Mozambique
At independence in 1975, Mozambique was one of the
world's poorest countries. Socialist mismanagement and a brutal
civil war from 1977-92 exacerbated the situation. In 1987, the
government embarked on a series of macroeconomic reforms designed to
stabilize the economy. These steps, combined with donor assistance
and with political stability since the multi-party elections in
1994, have led to dramatic improvements in the country's growth
rate. Inflation was reduced to single digits during the late 1990s,
and although it returned to double digits in 2000-06, in 2007
inflation had slowed to 8%, while GDP growth reached 7.5%. Fiscal
reforms, including the introduction of a value-added tax and reform
of the customs service, have improved the government's revenue
collection abilities. In spite of these gains, Mozambique remains
dependent upon foreign assistance for much of its annual budget, and
the majority of the population remains below the poverty line.
Subsistence agriculture continues to employ the vast majority of the
country's work force. A substantial trade imbalance persists
although the opening of the Mozal aluminum smelter, the country's
largest foreign investment project to date, has increased export
earnings. At the end of 2007, and after years of negotiations, the
government took over Portugal's majority share of the Cahora Bassa
Hydroelectricity (HCB) company, a dam that was not transferred to
Mozambique at independence because of the ensuing civil war and
unpaid debts. More power is needed for additional investment
projects in titanium extraction and processing and garment
manufacturing that could further close the import/export gap.
Mozambique's once substantial foreign debt has been reduced through
forgiveness and rescheduling under the IMF's Heavily Indebted Poor
Countries (HIPC) and Enhanced HIPC initiatives, and is now at a
manageable level. In July 2007 the Millennium Challenge Corporation
(MCC) signed a Compact with Mozambique; the Compact entered into
force in September 2008 and will continue for five years. Compact
projects will focus on improving sanitation, roads, agriculture, and
the business regulation environment in an effort to spur economic
growth in the four northern provinces of the country.
Namibia
The economy is heavily dependent on the extraction and
processing of minerals for export. Mining accounts for 8% of GDP,
but provides more than 50% of foreign exchange earnings. Rich
alluvial diamond deposits make Namibia a primary source for
gem-quality diamonds. Namibia is the fourth-largest exporter of
nonfuel minerals in Africa, the world's fifth-largest producer of
uranium, and the producer of large quantities of lead, zinc, tin,
silver, and tungsten. The mining sector employs only about 3% of the
population while about half of the population depends on subsistence
agriculture for its livelihood. Namibia normally imports about 50%
of its cereal requirements; in drought years food shortages are a
major problem in rural areas. A high per capita GDP, relative to the
region, hides one of the world's most unequal income distributions.
The Namibian economy is closely linked to South Africa with the
Namibian dollar pegged one-to-one to the South African rand.
Increased payments from the Southern African Customs Union (SACU)
put Namibia's budget into surplus in 2007 for the first time since
independence, but SACU payments will decline after 2008 as part of a
new revenue sharing formula. Increased fish production and mining of
zinc, copper, uranium, and silver spurred growth in 2003-07, but
growth in recent years was undercut by poor fish catches and high
costs for metal inputs.
Nauru
Revenues of this tiny island have traditionally come from
exports of phosphates now significantly depleted. An Australian
company in 2005 entered into an agreement intended to exploit
remaining supplies. Few other resources exist with most necessities
being imported, mainly from Australia its former occupier and later
major source of support. The rehabilitation of mined land and the
replacement of income from phosphates are serious long-term
problems. Reserves of phosphates may only last until 2010 at current
mining rates. In anticipation of the exhaustion of Nauru's phosphate
deposits, substantial amounts of phosphate income were invested in
trust funds to help cushion the transition and provide for Nauru's
economic future. As a result of heavy spending from the trust funds,
the government faces virtual bankruptcy. To cut costs the government
has frozen wages and reduced overstaffed public service departments.
Nauru lost further revenue in 2008 with the closure of Australia's
refugee processing center, making it almost totally dependent on
food imports and foreign aid. Housing, hospitals, and other capital
plant is deteriorating. The cost to Australia of keeping the
government and economy afloat continues to climb. Few comprehensive
statistics on the Nauru economy exist with estimates of Nauru's GDP
varying widely.
Navassa Island
Subsistence fishing and commercial trawling occur
within refuge waters.
