Bolivia
Bolivia is one of the poorest and least developed countries
in Latin America. Following a disastrous economic crisis during the
early 1980s, reforms spurred private investment, stimulated economic
growth, and cut poverty rates in the 1990s. The period 2003-05 was
characterized by political instability, racial tensions, and violent
protests against plans - subsequently abandoned - to export
Bolivia's newly discovered natural gas reserves to large northern
hemisphere markets. In 2005, the government passed a controversial
hydrocarbons law that imposed significantly higher royalties and
required foreign firms then operating under risk-sharing contracts
to surrender all production to the state energy company. In early
2008, higher earnings for mining and hydrocarbons exports pushed the
current account surplus to 9.4% of GDP and the government's higher
tax take produced a fiscal surplus after years of large deficits.
Private investment as a share of GDP, however, remains among the
lowest in Latin America, and inflation remained at double-digit
levels in 2008. The decline in commodity prices in late 2008, the
lack of foreign investment in the mining and hydrocarbon sectors,
and the suspension of trade benefits with the United States will
pose challenges for the Bolivian economy in 2009.
Bosnia and Herzegovina
The interethnic warfare in Bosnia and
Herzegovina caused production to plummet by 80% from 1992 to 1995
and unemployment to soar. With an uneasy peace in place, output
recovered in 1996-99 at high percentage rates from a low base; but
output growth slowed in 2000-02. Part of the lag in output was made
up in 2003-08 when GDP growth exceeded 5% per year. Banking reform
accelerated in 2001 as all the Communist-era payments bureaus were
shut down; foreign banks, primarily from Western Europe, now control
most of the banking sector. The konvertibilna marka (convertible
mark or BAM)- the national currency introduced in 1998 - is pegged
to the euro, and confidence in the currency and the banking sector
has increased. Bosnia's private sector is growing and foreign
investment is slowly increasing, but government spending, at nearly
40% of adjusted GDP, remains high because of redundant government
offices at the state, entity and municipal level. Implementing
privatization, however, has been slow, particularly in the
Federation where political division between ethnically-based
political parties makes agreement on economic policy more difficult.
A sizeable current account deficit and high unemployment rate remain
the two most serious macroeconomic problems. Successful
implementation of a value-added tax in 2006 provided a predictable
source of revenue for the government and helped rein in gray market
activity. National-level statistics have also improved over time but
a large share of economic activity remains unofficial and
unrecorded. Bosnia and Herzegovina became a full member of the
Central European Free Trade Agreement in September 2007. Bosnia's
economy has been largely sheltered from the global financial
downtown although key economic indicators have worsened. Key
exporters in the metal, automobile and wood processing industries
have reported a worsening performance and have announced layoffs and
output reductions.
Botswana
Botswana has maintained one of the world's highest economic
growth rates since independence in 1966, though growth fell below 5%
in 2007-08. Through fiscal discipline and sound management, Botswana
has transformed itself from one of the poorest countries in the
world to a middle-income country with a per capita GDP of $13,300 in
2008. Two major investment services rank Botswana as the best credit
risk in Africa. Diamond mining has fueled much of the expansion and
currently accounts for more than one-third of GDP and for 70-80% of
export earnings. Tourism, financial services, subsistence farming,
and cattle raising are other key sectors. On the downside, the
government must deal with high rates of unemployment and poverty.
Unemployment officially was 23.8% in 2004, but unofficial estimates
place it closer to 40%. HIV/AIDS infection rates are the second
highest in the world and threaten Botswana's impressive economic
gains. An expected leveling off in diamond mining production
overshadows long-term prospects.
