China China's economy during the last quarter century has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. China has generally implemented reforms in a gradualist or piecemeal fashion, including the sale of equity in China's largest state banks to foreign investors and refinements in foreign exchange and bond markets in 2005. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis, China in 2006 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income and 130 million Chinese fall below international poverty lines. Economic development has generally been more rapid in coastal provinces than in the interior, and there are large disparities in per capita income between regions. The government has struggled to: (a) sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the work force; (b) reduce corruption and other economic crimes; and (c) contain environmental damage and social strife related to the economy's rapid transformation. From 100 to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Another long-term threat to growth is the deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north. China continues to lose arable land because of erosion and economic development. China has benefited from a huge expansion in computer Internet use, with more than 100 million users at the end of 2005. Foreign investment remains a strong element in China's remarkable expansion in world trade and has been an important factor in the growth of urban jobs. In July 2005, China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. In 2006 China had the largest current account surplus - nearly $180 billion - in the world. More power generating capacity came on line in 2006 as large scale investments were completed. Thirteen years in construction at a cost of $24 billion, the immense Three Gorges Dam across the Yangtze River was essentially completed in 2006 and will revolutionize electrification and flood control in the area. The 11th Five-Year Program (2006-10), approved by the National People's Congress in March 2006, calls for a 20% reduction in energy consumption per unit of GDP by 2010 and an estimated 45% increase in GDP by 2010. The plan states that conserving resources and protecting the environment are basic goals, but it lacks details on the policies and reforms necessary to achieve these goals.
Christmas Island
Phosphate mining had been the only significant
economic activity, but in December 1987 the Australian Government
closed the mine. In 1991, the mine was reopened. With the support of
the government, a $34 million casino opened in 1993. The casino
closed in 1998. The Australian Government in 2001 agreed to support
the creation of a commercial space-launching site on the island,
projected to begin operations in the near future.
Clipperton Island
Although 115 species of fish have been identified
in the territorial waters of Clipperton Island, the only economic
activity is tuna fishing.
Cocos (Keeling) Islands
Grown throughout the islands, coconuts are
the sole cash crop. Small local gardens and fishing contribute to
the food supply, but additional food and most other necessities must
be imported from Australia. There is a small tourist industry.
Colombia
Colombia's economy has experienced positive growth over the
past three years despite a serious armed conflict. The economy
continues to improve in part because of austere government budgets,
focused efforts to reduce public debt levels, an export-oriented
growth strategy, an improved security situation in the country, and
high commodity prices. Ongoing economic problems facing President
URIBE range from reforming the pension system to reducing high
unemployment, and to achieving congressional passage of a fiscal
transfers reform. New exploration is needed to offset declining oil
production. International and domestic financial analysts note with
concern the growing central government deficit, which hovers at 5%
of GDP. However, the government's economic policy and democratic
security strategy have engendered a growing sense of confidence in
the economy, particularly within the business sector.
Comoros
One of the world's poorest countries, Comoros is made up of
three islands that have inadequate transportation links, a young and
rapidly increasing population, and few natural resources. The low
educational level of the labor force contributes to a subsistence
level of economic activity, high unemployment, and a heavy
dependence on foreign grants and technical assistance. Agriculture,
including fishing, hunting, and forestry, contributes 40% to GDP,
employs 80% of the labor force, and provides most of the exports.
The country is not self-sufficient in food production; rice, the
main staple, accounts for the bulk of imports. The government -
which is hampered by internal political disputes - is struggling to
upgrade education and technical training, privatize commercial and
industrial enterprises, improve health services, diversify exports,
promote tourism, and reduce the high population growth rate.
Increased foreign support is essential if the goal of 4% annual GDP
growth is to be met. Remittances from 150,000 Comorans abroad help
supplement GDP.
Congo, Democratic Republic of the
The economy of the Democratic
Republic of the Congo - a nation endowed with vast potential wealth
- has declined drastically since the mid-1980s. The war, which began
in August 1998, dramatically reduced national output and government
revenue, increased external debt, and resulted in the deaths of
perhaps 3.5 million people from violence, famine, and disease.
Foreign businesses curtailed operations due to uncertainty about the
outcome of the conflict, lack of infrastructure, and the difficult
operating environment. Conditions improved in late 2002 with the
withdrawal of a large portion of the invading foreign troops. The
transitional government has reopened relations with international
financial institutions and international donors, and President
KABILA has begun implementing reforms. Much economic activity lies
outside the GDP data. Economic stability improved in 2003-06,
although an uncertain legal framework, corruption, and a lack of
openness in government policy continues to hamper growth. In
2005-06, renewed activity in the mining sector, the source of most
exports, boosted Kinshasa's fiscal position and GDP growth. Business
and economic prospects are expected to improve once a new government
is installed after elections.
Congo, Republic of the
The economy is a mixture of village
agriculture and handicrafts, an industrial sector based largely on
oil, support services, and a government characterized by budget
problems and overstaffing. Oil has supplanted forestry as the
mainstay of the economy, providing a major share of government
revenues and exports. In the early 1980s, rapidly rising oil
revenues enabled the government to finance large-scale development
projects with GDP growth averaging 5% annually, one of the highest
rates in Africa. The government has mortgaged a substantial portion
of its oil earnings through oil-backed loans that have contributed
to a growing debt burden and chronic revenue shortfalls. Economic
reform efforts have been undertaken with the support of
international organizations, notably the World Bank and the IMF.
However, the reform program came to a halt in June 1997 when civil
war erupted. Denis SASSOU-NGUESSO, who returned to power when the
war ended in October 1997, publicly expressed interest in moving
forward on economic reforms and privatization and in renewing
cooperation with international financial institutions. Economic
progress was badly hurt by slumping oil prices and the resumption of
armed conflict in December 1998, which worsened the republic's
budget deficit. The current administration presides over an uneasy
internal peace and faces difficult economic challenges of
stimulating recovery and reducing poverty. Recovery of oil prices
has boosted the economy's GDP and near-term prospects. In March
2006, the World Bank and the International Monetary Fund (IMF)
approved Heavily Indebted Poor Countries (HIPC) treatment for Congo.
Cook Islands
Like many other South Pacific island nations, the Cook
Islands' economic development is hindered by the isolation of the
country from foreign markets, the limited size of domestic markets,
lack of natural resources, periodic devastation from natural
disasters, and inadequate infrastructure. Agriculture, employing
about 70% of the working population, provides the economic base with
major exports made up of copra and citrus fruit. Black pearls are
the Cook Island's leading export. Manufacturing activities are
limited to fruit processing, clothing, and handicrafts. Trade
deficits are offset by remittances from emigrants and by foreign
aid, overwhelmingly from New Zealand. In the 1980s and 1990s, the
country lived beyond its means, maintaining a bloated public service
and accumulating a large foreign debt. Subsequent reforms, including
the sale of state assets, the strengthening of economic management,
the encouragement of tourism, and a debt restructuring agreement,
have rekindled investment and growth.
Coral Sea Islands
no economic activity