Nepal
Nepal is among the poorest and least developed countries in
the world with almost one-third of its population living below the
poverty line. Agriculture is the mainstay of the economy, providing
a livelihood for three-fourths of the population and accounting for
about one-third of GDP. Industrial activity mainly involves the
processing of agricultural products, including pulses, jute,
sugarcane, tobacco, and grain. Bumper crops, better security,
improved transportation, and increased tourism pushed growth past 5%
in 2008, after growth had hovered around 3% - barely above the rate
of population growth - for the previous three years. The
deteriorating world economy in 2009 will challenge tourism and
remittance growth, a key source of foreign exchange. Nepal has
considerable scope for exploiting its potential in hydropower and
tourism, areas of recent foreign investment interest. Prospects for
foreign trade or investment in other sectors will remain poor,
however, because of the small size of the economy, its technological
backwardness, its remoteness and landlocked geographic location, its
civil strife and labor unrest, and its susceptibility to natural
disaster.
Netherlands
The Netherlands has a prosperous and open economy, which
depends heavily on foreign trade. The economy is noted for stable
industrial relations, moderate unemployment and inflation, a sizable
current account surplus, and an important role as a European
transportation hub. Industrial activity is predominantly in food
processing, chemicals, petroleum refining, and electrical machinery.
A highly mechanized agricultural sector employs no more than 3% of
the labor force but provides large surpluses for the food-processing
industry and for exports. The Netherlands, along with 11 of its EU
partners, began circulating the euro currency on 1 January 2002. The
country has been one of the leading European nations for attracting
foreign direct investment and is one of the four largest investors
in the US. The pace of job growth reached 10-year highs in 2007, but
economic growth fell sharply in 2008 as fallout from the world
financial crisis constricted demand and raised the specter of a
recession in 2009.
Netherlands Antilles
Tourism, petroleum refining, and offshore
finance are the mainstays of this small economy, which is closely
tied to the outside world. Although GDP has declined or grown
slightly in each of the past eight years, the islands enjoy a high
per capita income and a well-developed infrastructure compared with
other countries in the region. Most of the oil Netherlands Antilles
imports for its refineries come from Venezuela. Almost all consumer
and capital goods are imported, the US, Italy, and Mexico being the
major suppliers. Poor soils and inadequate water supplies hamper the
development of agriculture. Budgetary problems hamper reform of the
health and pension systems of an aging population. The Netherlands
provides financial aid to support the economy.
New Caledonia
New Caledonia has about 25% of the world's known
nickel resources. Only a small amount of the land is suitable for
cultivation, and food accounts for about 20% of imports. In addition
to nickel, substantial financial support from France - equal to more
than 15% of GDP - and tourism are keys to the health of the economy.
Substantial new investment in the nickel industry, combined with the
recovery of global nickel prices, brightens the economic outlook for
the next several years.
New Zealand
Over the past 20 years the government has transformed
New Zealand from an agrarian economy dependent on concessionary
British market access to a more industrialized, free market economy
that can compete globally. This dynamic growth has boosted real
incomes - but left behind some at the bottom of the ladder - and
broadened and deepened the technological capabilities of the
industrial sector. Per capita income has risen for nine consecutive
years and reached $27,900 in 2008 in purchasing power parity terms.
Debt-driven consumer spending drove robust growth in the first half
of the decade, helping fuel a large balance of payments deficit that
posed a challenge for economic managers. Inflationary pressures
caused the central bank to raise its key rate steadily from January
2004 until it was among the highest in the OECD in 2007-08;
international capital inflows attracted to the high rates further
strengthened the currency and housing market, however, aggravating
the current account deficit. The economy fell into recession in
2008. In line with global peers, the central bank has cut interest
rates aggressively; the new government is responding with plans to
raise productivity growth and develop infrastructure.
Nicaragua
Nicaragua has widespread underemployment and the second
lowest per capita income in the Western Hemisphere. The US-Central
America Free Trade Agreement (CAFTA) has been in effect since April
2006 and has expanded export opportunities for many agricultural and
manufactured goods. Textiles and apparel account for nearly 60% of
Nicaragua's exports, but recent increases in the minimum wage will
likely erode its comparative advantage in this industry. Nicaragua
relies on international economic assistance to meet internal- and
external-debt financing obligations. In early 2004, Nicaragua
secured some $4.5 billion in foreign debt reduction under the
Heavily Indebted Poor Countries (HIPC) initiative, and in October
2007, the IMF approved a new poverty reduction and growth facility
(PRGF) program. However, severe budget shortfalls resulting from the
suspension of large amounts of direct budget support from foreign
donors concerned with recent political developments has caused a
slowdown in PRGF disbursements. Similarly, private sector concerns
surrounding ORTEGA's handling of economic issues have dampened
investment. Economic growth has slowed in 2009, due to decreased
export demand from the US and Central American markets, lower
commodity prices for key agricultural exports, and low remittance
growth - remittances are equivalent to almost 15% of GDP.