Solomon Islands
The bulk of the population depends on agriculture,
fishing, and forestry for at least part of its livelihood. Most
manufactured goods and petroleum products must be imported. The
islands are rich in undeveloped mineral resources such as lead,
zinc, nickel, and gold. Prior to the arrival of the Regional
Assistance Mission to the Solomon Islands (RAMSI), severe ethnic
violence, the closing of key businesses, and an empty government
treasury culminated in economic collapse. RAMSI's efforts to restore
law and order and economic stability have led to modest growth as
the economy rebuilds.
Somalia
Somalia's economic fortunes are driven by its deep political
divisions. The northwestern area has declared its independence as
the "Republic of Somaliland"; the northeastern region of Puntland is
a semi-autonomous state; and the remaining southern portion is
riddled with the struggles of rival factions. Economic life
continues, in part because much activity is local and relatively
easily protected. Agriculture is the most important sector, with
livestock normally accounting for about 40% of GDP and about 65% of
export earnings, but Saudi Arabia's ban on Somali livestock, due to
Rift Valley Fever concerns, has severely hampered the sector. Nomads
and semi-nomads, who are dependent upon livestock for their
livelihood, make up a large portion of the population. Livestock,
hides, fish, charcoal, and bananas are Somalia's principal exports,
while sugar, sorghum, corn, qat, and machined goods are the
principal imports. Somalia's small industrial sector, based on the
processing of agricultural products, has largely been looted and
sold as scrap metal. Despite the seeming anarchy, Somalia's service
sector has managed to survive and grow. Telecommunication firms
provide wireless services in most major cities and offer the lowest
international call rates on the continent. In the absence of a
formal banking sector, money exchange services have sprouted
throughout the country, handling between $500 million and $1 billion
in remittances annually. Mogadishu's main market offers a variety of
goods from food to the newest electronic gadgets. The SCIC has
opened Mogadishu's main port and airport - closed for 15 years - and
now controls most of the ports and airfields in southern Somalia.
Hotels continue to operate, and militias provide security. The
ongoing civil disturbances and clan rivalries, however, have
interfered with any broad-based economic development and
international aid arrangements. Somalia's arrears to the IMF
continued to grow in 2006. Statistics on Somalia's GDP, growth, per
capita income, and inflation should be viewed skeptically. In late
December 2004, a major tsunami caused an estimated 150 deaths and
resulted in destruction of property in coastal areas.
South Africa
South Africa is a middle-income, emerging market with
an abundant supply of natural resources; well-developed financial,
legal, communications, energy, and transport sectors; a stock
exchange that ranks among the 10 largest in the world; and a modern
infrastructure supporting an efficient distribution of goods to
major urban centers throughout the region. However, growth has not
been strong enough to lower South Africa's high unemployment rate,
and daunting economic problems remain from the apartheid era -
especially poverty and lack of economic empowerment among the
disadvantaged groups. South African economic policy is fiscally
conservative, but pragmatic, focusing on targeting inflation and
liberalizing trade as means to increase job growth and household
income.
South Georgia and the South Sandwich Islands
Some fishing takes
place in adjacent waters. There is a potential source of income from
harvesting finfish and krill. The islands receive income from
postage stamps produced in the UK, sale of fishing licenses, and
harbor and landing fees from tourist vessels. Tourism from
specialized cruise ships is increasing rapidly.
Southern Ocean
Fisheries in 2003-04 landed 136,262 metric tons, of
which 87% (118,166 tons) was krill and 8% (11,182 tons) Patagonian
toothfish, compared to 142,555 tons in 2002-03 of which 83% (117,728
tons) was krill and 12% (16,479 tons) Patagonian toothfish
(estimated fishing from the area covered by the Convention of the
Conservation of Antarctic Marine Living Resources (CCAMLR), which
extends slightly beyond the Southern Ocean area). International
agreements were adopted in late 1999 to reduce illegal, unreported,
and unregulated fishing, which in the 2000-01 season landed, by one
estimate, 8,376 metric tons of Patagonian and Antarctic toothfish.
In the 2004-05 Antarctic summer 28,202 tourists, most of them
seaborne (approximately 97%), visited the Southern Ocean and
Antarctica, compared to 14,762 in 1999-2000.
Spain
The Spanish economy boomed from 1986 to 1990, averaging 5%
annual growth. After a European-wide recession in the early 1990s,
the Spanish economy resumed moderate growth starting in 1994.
