Burma
Burma, a resource-rich country, suffers from pervasive
government controls, inefficient economic policies, and rural
poverty. The junta took steps in the early 1990s to liberalize the
economy after decades of failure under the "Burmese Way to
Socialism," but those efforts stalled, and some of the
liberalization measures were rescinded. Lacking monetary or fiscal
stability, the economy suffers from serious macroeconomic imbalances
- including inflation, multiple official exchange rates that
overvalue the Burmese kyat, and a distorted interest rate regime.
Most overseas development assistance ceased after the junta began to
suppress the democracy movement in 1988 and subsequently refused to
honor the results of the 1990 legislative elections. In response to
the government of Burma's attack in May 2003 on AUNG SAN SUU KYI and
her convoy, the US imposed new economic sanctions against Burma -
including a ban on imports of Burmese products and a ban on
provision of financial services by US persons. A poor investment
climate further slowed the inflow of foreign exchange. The most
productive sectors will continue to be in extractive industries,
especially oil and gas, mining, and timber. Other areas, such as
manufacturing and services, are struggling with inadequate
infrastructure, unpredictable import/export policies, deteriorating
health and education systems, and corruption. A major banking crisis
in 2003 shuttered the country's 20 private banks and disrupted the
economy. As of 2006, the largest private banks operate under tight
restrictions limiting the private sector's access to formal credit.
Official statistics are inaccurate. Published statistics on foreign
trade are greatly understated because of the size of the black
market and unofficial border trade - often estimated to be as large
as the official economy. Burma's trade with Thailand, China, and
India is rising. Though the Burmese government has good economic
relations with its neighbors, better investment and business
climates and an improved political situation are needed to promote
foreign investment, exports, and tourism.
Burundi
Burundi is a landlocked, resource-poor country with an
underdeveloped manufacturing sector. The economy is predominantly
agricultural with more than 90% of the population dependent on
subsistence agriculture. Economic growth depends on coffee and tea
exports, which account for 90% of foreign exchange earnings. The
ability to pay for imports, therefore, rests primarily on weather
conditions and international coffee and tea prices. The Tutsi
minority, 14% of the population, dominates the government and the
coffee trade at the expense of the Hutu majority, 85% of the
population. An ethnic-based war that lasted for over a decade
resulted in more than 200,000 deaths, forced more than 48,000
refugees into Tanzania, and displaced 140,000 others internally.
Only one in two children go to school, and approximately one in 10
adults has HIV/AIDS. Food, medicine, and electricity remain in short
supply. Political stability and the end of the civil war have
improved aid flows and economic activity has increased, but
underlying weaknesses - a high poverty rate, poor education rates, a
weak legal system, and low administrative capacity - risk
undermining planned economic reforms. Burundi grew about 5 percent
in 2006. Delayed disbursements of funds from the World Bank may add
to budget pressures in 2007. Burundi will continue to remain heavily
dependent on aid from bilateral and multilateral donors.
Cambodia
In 1999, the first full year of peace in 30 years, the
government made progress on economic reforms. The US and Cambodia
signed a Bilateral Textile Agreement, which gave Cambodia a
guaranteed quota of US textile imports and established a bonus for
improving working conditions and enforcing Cambodian labor laws and
international labor standards in the industry. From 2001 to 2004,
the economy grew at an average rate of 6.4%, driven largely by an
expansion in the garment sector and tourism. With the January 2005
expiration of a WTO Agreement on Textiles and Clothing,
Cambodia-based textile producers were forced to compete directly
with lower-priced producing countries such as China and India.
Better-than-expected garment sector performance led to about 6%
growth per year in 2005-06. Faced with the possibility that its
vibrant garment industry, with more than 200,000 jobs, could be in
serious danger, the Cambodian government has committed itself to a
policy of continued support for high labor standards in an attempt
to maintain favor with buyers. The tourism industry continues to
grow rapidly, with foreign visitors surpassing 1 million for per
year beginning in 2005. In 2005, exploitable oil and natural gas
deposits were found beneath Cambodia's territorial waters,
representing a new revenue stream for the government once commercial
extraction begins in the coming years. Mining also is attracting
significant investor interest, particularly in the northeastern
parts of the country. The long-term development of the economy
remains a daunting challenge. The Cambodian government is working
with bilateral and multilateral donors, including the World Bank and
IMF, to address the country's many pressing needs. The major
economic challenge for Cambodia over the next decade will be
fashioning an economic environment in which the private sector can
create enough jobs to handle Cambodia's demographic imbalance. More
than 50% of the population is less than 21 years old. The population
lacks education and productive skills, particularly in the
poverty-ridden countryside, which suffers from an almost total lack
of basic infrastructure.
Cameroon
Because of its modest oil resources and favorable
agricultural conditions, Cameroon has one of the best-endowed
primary commodity economies in sub-Saharan Africa. Still, it faces
many of the serious problems facing other underdeveloped countries,
such as a top-heavy civil service and a generally unfavorable
climate for business enterprise. Since 1990, the government has
embarked on various IMF and World Bank programs designed to spur
business investment, increase efficiency in agriculture, improve
trade, and recapitalize the nation's banks. In June 2000, the
government completed an IMF-sponsored, three-year structural
adjustment program; however, the IMF is pressing for more reforms,
including increased budget transparency, privatization, and poverty
reduction programs. International oil and cocoa prices have a
significant impact on the economy.
