Solomon Islands
The bulk of the population depends on agriculture,
fishing, and forestry for at least part of its livelihood. Most
manufactured goods and petroleum products must be imported. The
islands are rich in undeveloped mineral resources such as lead,
zinc, nickel, and gold. Prior to the arrival of the Regional
Assistance Mission to the Solomon Islands (RAMSI), severe ethnic
violence, the closing of key businesses, and an empty government
treasury culminated in economic collapse. RAMSI's efforts to restore
law and order and economic stability have led to modest growth as
the economy rebuilds.
Somalia
Despite the lack of effective national governance, Somalia
has maintained a healthy informal economy, largely based on
livestock, remittance/money transfer companies, and
telecommunications. Agriculture is the most important sector, with
livestock normally accounting for about 40% of GDP and about 65% of
export earnings. Nomads and semi-pastoralists, who are dependent
upon livestock for their livelihood, make up a large portion of the
population. Livestock, hides, fish, charcoal, and bananas are
Somalia's principal exports, while sugar, sorghum, corn, qat, and
machined goods are the principal imports. Somalia's small industrial
sector, based on the processing of agricultural products, has
largely been looted and sold as scrap metal. Somalia's service
sector also has grown. Telecommunication firms provide wireless
services in most major cities and offer the lowest international
call rates on the continent. In the absence of a formal banking
sector, money exchange services have sprouted throughout the
country, handling between $500 million and $1 billion in remittances
annually. Mogadishu's main market offers a variety of goods from
food to the newest electronic gadgets. Hotels continue to operate
and are supported with private-security militias. Somalia's arrears
to the IMF continued to grow in 2006-07. Statistics on Somalia's
GDP, growth, per capita income, and inflation should be viewed
skeptically. In late December 2004, a major tsunami caused an
estimated 150 deaths and resulted in destruction of property in
coastal areas.
South Africa
South Africa is a middle-income, emerging market with
an abundant supply of natural resources; well-developed financial,
legal, communications, energy, and transport sectors; a stock
exchange that is 17th largest in the world; and modern
infrastructure supporting an efficient distribution of goods to
major urban centers throughout the region. Growth has been robust
since 2004, as South Africa has reaped the benefits of macroeconomic
stability and a global commodities boom. However, unemployment
remains high and outdated infrastructure has constrained growth. At
the end of 2007, South Africa began to experience an electricity
crisis because state power supplier Eskom suffered supply problems
with aged plants, necessitating "load-shedding" cuts to residents
and businesses in the major cities. Daunting economic problems
remain from the apartheid era - especially poverty, lack of economic
empowerment among the disadvantaged groups, and a shortage of public
transportation. South African economic policy is fiscally
conservative but pragmatic, focusing on controlling inflation,
maintaining a budget surplus, and using state-owned enterprises to
deliver basic services to low-income areas as a means to increase
job growth and household income.
South Georgia and the South Sandwich Islands
Some fishing takes
place in adjacent waters. There is a potential source of income from
harvesting finfish and krill. The islands receive income from
postage stamps produced in the UK, sale of fishing licenses, and
harbor and landing fees from tourist vessels. Tourism from
specialized cruise ships is increasing rapidly.
Southern Ocean
Fisheries in 2005-06 landed 128,081 metric tons, of
which 83% (106,591 tons) was krill (Euphausia superba) and 9.7%
(12,364 tons) Patagonian toothfish (Dissostichus eleginoides),
compared to 147,506 tons in 2004-05 of which 86% (127,035 tons) was
krill and 8% (11,821 tons) Patagonian toothfish (estimated fishing
from the area covered by the Convention of the Conservation of
Antarctic Marine Living Resources (CCAMLR), which extends slightly
beyond the Southern Ocean area). International agreements were
adopted in late 1999 to reduce illegal, unreported, and unregulated
fishing, which in the 2000-01 season landed, by one estimate, 8,376
metric tons of Patagonian and Antarctic toothfish. In the 2006-07
Antarctic summer, 35,552 tourists visited the Southern Ocean,
compared to 29,799 in 2005-2006 (estimates provided to the Antarctic
Treaty by the International Association of Antarctica Tour Operators
(IAATO), and does not include passengers on overflights and those
flying directly in and out of Antarctica).
Spain
The Spanish economy boomed from 1986 to 1990 averaging 5%
annual growth. After a European-wide recession in the early 1990s,
the Spanish economy resumed moderate growth starting in 1994.
