The 2010 CIA World Factbook

by United States. Central Intelligence Agency

Chile Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports account for more than one-fourth of GDP, with commodities making up some three-quarters of total exports. Copper alone provides one-third of government revenue. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the situation in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. In the years since then, growth has averaged 4% per year. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004. Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, Mercosur, China, India, South Korea, and Mexico. Over the past seven years, foreign direct investment inflows have quadrupled to some $15 billion in 2010, but FDI had dropped to about $7 billion in 2009 in the face of diminished investment throughout the world. The Chilean government conducts a rule-based countercyclical fiscal policy, accumulating surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and allowing deficit spending only during periods of low copper prices and growth. As of September 2008, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $20 billion. Chile used $4 billion from this fund to finance a fiscal stimulus package to fend off recession. In December 2009, the OECD invited Chile to become a full member, after a two year period of compliance with organization mandates. The economy started to show signs of a rebound in the fourth quarter, 2009, and GDP grew more than 5% in 2010. The magnitude 8.8 earthquake that struck Chile in February 2010 was one of the top ten strongest earthquakes on record. It caused considerable damage near the epicenter, located about 70 miles from Concepcion - and about 200 miles southwest of Santiago.

China China's economy since the late 1970s has changed from a closed, centrally planned system to a more market-oriented one that plays a major role in the global economy - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China generally has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceeded those of the US, although China was second to the US in the value of services it produced. Still, per capita income is below the world average. The Chinese government faces numerous economic development challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and approximately 200 million rural laborers and their dependents have relocated to urban areas to find work. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years, but China rebounded quickly, outperforming all other major economies in 2010 with GDP growth around 10%. The economy appears set to remain on a strong growth trajectory in 2011, lending credibility to the stimulus policies the regime rolled out during the global financial crisis. The government vows to continue reforming the economy and emphasizes the need to increase domestic consumption in order to make the economy less dependent on exports for GDP growth in the future, but China likely will make only marginal progress toward these rebalancing goals in 2011. Two economic problems China currently faces are inflation - which, late in 2010, surpassed the government's target of 3% - and local government debt, which swelled as a result of stimulus policies, and is largely off-the-books and potentially low-quality.

Christmas Island
Phosphate mining had been the only significant
economic activity, but in December 1987 the Australian government
closed the mine. In 1991, the mine was reopened. With the support of
the government, a $34 million casino opened in 1993, but closed in
1998.

Clipperton Island
Although 115 species of fish have been identified
in the territorial waters of Clipperton Island, the only economic
activity is tuna fishing.

Cocos (Keeling) Islands
Coconuts, grown throughout the islands, are
the sole cash crop. Small local gardens and fishing contribute to
the food supply, but additional food and most other necessities must
be imported from Australia. There is a small tourist industry.

Colombia
Colombia experienced accelerating growth between 2002 and
2007, chiefly due to improvements in domestic security, rising
commodity prices, and to President URIBE's promarket economic
policies. Foreign direct investment reached a record $10 billion in
2008, and continues to flow in, especially in the oil sector. A
series of policies enhanced Colombia's investment climate:
pro-business reforms in the oil and gas sectors and export-led
growth fueled mainly by the Andean Trade Promotion and Drug
Eradication Act. Inequality, underemployment, and narcotrafficking
remain significant challenges, and Colombia's infrastructure
requires major improvements to sustain economic expansion. Because
of the global financial crisis and weakening demand for Colombia's
exports, Colombia's economy grew only 2.7% in 2008, and 0.8% in 2009
but rebounded to around 4.5% in 2010. The government has encouraged
exporters to diversify their customer base beyond the United States
and Venezuela, traditionally Colombia's largest trading partners;
the SANTOS administration continues to pursue free trade agreements
with Asian and South American partners and awaits the approval of a
Canadian trade accord by Canada's and EU's parliaments. The business
sector remains concerned about Venezuela's trade restrictions on
Colombian exports, an appreciating domestic currency, and the
pending US Congressional approval of the US-Colombia Trade Promotion
Agreement.

Comoros
One of the world's poorest countries, Comoros is made up of
three islands that have inadequate transportation links, a young and
rapidly increasing population, and few natural resources. The low
educational level of the labor force contributes to a subsistence
level of economic activity, high unemployment, and a heavy
dependence on foreign grants and technical assistance. Agriculture,
including fishing, hunting, and forestry, contributes 40% to GDP,
employs 80% of the labor force, and provides most of the exports.
Export income is heavily reliant on the three main crops of vanilla,
cloves, and ylang-ylang and Comoros' export earnings are easily
disrupted by disasters such as fires. The country is not
self-sufficient in food production; rice, the main staple, accounts
for the bulk of imports. The government - which is hampered by
internal political disputes - lacks a comprehensive strategy to
attract foreign investment and is struggling to upgrade education
and technical training, privatize commercial and industrial
enterprises, improve health services, diversify exports, promote
tourism, and reduce the high population growth rate. Political
problems have inhibited growth, which has averaged only about 1% in
2006-09. Remittances from 150,000 Comorans abroad help supplement
GDP. In September 2009 the IMF approved Comoros for a three-year $21
million loan. The IMF gave generally positive reports of the
country's program performance as of October 2010. The African
Development Bank approved a $34.6 million debt-relief package loan
for Comoros in September 2010, and Comoros will attempt to qualifry
for debt relief in 2012 under the IMF and World Bank's Heavily
Indebted Poor Countries (HIPC) initiative.

