Faroe Islands
The Faroese economy is dependent on fishing, which
makes the economy vulnerable to price swings. The sector accounts
for 95% of exports and nearly half of GDP. Since 2003 the Faroese
economy has picked up as a result of higher prices for fish and for
housing. Unemployment is minimal and government finances are
relatively sound. Oil finds close to the Islands give hope for
economically recoverable deposits, which could eventually lay the
basis for a more diversified economy and lessen dependence on Danish
economic assistance. Aided by a substantial annual subsidy (about
15% of GDP) from Denmark, the Faroese have a standard of living not
far below the Danes and other Scandinavians.
Fiji
Fiji, endowed with forest, mineral, and fish resources, is one
of the most developed of the Pacific island economies though still
with a large subsistence sector. Sugar exports, remittances from
Fijians working abroad, and a growing tourist industry - with
400,000 to 500,000 tourists annually - are the major sources of
foreign exchange. Fiji's sugar has special access to European Union
markets but will be harmed by the EU's decision to cut sugar
subsidies. Sugar processing makes up one-third of industrial
activity but is not efficient. Fiji's tourism industry was damaged
by the December 2006 coup and is facing an uncertain recovery time.
In 2007 tourist arrivals were down almost 6%, with substantial job
losses in the service sector, and GDP dipped nearly 7%. The coup has
created a difficult business climate. The EU has suspended all aid
until the interim government takes steps toward new elections.
Long-term problems include low investment, uncertain land ownership
rights, and the government's inability to manage its budget.
Overseas remittances from Fijians working in Kuwait and Iraq have
decreased significantly. Fiji's current account deficit reached 23%
of GDP in 2006.
Finland
Finland has a highly industrialized, largely free-market
economy with per capita output roughly that of the UK, France,
Germany, and Italy. Its key economic sector is manufacturing -
principally the wood, metals, engineering, telecommunications, and
electronics industries. Trade is important; Finland's ratio of
exports to GDP has risen from a quarter to 37% over the past 15
years. Finland excels in high-tech exports such as mobile phones.
Except for timber and several minerals, Finland depends on imports
of raw materials, energy, and some components for manufactured
goods. Because of the climate, agricultural development is limited
to maintaining self-sufficiency in basic products. Forestry, an
important export earner, provides a secondary occupation for the
rural population. Although Finland has been one of the best
performing economies within the EU in recent years and its banks and
financial markets have avoided the worst of global financial crisis,
the world slowdown has hit export growth and domestic demand and
will serve as a brake on economic growth in 2009 and 2010. The
slowdown of construction, other investment, and exports will cause
unemployment to rise. During 2009, unemployment will climb to over
8% of the labor force. Long-term challenges include the need to
address a rapidly aging population and decreasing productivity that
threaten competitiveness, fiscal sustainability, and economic growth.
France
France is in the midst of transition from a well-to-do modern
economy that has featured extensive government ownership and
intervention to one that relies more on market mechanisms. The
government has partially or fully privatized many large companies,
banks, and insurers, and has ceded stakes in such leading firms as
Air France, France Telecom, Renault, and Thales. It maintains a
strong presence in some sectors, particularly power, public
transport, and defense industries. The telecommunications sector is
gradually being opened to competition. France's leaders remain
committed to a capitalism in which they maintain social equity by
means of laws, tax policies, and social spending that reduce income
disparity and the impact of free markets on public health and
welfare. Widespread opposition to labor reform has in recent years
hampered the government's ability to revitalize the economy. During
2007-08, the government implemented several important labor reforms,
including a de facto extension of the 35-hour workweek by allowing
employees to work longer overtime hours. During 2009, the government
is expected to delay or even renounce other reform efforts due to
the on-going financial crisis. GDP growth dropped to 0.3% in 2008;
the French government plans to increase public investment and
continue injecting capital into the banking sector to alleviate the
negative effects of the crisis during 2009. As a result of lower
fiscal revenues and increased expenditures the general government
deficit is expected to exceed the euro-zone ceiling 3% of GDP.
France's tax burden remains one of the highest in Europe - at nearly
50% of GDP in 2005. With at least 75 million foreign tourists per
year, France is the most visited country in the world and maintains
the third largest income in the world from tourism.
French Polynesia
Since 1962, when France stationed military
personnel in the region, French Polynesia has changed from a
subsistence agricultural economy to one in which a high proportion
of the work force is either employed by the military or supports the
tourist industry. With the halt of French nuclear testing in 1996,
the military contribution to the economy fell sharply. Tourism
accounts for about one-fourth of GDP and is a primary source of hard
currency earnings. Other sources of income are pearl farming and
deep-sea commercial fishing. The small manufacturing sector
primarily processes agricultural products. The territory benefits
substantially from development agreements with France aimed
principally at creating new businesses and strengthening social
services.
French Southern and Antarctic Lands
Economic activity is limited to
servicing meteorological and geophysical research stations, military
bases, and French and other fishing fleets. The fish catches landed
on Iles Kerguelen by foreign ships are exported to France and
Reunion.
