San Marino
The tourist sector contributes over 50% of GDP. In 2006
more than 2.1 million tourists visited San Marino. The key
industries are banking, clothing and apparel, electronics, and
ceramics. Main agricultural products are wine and cheeses. The per
capita level of output and standard of living are comparable to
those of the most prosperous regions of Italy, which supplies much
of its food.
Sao Tome and Principe
This small, poor island economy has become
increasingly dependent on cocoa since independence in 1975. Cocoa
production has substantially declined in recent years because of
drought and mismanagement. Sao Tome has to import all fuels, most
manufactured goods, consumer goods, and a substantial amount of
food. Over the years, it has had difficulty servicing its external
debt and has relied heavily on concessional aid and debt
rescheduling. Sao Tome benefited from $200 million in debt relief in
December 2000 under the Highly Indebted Poor Countries (HIPC)
program, which helped bring down the country's $300 million debt
burden. In August 2005, Sao Tome signed on to a new 3-year IMF
Poverty Reduction and Growth Facility (PRGF) program worth $4.3
million. Considerable potential exists for development of a tourist
industry, and the government has taken steps to expand facilities in
recent years. The government also has attempted to reduce price
controls and subsidies. Sao Tome is optimistic about the development
of petroleum resources in its territorial waters in the oil-rich
Gulf of Guinea, which are being jointly developed in a 60-40 split
with Nigeria. The first production licenses were sold in 2004,
though a dispute over licensing with Nigeria delayed Sao Tome's
receipt of more than $20 million in signing bonuses for almost a
year. Real GDP growth exceeded 6% in 2007, as a result of increases
in public expenditures and oil-related capital investment.
Saudi Arabia
Saudi Arabia has an oil-based economy with strong
government controls over major economic activities. It possesses
more than 20% of the world's proven petroleum reserves, ranks as the
largest exporter of petroleum, and plays a leading role in OPEC. The
petroleum sector accounts for roughly 75% of budget revenues, 45% of
GDP, and 90% of export earnings. About 40% of GDP comes from the
private sector. Roughly 5.5 million foreign workers play an
important role in the Saudi economy, particularly in the oil and
service sectors. High oil prices have boosted growth, government
revenues, and Saudi ownership of foreign assets, while enabling
Riyadh to pay down domestic debt. The government is encouraging
private sector growth - especially in power generation,
telecommunications, natural gas exploration, and petrochemicals - to
lessen the kingdom's dependence on oil exports and to increase
employment opportunities for the swelling Saudi population, nearly
40% of which are youths under 15 years old. Unemployment is high,
and the large youth population generally lacks the education and
technical skills the private sector needs. Riyadh has substantially
boosted spending on job training and education, infrastructure
development, and government salaries. As part of its effort to
attract foreign investment and diversify the economy, Saudi Arabia
acceded to the WTO in December 2005 after many years of
negotiations. The government has announced plans to establish six
"economic cities" in different regions of the country to promote
development and diversification.
Senegal
In January 1994, Senegal undertook a bold and ambitious
economic reform program with the support of the international donor
community. This reform began with a 50% devaluation of Senegal's
currency, the CFA franc, which was linked at a fixed rate to the
French franc. Government price controls and subsidies have been
steadily dismantled. After seeing its economy contract by 2.1% in
1993, Senegal made an important turnaround, thanks to the reform
program, with real growth in GDP averaging over 5% annually during
1995-2007. Annual inflation had been pushed down to the low single
digits. As a member of the West African Economic and Monetary Union
(WAEMU), Senegal is working toward greater regional integration with
a unified external tariff and a more stable monetary policy. High
unemployment, however, continues to prompt illegal migrants to flee
Senegal in search of better job opportunities in Europe. Senegal was
also beset by an energy crisis that caused widespread blackouts in
2006 and 2007. The phosphate industry has struggled for two years to
secure capital, and reduced output has directly impacted GDP. In
2007, Senegal signed agreements for major new mining concessions for
iron, zircon, and gold with foreign companies. Firms from Dubai have
agreed to manage and modernize Dakar's maritime port, and create a
new special economic zone. Senegal still relies heavily upon outside
donor assistance. Under the IMF's Highly Indebted Poor Countries
(HIPC) debt relief program, Senegal has benefited from eradication
of two-thirds of its bilateral, multilateral, and private-sector
debt. In 2007, Senegal and the IMF agreed to a new, non-disbursing,
Policy Support Initiative program.
Serbia
MILOSEVIC-era mismanagement of the economy, an extended
period of economic sanctions, and the damage to Yugoslavia's
infrastructure and industry during the NATO airstrikes in 1999 left
the economy only half the size it was in 1990. After the ousting of
former Federal Yugoslav President MILOSEVIC in September 2000, the
Democratic Opposition of Serbia (DOS) coalition government
implemented stabilization measures and embarked on a market reform
program. After renewing its membership in the IMF in December 2000,
a down-sized Yugoslavia continued to reintegrate into the
international community by rejoining the World Bank (IBRD) and the
European Bank for Reconstruction and Development (EBRD). A World
Bank-European Commission sponsored Donors' Conference held in June
2001 raised $1.3 billion for economic restructuring. In November
2001, the Paris Club agreed to reschedule the country's $4.5 billion
public debt and wrote off 66% of the debt. In July 2004, the London
Club of private creditors forgave $1.7 billion of debt just over
half the total owed. Belgrade has made only minimal progress in
restructuring and privatizing its holdings in major sectors of the
economy, including energy and telecommunications. It has made
halting progress towards EU membership and is currently pursuing a
Stabilization and Association Agreement with Brussels. Serbia is
also pursuing membership in the World Trade Organization.