Congo, Democratic Republic of the
The economy of the Democratic
Republic of the Congo - a nation endowed with vast potential wealth
- is slowly recovering from decades of decline. Systemic corruption
since independence in 1960 and conflict that began in May 1997 has
dramatically reduced national output and government revenue,
increased external debt, and resulted in the deaths of more than 5
million people from violence, famine, and disease. Foreign
businesses curtailed operations due to uncertainty about the outcome
of the conflict, lack of infrastructure, and the difficult operating
environment. Conditions began to improve in late 2002 with the
withdrawal of a large portion of the invading foreign troops. The
transitional government reopened relations with international
financial institutions and international donors, and President
KABILA began implementing reforms. Progress has been slow and the
International Monetary Fund curtailed their program for the DRC at
the end of March 2006 because of fiscal overruns. Much economic
activity still occurs in the informal sector, and is not reflected
in GDP data. Renewed activity in the mining sector, the source of
most export income, boosted Kinshasa's fiscal position and GDP
growth from 2006-2008, however, the government's review of mining
contracts that began in 2006, combined with a fall in world market
prices for the DRC's key mineral exports temporarily weakened output
in 2009, leading to a balance of payments crisis. The recovery in
mineral prices beginning in mid 2009 boosted mineral exports, and
emergency funds from the IMF boosted foreign reserves. An uncertain
legal framework, corruption, a lack of transparency in government
policy are long-term problems for the mining sector and the economy
as a whole. The global recession cut economic growth in 2009 to less
than half its 2008 level, but growth returned to 3% in 2010. The DRC
signed a Poverty Reduction and Growth Facility with the IMF in 2009
and received $12 billion in multilateral and bilateral debt relief
in 2010.

Congo, Republic of the
The economy is a mixture of subsistence
agriculture, an industrial sector based largely on oil and support
services, and government spending. Oil has supplanted forestry as
the mainstay of the economy, providing a major share of government
revenues and exports. In the early 1980s, rapidly rising oil
revenues enabled the government to finance large-scale development
projects with GDP growth averaging 5% annually, one of the highest
rates in Africa. Characterized by budget problems and overstaffing,
the government has mortgaged a substantial portion of its oil
earnings through oil-backed loans that have contributed to a growing
debt burden and chronic revenue shortfalls. Economic reform efforts
have been undertaken with the support of international
organizations, notably the World Bank and the IMF. However, the
reform program came to a halt in June 1997 when civil war erupted.
Denis SASSOU-NGUESSO, who returned to power when the war ended in
October 1997, publicly expressed interest in moving forward on
economic reforms and privatization and in renewing cooperation with
international financial institutions. Economic progress was badly
hurt by slumping oil prices and the resumption of armed conflict in
December 1998, which worsened the republic's budget deficit. The
current administration presides over an uneasy internal peace and
faces difficult economic challenges of stimulating recovery and
reducing poverty. The drop in oil prices during the global crisis
reduced oil revenue by about 30%, but the subsequent recovery of oil
prices has boosted the economy's GDP and near-term prospects. In
March 2006, the World Bank and the International Monetary Fund (IMF)
approved Heavily Indebted Poor Countries (HIPC) treatment for Congo,
receiving $1.9 billion in debt relief under the program in 2010.

Cook Islands
Like many other South Pacific island nations, the Cook
Islands' economic development is hindered by the isolation of the
country from foreign markets, the limited size of domestic markets,
lack of natural resources, periodic devastation from natural
disasters, and inadequate infrastructure. Agriculture, employing
more than one-quarter of the working population, provides the
economic base with major exports made up of copra and citrus fruit.
Black pearls are the Cook Islands' leading export. Manufacturing
activities are limited to fruit processing, clothing, and
handicrafts. Trade deficits are offset by remittances from emigrants
and by foreign aid overwhelmingly from New Zealand. In the 1980s and
1990s, the country lived beyond its means, maintaining a bloated
public service and accumulating a large foreign debt. Subsequent
reforms, including the sale of state assets, the strengthening of
economic management, the encouragement of tourism, and a debt
restructuring agreement, have rekindled investment and growth.