Venezuela
Venezuela remains highly dependent on oil revenues, which
account for roughly 90% of export earnings, about 50% of the federal
budget revenues, and around 30% of GDP. A nationwide strike between
December 2002 and February 2003 had far-reaching economic
consequences - real GDP declined by around 9% in 2002 and 8% in 2003
- but economic output since then has recovered strongly. Fueled by
high oil prices, record government spending helped to boost GDP by
about 10% in 2006, 8% in 2007, and nearly 5% in 2008. This spending,
combined with recent minimum wage hikes and improved access to
domestic credit, has created a consumption boom but has come at the
cost of higher inflation - roughly 20% in 2007 and more than 30% in
2008. Imports also have jumped significantly. Declining oil prices
in the latter part of 2008 are expected to undermine the govenment's
ability to continue the high rate of spending. President Hugo CHAVEZ
in 2008 continued efforts to increase the government's contol of the
economy by nationalizing firms in the cement and steel sectors. In
2007, he nationalized firms in the petroleum, communications, and
electricity sectors. In July 2008, CHAVEZ implemented by decree a
number of laws that further consolidate and centralize authority
over the economy through his plan for "21st Century Socialism."
Vietnam
Vietnam is a densely-populated developing country that in
the last 30 years has had to recover from the ravages of war, the
loss of financial support from the old Soviet Bloc, and the
rigidities of a centrally-planned economy. Since 2001, Vietnamese
authorities have reaffirmed their commitment to economic
liberalization and international integration. They have moved to
implement the structural reforms needed to modernize the economy and
to produce more competitive export-driven industries. Vietnam's
membership in the ASEAN Free Trade Area (AFTA) and entry into force
of the US-Vietnam Bilateral Trade Agreement in December 2001 have
led to even more rapid changes in Vietnam's trade and economic
regime. Vietnam's exports to the US increased 900% from 2001 to
2007. Vietnam joined the WTO in January 2007 following over a decade
long negotiation process. WTO membership has provided Vietnam an
anchor to the global market and reinforced the domestic economic
reform process. Among other benefits, accession allows Vietnam to
take advantage of the phase-out of the Agreement on Textiles and
Clothing, which eliminated quotas on textiles and clothing for WTO
partners on 1 January 2005. Agriculture's share of economic output
has continued to shrink from about 25% in 2000 to less than 20% in
2008. Deep poverty has declined significantly and is now smaller
than that of China, India, and the Philippines. Vietnam is working
to create jobs to meet the challenge of a labor force that is
growing by more than one-and-a-half million people every year. The
global financial crisis, however, will constrain Vietnam's ability
to create jobs and further reduce poverty. As global growth sharply
drops in 2009, Vietnam's export-oriented economy - exports were 68%
of GDP in 2007 - will suffer from lower exports, higher unemployment
and corporate bankruptcies, and decreased foreign investment.
Virgin Islands
Tourism is the primary economic activity, accounting
for 80% of GDP and employment. The islands hosted 2.6 million
visitors in 2005. The manufacturing sector consists of petroleum
refining, rum distilling, textiles, electronics, pharmaceuticals,
and watch assembly. One of the world's largest petroleum refineries
is at Saint Croix. The agricultural sector is small, with most food
being imported. International business and financial services are
small but growing components of the economy. The islands are
vulnerable to substantial damage from storms. The government is
working to improve fiscal discipline, to support construction
projects in the private sector, to expand tourist facilities, to
reduce crime, and to protect the environment.
Wake Island
Economic activity is limited to providing services to
military personnel and contractors located on the island. All food
and manufactured goods must be imported.
Wallis and Futuna
The economy is limited to traditional subsistence
agriculture, with about 80% of labor force earnings from agriculture
(coconuts and vegetables), livestock (mostly pigs), and fishing.
About 4% of the population is employed in government. Revenues come
from French Government subsidies, licensing of fishing rights to
Japan and South Korea, import taxes, and remittances from expatriate
workers in New Caledonia.
West Bank
The West Bank - the larger of the two areas comprising the
Palestinian Authority (PA) - has experienced a general decline in
economic conditions since the second intifada began in September
2000. The downturn has been largely a result of Israeli closure
policies - the imposition of closures and access restrictions in
response to security concerns in Israel - which disrupted labor and
trading relationships. In 2001, and even more severely in 2002,
Israeli military measures in PA areas resulted in the destruction of
capital, the disruption of administrative structures, and widespread
business closures. International aid of at least $1.14 billion to
the West Bank and Gaza Strip in 2004 prevented the complete collapse
of the economy and allowed some reforms in the government's
financial operations. In 2005, high unemployment and limited trade
opportunities - due to continued closures both within the West Bank
and externally - stymied growth. Israel's and the international
community's financial embargo of the PA when HAMAS ran the PA during
March 2006 - June 2007 interrupted the provision of PA social
services and the payment of PA salaries. Since then the FAYYAD
government in the West Bank has restarted salary payments and the
provision of services but would be unable to operate absent high
levels of international assistance.
