Guatemala
Guatemala is the largest and most populous of the Central
American countries with a GDP per capita roughly one-half that of
Brazil, Argentina, and Chile. The agricultural sector accounts for
about one-fourth of GDP, two-fifths of exports, and half of the
labor force. Coffee, sugar, and bananas are the main products. The
1996 signing of peace accords, which ended 36 years of civil war,
removed a major obstacle to foreign investment, and Guatemala since
then has pursued important reforms and macroeconomic stabilization.
The distribution of income remains highly unequal with about 75% of
the population below the poverty line. Other ongoing challenges
include increasing government revenues, negotiating further
assistance from international donors, upgrading both government and
private financial operations, curtailing drug trafficking, and
narrowing the trade deficit. Remittances from a large expatriate
community that moved to the United States during the war have become
an important source of foreign exchange.
Guernsey
Financial services - banking, fund management, insurance -
account for about 23% of employment and 32% of total income in this
tiny, prosperous Channel Island economy. Tourism, manufacturing, and
horticulture, mainly tomatoes and cut flowers, have been declining.
Financial services, construction, retail, and the public sector have
been growing. Light tax and death duties make Guernsey a popular tax
haven. The evolving economic integration of the EU nations is
changing the environment under which Guernsey operates.
Guinea
Guinea possesses major mineral, hydropower, and agricultural
resources, yet remains an underdeveloped nation. The country
possesses almost half of the world's bauxite reserves and is the
second-largest bauxite producer. The mining sector accounts for over
70% of exports. Long-run improvements in government fiscal
arrangements, literacy, and the legal framework are needed if the
country is to move out of poverty. Fighting along the Sierra Leonean
and Liberian borders, as well as refugee movements, have caused
major economic disruptions, aggravating a loss in investor
confidence. Panic buying has created food shortages and inflation
and caused riots in local markets. Guinea is trying to reengage with
the IMF and World Bank, which cut off most assistance in 2003.
Growth rose slightly in 2006, primarily due to increases in global
demand and commodity prices on world markets, but the standard of
living fell. The Guinea franc depreciated sharply as the prices for
basic necessities like food and fuel rose beyond the reach of most
Guineans. Dissatisfaction with economic conditions prompted
nationwide strikes in February and June 2006.
Guinea-Bissau
One of the 10 poorest countries in the world,
Guinea-Bissau depends mainly on farming and fishing. Cashew crops
have increased remarkably in recent years, and the country now ranks
sixth in cashew production. Guinea-Bissau exports fish and seafood
along with small amounts of peanuts, palm kernels, and timber. Rice
is the major crop and staple food. However, intermittent fighting
between Senegalese-backed government troops and a military junta
destroyed much of the country's infrastructure and caused widespread
damage to the economy in 1998; the civil war led to a 28% drop in
GDP that year, with partial recovery in 1999-2002. Before the war,
trade reform and price liberalization were the most successful part
of the country's structural adjustment program under IMF
sponsorship. The tightening of monetary policy and the development
of the private sector had also begun to reinvigorate the economy.
Because of high costs, the development of petroleum, phosphate, and
other mineral resources is not a near-term prospect. However,
offshore oil prospecting has begun and could lead to much-needed
revenue in the long run. The inequality of income distribution is
one of the most extreme in the world. The government and
international donors continue to work out plans to forward economic
development from a lamentably low base. In December 2003, the World
Bank, IMF, and UNDP were forced to step in to provide emergency
budgetary support in the amount of $107 million for 2004,
representing over 80% of the total national budget. Government drift
and indecision, however, have resulted in continued low growth in
2002-06.
Guyana
The Guyanese economy exhibited moderate economic growth in
2001-02, based on expansion in the agricultural and mining sectors,
a more favorable atmosphere for business initiatives, a more
realistic exchange rate, fairly low inflation, and the continued
support of international organizations. Chronic problems include a
shortage of skilled labor and a deficient infrastructure. The
government is juggling a sizable external debt against the urgent
need for expanded public investment. The InterAmerican Development
Bank in November 2006 canceled Guyana's nearly $400 million debt
with the Bank. The bauxite mining sector should benefit in the near
term from restructuring and partial privatization. Export earnings
from agriculture and mining have fallen sharply, while the import
bill has risen, driven by higher energy prices. Guyana's entrance
into the Caricom Single Market and Economy (CSME) in January 2006
will broaden the country's export market, primarily in the raw
materials sector.