Gabon
Gabon enjoys a per capita income four times that of most
sub-Saharan African nations, but because of high income inequality,
a large proportion of the population remains poor. Gabon depended on
timber and manganese until oil was discovered offshore in the early
1970s. The oil sector now accounts for more than 50% of GDP. Gabon
continues to face fluctuating prices for its oil, timber, and
manganese exports. Despite the abundance of natural wealth, poor
fiscal management hobbles the economy. In 1997, an IMF mission to
Gabon criticized the government for overspending on off-budget
items, overborrowing from the central bank, and slipping on its
schedule for privatization and administrative reform. The rebound of
oil prices since 1999 have helped growth, but drops in production
have hampered Gabon from fully realizing potential gains, and will
continue to temper the gains for most of this decade. In December
2000, Gabon signed a new agreement with the Paris Club to reschedule
its official debt. A follow-up bilateral repayment agreement with
the US was signed in December 2001. Gabon signed a 14-month Stand-By
Arrangement with the IMF in May 2007, and received Paris Club debt
rescheduling later that year.
Gambia, The
The Gambia has no confirmed mineral or natural resource
deposits and has a limited agricultural base. About 75% of the
population depends on crops and livestock for its livelihood.
Small-scale manufacturing activity features the processing of
peanuts, fish, and hides. Reexport trade normally constitutes a
major segment of economic activity, but a 1999 government-imposed
preshipment inspection plan, and instability of the Gambian dalasi
(currency) have drawn some of the reexport trade away from The
Gambia. The Gambia's natural beauty and proximity to Europe has made
it one of the larger markets for tourism in West Africa. The
government's 1998 seizure of the private peanut firm Alimenta
eliminated the largest purchaser of Gambian groundnuts. Despite an
announced program to begin privatizing key parastatals, no plans
have been made public that would indicate that the government
intends to follow through on its promises. Unemployment and
underemployment rates remain extremely high; short-run economic
progress depends on sustained bilateral and multilateral aid, on
responsible government economic management, on continued technical
assistance from the IMF and bilateral donors, and on expected growth
in the construction sector.
Gaza Strip
High population density, limited land access, and strict
internal and external security controls have kept economic
conditions in the Gaza Strip - the smaller of the two areas under
the Palestinian Authority (PA) - even more degraded than in the West
Bank. The beginning of the second intifada in September 2000 sparked
an economic downturn, largely the result of Israeli closure
policies; these policies, which were imposed to address security
concerns in Israel, disrupted labor and trade access to and from the
Gaza Strip. In 2001, and even more severely in 2003, Israeli
military measures in PA areas resulted in the destruction of
capital, the disruption of administrative structures, and widespread
business closures. The Israeli withdrawal from the Gaza Strip in
September 2005 offered some medium-term opportunities for economic
growth, but Israeli-imposed crossings closures, which became more
restrictive after HAMAS violently took over the territory in June
2007, have resulted in widespread private sector layoffs and
shortages of most goods. The status of the crossings, which are
closed to all but the most basic goods, has not changed following
Israel's military offensive into the Gaza Strip in early 2009.
Georgia
Georgia's economy sustained GDP growth of close to 10% in
2006 and 12% in 2007, based on strong inflows of foreign investment
and robust government spending. However, growth slowed to less than
3% in 2008 and is expected to slow further in 2009. Georgia's main
economic activities include the cultivation of agricultural products
such as grapes, citrus fruits, and hazelnuts; mining of manganese
and copper; and output of a small industrial sector producing
alcoholic and nonalcoholic beverages, metals, machinery, aircraft
and chemicals. Areas of recent improvement include growth in the
construction, banking services, and mining sectors, but reduced
availability of external investment and the slowing regional economy
are emerging risks. The country imports nearly all its needed
supplies of natural gas and oil products. It has sizeable hydropower
capacity, a growing component of its energy supplies. Georgia has
overcome the chronic energy shortages of the past by renovating
hydropower plants and by bringing in newly available supplies from
Azerbaijan. It also has an increased ability to pay for more
expensive gas imports from Russia. The construction on the
Baku-T'bilisi-Ceyhan oil pipeline, the Baku-T'bilisi-Erzerum gas
pipeline, and the Kars-Akhalkalaki Railroad are part of a strategy
to capitalize on Georgia's strategic location between Europe and
Asia and develop its role as a transit point for gas, oil and other
goods. Georgia has historically suffered from a chronic failure to
collect tax revenues; however, the government has made great
progress and has reformed the tax code, improved tax administration,
increased tax enforcement, and cracked down on corruption since
coming to power in 2004. Government revenues have increased nearly
four fold since 2003. Due to improvements in customs and tax
enforcement, smuggling is a declining problem. The country is
pinning its hopes for long-term growth on a determined effort to
reduce regulation, taxes, and corruption in order to attract foreign
investment, but the economy faces a more difficult investment
climate both domestically and internationally.