Finland
Finland has a highly industrialized, largely free-market
economy with per capita output roughly that of the UK, France,
Germany, and Italy. Its key economic sector is manufacturing -
principally the wood, metals, engineering, telecommunications, and
electronics industries. Trade is important; exports equal nearly
two-fifths of GDP. Finland excels in high-tech exports, e.g., mobile
phones. Except for timber and several minerals, Finland depends on
imports of raw materials, energy, and some components for
manufactured goods. Because of the climate, agricultural development
is limited to maintaining self-sufficiency in basic products.
Forestry, an important export earner, provides a secondary
occupation for the rural population. High unemployment remains a
persistent problem. In 2007 Russia announced plans to impose high
tariffs on raw timber exported to Finland. The Finnish pulp and
paper industry will be threatened if these duties are put into place
in 2008 and 2009, and the matter is now being handled by the
European Union.
France
France is in the midst of transition from a well-to-do modern
economy that has featured extensive government ownership and
intervention to one that relies more on market mechanisms. The
government has partially or fully privatized many large companies,
banks, and insurers, and has ceded stakes in such leading firms as
Air France, France Telecom, Renault, and Thales. It maintains a
strong presence in some sectors, particularly power, public
transport, and defense industries. The telecommunications sector is
gradually being opened to competition. France's leaders remain
committed to a capitalism in which they maintain social equity by
means of laws, tax policies, and social spending that reduce income
disparity and the impact of free markets on public health and
welfare. Widespread opposition to labor reform has in recent years
hampered the government's ability to revitalize the economy. In
2007, the government launched divisive labor reform efforts that
will continue into 2008. France's tax burden remains one of the
highest in Europe (nearly 50% of GDP in 2005). France brought the
budget deficit within the eurozone's 3%-of-GDP limit for the first
time in 2007 and has reduced unemployment to roughly 8%. With at
least 75 million foreign tourists per year, France is the most
visited country in the world and maintains the third largest income
in the world from tourism.
French Polynesia
Since 1962, when France stationed military
personnel in the region, French Polynesia has changed from a
subsistence agricultural economy to one in which a high proportion
of the work force is either employed by the military or supports the
tourist industry. With the halt of French nuclear testing in 1996,
the military contribution to the economy fell sharply. Tourism
accounts for about one-fourth of GDP and is a primary source of hard
currency earnings. Other sources of income are pearl farming and
deep-sea commercial fishing. The small manufacturing sector
primarily processes agricultural products. The territory benefits
substantially from development agreements with France aimed
principally at creating new businesses and strengthening social
services.
French Southern and Antarctic Lands
Economic activity is limited to
servicing meteorological and geophysical research stations, military
bases, and French and other fishing fleets. The fish catches landed
on Iles Kerguelen by foreign ships are exported to France and
Reunion.
Gabon
Gabon enjoys a per capita income four times that of most of
sub-Saharan African nations. but because of high income inequality,
a large proportion of the population remains poor. Gabon depended on
timber and manganese until oil was discovered offshore in the early
1970s. The oil sector now accounts for 50% of GDP. Gabon continues
to face fluctuating prices for its oil, timber, and manganese
exports. Despite the abundance of natural wealth, poor fiscal
management hobbles the economy. The devaluation of the CFA franc -
its currency - by 50% in January 1994 sparked a one-time
inflationary surge, to 35%; the rate dropped to 6% in 1996. The IMF
provided a one-year standby arrangement in 1994-95, a three-year
Enhanced Financing Facility (EFF) at near commercial rates beginning
in late 1995, and stand-by credit of $119 million in October 2000.
Those agreements mandated progress in privatization and fiscal
discipline. France provided additional financial support in January
1997 after Gabon met IMF targets for mid-1996. In 1997, an IMF
mission to Gabon criticized the government for overspending on
off-budget items, overborrowing from the central bank, and slipping
on its schedule for privatization and administrative reform. The
rebound of oil prices since 1999 have helped growth, but drops in
production have hampered Gabon from fully realizing potential gains,
and will continue to temper the gains for most of this decade. In
December 2000, Gabon signed a new agreement with the Paris Club to
reschedule its official debt. A follow-up bilateral repayment
agreement with the US was signed in December 2001. Gabon signed a
14-month Stand-By Arrangement with the IMF in May 2004, and received
Paris Club debt rescheduling later that year. Short-term progress
depends on an upbeat world economy and fiscal and other adjustments
in line with IMF policies.
Gambia, The
The Gambia has no confirmed mineral or natural resource
deposits and has a limited agricultural base. About 75% of the
population depends on crops and livestock for its livelihood.
Small-scale manufacturing activity features the processing of
peanuts, fish, and hides. Reexport trade normally constitutes a
major segment of economic activity, but a 1999 government-imposed
preshipment inspection plan, and instability of the Gambian dalasi
(currency) have drawn some of the reexport trade away from The
Gambia. The Gambia's natural beauty and proximity to Europe has made
it one of the larger markets for tourism in West Africa. The
government's 1998 seizure of the private peanut firm Alimenta
eliminated the largest purchaser of Gambian groundnuts. Despite an
announced program to begin privatizing key parastatals, no plans
have been made public that would indicate that the government
intends to follow through on its promises. Unemployment and
underemployment rates remain extremely high; short-run economic
progress depends on sustained bilateral and multilateral aid, on
responsible government economic management, on continued technical
assistance from the IMF and bilateral donors, and on expected growth
in the construction sector.
