Paracel Islands
China announced plans in 1997 to open the islands
for tourism.
Paraguay
Landlocked Paraguay has a market economy marked by a large
informal sector. This sector features both reexport of imported
consumer goods to neighboring countries, as well as the activities
of thousands of microenterprises and urban street vendors. Because
of the importance of the informal sector, accurate economic measures
are difficult to obtain. A large percentage of the population,
especially in rural areas, derives its living from agricultural
activity, often on a subsistence basis. On a per capita basis, real
income has stagnated at 1980 levels. Most observers attribute
Paraguay's poor economic performance to political uncertainty,
corruption, limited progress on structural reform, and deficient
infrastructure. The economy rebounded between 2003 and 2007, posting
modest growth each year, as growing world demand for commodities
combined with high prices and favorable weather to support
Paraguay's commodity-based export expansion.
Peru
Peru's economy reflects its varied geography - an arid coastal
region, the Andes further inland, and tropical lands bordering
Colombia and Brazil. Abundant mineral resources are found in the
mountainous areas, and Peru's coastal waters provide excellent
fishing grounds. However, overdependence on minerals and metals
subjects the economy to fluctuations in world prices, and a lack of
infrastructure deters trade and investment. After several years of
inconsistent economic performance, the Peruvian economy grew by more
than 4% per year during the period 2002-06, with a stable exchange
rate and low inflation. Growth jumped to 7.5% in 2007, driven by
higher world prices for minerals and metals. Risk premiums on
Peruvian bonds on secondary markets reached historically low levels
in late 2004, reflecting investor optimism regarding the
government's prudent fiscal policies and openness to trade and
investment. Despite the strong macroeconomic performance,
underemployment and poverty have stayed persistently high. Growth
prospects depend on exports of minerals, textiles, and agricultural
products, and by expectations for the Camisea natural gas
megaproject and for other promising energy projects. Upon taking
office, President GARCIA announced Sierra Exportadora, a program
aimed at promoting economic growth in Peru's southern and central
highlands.
Philippines
The Philippine economy grew at its fastest pace in three
decades with real GDP growth exceeding 7% in 2007. Higher government
spending contributed to the growth, but a resilient service sector
and large remittances from the millions of Filipinos who work abroad
have played an increasingly important role. Economic growth has
averaged 5% since President MACAPAGAL-ARROYO took office in 2001.
Nevertheless, the Philippines will need still higher, sustained
growth to make progress in alleviating poverty, given its high
population growth and unequal distribution of income.
MACAPAGAL-ARROYO averted a fiscal crisis by pushing for new revenue
measures and, until recently, tightening expenditures. Declining
fiscal deficits, tapering debt and debt service ratios, as well as
recent efforts to increase spending on infrastructure and social
services have heightened optimism over Philippine economic
prospects. Although the general macroeconomic outlook has improved
significantly, the Philippines continues to face important
challenges and must maintain the reform momentum in order to catch
up with regional competitors, improve employment opportunities, and
alleviate poverty. Longer-term fiscal stability will require more
sustainable revenue sources, rather than non-recurring revenues from
privatization.
Pitcairn Islands
The inhabitants of this tiny isolated economy exist
on fishing, subsistence farming, handicrafts, and postage stamps.
The fertile soil of the valleys produces a wide variety of fruits
and vegetables, including citrus, sugarcane, watermelons, bananas,
yams, and beans. Bartering is an important part of the economy. The
major sources of revenue are the sale of postage stamps to
collectors and the sale of handicrafts to passing ships. In October
2004, more than one-quarter of Pitcairn's small labor force was
arrested, putting the economy in a bind, since their services were
required as lighter crew to load or unload passing ships.
Poland
Poland has pursued a policy of economic liberalization since
1990 and today stands out as a success story among transition
economies. In 2007, GDP grew an estimated 6.5%, based on rising
private consumption, a jump in corporate investment, and EU funds
inflows. GDP per capita is still much below the EU average, but is
similar to that of the three Baltic states. Since 2004, EU
membership and access to EU structural funds have provided a major
boost to the economy. Unemployment is falling rapidly, though at
roughly 12.8% in 2007, it remains well above the EU average.
