The 2008 CIA World Factbook

by United States. Central Intelligence Agency

Haiti
Haiti is the poorest country in the Western Hemisphere, with
80% of the population living under the poverty line and 54% in
abject poverty. Two-thirds of all Haitians depend on the
agricultural sector, mainly small-scale subsistence farming, and
remain vulnerable to damage from frequent natural disasters,
exacerbated by the country's widespread deforestation. A
macroeconomic program developed in 2005 with the help of the
International Monetary Fund helped the economy grow 3.5% in 2007,
the highest growth rate since 1999. US economic engagement under the
Haitian Hemispheric Opportunity through Partnership Encouragement
(HOPE) Act, passed in December 2006, has boosted the garment and
automotive parts exports and investment by providing tariff-free
access to the US. Haiti suffers from high inflation, a lack of
investment because of insecurity and limited infrastructure, and a
severe trade deficit. In 2005, Haiti paid its arrears to the World
Bank, paving the way for reengagement with the Bank. The government
relies on formal international economic assistance for fiscal
sustainability. Remittances are the primary source of foreign
exchange, equaling nearly a quarter of GDP and more than twice the
earnings from exports.

Heard Island and McDonald Islands
The islands have no indigenous
economic activity, but the Australian Government allows limited
fishing in the surrounding waters.

Holy See (Vatican City)
This unique, noncommercial economy is
supported financially by an annual contribution (known as Peter's
Pence) from Roman Catholic dioceses throughout the world; by the
sale of postage stamps, coins, medals, and tourist mementos; by fees
for admission to museums; and by the sale of publications.
Investments and real estate income also account for a sizable
portion of revenue. The incomes and living standards of lay workers
are comparable to those of counterparts who work in the city of Rome.

Honduras
Honduras, the second poorest country in Central America and
one of the poorest countries in the Western Hemisphere, with an
extraordinarily unequal distribution of income and massive
unemployment, is banking on expanded trade under the US-Central
America Free Trade Agreement (CAFTA) and on debt relief under the
Heavily Indebted Poor Countries (HIPC) initiative. Despite
improvements in tax collections, the government's fiscal deficit is
growing due to increases in current expenditures and financial
losses from the state energy and telephone companies. Honduras is
the fastest growing remittance destination in the region with
inflows representing over a quarter of GDP, equivalent to nearly
three-quarters of exports. The economy relies heavily on a narrow
range of exports, notably bananas and coffee, making it vulnerable
to natural disasters and shifts in commodity prices, however,
investments in the maquila and non-traditional export sectors are
slowly diversifying the economy. Growth remains dependent on the
economy of the US, its largest trading partner, and on reduction of
the high crime rate, as a means of attracting and maintaining
investment.

Hong Kong
Hong Kong has a free market economy highly dependent on
international trade. In 2006, the total value of goods and services
trade, including the sizable share of reexports, was equivalent to
400% of GDP. The territory has become increasingly integrated with
mainland China over the past few years through trade, tourism, and
financial links. The mainland has long been Hong Kong's largest
trading partner, accounting for 46% of Hong Kong's total trade by
value in 2006. As a result of China's easing of travel restrictions,
the number of mainland tourists to the territory has surged from 4.5
million in 2001 to 13.6 million in 2006, when they outnumbered
visitors from all other countries combined. Hong Kong has also
established itself as the premier stock market for Chinese firms
seeking to list abroad. Bolstered by several successful initial
public offerings in early 2007, by September 2007 mainland companies
accounted for one-third of the firms listed on the Hong Kong Stock
Exchange, and more than half of the Exchange's market
capitalization. During the past decade, as Hong Kong's manufacturing
industry moved to the mainland, its service industry has grown
rapidly and now accounts for 91% of the territory's GDP. Hong Kong's
natural resources are limited, and food and raw materials must be
imported. GDP growth averaged a strong 5% from 1989 to 2007, despite
the economy suffering two recessions during the Asian financial
crisis in 1997-98 and the global downturn in 2001-02. Hong Kong
continues to link its currency closely to the US dollar, maintaining
an arrangement established in 1983.

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. The private sector accounts for more than 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. Hungary issues investment-grade
sovereign debt. International observers, however, have expressed
concerns over Hungary's fiscal and current account deficits. In
2007, Hungary eliminated a trade deficit that had persisted for
several years. Inflation declined from 14% in 1998 to a low of 3.7%
in 2006, but jumped to 7.8% in 2007. 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 4% of GDP by 2008, from about 6% in 2007. The government's
austerity program of tax hikes and subsidy cuts has reduced
Hungary's large budget deficit, but the reforms have dampened
domestic consumption, slowing GDP growth to about 2% in 2007. The
government will need to pass additional reforms to ensure the
long-term stability of public finances. The government plans to
eventually lower its public sector deficit to below 3% of GDP to
adopt the euro.

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 70% 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. Substantial foreign investment in the aluminum and
hydropower sectors has boosted economic growth which, nevertheless,
has been volatile and characterized by recurrent imbalances.
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. The 2006
closure of the US military base at Keflavik had very little impact
on the national economy; Iceland's low unemployment rate aided
former base employees in finding alternate employment.

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 third of its labor force. About
three-fifths of the work force is in agriculture, leading the United
Progressive Alliance (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.
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 remains stalled 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 1997, reducing poverty by about 10 percentage points.
India achieved 8.5% GDP growth in 2006, and again in 2007,
significantly expanding production of manufactures. 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 combined with easy consumer credit and a real
estate boom fueled inflation concerns in 2006 and 2007, leading to a
series of central bank interest rate hikes that have slowed credit
growth and eased 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 been undergoing
significant economic reforms under President YUDHOYONO. Indonesia's
debt-to-GDP ratio has been declining steadily, its foreign exchange
reserves are at an all-time high of over $50 billion, and its stock
market has been one of the three best performers in the world in
2006 and 2007, as global investors sought out higher returns in
emerging markets. The government has introduced significant reforms
in the financial sector, including tax and customs reforms, the
introduction of Treasury bills, and improved capital market
supervision. Indonesia's new investment law, passed in March 2007,
seeks to address some of the concerns of foreign and domestic
investors. Indonesia still struggles with poverty and unemployment,
inadequate infrastructure, corruption, a complex regulatory
environment, and unequal resource distribution among regions.
Indonesia has been slow to privatize over 100 state-owned
enterprises, several of which have monopolies in key sectors. The
non-bank financial sector, including pension funds and insurance,
remains weak. Capital markets are underdeveloped. The high global
price of oil in 2007 increased the cost of domestic fuel and
electricity subsidies, and are contributing to concerns about higher
food prices. Located on the Pacific "Ring of Fire" Indonesia remains
vulnerable to volcanic and tectonic disasters. Significant progress
has been made in rebuilding Aceh after the devastating December 2004
tsunami, and the province now shows more economic activity than
before the disaster. Unfortunately, Indonesia suffered new disasters
in 2006 and early 2007 including: a major earthquake near
Yogyakarta, an industrial accident in Sidoarjo, East Java that
created a "mud volcano," a tsunami in South Java, and major flooding
in Jakarta, all of which caused additional damages in the billions
of dollars. Donors are assisting Indonesia with its disaster
mitigation and early warning efforts.