Canada
As an affluent, high-tech industrial society in the trillion
dollar class, Canada resembles the US in its market-oriented
economic system, pattern of production, and affluent living
standards. Since World War II, the impressive growth of the
manufacturing, mining, and service sectors has transformed the
nation from a largely rural economy into one primarily industrial
and urban. The 1989 US-Canada Free Trade Agreement (FTA) and the
1994 North American Free Trade Agreement (NAFTA) (which includes
Mexico) touched off a dramatic increase in trade and economic
integration with the US. Given its great natural resources, skilled
labor force, and modern capital plant, Canada enjoys solid economic
prospects. Top-notch fiscal management has produced consecutive
balanced budgets since 1997, although public debate continues over
how to manage the rising cost of the publicly funded healthcare
system. Exports account for roughly a third of GDP. Canada enjoys a
substantial trade surplus with its principal trading partner, the
US, which absorbs about 85% of Canadian exports. Canada is the US'
largest foreign supplier of energy, including oil, gas, uranium, and
electric power.
Cape Verde
This island economy suffers from a poor natural resource
base, including serious water shortages exacerbated by cycles of
long-term drought. The economy is service-oriented, with commerce,
transport, tourism, and public services accounting for 66% of GDP.
Although nearly 70% of the population lives in rural areas, the
share of food production in GDP in 2004 was only 12%, of which
fishing accounted for 1.5%. About 82% of food must be imported. The
fishing potential, mostly lobster and tuna, is not fully exploited.
Cape Verde annually runs a high trade deficit, financed by foreign
aid and remittances from emigrants; remittances supplement GDP by
more than 20%. Economic reforms are aimed at developing the private
sector and attracting foreign investment to diversify the economy.
Future prospects depend heavily on the maintenance of aid flows, the
encouragement of tourism, remittances, and the momentum of the
government's development program. Cape Verde has been exploring
European Union membership in recent years.
Cayman Islands
With no direct taxation, the islands are a thriving
offshore financial center. More than 68,000 companies were
registered in the Cayman Islands as of 2003, including almost 500
banks, 800 insurers, and 5000 mutual funds. A stock exchange was
opened in 1997. Tourism is also a mainstay, accounting for about 70%
of GDP and 75% of foreign currency earnings. The tourist industry is
aimed at the luxury market and caters mainly to visitors from North
America. Total tourist arrivals exceeded 2.1 million in 2003, with
about half from the US. About 90% of the islands' food and consumer
goods must be imported. The Caymanians enjoy one of the highest
outputs per capita and one of the highest standards of living in the
world.
Central African Republic
Subsistence agriculture, together with
forestry, remains the backbone of the economy of the Central African
Republic (CAR), with more than 70% of the population living in
outlying areas. The agricultural sector generates more than half of
GDP. Timber has accounted for about 16% of export earnings and the
diamond industry, for 40%. Important constraints to economic
development include the CAR's landlocked position, a poor
transportation system, a largely unskilled work force, and a legacy
of misdirected macroeconomic policies. Factional fighting between
the government and its opponents remains a drag on economic
revitalization. Distribution of income is extraordinarily unequal.
Grants from France and the international community can only
partially meet humanitarian needs.
Chad
Chad's primarily agricultural economy will continue to be
boosted by major foreign direct investment projects in the oil
sector that began in 2000. Over 80% of Chad's population relies on
subsistence farming and livestock raising for its livelihood. Chad's
economy has long been handicapped by its landlocked position, high
energy costs, and a history of instability. Chad relies on foreign
assistance and foreign capital for most public and private sector
investment projects. A consortium led by two US companies has been
investing $3.7 billion to develop oil reserves - estimated at 1
billion barrels - in southern Chad. The nation's total oil reserves
has been estimated to be 2 billion barrels. Oil production came on
stream in late 2003. Chad began to export oil in 2004. Cotton,
cattle, and gum arabic provide the bulk of Chad's non-oil export
earnings.
Chile
Chile has a market-oriented economy characterized by a high
level of foreign trade. During the early 1990s, Chile's reputation
as a role model for economic reform was strengthened when the
democratic government of Patricio AYLWIN - which took over from the
military in 1990 - deepened the economic reform initiated by the
military government. Growth in real GDP averaged 8% during 1991-97,
but fell to half that level in 1998 because of tight monetary
policies implemented to keep the current account deficit in check
and because of lower export earnings - the latter a product of the
global financial crisis. A severe drought exacerbated the recession
in 1999, reducing crop yields and causing hydroelectric shortfalls
and electricity rationing, and Chile experienced negative economic
growth for the first time in more than 15 years. Despite the effects
of the recession, Chile maintained its reputation for strong
financial institutions and sound policy that have given it the
strongest sovereign bond rating in South America. By the end of
1999, exports and economic activity had begun to recover, and growth
rebounded to 4.2% in 2000. Growth fell back to 3.1% in 2001 and 2.1%
in 2002, largely due to lackluster global growth and the devaluation
of the Argentine peso. Chile's economy began a slow recovery in
2003, growing 3.2%, and accelerated to about 5% per year in 2004-06,
while Chile maintained a low rate of inflation. GDP growth benefited
from high copper prices, solid export earnings (particularly
forestry, fishing, and mining), and stepped-up foreign direct
investment. Unemployment has exhibited a downward trend over the
past year, but remains fairly high. Chile deepened its longstanding
commitment to trade liberalization with the signing of a free trade
agreement with the US, which took effect on 1 January 2004. Chile
signed a free trade agreement with China in November 2005, and it
already has several trade deals signed with other nations and blocs,
including the European Union, Mercosur, South Korea, and Mexico.
Record-high copper prices helped to strengthen the peso to a 6 1/2-year
high, as of December 2006, and added investment in the mining sector
will boost GDP in 2007.