Virgin Islands
Tourism is the primary economic activity, accounting
for 80% of GDP and employment. The islands hosted 2.6 million
visitors in 2005. The manufacturing sector consists of petroleum
refining, textiles, electronics, pharmaceuticals, and watch
assembly. One of the world's largest petroleum refineries is at
Saint Croix. The agricultural sector is small, with most food being
imported. International business and financial services are small
but growing components of the economy. The islands are vulnerable to
substantial damage from storms. The government is working to improve
fiscal discipline, to support construction projects in the private
sector, to expand tourist facilities, to reduce crime, and to
protect the environment.
Wake Island
Economic activity is limited to providing services to
military personnel and contractors located on the island. All food
and manufactured goods must be imported.
Wallis and Futuna
The economy is limited to traditional subsistence
agriculture, with about 80% of labor force earnings from agriculture
(coconuts and vegetables), livestock (mostly pigs), and fishing.
About 4% of the population is employed in government. Revenues come
from French Government subsidies, licensing of fishing rights to
Japan and South Korea, import taxes, and remittances from expatriate
workers in New Caledonia.
West Bank
The West Bank - the larger of the two areas under the
Palestinian Authority (PA) - has experienced a general decline in
economic conditions since the second intifadah began in September
2000. The downturn has been largely the result of Israeli closure
policies - the imposition of border closures in response to security
incidents in Israel - which disrupted labor and trading
relationships. In 2001, and even more severely in 2002, Israeli
military measures in PA areas resulted in the destruction of
capital, the disruption of administrative structures, and widespread
business closures. International aid of at least $1.14 billion to
the West Bank and Gaza Strip in 2004 prevented the complete collapse
of the economy and allowed some reforms in the government's
financial operations. In 2005, high unemployment and limited trade
opportunities - due to continued closures both within the West Bank
and externally - stymied growth. Israel's and the international
community's financial embargo of the PA since HAMAS took office in
March 2006 has interrupted the provision of PA social services and
the payment of PA salaries.
Western Sahara
Western Sahara depends on pastoral nomadism, fishing,
and phosphate mining as the principal sources of income for the
population. The territory lacks sufficient rainfall for sustainable
agricultural production, and most of the food for the urban
population must be imported. Incomes in Western Sahara are
substantially below the Moroccan level. The Moroccan Government
controls all trade and other economic activities in Western Sahara.
Morocco and the European Union signed a four-year agreement in July
2006 allowing European vessels to fish off the coast of Morocco,
including the disputed waters off the coast of Western Sahara.
Moroccan energy interests in 2001 signed contracts to explore for
oil off the coast of Western Sahara, which has angered the
Polisario. However, in 2006, the Polisario awarded similar
exploration licenses in the disputed territory, which would come
into force if Morocco and the Polisario resolve their dispute over
Western Sahara.
World
Global output rose by 4.4% in 2005, led by China (9.3%), India
(7.6%), and Russia (5.9%). The other 14 successor nations of the
USSR and the other old Warsaw Pact nations again experienced widely
divergent growth rates; the three Baltic nations continued as strong
performers, in the 7% range of growth. Growth results posted by the
major industrial countries varied from no gain for Italy to a strong
gain by the United States (3.5%). The developing nations also varied
in their growth results, with many countries facing population
increases that erode gains in output. Externally, the nation-state,
as a bedrock economic-political institution, is steadily losing
control over international flows of people, goods, funds, and
technology. Internally, the central government often finds its
control over resources slipping as separatist regional movements -
typically based on ethnicity - gain momentum, e.g., in many of the
successor states of the former Soviet Union, in the former
Yugoslavia, in India, in Iraq, in Indonesia, and in Canada.
Externally, the central government is losing decisionmaking powers
to international bodies, notably the EU. In Western Europe,
governments face the difficult political problem of channeling
resources away from welfare programs in order to increase investment
and strengthen incentives to seek employment. The addition of 80
million people each year to an already overcrowded globe is
exacerbating the problems of pollution, desertification,
underemployment, epidemics, and famine. Because of their own
internal problems and priorities, the industrialized countries
devote insufficient resources to deal effectively with the poorer
areas of the world, which, at least from an economic point of view,
are becoming further marginalized. The introduction of the euro as
the common currency of much of Western Europe in January 1999, while
paving the way for an integrated economic powerhouse, poses economic
risks because of varying levels of income and cultural and political
differences among the participating nations. The terrorist attacks
on the US on 11 September 2001 accentuated a further growing risk to
global prosperity, illustrated, for example, by the reallocation of
resources away from investment to anti-terrorist programs. The
opening of war in March 2003 between a US-led coalition and Iraq
added new uncertainties to global economic prospects. After the
coalition victory, the complex political difficulties and the high
economic cost of establishing domestic order in Iraq became major
global problems that continued through 2006.
Yemen
Yemen, one of the poorest countries in the Arab world,
reported average annual growth of 3.5% from 2000 through 2006. Its
economic fortunes depend mostly on oil. Oil revenues probably
increased in 2006 as a result of higher prices. Yemen was on an
IMF-supported structural adjustment program designed to modernize
and streamline the economy, which led to substantial foreign debt
relief and restructuring. However, government dedication to the
program waned in 2001 for political reasons. Yemen is struggling to
control excessive spending and rampant corruption. Yemen is
dependent on foreign aid to finance its budget deficits and
development projects. In November, Yemen secured $4.7 billion in
assistance from Arabian Gulf and Western donors.
Zambia
Despite progress in privatization and budgetary reform,
Zambia's economic growth in 2005-06 remained somewhat below the
6%-7% per year needed to reduce poverty significantly. Privatization
of government-owned copper mines relieved the government from
covering mammoth losses generated by the industry and greatly
improved the chances for copper mining to return to profitability
and spur economic growth. Copper output has increased steadily since
2004, due to higher copper prices and the opening of new mines. The
maize harvest was again good in 2005, helping boost GDP and
agricultural exports. Cooperation continues with international
bodies on programs to reduce poverty, including a new lending
arrangement with the IMF in the second quarter of 2004. A tighter
monetary policy will help cut inflation, but Zambia still has a
serious problem with high public debt.
Zimbabwe
The government of Zimbabwe faces a wide variety of
difficult economic problems as it struggles with an unsustainable
fiscal deficit, an overvalued exchange rate, soaring inflation, and
bare shelves. Its 1998-2002 involvement in the war in the Democratic
Republic of the Congo drained hundreds of millions of dollars from
the economy. The government's land reform program, characterized by
chaos and violence, has badly damaged the commercial farming sector,
the traditional source of exports and foreign exchange and the
provider of 400,000 jobs, turning Zimbabwe into a net importer of
food products. Badly needed support from the IMF has been suspended
because of the government's arrears on past loans, which it began
repaying in 2005. The official annual inflation rate rose from 32%
in 1998, to 133% in 2004, 585% in 2005, and approached 1000% in
2006, although private sector estimates put the figure much higher.
Meanwhile, the official exchange rate fell from approximately 1
(revalued) Zimbabwean dollar per US dollar in 2003 to 250 per US
dollar in August 2006.
This page was last updated on 8 February, 2007