Haiti
Haiti is the poorest country in the Western Hemisphere, with
80% of the population living under the poverty line and 54% in
abject poverty. Two-thirds of all Haitians depend on the agriculture
sector, mainly small-scale subsistence farming, and remain
vulnerable to damage from frequent natural disasters, exacerbated by
the country's widespread deforestation. A macroeconomic program
developed in 2005 with the help of the International Monetary Fund
helped the economy grow 1.8% in 2006, the highest growth rate since
1999. Haiti suffers from higher inflation than similar low-income
countries, a lack of investment, and a severe trade deficit. In
2005, Haiti paid its arrears to the World Bank, paving the way for
reengagement with the Bank. The government relies on formal
international economic assistance for fiscal sustainability. In
2006, Haiti held a successful donors conference in which the total
aid pledged exceeded Haiti's request. Remittances are the primary
source of foreign exchange, equaling nearly a quarter of GDP.
Heard Island and McDonald Islands
No indigenous economic activity,
but the Australian Government allows limited fishing around the
islands.
Holy See (Vatican City)
This unique, noncommercial economy is
supported financially by an annual contribution from Roman Catholic
dioceses throughout the world (known as Peter's Pence); by the sale
of postage stamps, coins, medals, and tourist mementos; by fees for
admission to museums; and by the sale of publications. Investments
and real estate income also account for a sizable portion of
revenue. The incomes and living standards of lay workers are
comparable to those of counterparts who work in the city of Rome.
Honduras
Honduras, the second poorest country in Central America and
one of the poorest countries in the Western Hemisphere, with an
extraordinarily unequal distribution of income and massive
unemployment, is banking on expanded trade under the US-Central
America Free Trade Agreement (CAFTA) and on debt relief under the
Heavily Indebted Poor Countries (HIPC) initiative. The country has
met most of its macroeconomic targets, and began a three-year IMF
Poverty Reduction and Growth Facility (PGRF) program in February
2004. The economy relies heavily on a narrow range of exports,
notably bananas and coffee, making it vulnerable to natural
disasters and shifts in commodity prices, but in recent years has
experienced a rapid rise in exports of light manufacturers. Growth
remains dependent on the economy of the US, its largest trading
partner, and on reduction of the high crime rate, as a means of
attracting and maintaining investment.
Hong Kong
Hong Kong has a free market economy highly dependent on
international trade. The territory has become more closely linked to
mainland China over the past few years. Even before Hong Kong
reverted to Chinese administration on 1 July 1997, it had extensive
trade and investment ties with China. Hong Kong's service industry
over the past decade has grown rapidly as its manufacturing industry
has moved to the mainland. Hong Kong also has stepped up its efforts
to gain approval to offer more mainland financial services in a bid
to remain competitive with China's growing financial centers. Hong
Kong's natural resources are limited, and food and raw materials
must be imported. Gross imports and exports (i.e., including
reexports to and from third countries) each exceed GDP in dollar
value. Per capita GDP exceeds that of the four big economies of
Western Europe. GDP growth averaged a strong 5% from 1989 to 2006,
but Hong Kong suffered two recessions in the past eight years
because of the Asian financial crisis in 1997-1998 and the global
downturn in 2001-2002. Although the Severe Acute Respiratory
Syndrome (SARS) outbreak in 2003 also battered Hong Kong's economy,
a solid rise in exports, a boom in tourism from the mainland because
of China's easing of travel restrictions, and a return of consumer
confidence resulted in the resumption of strong growth from late
2003 through 2006. Moreover, several large initial public offerings
of Chinese companies on the Hong Kong stock exchange since late 2005
have helped to boost Hong Kong's status as a financial hub and have
contributed to the improved performance of the market in late 2006.