Spain's mixed capitalist economy supports a GDP that on a per capita
basis is equal to that of the leading West European economies. The
center-right government of former President Jose Maria AZNAR
successfully worked to gain admission to the first group of
countries launching the European single currency (the euro) on 1
January 1999. The AZNAR administration continued to advocate
liberalization, privatization, and deregulation of the economy and
introduced some tax reforms to that end. Unemployment fell steadily
under the AZNAR administration but remains high at 7.6%. Growth
averaging more than 3% annually during 2003-07 was satisfactory
given the background of a faltering European economy. The Socialist
president, Jose Luis Rodriguez ZAPATERO, has made mixed progress in
carrying out key structural reforms, which need to be accelerated
and deepened to sustain Spain's economic growth. Despite the
economy's relative solid footing significant downside risks remain
including Spain's continued loss of competitiveness, the potential
for a housing market collapse, the country's changing demographic
profile, and a decline in EU structural funds.
Spratly Islands
Economic activity is limited to commercial fishing.
The proximity to nearby oil- and gas-producing sedimentary basins
suggests the potential for oil and gas deposits, but the region is
largely unexplored. There are no reliable estimates of potential
reserves. Commercial exploitation has yet to be developed.
Sri Lanka
In 1977, Colombo abandoned statist economic policies and
its import substitution trade policy for more market-oriented
policies, export-oriented trade, and encouragement of foreign
investment. Recent changes in government, however, have brought some
policy reversals. Currently, the ruling Sri Lanka Freedom Party has
a more statist economic approach, which seeks to reduce poverty by
steering investment to disadvantaged areas, developing small and
medium enterprises, promoting agriculture, and expanding the already
enormous civil service. The government has halted privatizations.
Although suffering a brutal civil war that began in 1983, Sri Lanka
saw GDP growth average 4.5% in the last 10 years with the exception
of a recession in 2001. In late December 2004, a major tsunami took
about 31,000 lives, left more than 6,300 missing and 443,000
displaced, and destroyed an estimated $1.5 billion worth of
property. Government spending and reconstruction drove growth to
more than 7% in 2006 but reduced agriculture output probably slowed
growth to about 6 percent in 2007. Government spending and loose
monetary policy drove inflation to nearly 16% in 2007. Sri Lanka's
most dynamic sectors now are food processing, textiles and apparel,
food and beverages, port construction, telecommunications, and
insurance and banking. In 2006, plantation crops made up only about
15% of exports (compared with more than 90% in 1970), while textiles
and garments accounted for more than 60%. About 800,000 Sri Lankans
work abroad, 90% of them in the Middle East. They send home more
than $1 billion a year. The struggle by the Tamil Tigers of the
north and east for an independent homeland continues to cast a
shadow over the economy.
Sudan
Sudan's economy is booming on the back of increases in oil
production, high oil prices, and large inflows of foreign direct
investment. GDP growth registered more than 10% per year in 2006 and
2007. From 1997 to date, Sudan has been working with the IMF to
implement macroeconomic reforms, including a managed float of the
exchange rate. Sudan began exporting crude oil in the last quarter
of 1999. Agricultural production remains important, because it
employs 80% of the work force and contributes a third of GDP. The
Darfur conflict, the aftermath of two decades of civil war in the
south, the lack of basic infrastructure in large areas, and a
reliance by much of the population on subsistence agriculture ensure
much of the population will remain at or below the poverty line for
years despite rapid rises in average per capita income. In January
2007, the government introduced a new currency, the Sudanese Pound,
at an initial exchange rate of $1.00 equals 2 Sudanese Pounds.
Suriname
The economy is dominated by the mining industry, with
exports of alumina, gold, and oil accounting for about 85% of
exports and 25% of government revenues, making the economy highly
vulnerable to mineral price volatility. The short-term economic
outlook depends on the government's ability to control inflation and
on the development of projects in the bauxite and gold mining
sectors. Suriname has received aid for these projects from
Netherlands, Belgium, and the European Development Fund. Suriname's
economic prospects for the medium term will depend on continued
commitment to responsible monetary and fiscal policies and to the
introduction of structural reforms to liberalize markets and promote
competition. In 2000, the government of Ronald VENETIAAN, returned
to office and inherited an economy with inflation of over 100% and a
growing fiscal deficit. He quickly implemented an austerity program,
raised taxes, attempted to control spending, and tamed inflation.
These economic policies are likely to remain in effect during
VENETIAAN's third term. Prospects for local onshore oil production
are good as a drilling program is underway. Offshore oil drilling
was given a boost in 2004 when the State Oil Company (Staatsolie)
signed exploration agreements with Repsol, Maersk, and Occidental.
Bidding on these new offshore blocks was completed in July 2006.