Azerbaijan
Azerbaijan's high economic growth during 2006-08 was
attributable to large and growing oil exports, but some non-export
sectors also featured double-digit growth, spurred by growth in the
construction, banking, and real estate sectors. In 2009, economic
growth remained above 9% even as oil prices moderated and growth in
the construction sector cooled. In 2010, economic growth slowed to
approximately 3.7%, although the impact of the global financial
crisis was less severe than in many other countries in the region.
The current global economic slowdown presents some challenges for
the Azerbaijani economy as oil prices remain below their mid-2008
highs, highlighting Azerbaijan's reliance on energy exports and
lackluster attempts to diversify its economy. Azerbaijan's oil
production increased dramatically in 1997, when Azerbaijan signed
the first production-sharing arrangement (PSA) with the Azerbaijan
International Operating Company. Oil exports through the
Baku-Tbilisi-Ceyhan Pipeline remain the main economic driver while
efforts to boost Azerbaijan's gas production are underway. However,
Azerbaijan has made only limited progress on instituting
market-based economic reforms. Pervasive public and private sector
corruption and structural economic inefficiencies remain a drag on
long-term growth, particularly in non-energy sectors. Several other
obstacles impede Azerbaijan's economic progress: the need for
stepped up foreign investment in the non-energy sector and the
continuing conflict with Armenia over the Nagorno-Karabakh region.
Trade with Russia and the other former Soviet republics is declining
in importance, while trade is building with Turkey and the nations
of Europe. Long-term prospects will depend on world oil prices, the
location of new oil and gas pipelines in the region, and
Azerbaijan's ability to manage its energy wealth to promote
sustainable growth in non-energy sectors of the economy and spur
employment.
Bahamas, The
The Bahamas is one of the wealthiest Caribbean
countries with an economy heavily dependent on tourism and offshore
banking. Tourism together with tourism-driven construction and
manufacturing accounts for approximately 60% of GDP and directly or
indirectly employs half of the archipelago's labor force. Prior to
2006, a steady growth in tourism receipts and a boom in construction
of new hotels, resorts, and residences led to solid GDP growth but
since then tourism receipts have begun to drop off. The global
recession in 2009 took a sizeable toll on the Bahamas, resulting in
a contraction in GDP and a widening budget deficit. The decline
continued in 2010 as tourism from the US and sector investment
lagged. Financial services constitute the second-most important
sector of the Bahamian economy and, when combined with business
services, account for about 36% of GDP. However, the financial
sector currently is smaller than it has been in the past because of
the enactment of new and more strict financial regulations in 2000
that caused many international businesses to relocate elsewhere.
Manufacturing and agriculture combined contribute approximately a
tenth of GDP and show little growth, despite government incentives
aimed at those sectors. Overall growth prospects in the short run
rest heavily on the fortunes of the tourism sector.
Bahrain
Bahrain is one of the most diversified economies in the
Persian Gulf. Highly developed communication and transport
facilities make Bahrain home to numerous multinational firms with
business in the Gulf. As part of its diversification plans, Bahrain
implemented a Free Trade Agreement (FTA) with the US in August 2006,
the first FTA between the US and a Gulf state. Bahrain's economy,
however, continues to depend heavily on oil. Petroleum production
and refining account for more than 60% of Bahrain's export receipts,
70% of government revenues, and 11% of GDP (exclusive of allied
industries). Other major economic activities are production of
aluminum - Bahrain's second biggest export after oil - finance, and
construction. Bahrain competes with Malaysia as a worldwide center
for Islamic banking and continues to seek new natural gas supplies
as feedstock to support its expanding petrochemical and aluminum
industries. Unemployment, especially among the young, is a long-term
economic problem Bahrain struggles to address. In 2009, to help
lower unemployment among Bahraini nationals, Bahrain reduced
sponsorship for expatriate workers, increasing the costs of
employing foreign labor. The global financial crisis caused funding
for many non-oil projects to dry up and resulted in slower economic
growth for Bahrain. Other challenges facing Bahrain include the slow
growth of government debt as a result of a large subsidy program,
the financing of large government projects, and debt restructuring,
such as the bailout of state-owned Gulf Air.
Bangladesh
The economy has grown 5-6% per year since 1996 despite
political instability, poor infrastructure, corruption, insufficient
power supplies, and slow implementation of economic reforms.
Bangladesh remains a poor, overpopulated, and inefficiently-governed
nation. Although more than half of GDP is generated through the
service sector, 45% of Bangladeshis are employed in the agriculture
sector, with rice as the single-most-important product. Bangladesh's
growth was resilient during the 2008-09 global financial crisis and
recession. Garment exports, totaling $12.3 billion in FY09 and
remittances from overseas Bangladeshis totaling $9.7 billion in FY09
accounted for almost 25% of GDP.
Barbados
Historically, the Barbadian economy was dependent on
sugarcane cultivation and related activities. However, in recent
years the economy has diversified into light industry and tourism
with about three-quarters of GDP and 80% of exports being attributed
to services. Growth has rebounded since 2003, bolstered by increases
in construction projects and tourism revenues, reflecting its
success in the higher-end segment, but the sector faced declining
revenues in 2009 with the global economic downturn. The country
enjoys one of the highest per capita incomes in the region. Offshore
finance and information services are important foreign exchange
earners and thrive from having the same time zone as eastern US
financial centers and a relatively highly educated workforce. The
government continues its efforts to reduce unemployment, to
encourage direct foreign investment, and to privatize remaining
state-owned enterprises. The public debt-to-GDP ratio rose to over
100% in 2009, largely because a sharp slowdown in tourism and
financial services led to a wide budget deficit.
