Tonga
Tonga, a small, open, South Pacific island economy, has a
narrow export base in agricultural goods. Squash, coconuts, bananas,
and vanilla beans are the main crops, and agricultural exports make
up two-thirds of total exports. The country must import a high
proportion of its food, mainly from New Zealand. The country remains
dependent on external aid and remittances from Tongan communities
overseas to offset its trade deficit. Tourism is the second-largest
source of hard currency earnings following remittances. The
government is emphasizing the development of the private sector,
especially the encouragement of investment, and is committing
increased funds for health and education. Tonga has a reasonably
sound basic infrastructure and well-developed social services. High
unemployment among the young, a continuing upturn in inflation,
pressures for democratic reform, and rising civil service
expenditures are major issues facing the government.
Trinidad and Tobago
Trinidad and Tobago, the leading Caribbean
producer of oil and gas, has earned a reputation as an excellent
investment site for international businesses. Tourism is a growing
sector, although not proportionately as important as in many other
Caribbean islands. The economy benefits from low inflation and a
growing trade surplus. Prospects for growth in 2006 are good as
prices for oil, petrochemicals, and liquefied natural gas are
expected to remain high, and foreign direct investment continues to
grow to support expanded capacity in the energy sector. The
government is coping with a rise in violent crime.
Tromelin Island
no economic activity
Tunisia
Tunisia has a diverse economy, with important agricultural,
mining, energy, tourism, and manufacturing sectors. Governmental
control of economic affairs while still heavy has gradually lessened
over the past decade with increasing privatization, simplification
of the tax structure, and a prudent approach to debt. Progressive
social policies also have helped raise living conditions in Tunisia
relative to the region. Real growth slowed to a 15-year low of 1.9%
in 2002 because of agricultural drought and lackluster tourism.
Better rains in 2003 through 2005, however, helped push GDP growth
to about 5% for these years. Tourism also recovered after the end of
combat operations in Iraq. Tunisia is gradually removing barriers to
trade with the EU. Broader privatization, further liberalization of
the investment code to increase foreign investment, improvements in
government efficiency, and reduction of the trade deficit are among
the challenges ahead.
Turkey
Turkey's dynamic economy is a complex mix of modern industry
and commerce along with a traditional agriculture sector that still
accounts for more than 35% of employment. It has a strong and
rapidly growing private sector, yet the state still plays a major
role in basic industry, banking, transport, and communication. The
largest industrial sector is textiles and clothing, which accounts
for one-third of industrial employment; it faces stiff competition
in international markets with the end of the global quota system.
However, other sectors, notably the automotive and electronics
industries, are rising in importance within Turkey's export mix.
Real GNP growth has exceeded 6% in many years, but this strong
expansion has been interrupted by sharp declines in output in 1994,
1999, and 2001. The economy is turning around with the
implementation of economic reforms, and 2004 GDP growth reached 9%.
Inflation fell to 7.7% in 2005 - a 30-year low. Despite the strong
economic gains in 2002-05, which were largely due to renewed
investor interest in emerging markets, IMF backing, and tighter
fiscal policy, the economy is still burdened by a high current
account deficit and high debt. The public sector fiscal deficit
exceeds 6% of GDP - due in large part to high interest payments,
which accounted for about 37% of central government spending in
2004. Prior to 2005, foreign direct investment (FDI) in Turkey
averaged less than $1 billion annually, but further economic and
judicial reforms and prospective EU membership are expected to boost
FDI. Privatization sales are currently approaching $21 billion.
Turkmenistan
Turkmenistan is a largely desert country with intensive
agriculture in irrigated oases and large gas and oil resources.
One-half of its irrigated land is planted in cotton; formerly it was
the world's tenth-largest producer. Poor harvests in recent years
have led to an almost 50% decline in cotton exports. With an
authoritarian ex-Communist regime in power and a tribally based
social structure, Turkmenistan has taken a cautious approach to
economic reform, hoping to use gas and cotton sales to sustain its
inefficient economy. Privatization goals remain limited. In
1998-2005, Turkmenistan suffered from the continued lack of adequate
export routes for natural gas and from obligations on extensive
short-term external debt. At the same time, however, total exports
rose by 20% to 30% per year in 2003-2005, largely because of higher
international oil and gas prices. In 2005, Ashgabat sought to raise
natural gas export prices to its main customers, Russia and Ukraine,
from $44 per thousand cubic meters (tcm) to $66 per tcm. Overall
prospects in the near future are discouraging because of widespread
internal poverty, the burden of foreign debt, the government's
irrational use of oil and gas revenues, and its unwillingness to
adopt market-oriented reforms. Turkmenistan's economic statistics
are state secrets, and GDP and other figures are subject to wide
margins of error. In particular, the rate of GDP growth is uncertain.
