Howland Island
no economic activity
Hungary
Hungary has made the transition from a centrally planned to
a market economy, with a per capita income nearly two-thirds that of
the EU-25 average. Hungary continues to demonstrate strong economic
growth and acceded to the EU in May 2004. The private sector
accounts for over 80% of GDP. Foreign ownership of and investment in
Hungarian firms are widespread, with cumulative foreign direct
investment totaling more than $60 billion since 1989. Hungarian
sovereign debt was upgraded in 2000 - together with the Czech
Republic, Hungary holds the highest rating among the Central
European transition economies. Rating agencies, however, have
expressed concerns over Hungary's fiscal and current account
deficits. Inflation has declined from 14% in 1998 to 3.7% in 2006.
Unemployment has persisted above 6%. Hungary's labor force
participation rate of 57% is one of the lowest in the Organization
for Economic Cooperation and Development (OECD). Germany is by far
Hungary's largest economic partner. Policy challenges include
cutting the public sector deficit to 3% of GDP by 2008, from about
6.5% in 2006, and orchestrating an orderly interest rate reduction
without sparking capital outflows.
Iceland
Iceland's Scandinavian-type economy is basically
capitalistic, yet with an extensive welfare system (including
generous housing subsidies), low unemployment, and remarkably even
distribution of income. In the absence of other natural resources
(except for abundant geothermal power), the economy depends heavily
on the fishing industry, which provides nearly 60% of export
earnings and employs 6% of the work force. The economy remains
sensitive to declining fish stocks as well as to fluctuations in
world prices for its main exports: fish and fish products, aluminum,
and ferrosilicon. Government policies include reducing the current
account deficit, limiting foreign borrowing, containing inflation,
revising agricultural and fishing policies, and diversifying the
economy. The government remains opposed to EU membership, primarily
because of Icelanders' concern about losing control over their
fishing resources. Iceland's economy has been diversifying into
manufacturing and service industries in the last decade, and new
developments in software production, biotechnology, and financial
services are taking place. The tourism sector is also expanding,
with the recent trends in ecotourism and whale watching. Since 2000
growth has varied from a -1% in 2002 to 8% in 2004.
Iles Eparses
no economic activity
India
India's diverse economy encompasses traditional village
farming, modern agriculture, handicrafts, a wide range of modern
industries, and a multitude of services. Services are the major
source of economic growth, accounting for more than half of India's
output with less than one quarter of its labor force. About
three-fifths of the work force is in agriculture, leading the UPA
government to articulate an economic reform program that includes
developing basic infrastructure to improve the lives of the rural
poor and boost economic performance. The government has reduced
controls on foreign trade and investment. Tariffs averaged 12.5% on
non-agricultural items in 2006. Higher limits on foreign direct
investment were permitted in a few key sectors, such as
telecommunications. However, tariff spikes in sensitive categories,
including agriculture, and incremental progress on economic reforms
still hinder foreign access to India's vast and growing market.
Privatization of government-owned industries remained stalled in
2006, and continues to generate political debate; populist pressure
from within the UPA government and from its Left Front allies
continues to restrain needed initiatives. The economy has posted an
average growth rate of more than 7% in the decade since 1996,
reducing poverty by about 10 percentage points. India achieved 8.5%
GDP growth in 2006, significantly expanding manufacturing. India is
capitalizing on its large numbers of well-educated people skilled in
the English language to become a major exporter of software services
and software workers. Economic expansion has helped New Delhi
continue to make progress in reducing its federal fiscal deficit.
However, strong growth - more than 8 percent growth in each of the
last three years - combined with easy consumer credit and a real
estate boom is fueling inflation concerns. The huge and growing
population is the fundamental social, economic, and environmental
problem.
Indian Ocean
The Indian Ocean provides major sea routes connecting
the Middle East, Africa, and East Asia with Europe and the Americas.
It carries a particularly heavy traffic of petroleum and petroleum
products from the oilfields of the Persian Gulf and Indonesia. Its
fish are of great and growing importance to the bordering countries
for domestic consumption and export. Fishing fleets from Russia,
Japan, South Korea, and Taiwan also exploit the Indian Ocean, mainly
for shrimp and tuna. Large reserves of hydrocarbons are being tapped
in the offshore areas of Saudi Arabia, Iran, India, and western
Australia. An estimated 40% of the world's offshore oil production
comes from the Indian Ocean. Beach sands rich in heavy minerals and
offshore placer deposits are actively exploited by bordering
countries, particularly India, South Africa, Indonesia, Sri Lanka,
and Thailand.
