and
service sectors. The government is encouraging private sector growth
to lessen the kingdom's dependence on oil and increase employment
opportunities for the swelling Saudi population. The government has
begun to permit private sector and foreign investor participation in
the power generation and telecom sectors. As part of its effort to
attract foreign investment and diversify the economy, Saudi Arabia
acceded to the WTO in 2005 after many years of negotiations. With
high oil revenues enabling the government to post large budget
surpluses, Riyadh has been able to substantially boost spending on
job training and education, infrastructure development, and
government salaries.

Senegal
In January 1994, Senegal undertook a bold and ambitious
economic reform program with the support of the international donor
community. This reform began with a 50% devaluation of Senegal's
currency, the CFA franc, which was linked at a fixed rate to the
French franc. Government price controls and subsidies have been
steadily dismantled. After seeing its economy contract by 2.1% in
1993, Senegal made an important turnaround, thanks to the reform
program, with real growth in GDP averaging over 5% annually during
1995-2004. Annual inflation had been pushed down to the low single
digits. As a member of the West African Economic and Monetary Union
(WAEMU), Senegal is working toward greater regional integration with
a unified external tariff and a more stable monetary policy.
However, Senegal still relies heavily upon outside donor assistance.
Under the IMF's Highly Indebted Poor Countries (HIPC) debt relief
program, Senegal will benefit from eradication of two-thirds of its
bilateral, multilateral, and private-sector debt.

Serbia
MILOSEVIC-era mismanagement of the economy, an extended
period of economic sanctions, and the damage to Yugoslavia's
infrastructure and industry during the NATO airstrikes in 1999 left
the economy only half the size it was in 1990. After the ousting of
former Federal Yugoslav President MILOSEVIC in October 2000, the
Democratic Opposition of Serbia (DOS) coalition government
implemented stabilization measures and embarked on a market reform
program. After renewing its membership in the IMF in December 2000,
a down-sized Yugoslavia continued to reintegrate into the
international community by rejoining the World Bank (IBRD) and the
European Bank for Reconstruction and Development (EBRD). A World
Bank-European Commission sponsored Donors' Conference held in June
2001 raised $1.3 billion for economic restructuring. In November
2001, the Paris Club agreed to reschedule the country's $4.5 billion
public debt and wrote off 66% of the debt. In July 2004, the London
Club of private creditors forgave $1.7 billion of debt, just over
half the total owed. Belgrade has made only minimal progress in
restructuring and privatizing its holdings in major sectors of the
economy, including energy and telecommunications. It has made
halting progress towards EU membership and is currently pursuing a
Stabilization and Association Agreement with Brussels. Serbia is
also pursuing membership in the World Trade Organization.
Unemployment remains an ongoing political and economic problem. The
Republic of Montenegro severed its economy from Serbia during the
MILOSEVIC era; therefore, the formal separation of Serbia and
Montenegro in June 2006 had little real impact on either economy.
Kosovo's economy continues to transition to a market-based system
and is largely dependent on the international community and the
diaspora for financial and technical assistance. The euro and the
Yugoslav dinar are both accepted currencies in Kosovo. While
maintaining ultimate oversight, UNMIK continues to work with the EU
and Kosovo's local provisional government to accelerate economic
growth, lower unemployment, and attract foreign investment to help
Kosovo integrate into regional economic structures. The complexity
of Serbia and Kosovo's political and legal relationships has created
uncertainty over property rights and hindered the privatization of
state-owned assets in Kosovo. Most of Kosovo's population lives in
rural towns outside of the largest city, Pristina. Inefficient,
near-subsistence farming is common.
note: economic data for Serbia currently reflects information for
the former Serbia and Montenegro, unless otherwise noted; data for
Serbia alone will be added when available

Seychelles
Since independence in 1976, per capita output in this
Indian Ocean archipelago has expanded to roughly seven times the old
near-subsistence level. Growth has been led by the tourist sector,
which employs about 30% of the labor force and provides more than
70% of hard currency earnings, and by tuna fishing. In recent years
the government has encouraged foreign investment in order to upgrade
hotels and other services. At the same time, the government has
moved to reduce the dependence on tourism by promoting the
development of farming, fishing, and small-scale manufacturing.
Sharp drops illustrated the vulnerability of the tourist sector in
1991-92 due largely to the Gulf War, and once again following the 11
September 2001 terrorist attacks on the US. Growth slowed in
1998-2002, and fell in 2003, due to sluggish tourist and tuna
sectors, but resumed in 2004, erasing a persistent budget deficit.
Growth turned negative again in 2005. Tight controls on exchange
rates and the scarcity of foreign exchange have impaired short-term
economic prospects. The black-market value of the Seychelles rupee
is half the official exchange rate; without a devaluation of the
currency, the tourist sector may remain sluggish as vacationers seek
cheaper destinations such as Comoros, Mauritius, and Madagascar.