Bouvet Island
no economic activity; declared a nature reserve
Brazil
Characterized by large and well-developed agricultural,
mining, manufacturing, and service sectors, Brazil's economy
outweighs that of all other South American countries and Brazil is
expanding its presence in world markets. From 2003 to 2007, Brazil
ran record trade surpluses and recorded its first current account
surpluses since 1992. Productivity gains coupled with high commodity
prices contributed to the surge in exports. Brazil improved its debt
profile in 2006 by shifting its debt burden toward real denominated
and domestically held instruments. LULA da Silva restated his
commitment to fiscal responsibility by maintaining the country's
primary surplus during the 2006 election. Following his second
inauguration in October of that year, LULA da Silva announced a
package of further economic reforms to reduce taxes and increase
investment in infrastructure. Brazil's debt achieved investment
grade status early in 2008, but the government's attempt to achieve
strong growth while reducing the debt burden created inflationary
pressures. For most of 2008, the Central Bank embarked on a
restrictive monetary policy to stem these pressures. Since the onset
of the global financial crisis in September, Brazil's currency and
its stock market - Bovespa - have significantly lost value, -41% for
Bovespa for the year ending 30 December 2008. Brazil incurred
another current account deficit in 2008, as world demand and prices
for commodities dropped in the second-half of the year.
British Indian Ocean Territory All economic activity is concentrated on the largest island of Diego Garcia, where a joint UK-US military facility is located. Construction projects and various services needed to support the military installation are performed by military and contract employees from the UK, Mauritius, the Philippines, and the US. There are no industrial or agricultural activities on the islands. The territory earns foreign exchange by selling fishing licenses and postage stamps.
British Virgin Islands
The economy, one of the most stable and
prosperous in the Caribbean, is highly dependent on tourism
generating an estimated 45% of the national income. An estimated
820,000 tourists, mainly from the US, visited the islands in 2005.
In the mid-1980s, the government began offering offshore
registration to companies wishing to incorporate in the islands, and
incorporation fees now generate substantial revenues. Roughly
400,000 companies were on the offshore registry by yearend 2000. The
adoption of a comprehensive insurance law in late 1994, which
provides a blanket of confidentiality with regulated statutory
gateways for investigation of criminal offenses, made the British
Virgin Islands even more attractive to international business.
Livestock raising is the most important agricultural activity; poor
soils limit the islands' ability to meet domestic food requirements.
Because of traditionally close links with the US Virgin Islands, the
British Virgin Islands has used the US dollar as its currency since
1959.
Brunei
Brunei has a small well-to-do economy that encompasses a
mixture of foreign and domestic entrepreneurship, government
regulation, welfare measures, and village tradition. Crude oil and
natural gas production account for just over half of GDP and more
than 90% of exports. Per capita GDP is among the highest in Asia,
and substantial income from overseas investment supplements income
from domestic production. The government provides for all medical
services and free education through the university level and
subsidizes rice and housing. Brunei's leaders are concerned that
steadily increased integration into the world economy will undermine
internal social cohesion. Plans for the future include upgrading the
labor force, reducing unemployment, strengthening the banking and
tourist sectors, increasing agricultural production, and, in
general, further widening the economic base beyond oil and gas.
Bulgaria
Bulgaria, a former Communist country that entered the EU on
1 January 2007, has experienced strong growth since a major economic
downturn in 1996. Successive governments have demonstrated a
commitment to economic reforms and responsible fiscal planning, but
have failed so far to rein in rising inflation and large current
account deficits. Bulgaria has averaged more than 6% growth since
2004, attracting significant amounts of foreign direct investment,
but corruption in the public administration, a weak judiciary, and
the presence of organized crime remain significant challenges.
Burkina Faso
One of the poorest countries in the world, landlocked
Burkina Faso has few natural resources and a weak industrial base.
About 90% of the population is engaged in subsistence agriculture,
which is vulnerable to periodic drought. Cotton is the main cash
crop and the government has joined with three other cotton producing
countries in the region - Mali, Niger, and Chad - to lobby in the
World Trade Organization for fewer subsidies to producers in other
competing countries. Since 1998, Burkina Faso has embarked upon a
gradual but successful privatization of state-owned enterprises.
Having revised its investment code in 2004, Burkina Faso hopes to
attract foreign investors. Thanks to this new code and other
legislation favoring the mining sector, the country has seen an
upswing in gold exploration and production. While the bitter
internal crisis in neighboring Cote d'Ivoire is beginning to be
resolved, it is still having a negative effect on Burkina Faso's
trade and employment. Burkina Faso received a Millennium Challenge
Corporation (MCC) threshold grant to improve girls' education at the
primary school level, and signed an MCC compact that focuses on the
areas of infrastructure, agriculture, and land reform in July 2008.