Indonesia
Indonesia, a vast polyglot nation, has struggled to
overcome the Asian financial crisis, and still grapples with high
poverty and unemployment, inadequate infrastructure, endemic
corruption, a fragile banking sector, a poor investment climate, and
unequal resource distribution among regions. The country continues
the slow work of rebuilding from the devastating December 2004
tsunami and from an earthquake in central Java in May 2006 that
caused over $3 billion in damage and losses. Declining oil
production and lack of new exploration investment turned Indonesia
into a net oil importer in 2004. The cost of subsidizing domestic
fuel placed increasing strain on the budget in 2005, and combined
with indecisive monetary policy, contributed to a run on the
currency in August, prompting the government to enact a 126% average
fuel price hike in October. The resulting inflation and interest
rate hikes dampened growth through mid-2006, while large increases
in rice prices pushed millions more people under the national
poverty line. Economic reformers introduced three policy packages in
2006 to improve the investment climate, infrastructure, and the
financial sector, but translating them into reality has not been
easy. Keys to future growth remain internal reform, building up the
confidence of international and domestic investors, and strong
global economic growth.
Iran
Iran's economy is marked by a bloated, inefficient state
sector, over reliance on the oil sector, and statist policies that
create major distortions throughout. Most economic activity is
controlled by the state. Private sector activity is typically
small-scale - workshops, farming, and services. President Mahmud
AHMADI-NEJAD has continued to follow the market reform plans of
former President RAFSANJANI, with limited progress. Relatively high
oil prices in recent years have enabled Iran to amass nearly $60
billion in foreign exchange reserves, but have not eased economic
hardships such as high unemployment and inflation. The proportion of
the economy devoted to the development of weapons of mass
destruction remains a contentious issue with leading Western nations.
Iraq
Iraq's economy is dominated by the oil sector, which has
traditionally provided about 95% of foreign exchange earnings.
Iraq's seizure of Kuwait in August 1990, subsequent international
economic sanctions, and damage from military action by an
international coalition beginning in January 1991 drastically
reduced economic activity. Although government policies supporting
large military and internal security forces and allocating resources
to key supporters of the regime hurt the economy, implementation of
the UN's oil-for-food program, which began in December 1996, helped
improve conditions for the average Iraqi citizen. Iraq was allowed
to export limited amounts of oil in exchange for food, medicine, and
some infrastructure spare parts. In December 1999, the UN Security
Council authorized Iraq to export under the program as much oil as
required to meet humanitarian needs. The military victory of the
US-led coalition in March-April 2003 resulted in the shutdown of
much of the central economic administrative structure. Although a
comparatively small amount of capital plant was damaged during the
hostilities, looting, insurgent attacks, and sabotage have
undermined efforts to rebuild the economy. Attacks on key economic
facilities - especially oil pipelines and infrastructure - have
prevented Iraq from reaching projected export volumes, but total
government revenues have been higher than anticipated due to high
oil prices. Despite political uncertainty, Iraq is making some
progress in building the institutions needed to implement economic
policy and has concluded a debt reduction agreement with the Paris
Club and a Standby Arrangement with the IMF. Iraq's economic
prospects will depend on the government's ability to control
inflation, to implement structural reforms such as bank
restructuring, and to develop the private sector.
Ireland
Ireland is a small, modern, trade-dependent economy with
growth averaging 6% in 1995-2006. Agriculture, once the most
important sector, is now dwarfed by industry and services. Industry
accounts for 46% of GDP, about 80% of exports, and 29% of the labor
force. Although exports remain the primary engine for Ireland's
growth, the economy has also benefited from a rise in consumer
spending, construction, and business investment. Per capita GDP is
10% above that of the four big European economies and the second
highest in the EU behind Luxembourg. Over the past decade, the Irish
Government has implemented a series of national economic programs
designed to curb price and wage inflation, reduce government
spending, increase labor force skills, and promote foreign
investment. Ireland joined in circulating the euro on 1 January 2002
along with 11 other EU nations.