Nigeria
Oil-rich Nigeria, long hobbled by political instability,
corruption, inadequate infrastructure, and poor macroeconomic
management, is undertaking some reforms under a new reform-minded
administration. Nigeria's former military rulers failed to diversify
the economy away from its overdependence on the capital-intensive
oil sector, which provides 20% of GDP, 95% of foreign exchange
earnings, and about 65% of budgetary revenues. The largely
subsistence agricultural sector has failed to keep up with rapid
population growth - Nigeria is Africa's most populous country - and
the country, once a large net exporter of food, now must import
food. Following the signing of an IMF stand-by agreement in August
2000, Nigeria received a debt-restructuring deal from the Paris Club
and a $1 billion credit from the IMF, both contingent on economic
reforms. Nigeria pulled out of its IMF program in April 2002, after
failing to meet spending and exchange rate targets, making it
ineligible for additional debt forgiveness from the Paris Club. In
the last year the government has begun showing the political will to
implement the market-oriented reforms urged by the IMF, such as to
modernize the banking system, to curb inflation by blocking
excessive wage demands, and to resolve regional disputes over the
distribution of earnings from the oil industry. In 2003, the
government began deregulating fuel prices, announced the
privatization of the country's four oil refineries, and instituted
the National Economic Empowerment Development Strategy, a
domestically designed and run program modeled on the IMF's Poverty
Reduction and Growth Facility for fiscal and monetary management. In
November 2005, Abuja won Paris Club approval for a debt-relief deal
that eliminated $18 billion of debt in exchange for $12 billion in
payments-a total package worth $30 billion of Nigeria's total $37
billion external debt. The deal requires Nigeria to be subject to
stringent IMF reviews. GDP rose strongly in 2006, based largely on
increased oil exports and high global crude prices.
Niue
The economy suffers from the typical Pacific island problems of
geographic isolation, few resources, and a small population.
Government expenditures regularly exceed revenues, and the shortfall
is made up by critically needed grants from New Zealand that are
used to pay wages to public employees. Niue has cut government
expenditures by reducing the public service by almost half. The
agricultural sector consists mainly of subsistence gardening,
although some cash crops are grown for export. Industry consists
primarily of small factories to process passion fruit, lime oil,
honey, and coconut cream. The sale of postage stamps to foreign
collectors is an important source of revenue. The island in recent
years has suffered a serious loss of population because of
emigration to New Zealand. Efforts to increase GDP include the
promotion of tourism and a financial services industry, although the
International Banking Repeal Act of 2002 resulted in the termination
of all offshore banking licenses. Economic aid from New Zealand in
2002 was about US$2 million. Niue suffered a devastating typhoon in
January 2004, which decimated nascent economic programs. While in
the process of rebuilding, Niue has been dependent on foreign aid.
Norfolk Island
Tourism, the primary economic activity, has steadily
increased over the years and has brought a level of prosperity
unusual among inhabitants of the Pacific islands. The agricultural
sector has become self-sufficient in the production of beef,
poultry, and eggs.
Northern Mariana Islands
The economy benefits substantially from
financial assistance from the US. The rate of funding has declined
as locally generated government revenues have grown. The key tourist
industry employs about 50% of the work force and accounts for
roughly one-fourth of GDP. Japanese tourists predominate. Annual
tourist entries have exceeded one-half million in recent years, but
financial difficulties in Japan have caused a temporary slowdown.
The agricultural sector is made up of cattle ranches and small farms
producing coconuts, breadfruit, tomatoes, and melons. Garment
production is by far the most important industry with the employment
of 17,500 mostly Chinese workers and sizable shipments to the US
under duty and quota exemptions.
Norway
The Norwegian economy is a prosperous bastion of welfare
capitalism, featuring a combination of free market activity and
government intervention. The government controls key areas such as
the vital petroleum sector (through large-scale state enterprises).