Western Sahara
Western Sahara depends on pastoral nomadism, fishing,
and phosphate mining as the principal sources of income for the
population. The territory lacks sufficient rainfall for sustainable
agricultural production, and most of the food for the urban
population must be imported. Incomes in Western Sahara are
substantially below the Moroccan level. The Moroccan Government
controls all trade and other economic activities in Western Sahara.
Morocco and the EU signed a four-year agreement in July 2006
allowing European vessels to fish off the coast of Morocco,
including the disputed waters off the coast of Western Sahara.
Moroccan energy interests in 2001 signed contracts to explore for
oil off the coast of Western Sahara, which has angered the
Polisario. However, in 2006 the Polisario awarded similar
exploration licenses in the disputed territory, which would come
into force if Morocco and the Polisario resolve their dispute over
Western Sahara.
World
Global output rose by 3.8% in 2008, down from 5.2% in 2007.
Among major economies, growth was led by China (9.8%), Russia
(7.4%), and India (7.3%). Worldwide, nations varied widely in their
growth results, with Macau (15%), Azerbaijan (13.2%), and Angola
(11.6%), registering the highest. Growth rates slowed in all the
major industrial countries and most developing countries, because of
uncertainties in the financial markets and lowered consumer
confidence. Externally, the nation-state, as a bedrock
economic-political institution, is steadily losing control over
international flows of people, goods, funds, and technology.
Internally, the central government often finds its control over
resources slipping as separatist regional movements - typically
based on ethnicity - gain momentum, e.g., in many of the successor
states of the former Soviet Union, in the former Yugoslavia, in
India, in Iraq, in Indonesia, and in Canada. Externally, the central
government is losing decisionmaking powers to international bodies,
notably the EU. In Western Europe, governments face the difficult
political problem of channeling resources away from welfare programs
in order to increase investment and strengthen incentives to seek
employment. The addition of 80 million people each year to an
already overcrowded globe is exacerbating the problems of pollution,
desertification, underemployment, epidemics, and famine. Because of
their own internal problems and priorities, the industrialized
countries devote insufficient resources to deal effectively with the
poorer areas of the world, which, at least from an economic point of
view, are becoming further marginalized. The introduction of the
euro as the common currency of much of Western Europe in January
1999, while paving the way for an integrated economic powerhouse,
poses economic risks because of varying levels of income and
cultural and political differences among the participating nations.
The terrorist attacks on the US on 11 September 2001 accentuated a
growing risk to global prosperity, illustrated, for example, by the
reallocation of resources away from investment to anti-terrorist
programs. The opening of war in March 2003 between a US-led
coalition and Iraq added new uncertainties to global economic
prospects. The complex political difficulties and the high economic
cost of establishing domestic order in Iraq became major global
problems that continued through 2008.
Yemen
Yemen, one of the poorest countries in the Arab world,
reported average annual growth in the range of 3-4% from 2000
through 2007. In 2008, growth declined slightly as the price of oil
dropped and the slowing global economy reduced demand for oil.
Yemen's economic fortunes depend mostly on declining oil resources,
but the country is trying to diversify its earnings. In 2006, Yemen
began an economic reform program designed to bolster non-oil sectors
of the economy and foreign investment. As a result of the program,
international donors pledged about $5 billion for development
projects. A liquefied natural gas facility is scheduled to open in
2009. Yemen has limited exposure to the international financial
system and no capital markets, however, the global financial crisis
probably will reduce international aid in 2009.
Zambia
Zambia's economy has experienced strong growth in recent
years, with real GDP growth in 2005-08 about 6% per year.
Privatization of government-owned copper mines in the 1990s relieved
the government from covering mammoth losses generated by the
industry and greatly improved the chances for copper mining to
return to profitability and spur economic growth. Copper output has
increased steadily since 2004, due to higher copper prices and
foreign investment. In 2005, Zambia qualified for debt relief under
the Highly Indebted Poor Country Initiative, consisting of
approximately USD 6 billion in debt relief. Zambia experienced a
bumper harvest in 2007, which helped to boost GDP and agricultural
exports and contain inflation. Although poverty continues to be
significant problem in Zambia, its economy has strengthened,
featuring single-digit inflation, a relatively stable currency,
decreasing interest rates, and increasing levels of trade. The
decline in world commodity prices and demand will hurt GDP growth in
2009, and elections and campaign promises are likely to weaken
Zambia's improved fiscal stance.