Belarus
Belarus has seen limited structural reform since 1995, when
President LUKASHENKO launched the country on the path of "market
socialism." In keeping with this policy, LUKASHENKO reimposed
administrative controls over prices and currency exchange rates and
expanded the state's right to intervene in the management of private
enterprises. Since 2005, the government has re-nationalized a number
of private companies. In addition, businesses have been subjected to
pressure by central and local governments, including arbitrary
changes in regulations, numerous rigorous inspections, retroactive
application of new business regulations, and arrests of "disruptive"
businessmen and factory owners. Continued state control over
economic operations hampers market entry for businesses, both
domestic and foreign. Government statistics indicate GDP growth was
strong, surpassing 10% in 2008, despite the roadblocks of a tough,
centrally directed economy with a high rate of inflation and a low
rate of unemployment. However, the global crisis pushed the country
into recession in 2009, and GDP grew only 0.2% for the year.
Slumping foreign demand hit the industrial sector hard. Minsk has
depended on a standby-agreement with the IMF to assist with balance
of payments shortfalls. In line with IMF conditions, in 2009,
Belarus devalued the ruble more than 40% and tightened some fiscal
and monetary policies. On 1 January 2010, Russia, Kazakhstan and
Belarus launched a customs union, with unified trade regulations and
customs codes still under negotiation. In late January, Russia and
Belarus amended their 2007 oil supply agreement. The new terms
raised prices for above quota purchases, increasing Belarus' current
account deficit. GDP grew 4.8% in 2010, in part, on the strength of
renewed export growth. In December 2010, Belarus, Russia and
Kazakhstan signed an agreement to form a Common Economic Space and
Russia removed all Belarusian oil duties.
Belgium
This modern, private-enterprise economy has capitalized on
its central geographic location, highly developed transport network,
and diversified industrial and commercial base. Industry is
concentrated mainly in the populous Flemish area in the north. With
few natural resources, Belgium imports substantial quantities of raw
materials and exports a large volume of manufactures, making its
economy vulnerable to volatility in world markets. Roughly
three-quarters of Belgium's trade is with other EU countries. In
2009 Belgian GDP contracted by 2.7%, the unemployment rate rose
slightly, and the budget deficit worsened because of large-scale
bail-outs in the financial sector. Belgium's budget deficit widened
to 4.8% of GDP in 2010, while public debt was just over 100% of GDP.
Belgian banks have been severely affected by the international
financial crisis with three major banks receiving capital injections
from the government. An ageing population and rising social
expenditures are also increasing pressure on public finances, making
it likely the government will need to implement unpopular austerity
measures to assuage investor concerns about Belgium's ability to
restore fiscal balance.
Belize
In this small, essentially private-enterprise economy,
tourism is the number one foreign exchange earner followed by
exports of marine products, citrus, cane sugar, bananas, and
garments. The government's expansionary monetary and fiscal
policies, initiated in September 1998, led to sturdy GDP growth
averaging nearly 4% in 1999-2007, though growth slipped to 3.8% in
2008, 0% in 2009, and 1.5% in 2010 as a result of the global
slowdown, natural disasters, and the drop in the price of oil. Oil
discoveries in 2006 bolstered economic growth. Exploration efforts
continue and production increased a small amount in 2009. Major
concerns continue to be the sizable trade deficit and heavy foreign
debt burden. In February 2007, the government restructured nearly
all of its public external commercial debt, which helped reduce
interest payments and relieved some of the country's liquidity
concerns. A key objective remains the reduction of poverty and
inequality with the help of international donors.
Benin
The economy of Benin remains underdeveloped and dependent on
subsistence agriculture, cotton production, and regional trade.
Growth in real output had averaged about 4% before the global
recession, but fell to 2.5% in 2009 and 3% in 2010. Inflation has
subsided over the past several years. In order to raise growth,
Benin plans to attract more foreign investment, place more emphasis
on tourism, facilitate the development of new food processing
systems and agricultural products, and encourage new information and
communication technology. Specific projects to improve the business
climate by reforms to the land tenure system, the commercial justice
system, and the financial sector were included in Benin's $307
million Millennium Challenge Account grant signed in February 2006.
The 2001 privatization policy continues in telecommunications,
water, electricity, and agriculture. As result of these reforms,
Benin has become the most competitive country in the West African
Economic and Monetary Union, according to the World Economic Forum.
The Paris Club and bilateral creditors have eased the external debt
situation, with Benin benefiting from a G-8 debt reduction announced
in July 2005, while pressing for more rapid structural reforms. An
insufficient electrical supply continues to adversely affect Benin's
economic growth though the government recently has taken steps to
increase domestic power production.
Bermuda
Bermuda enjoys the third highest per capita income in the
world, more than 50% higher than that of the US; the average cost of
a house by the mid-2000s exceeded $1,000,000. Its economy is
primarily based on providing financial services for international
business and luxury facilities for tourists. A number of reinsurance
companies relocated to the island following the 11 September 2001
attacks and again after Hurricane Katrina in August 2005
contributing to the expansion of an already robust international
business sector. Bermuda's tourism industry - which derives over 80%
of its visitors from the US - continues to struggle but remains the
island's number two industry. Most capital equipment and food must
be imported. Bermuda's industrial sector is largely focused on
construction and agriculture is limited, with only 20% of the land
being arable.