Turks and Caicos Islands
The Turks and Caicos economy is based on
tourism, fishing, and offshore financial services. Most capital
goods and food for domestic consumption are imported. The US is the
leading source of tourists, accounting for more than half of the
annual 93,000 visitors in the late 1990s. Major sources of
government revenue also include fees from offshore financial
activities and customs receipts.
Tuvalu
Tuvalu consists of a densely populated, scattered group of
nine coral atolls with poor soil. The country has no known mineral
resources and few exports. Subsistence farming and fishing are the
primary economic activities. Fewer than 1,000 tourists, on average,
visit Tuvalu annually. Government revenues largely come from the
sale of stamps and coins and remittances from seamen on merchant
ships abroad. About 1,000 Tuvaluans are being repatriated from
Nauru, with the decline of phosphate resources there. Substantial
income is received annually from an international trust fund
established in 1987 by Australia, NZ, and the UK and supported also
by Japan and South Korea. Thanks to wise investments and
conservative withdrawals, this fund has grown from an initial $17
million to over $35 million in 1999. The US Government is also a
major revenue source for Tuvalu because of payments from a 1988
treaty on fisheries. In an effort to reduce its dependence on
foreign aid, the government is pursuing public sector reforms,
including privatization of some government functions and personnel
cuts of up to 7%. Tuvalu derives around $1.5 million per year from
the lease of its ".tv" Internet domain name. With merchandise
exports only a fraction of merchandise imports, continued reliance
must be placed on fishing and telecommunications license fees,
remittances from overseas workers, official transfers, and income
from overseas investments.
Uganda
Uganda has substantial natural resources, including fertile
soils, regular rainfall, and sizable mineral deposits of copper and
cobalt. Agriculture is the most important sector of the economy,
employing over 80% of the work force. Coffee accounts for the bulk
of export revenues. Since 1986, the government - with the support of
foreign countries and international agencies - has acted to
rehabilitate and stabilize the economy by undertaking currency
reform, raising producer prices on export crops, increasing prices
of petroleum products, and improving civil service wages. The policy
changes are especially aimed at dampening inflation and boosting
production and export earnings. During 1990-2001, the economy turned
in a solid performance based on continued investment in the
rehabilitation of infrastructure, improved incentives for production
and exports, reduced inflation, gradually improved domestic
security, and the return of exiled Indian-Ugandan entrepreneurs. In
2000, Uganda qualified for enhanced Highly Indebted Poor Countries
(HIPC) debt relief worth $1.3 billion and Paris Club debt relief
worth $145 million. These amounts combined with the original HIPC
debt relief added up to about $2 billion. Growth for 2001-02 was
solid despite continued decline in the price of coffee, Uganda's
principal export. Growth in 2003-05 reflected an upturn in Uganda's
export markets.
Ukraine
After Russia, the Ukrainian republic was far and away the
most important economic component of the former Soviet Union,
producing about four times the output of the next-ranking republic.
Its fertile black soil generated more than one-fourth of Soviet
agricultural output, and its farms provided substantial quantities
of meat, milk, grain, and vegetables to other republics. Likewise,
its diversified heavy industry supplied the unique equipment (for
example, large diameter pipes) and raw materials to industrial and
mining sites (vertical drilling apparatus) in other regions of the
former USSR. Ukraine depends on imports of energy, especially
natural gas, to meet some 85% of its annual energy requirements.
Shortly after independence was ratified in December 1991, the
Ukrainian Government liberalized most prices and erected a legal
framework for privatization, but widespread resistance to reform
within the government and the legislature soon stalled reform
efforts and led to some backtracking. Output by 1999 had fallen to
less than 40% of the 1991 level. Loose monetary policies pushed
inflation to hyperinflationary levels in late 1993. Ukraine's
dependence on Russia for energy supplies and the lack of significant
structural reform have made the Ukrainian economy vulnerable to
external shocks. A dispute with Russia over pricing led to a
temporary gas cut-off; Ukraine concluded a deal with Russia in
January 2006, which almost doubled the price Ukraine pays for
Russian gas, and could cost the Ukrainian economy $1.4-2.2 billion
and cause GDP growth to fall 3-4%. Ukrainian government officials
eliminated most tax and customs privileges in a March 2005 budget
law, bringing more economic activity out of Ukraine's large shadow
economy, but more improvements are needed, including fighting
corruption, developing capital markets, and improving the
legislative framework for businesses. Reforms in the more
politically sensitive areas of structural reform and land
privatization are still lagging. Outside institutions - particularly
the IMF - have encouraged Ukraine to quicken the pace and scope of
reforms. GDP growth was 2.4% in 2005, down from 12.4% in 2004. The
current account surplus reached $2.2 billion in 2005. The
privatization of the Kryvoryzhstal steelworks in late 2005 produced
$4.8 billion in windfall revenue for the government. Some of the
proceeds were used to finance the budget deficit, some to
recapitalize two state banks, some to retire public debt, and the
rest may be used to finance future deficits.