Spain's mixed capitalist economy supports a GDP that on a per capita
basis is 80% that of the four leading West European economies. The
center-right government of former President AZNAR successfully
worked to gain admission to the first group of countries launching
the European single currency (the euro) on 1 January 1999. The AZNAR
administration continued to advocate liberalization, privatization,
and deregulation of the economy and introduced some tax reforms to
that end. Unemployment fell steadily under the AZNAR administration
but remains high at 8.7%. Growth averaging 3% annually during
2003-06 was satisfactory given the background of a faltering
European economy. The Socialist president, RODRIGUEZ ZAPATERO, has
made mixed progress in carrying out key structural reforms, which
need to be accelerated and deepened to sustain Spain's strong
economic growth. Despite the economy's relative solid footing
significant downside risks remain, including Spain's continued loss
of competitiveness, the potential for a housing market collapse, the
country's changing demographic profile and a decline in EU
structural funds.
Spratly Islands
Economic activity is limited to commercial fishing.
The proximity to nearby oil- and gas-producing sedimentary basins
suggests the potential for oil and gas deposits, but the region is
largely unexplored. There are no reliable estimates of potential
reserves. Commercial exploitation has yet to be developed.
Sri Lanka
In 1977, Colombo abandoned statist economic policies and
its import substitution trade policy for more market-oriented
policies, export-oriented trade, and encouragement of foreign
investment. Recent changes in government have brought some policy
reversals, however. Currently, the ruling Sri Lanka Freedom Party
has a more statist economic approach which seeks to reduce poverty
by steering investment to disadvantaged areas, developing small and
medium enterprises, promoting agriculture, and expanding the already
enormous civil service. The government has halted most
privatizations. Although suffering a brutal civil war that began in
1983, Sri Lanka saw GDP growth average 4.5% in the last ten years,
with a brief interruption during the global downturn in 2001. In
late December 2004, a major tsunami took about 31,000 lives, left
more than 6,300 missing and 443,000 displaced, and destroyed an
estimated $1.5 billion worth of property. Growth, partly spurred by
reconstruction, reached 5% in 2005 and more than 6% in 2006. Sri
Lanka's most dynamic sectors now are food processing, textiles and
apparel, food and beverages, port contstruction, telecommunications,
and insurance and banking. In 2005, plantation crops made up only
about 15% of exports (compared with more than 90% in 1970), while
textiles and garments accounted for more than 60%. About 800,000 Sri
Lankans work abroad, 90% in the Middle East. They send home about $1
billion a year. The struggle by the Tamil Tigers of the north and
east for a largely independent homeland continues to cast a shadow
over the economy.
Sudan
Sudan has turned around a struggling economy with sound
economic policies and infrastructure investments, but it still faces
formidable economic problems, starting from its low level of per
capita output. From 1997 to date, Sudan has been implementing IMF
macroeconomic reforms. In 1999, Sudan began exporting crude oil and
in the last quarter of 1999 recorded its first trade surplus, which,
along with monetary policy, has stabilized the exchange rate.
Increased oil production, revived light industry, and expanded
export processing zones helped sustain GDP growth at 10% in 2006.
Agricultural production remains Sudan's most important sector,
employing 80% of the work force, contributing 35% of GDP, and
accounting for most of GDP growth, but most farms remain rain-fed
and susceptible to drought. Chronic instability - resulting from the
long-standing civil war between the Muslim north and the
Christian/pagan south, adverse weather, and weak world agricultural
prices - ensure that much of the population will remain at or below
the poverty line for years.
Suriname
The economy is dominated by the mining industry, which
accounts for more than a third of GDP and subjects government
revenues to mineral price volatility. The short-term economic
outlook depends on the government's ability to control inflation and
on the development of projects in the bauxite and gold mining
sectors. Suriname's economic prospects for the medium term will
depend on continued commitment to responsible monetary and fiscal
policies and to the introduction of structural reforms to liberalize
markets and promote competition. The government of Ronald VENETIAAN,
in his first term, implemented an austerity program, raised taxes,
and attempted to control spending. Economic policies are likely to
remain the same during VENETIAAN's second term. Prospects for local
onshore oil production are good, as a drilling program is underway.
Offshore oil drilling was given a boost in 2004 when the State Oil
Company (Staatsolie) signed exploration agreements with Repsol,
Mearsk, and Occidental. Bidding on these new offshore blocks was
completed in July 2006.