Gaza Strip
High population density, limited land access, and strict
internal and external security controls have kept economic
conditions in the Gaza Strip - the smaller of the two areas under
the Palestinian Authority (PA)- even more degraded than in the West
Bank. The beginning of the second intifada in September 2000 sparked
an economic downturn, largely the result of Israeli closure
policies; these policies, which were imposed to address security
concerns in Israel, disrupted labor and trade access to and from the
Gaza Strip. In 2001, and even more severely in 2003, Israeli
military measures in PA areas resulted in the destruction of
capital, the disruption of administrative structures, and widespread
business closures. The Israeli withdrawal from the Gaza Strip in
September 2005 offered some medium-term opportunities for economic
growth, but continued Israeli-imposed crossings closures, which
became more restrictive after Hamas violently took over the
territory in June 2007, have resulted in widespread private sector
layoffs and shortages of most goods.
Georgia
Georgia's economy has sustained robust GDP growth of close
to 10% in 2006 and 12% in 2007, based on strong inflows of foreign
investment and robust government spending. However, a widening trade
deficit and higher inflation are emerging risks to the economy.
Areas of recent improvement include increasing foreign direct
investment as well as growth in the construction, banking services
and mining sectors. Georgia's main economic activities include the
cultivation of agricultural products such as grapes, citrus fruits,
and hazelnuts; mining of manganese and copper; and output of a small
industrial sector producing alcoholic and nonalcoholic beverages,
metals, machinery, aircraft and chemicals. The country imports
nearly all its needed supplies of natural gas and oil products. It
has sizeable hydropower capacity, a growing component of its energy
supplies. Despite the severe damage the economy suffered due to
civil strife in the 1990s, Georgia, with the help of the IMF and
World Bank, has made substantial economic gains since 2000,
achieving positive GDP growth and curtailing inflation. Georgia's
GDP growth neared 10% in 2006 and 2007 despite restrictions on
commerce with Russia. Areas of recent improvement include increased
foreign direct investment as well as growth in the construction,
banking services, and mining sectors. In addition, the reinvigorated
privatization process has met with success. However, a widening
trade deficit and higher inflation are emerging risks to the
economy. Georgia has suffered from a chronic failure to collect tax
revenues; however, the new government is making progress and has
reformed the tax code, improved tax administration, increased tax
enforcement, and cracked down on corruption. Government revenues
have increased nearly four fold since 2003. Due to improvements in
customs and financial (tax) enforcement, smuggling is a declining
problem. Georgia has overcome the chronic energy shortages of the
past by renovating hydropower plants and by bringing newly available
natural gas supplies from Azerbaijan. It also has an increased
ability to pay for more expensive gas imports from Russia. The
country is pinning its hopes for long-term growth on a determined
effort to reduce regulation, taxes and corruption in order to
attract foreign investment. The construction on the
Baku-T'bilisi-Ceyhan oil pipeline, the Baku-T'bilisi-Erzerum gas
pipeline, and the Kars-Akhalkalaki Railroad are part of a strategy
to capitalize on Georgia's strategic location between Europe and
Asia and develop its role as a transit point for gas, oil and other
goods.
Germany
Germany's affluent and technologically powerful economy -
the fifth largest in the world in PPP terms - showed considerable
improvement in 2007 with 2.6% growth. After a long period of
stagnation with an average growth rate of 0.7% between 2001-05 and
chronically high unemployment, stronger growth led to a considerable
fall in unemployment to about 8% near the end of 2007. Among the
most important reasons for Germany's high unemployment during the
past decade were macroeconomic stagnation, the declining level of
investment in plant and equipment, company restructuring, flat
domestic consumption, structural rigidities in the labor market,
lack of competition in the service sector, and high interest rates.
The modernization and integration of the eastern German economy
continues to be a costly long-term process, with annual transfers
from west to east amounting to roughly $80 billion. The former
government of Chancellor Gerhard SCHROEDER launched a comprehensive
set of reforms of labor market and welfare-related institutions. The
current government of Chancellor Angela MERKEL has initiated other
reform measures, such as a gradual increase in the mandatory
retirement age from 65 to 67 and measures to increase female
participation in the labor market. Germany's aging population,
combined with high chronic unemployment, has pushed social security
outlays to a level exceeding contributions, but higher government
revenues from the cyclical upturn in 2006-07 and a 3% rise in the
value-added tax pushed Germany's budget deficit well below the EU's
3% debt limit. Corporate restructuring and growing capital markets
are setting the foundations that could help Germany meet the
long-term challenges of European economic integration and
globalization, although some economists continue to argue the need
for change in inflexible labor and services markets. Growth may fall
below 2% in 2008 as the strong euro, high oil prices, tighter credit
markets, and slowing growth abroad take their toll.
Ghana
Well endowed with natural resources, Ghana has roughly twice
the per capita output of the poorest countries in West Africa. Even
so, Ghana remains heavily dependent on international financial and
technical assistance. Gold and cocoa production, and individual
remittances, are major sources of foreign exchange. The domestic
economy continues to revolve around agriculture, which accounts for
about 35% of GDP and employs about 55% of the work force, mainly
small landholders. Ghana opted for debt relief under the Heavily
Indebted Poor Country (HIPC) program in 2002, and is also benefiting
from the Multilateral Debt Relief Initiative that took effect in
2006. Thematic priorities under its current Growth and Poverty
Reduction Strategy, which also provides the framework for
development partner assistance, are: macroeconomic stability;
private sector competitiveness; human resource development; and good
governance and civic responsibility. Sound macro-economic management
along with high prices for gold and cocoa helped sustain GDP growth
in 2007. Ghana signed a Millennium Challenge Corporation (MCC)
Compact in 2006, which aims to assist in transforming Ghana's
agricultural sector.