The 2010 CIA World Factbook

by United States. Central Intelligence Agency

This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends. Country

Economy - overview

Afghanistan
Afghanistan's economy is recovering from decades of
conflict. The economy has improved significantly since the fall of
the Taliban regime in 2001 largely because of the infusion of
international assistance, the recovery of the agricultural sector,
and service sector growth. Despite the progress of the past few
years, Afghanistan is extremely poor, landlocked, and highly
dependent on foreign aid, agriculture, and trade with neighboring
countries. Much of the population continues to suffer from shortages
of housing, clean water, electricity, medical care, and jobs.
Criminality, insecurity, weak governance, and the Afghan
Government's inability to extend rule of law to all parts of the
country pose challenges to future economic growth. Afghanistan's
living standards are among the lowest in the world. While the
international community remains committed to Afghanistan's
development, pledging over $67 billion at four donors' conferences
since 2002, the Government of Afghanistan will need to overcome a
number of challenges, including low revenue collection, anemic job
creation, high levels of corruption, weak government capacity, and
poor public infrastructure.

Akrotiri
Economic activity is limited to providing services to the
military and their families located in Akrotiri. All food and
manufactured goods must be imported.

Albania
Albania, a formerly closed, centrally-planned state, is
making the difficult transition to a more modern open-market
economy. Macroeconomic growth averaged around 6% between 2004-08,
but declined to about 3% in 2009-10. Inflation is low and stable.
The government has taken measures to curb violent crime, and
recently adopted a fiscal reform package aimed at reducing the large
gray economy and attracting foreign investment. The economy is
bolstered by annual remittances from abroad representing about 15%
of GDP, mostly from Albanians residing in Greece and Italy; this
helps offset the towering trade deficit. The agricultural sector,
which accounts for over half of employment but only about one-fifth
of GDP, is limited primarily to small family operations and
subsistence farming because of lack of modern equipment, unclear
property rights, and the prevalence of small, inefficient plots of
land. Energy shortages because of a reliance on hydropower, and
antiquated and inadequate infrastructure contribute to Albania's
poor business environment and lack of success in attracting new
foreign investment needed to expand the country's export base. The
completion of a new thermal power plant near Vlore has helped
diversify generation capacity, and plans to upgrade transmission
lines between Albania and Montenegro and Kosovo would help relieve
the energy shortages. Also, with help from EU funds, the government
is taking steps to improve the poor national road and rail network,
a long-standing barrier to sustained economic growth.

Algeria
Algeria's economy remains dominated by the state, a legacy
of the country's socialist post-independence development model.
Gradual liberalization since the mid-1990s has opened up more of the
economy, but in recent years Algeria has imposed new restrictions on
foreign involvement in its economy and largely halted the
privatization of state-owned industries. Hydrocarbons have long been
the backbone of the economy, accounting for roughly 60% of budget
revenues, 30% of GDP, and over 95% of export earnings. Algeria has
the eighth-largest reserves of natural gas in the world and is the
fourth-largest gas exporter. It ranks 16th in oil reserves. Thanks
to strong hydrocarbon revenues, Algeria has a cushion of $150
billion in foreign currency reserves and a large hydrocarbon
stabilization fund. In addition, Algeria's external debt is
extremely low at about 1% of GDP. Algeria has struggled to develop
industires outside of hydrocarbons in part because of high costs and
an inert state bureaucracy.The government's efforts to diversify the
economy by attracting foregin and domestic investment outside the
energy sector have done little to reduce high poverty and youth
unemployment rates. In 2010, Algeria began a five-year, $286 billion
development program to update the country's infrastructure and
provide jobs. The costly program will boost Algeria's economy in
2011 but worsen the country's budget deficit. Long-term economic
challenges include diversification from hydrocarbons, relaxing state
control of the economy, and providing adequate jobs for youger
Algerians.

American Samoa
American Samoa has a traditional Polynesian economy
in which more than 90% of the land is communally owned. Economic
activity is strongly linked to the US with which American Samoa
conducts most of its commerce. Tuna fishing and tuna processing
plants are the backbone of the private sector, with canned tuna the
primary export. The two tuna canneries account for 80% of
employment. In late September 2009, an earthquake and the resulting
tsunami devastated American Samoa and nearby Samoa, disrupting
transportation and power generation, and resulting in about 200
deaths. The US Federal Emergency Management Agency is overseeing a
relief program of nearly $25 million. Transfers from the US
Government add substantially to American Samoa's economic well
being. Attempts by the government to develop a larger and broader
economy are restrained by Samoa's remote location, its limited
transportation, and its devastating hurricanes. Tourism is a
promising developing sector.

Andorra
Tourism, the mainstay of Andorra's tiny, well-to-do economy,
accounts for more than 80% of GDP. An estimated 11 million tourists
visit annually, attracted by Andorra's duty-free status for some
products and by its summer and winter resorts. Andorra's comparative
advantage eroded when the borders of neighboring France and Spain
opened, providing broader availability of goods and lower tariffs.
The banking sector, with its partial "tax haven" status, also
contributes substantially to the economy. Agricultural production is
limited - only 2% of the land is arable - and most food has to be
imported. The principal livestock activity is sheep raising.
Manufacturing output consists mainly of cigarettes, cigars, and
furniture. Andorra is a member of the EU Customs Union and is
treated as an EU member for trade in manufactured goods (no tariffs)
and as a non-EU member for agricultural products.

Angola
Angola's high growth rate in recent years was driven by high
international prices for its oil. Angola became a member of OPEC in
late 2006 and in late 2007 was assigned a production quota of 1.9
million barrels a day (bbl/day), somewhat less than the 2-2.5
million bbl/day Angola's government had wanted. Oil production and
its supporting activities contribute about 85% of GDP. Diamond
exports contribute an additional 5%. Subsistence agriculture
provides the main livelihood for most of the people, but half of the
country's food is still imported. Increased oil production supported
growth averaging more than 15% per year from 2004 to 2008. A postwar
reconstruction boom and resettlement of displaced persons has led to
high rates of growth in construction and agriculture as well. Much
of the country's infrastructure is still damaged or undeveloped from
the 27-year-long civil war. Land mines left from the war still mar
the countryside, even though peace was established after the death
of rebel leader Jonas SAVIMBI in February 2002. Since 2005, the
government has used billions of dollars in credit lines from China,
Brazil, Portugal, Germany, Spain, and the EU to rebuild Angola's
public infrastructure. The global recession temporarily stalled
economic growth. Lower prices for oil and diamonds during the global
recession led to a contraction in GDP in 2009, and many construction
projects stopped because Luanda accrued $9 billion in arrears to
foreign construction companies when government revenue fell in 2008
and 2009. Angola abandoned its currency peg in 2009, and in November
2009 signed onto an IMF Stand-By Arrangement loan of $1.4 billion to
rebuild international reserves. Although consumer inflation declined
from 325% in 2000 to under 14% in 2010, Luanda has been unable to
reduce inflation below 10%. The Angolan kwanza depreciated again in
mid 2010, which, along with higher oil prices, should boost economic
growth in all sectors. Corruption, especially in the extractive
sectors, also is a major challenge.

Anguilla
Anguilla has few natural resources, and the economy depends
heavily on luxury tourism, offshore banking, lobster fishing, and
remittances from emigrants. Increased activity in the tourism
industry has spurred the growth of the construction sector
contributing to economic growth. Anguillan officials have put
substantial effort into developing the offshore financial sector,
which is small but growing. In the medium term, prospects for the
economy will depend largely on the tourism sector and, therefore, on
revived income growth in the industrialized nations as well as on
favorable weather conditions.