Slovakia
Slovakia has made significant economic reforms since its
separation from the Czech Republic in 1993. Reforms to the taxation,
healthcare, pension, and social welfare systems helped Slovakia to
consolidate its budget and get on track to join the EU in 2004 and
to adopt the euro in January 2009. Major privatizations are nearly
complete, the banking sector is almost entirely 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 and
electronic sectors has been strong. Slovakia's economic growth
exceeded expectations in 2001-08 despite the general European
slowdown. Unemployment, at an unacceptable 18% in 2003-04, dropped
to 8.4% in 2008 but remains the economy's Achilles heel. 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 and has focused on regulating energy and food
prices instead. The OECD expects Slovakia's GDP growth to be
positive in 2009.
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.
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 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 transfer/remittance services have sprouted throughout
the country, handling roughly $2 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 2008. Statistics on Somalia's GDP, growth,
per capita income, and inflation should be viewed skeptically.
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 was robust from
2004 to 2008 as South Africa reaped the benefits of macroeconomic
stability and a global commodities boom, but began to slow in the
second half of 2008 due to the global financial crisis' impact on
commodity prices and demand. 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 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 2006-07 landed 126,976 metric tons, of
which 82% (104,586 tons) was krill (Euphausia superba) and 9.5%
(12,027 tons) Patagonian toothfish (Dissostichus eleginoides - also
known as Chilean sea bass), compared to 127,910 tons in 2005-06 of
which 83% (106,591 tons) was krill and 9.7% (12,396 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 2007-08 Antarctic summer, 45,213
tourists visited the Southern Ocean, compared to 35,552 in
2006-2007, and 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 grew every year from 1994 through 2008
before entering a recession that started in the third quarter of
2008. Spain's mixed capitalist economy supports a GDP that on a per
capita basis is approaching that of the largest West European
economies. The Socialist president, Jose Luis Rodriguez ZAPATERO, in
office since 2004, has made mixed progress in carrying out key
structural reforms. The economy was greatly affected, especially
after Zapatero's second term began in April 2008, by the bursting of
the housing bubble and construction boom that had fueled much of the
economic growth between 2001 and 2007. The global financial crisis
exacerbated the economic downturn. GDP growth in 2008 was 1.2%, well
below the 3% or higher growth the country enjoyed from 1997 through
2007. The Spanish banking system is considered solid, thanks in part
to conservative oversight by the European Central Bank, and
government intervention to rescue banks on the scale seen elsewhere
in Europe in 2008 was not necessary. After considerable success
since the mid-1990s in reducing unemployment to a 2007 low of 8%,
Spain suffered a major spike in unemployment in the last few months
of 2008, finishing the year with an unemployment rate over 13%.
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 on development and fighting the LTTE
drove GDP growth to about 7% per year in 2006-07 before the global
recession slow growth in 2008, but high government spending and high
oil and commodity prices also raised inflation to around 15% in
2008. Sri Lanka's most dynamic sectors now are food processing,
textiles and apparel, food and beverages, port construction,
telecommunications, and insurance and banking. In 2008, plantation
crops made up only about 20% of exports (compared with more than 90%
in 1970), while textiles and garments accounted for more than 40%.
About 1.5 million Sri Lankans work abroad, 90% of them in the Middle
East. They send home more than $2.5 billion a year. The 25-year
civil conflict between LTTE and the government of Sri Lanka has been
a serious impediment to economic activities. By mid February 2009,
the LTTE remained in control of small and shrinking area in the
North. The conflict continues to cast a shadow over the economy.