The country is richly endowed with natural resources - petroleum,
hydropower, fish, forests, and minerals - and is highly dependent on
its oil production and international oil prices, with oil and gas
accounting for one-third of exports. Only Saudi Arabia and Russia
export more oil than Norway. Norway opted to stay out of the EU
during a referendum in November 1994; nonetheless, it contributes
sizably to the EU budget. The government has moved ahead with
privatization. Although Norwegian oil production peaked in 2000,
natural gas production is still rising. Norwegians realize that once
their gas production peaks they will eventually face declining oil
and gas revenues; accordingly, Norway has been saving its
oil-and-gas-boosted budget surpluses in a Government Petroleum Fund,
which is invested abroad and now is valued at more than $250
billion. After lackluster growth of less than 1% in 2002-03, GDP
growth picked up to 3-4% in 2004-06. Norway's economy remains
buoyant. Domestic economic activity is, and will continue to be, the
main driver of growth, supported by high consumer confidence and
strong investment spending in the offshore oil and gas sector.
Oman
Oman is a middle-income economy in the Middle East with notable
oil and gas resources, a substantial trade surplus, and low
inflation. Sustained high oil prices in recent years have helped
build Oman's budget and trade surpluses and foreign reserves. Oman
joined the World Trade Organization in November 2000 and continues
to liberalize its markets. To reduce unemployment and limit
dependence on foreign labor, the government is encouraging the
replacement of foreign expatriate workers with local workers. Oman
actively seeks private foreign investors, especially in the
industrial, information technology, tourism, and higher education
fields. Industrial development plans focus on gas resources, metal
manufacturing, petrochemicals, and international transshipment ports.
Pacific Ocean
The Pacific Ocean is a major contributor to the world
economy and particularly to those nations its waters directly touch.
It provides low-cost sea transportation between East and West,
extensive fishing grounds, offshore oil and gas fields, minerals,
and sand and gravel for the construction industry. In 1996, over 60%
of the world's fish catch came from the Pacific Ocean. Exploitation
of offshore oil and gas reserves is playing an ever-increasing role
in the energy supplies of the US, Australia, NZ, China, and Peru.
The high cost of recovering offshore oil and gas, combined with the
wide swings in world prices for oil since 1985, has led to
fluctuations in new drillings.
Pakistan
Pakistan, an impoverished and underdeveloped country, has
suffered from decades of internal political disputes, low levels of
foreign investment, and a costly, ongoing confrontation with
neighboring India. However, IMF-approved government policies,
bolstered by generous foreign assistance and renewed access to
global markets since 2001, have generated solid macroeconomic
recovery the last five years. The government has made substantial
macroeconomic reforms since 2000, most notably privatizing the
banking sector. Poverty levels have decreased by 10 percent since
2001, and Islamabad has steadily raised development spending in
recent years, including a 52-percent real increase in the budget
allocation for development in fiscal year 2007, a necessary step
toward reversing the broad underdevelopment of its social sector.
The fiscal deficit - the result of chronically low tax collection
and increased spending, including reconstruction costs from the
October 2005 earthquake - appears manageable for now. GDP growth,
spurred by gains in the industrial and service sectors, remained in
the 6-8% range in 2004-06. Inflation remains the biggest threat to
the economy, jumping to more than 9% in 2005 before easing to 7.9%
in 2006. The central bank is pursuing tighter monetary policy -
raising interest rates in 2006 - while trying to preserve growth.
Foreign exchange reserves are bolstered by steady worker
remittances, but a growing current account deficit - driven by a
widening trade gap as import growth outstrips export expansion -
could draw down reserves and dampen GDP growth in the medium term.
Palau
The economy consists primarily of tourism, subsistence
agriculture, and fishing. The government is the major employer of
the work force, relying heavily on financial assistance from the US.
Business and tourist arrivals numbered 63,000 in 2003. The
population enjoys a per capita income twice that of the Philippines
and much of Micronesia. Long-run prospects for the key tourist
sector have been greatly bolstered by the expansion of air travel in
the Pacific, the rising prosperity of leading East Asian countries,
and the willingness of foreigners to finance infrastructure
development.
Palmyra Atoll
no economic activity