Sierra Leone
Sierra Leone is an extremely poor African nation with
tremendous inequality in income distribution. While it possesses
substantial mineral, agricultural, and fishery resources, its
economic and social infrastructure is not well developed, and
serious social disorders continue to hamper economic development.
About two-thirds of the working-age population engages in
subsistence agriculture. Manufacturing consists mainly of the
processing of raw materials and of light manufacturing for the
domestic market. Alluvial diamond mining remains the major source of
hard currency earnings, accounting for nearly half of Sierra Leone's
exports. The fate of the economy depends upon the maintenance of
domestic peace and the continued receipt of substantial aid from
abroad, which is essential to offset the severe trade imbalance and
supplement government revenues. The IMF has completed a Poverty
Reduction and Growth Facility program that helped stabilize economic
growth and reduce inflation. A recent increase in political
stability has led to a revival of economic activity, such as the
rehabilitation of bauxite mining.

Singapore
Singapore, a highly-developed and successful free-market
economy, enjoys a remarkably open and corruption-free environment,
stable prices, and a per capita GDP equal to that of the four
largest West European countries. The economy depends heavily on
exports, particularly in electronics and manufacturing. It was hard
hit in 2001-03 by the global recession, by the slump in the
technology sector, and by an outbreak of Severe Acute Respiratory
Syndrome (SARS) in 2003, which curbed tourism and consumer spending.
The government hopes to establish a new growth path that will be
less vulnerable to the external business cycle and will continue
efforts to establish Singapore as Southeast Asia's financial and
high-tech hub. Fiscal stimulus, low interest rates, a surge in
exports, and internal flexibility led to vigorous growth in 2004,
with real GDP rising by 8% - by far the economy's best performance
since 2000 - but growth slowed to 5.7% in 2005.

Slovakia
Slovakia has mastered much of the difficult transition from
a centrally planned economy to a modern market economy. The DZURINDA
government made excellent progress during 2001-04 in macroeconomic
stabilization and structural reform. Major privatizations are nearly
complete, the banking sector is almost completely in foreign hands,
and the government has helped facilitate a foreign investment boom
with business-friendly policies, such as labor market liberalization
and a 19% flat tax. Foreign investment in the automotive sector has
been strong. Slovakia's economic growth exceeded expectations in
2001-05, despite the general European slowdown. Unemployment, at an
unacceptable 18% in 2003-04, dropped to 16.4% in 2005, but remains
the economy's Achilles heel. Slovakia joined the EU on 1 May 2004.

Slovenia
With its small transition economy and population of
approximately two million, Slovenia is a model of economic success
and stability for its neighbors in the former Yugoslavia. The
country, which joined the EU in 2004, has excellent infrastructure,
a well-educated work force, and an excellent central location. It
enjoys a GDP per capita substantially higher than any of the other
transitioning economies of Central Europe. In March 2004, Slovenia
became the first transition country to graduate from borrower status
to donor partner at the World Bank. Slovenia plans to adopt the euro
by 2007 and has met the EU's Maastricht criteria for inflation.
Despite its economic success, Slovenia faces growing challenges.
Much of the economy remains in state hands and foreign direct
investment (FDI) in Slovenia is one of the lowest in the EU on a per
capita basis. Taxes are relatively high, the labor market is often
seen as inflexible, and legacy industries are losing sales to more
competitive firms in China, India, and elsewhere. The current
center-right government, elected in October 2004, has pledged to
accelerate privatization of a number of large state holdings and is
interested in increasing FDI in Slovenia. In late 2005, the
government's new Committee for Economic Reforms was elevated to
cabinet-level status. The Committee's program includes plans for
lowering the tax burden, privatizing state-controlled firms,
improving the flexibility of the labor market, and increasing the
government's efficiency.

Solomon Islands
The bulk of the population depends on agriculture,
fishing, and forestry for at least part of its livelihood. Most
manufactured goods and petroleum products must be imported. The
islands are rich in undeveloped mineral resources such as lead,
zinc, nickel, and gold. Prior to the arrival of the Regional
Assistance Mission to the Solomon Islands (RAMSI), severe ethnic
violence, the closing of key businesses, and an empty government
treasury culminated in economic collapse. RAMSI has enabled a return
to law and order, a new period of economic stability, and modest
growth as the economy rebuilds.