Unemployment remains an ongoing political and economic problem.
Seychelles
Since independence in 1976, per capita output in this
Indian Ocean archipelago has expanded to roughly seven times the
pre-independence, near-subsistence level, moving the island into the
upper-middle income group of countries. Growth has been led by the
tourist sector, which employs about 30% of the labor force and
provides more than 70% of hard currency earnings, and by tuna
fishing. In recent years, the government has encouraged foreign
investment to upgrade hotels and other services. At the same time,
the government has moved to reduce the dependence on tourism by
promoting the development of farming, fishing, and small-scale
manufacturing. Sharp drops illustrated the vulnerability of the
tourist sector in 1991-92 due largely to the Gulf War and once again
following the 11 September 2001 terrorist attacks on the US.
Economic growth slowed in 1998-2002 and fell in 2003-04, due to
sluggish tourist and tuna sectors, but resumed in 2005-07. Real GDP
grew by 5.8% in 2007, driven by tourism and a boom in
tourism-related construction. The Seychelles rupee was allowed to
depreciate in 2006 after being overvalued for years and fell by 10%
in the first 9 months of 2007.
Sierra Leone
Sierra Leone is an extremely poor nation with
tremendous inequality in income distribution. While it possesses
substantial mineral, agricultural, and fishery resources, its
physical and social infrastructure is not well developed, and
serious social disorders continue to hamper economic development.
Nearly half of the working-age population engages in subsistence
agriculture. Manufacturing consists mainly of the processing of raw
materials and of light manufacturing for the domestic market.
Alluvial diamond mining remains the major source of hard currency
earnings accounting for nearly half of Sierra Leone's exports. The
fate of the economy depends upon the maintenance of domestic peace
and the continued receipt of substantial aid from abroad, which is
essential to offset the severe trade imbalance and supplement
government revenues. The IMF has completed a Poverty Reduction and
Growth Facility program that helped stabilize economic growth and
reduce inflation. A recent increase in political stability has led
to a revival of economic activity such as the rehabilitation of
bauxite and rutile mining.
Singapore
Singapore has a highly developed and successful
free-market economy. It enjoys a remarkably open and corruption-free
environment, stable prices, and a per capita GDP equal to that of
the four largest West European countries. The economy depends
heavily on exports, particularly in consumer electronics and
information technology products. It was hard hit from 2001-03 by the
global recession, by the slump in the technology sector, and by an
outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003, which
curbed tourism and consumer spending. Fiscal stimulus, low interest
rates, a surge in exports, and internal flexibility led to vigorous
growth in 2004-07 with real GDP growth averaging 7% annually. The
government hopes to establish a new growth path that will be less
vulnerable to the global demand cycle for information technology
products - it has attracted major investments in pharmaceuticals and
medical technology production - and will continue efforts to
establish Singapore as Southeast Asia's financial and high-tech hub.
Slovakia
Slovakia has mastered much of the difficult transition from
a centrally planned economy to a modern market economy. The DZURINDA
government made excellent progress during 2001-04 in macroeconomic
stabilization and structural reform. Major privatizations are nearly
complete, the banking sector is almost completely in foreign hands,
and the government has helped facilitate a foreign investment boom
with business friendly policies such as labor market liberalization
and a 19% flat tax. Foreign investment in the automotive sector has
been strong. Slovakia's economic growth exceeded expectations in
2001-07 despite the general European slowdown. Unemployment, at an
unacceptable 18% in 2003-04, dropped to 8.6% in 2007 but remains the
economy's Achilles heel. Slovakia joined the EU on 1 May 2004 and
will be the second of the new EU member states to adopt the euro in
2009 if it continues to meet euro adoption criteria in 2008. Despite
its 2006 pre-election promises to loosen fiscal policy and reverse
the previous DZURINDA government's pro-market reforms, FICO's
cabinet has thus far been careful to keep a lid on spending in order
to meet euro adoption criteria. The FICO government is pursuing a
state-interventionist economic policy, however, and has pushed to
regulate energy and food prices.
Slovenia
Slovenia, which on 1 January 2007 became the first 2004
European Union entrant to adopt the euro, is a model of economic
success and stability for the region. With the highest per capita
GDP in Central Europe, Slovenia has excellent infrastructure, a
well-educated work force, and a strategic location between the
Balkans and Western Europe. Privatization has lagged since 2002, and
the economy has one of highest levels of state control in the EU.
Structural reforms to improve the business environment have allowed
for somewhat greater foreign participation in Slovenia's economy and
have helped to lower unemployment. In March 2004, Slovenia became
the first transition country to graduate from borrower status to
donor partner at the World Bank. In December 2007, Slovenia was
invited to begin the accession process for joining the OECD. Despite
its economic success, foreign direct investment (FDI) in Slovenia
has lagged behind the region average, and taxes remain relatively
high. Furthermore, the labor market is often seen as inflexible, and
legacy industries are losing sales to more competitive firms in
China, India, and elsewhere.