Tightening labor markets, and rising global energy and food prices,
pose a risk to consumer price stability. In December 2007 inflation
reached 4.1% on a year-over-year basis, or higher than the upper
limit of the National Bank of Poland's target range. Poland's
economic performance could improve further if the country addresses
some of the remaining deficiencies in its business environment. An
inefficient commercial court system, a rigid labor code,
bureaucratic red tape, and persistent low-level corruption keep the
private sector from performing up to its full potential. Rising
demands to fund health care, education, and the state pension system
present a challenge to the Polish government's effort to hold the
consolidated public sector budget deficit under 3.0% of GDP, a
target which was achieved in 2007. The PO/PSL coalition government
which came to power in November 2007 plans to further reduce the
budget deficit with the aim of eventually adopting the euro. The new
government has also announced its intention to enact
business-friendly reforms, reduce public sector spending growth,
lower taxes, and accelerate privatization. However, the government
does not have the necessary three-fifths majority needed to override
a presidential veto, and thus may have to water down initiatives in
order to garner enough support to pass its pro-business policies.
Portugal
Portugal has become a diversified and increasingly
service-based economy since joining the European Community in 1986.
Over the past two decades, successive governments have privatized
many state-controlled firms and liberalized key areas of the
economy, including the financial and telecommunications sectors. The
country qualified for the European Monetary Union (EMU) in 1998 and
began circulating the euro on 1 January 2002 along with 11 other EU
member economies. Economic growth had been above the EU average for
much of the 1990s, but fell back in 2001-07. GDP per capita stands
at roughly two-thirds of the EU-27 average. A poor educational
system, in particular, has been an obstacle to greater productivity
and growth. Portugal has been increasingly overshadowed by
lower-cost producers in Central Europe and Asia as a target for
foreign direct investment. The budget deficit surged to an all-time
high of 6% of GDP in 2005, but the government reduced the deficit to
2.6% in 2007 - a year ahead of Portugal's targeted schedule.
Nonetheless, the government faces tough choices in its attempts to
boost Portugal's economic competitiveness while keeping the budget
deficit within the eurozone's 3%-of-GDP ceiling.
Puerto Rico
Puerto Rico has one of the most dynamic economies in the
Caribbean region. A diverse industrial sector has far surpassed
agriculture as the primary locus of economic activity and income.
Encouraged by duty-free access to the US and by tax incentives, US
firms have invested heavily in Puerto Rico since the 1950s. US
minimum wage laws apply. Sugar production has lost out to dairy
production and other livestock products as the main source of income
in the agricultural sector. Tourism has traditionally been an
important source of income, with estimated arrivals of nearly 5
million tourists in 2004. Growth fell off in 2001-03, largely due to
the slowdown in the US economy, recovered in 2004-05, but declined
again in 2006-07.
Qatar
Qatar is in the midst of an economic boom supported by its
expanding production of natural gas and oil. Economic policy is
focused on development of Qatar's nonassociated natural gas reserves
and increasing private and foreign investment in non-energy sectors.
Oil and gas account for more than 60% of GDP, roughly 85% of export
earnings, and 70% of government revenues. Oil and gas have made
Qatar the highest per-capita income country and one of the world's
fastest growing. Sustained high oil prices and increased natural gas
exports in recent years have helped build Qatar's budget and trade
surpluses and foreign reserves. Proved oil reserves of more than 15
billion barrels should ensure continued output at current levels for
22 years. Qatar's proved reserves of natural gas are roughly 25
trillion cubic meters, about 15% of the world total and third
largest in the world. Qatar has permitted substantial foreign
investment in the development of its gas fields during the last
decade and became the world's top liquefied natural gas (LNG)
exporter in 2007.
Romania
Romania, which joined the European Union on 1 January 2007,
began the transition from Communism in 1989 with a largely obsolete
industrial base and a pattern of output unsuited to the country's
needs. The country emerged in 2000 from a punishing three-year
recession thanks to strong demand in EU export markets. Domestic
consumption and investment have fueled strong GDP growth in recent
years, but have led to large current account imbalances. Romania's
macroeconomic gains have only recently started to spur creation of a
middle class and address Romania's widespread poverty. Corruption
and red tape continue to handicap its business environment.
Inflation rose in 2007 for the first time in eight years, driven in
part by the depreciation of the currency, rising energy costs, a
nation-wide drought affecting food prices, and a relaxation of
fiscal discipline. Romania hopes to adopt the euro by 2014.