The 2010 CIA World Factbook

by United States. Central Intelligence Agency

European Union
Internally, the EU has abolished trade barriers,
adopted a common currency, and is striving toward convergence of
living standards. Internationally, the EU aims to bolster Europe's
trade position and its political and economic power. Because of the
great differences in per capita income among member states (from
$7,000 to $78,000) and in national attitudes toward issues like
inflation, debt, and foreign trade, the EU faces difficulties in
devising and enforcing common policies. In the wake of the global
economic crisis, the European Commission projected that the EU's
economy would shrink by 4% in 2009 and 0.1% in 2010. The EU has
recovered from the crisis faster than expected, however, and the
Commission estimates 2010 growth at 1.8%. Significant risks to
growth nevertheless remain, including, high official debts and
deficits, aging populations, over-regulation of non-financial
businesses, and doubts about the sustainability of European Economic
and Monetary Union (EMU). In June 2010, prompted by the Greek
financial crisis, the EU and the IMF set up a $1 trillion bailout
fund to rescue any EMU member in danger of default, but it has not
calmed market jitters that have diminished the value of the euro.
Eleven established EU member states introduced the euro as their
common currency on 1 January 1999 (Greece did so two years later),
but the UK and Denmark have 'opt-outs' that allow them to keep their
national currencies, and Sweden has not taken the steps needed to
participate. Between 2004 and 2007, the EU admitted 12 countries
that are, in general, less advanced economically than the other 15.
Of the 12 most recent member states, only Slovenia (1 January 2007),
Cyprus and Malta (1 January 2008), Slovakia (1 January 2009), and
Estonia (1 January 2011) have adopted the euro; the remaining states
other than the UK and Denmark are legally required to adopt the
currency upon meeting EU's fiscal and monetary convergence criteria.

Falkland Islands (Islas Malvinas) The economy was formerly based on agriculture, mainly sheep farming, but today fishing contributes the bulk of economic activity. In 1987, the government began selling fishing licenses to foreign trawlers operating within the Falkland Islands' exclusive fishing zone. These license fees total more than $40 million per year, which help support the island's health, education, and welfare system. Squid accounts for 75% of the fish taken. Dairy farming supports domestic consumption; crops furnish winter fodder. Foreign exchange earnings come from shipments of high-grade wool to the UK and the sale of postage stamps and coins. The islands are now self-financing except for defense. The British Geological Survey announced a 200-mile oil exploration zone around the islands in 1993, and early seismic surveys suggest substantial reserves capable of producing 500,000 barrels per day; to date, no exploitable site has been identified. An agreement between Argentina and the UK in 1995 seeks to defuse licensing and sovereignty conflicts that would dampen foreign interest in exploiting potential oil reserves. Political tensions between the UK and Argentina rose in early 2010 after a UK company began oil drilling activities in the waters around the Falkland Islands but abated somewhat when the drilling operation failed to discover commercially exploitable oil reserves. Tourism, especially eco-tourism, is increasing rapidly, with about 30,000 visitors in 2001. Another large source of income is interest paid on money the government has in the bank. The British military presence also provides a sizeable economic boost.

Faroe Islands
The Faroese economy is dependent on fishing, which
makes the economy vulnerable to price swings. The sector accounts
for about 95% of exports and nearly half of GDP. In early 2008 the
Faroese economy began to slow as a result of smaller catches and
historically high oil prices that continue to trouble the economy.
Though oil prices have come down, reduced catches, especially of cod
and haddock, have continued to strain the Faroese economy. GDP grew
0.5% in 2008-09. The slowdown in the Faroese economy followed a
strong performance since the mid-1990s with annual growth rates
averaging close to 6%, mostly a result of increased fish landings
and salmon farming, and high export prices. Unemployment reached its
lowest level in the first half of 2008, but increased to 3.9% in
2009 and is rising. The Faroese Home Rule Government produced
increasing budget surpluses that helped to reduce the large public
debt, most of it to Denmark. However, total dependence on fishing
and salmon farming make the Faroese economy very vulnerable to
fluctuations in world demand. In addition, budget surpluses turned
to deficits in 2008-09, and the economy at both the country and
local level is running large deficits. Initial discoveries of oil in
the Faroese area give hope for eventual oil production, which may
provide a foundation for a more diversified economy and less
dependence on Danish economic assistance. Aided by an annual subsidy
from Denmark amounting to about 6% of Faroese GDP, the Faroese have
a standard of living almost equal to that of Denmark and Greenland.

Fiji
Fiji, endowed with forest, mineral, and fish resources, is one
of the most developed of the Pacific island economies though still
with a large subsistence sector. Sugar exports, remittances from
Fijians working abroad, and a growing tourist industry - with
400,000 to 500,000 tourists annually - are the major sources of
foreign exchange. Fiji's sugar has special access to European Union
markets but will be harmed by the EU's decision to cut sugar
subsidies. Sugar processing makes up one-third of industrial
activity but is not efficient. Fiji's tourism industry was damaged
by the December 2006 coup and is facing an uncertain recovery time.
In 2007 tourist arrivals were down almost 6%, with substantial job
losses in the service sector, and GDP dipped. The coup has created a
difficult business climate. The EU has suspended all aid until the
interim government takes steps toward new elections. Long-term
problems include low investment, uncertain land ownership rights,
and the government's inability to manage its budget. Overseas
remittances from Fijians working in Kuwait and Iraq have decreased
significantly. Fiji's current account deficit reached 23% of GDP in
2006.

Finland
Finland has a highly industrialized, largely free-market
economy with per capita output roughly that of Austria, Belgium, the
Netherlands, and Sweden. Trade is important with exports accounting
for over one third of GDP in recent years. Finland is strongly
competitive in manufacturing - principally the wood, metals,
engineering, telecommunications, and electronics industries. Finland
excels in high-tech exports such as mobile phones. Except for timber
and several minerals, Finland depends on imports of raw materials,
energy, and some components for manufactured goods. Because of the
climate, agricultural development is limited to maintaining
self-sufficiency in basic products. Forestry, an important export
earner, provides a secondary occupation for the rural population.
Finland had been one of the best performing economies within the EU
in recent years and its banks and financial markets avoided the
worst of global financial crisis. However, the world slowdown hit
exports and domestic demand hard in 2009, with Finland experiencing
one of the deepest contractions in the euro zone. A recovery of
exports stimulated economic growth in 2010, and led to a lowering of
unemployment. The recession left a deep mark on general government
finances and the debt ratio, turning previously strong budget
surpluses into deficits. In the next few years, the great challenge
of economic policy will be to implement a post-recession exit
strategy in which measures supporting growth will be combined with
general government adjustment measures. Longer-term, Finland must
address a rapidly aging population and decreasing productivity that
threaten competitiveness, fiscal sustainability, and economic growth.

France
France is in the midst of transition from a well-to-do modern
economy that has featured extensive government ownership and
intervention to one that relies more on market mechanisms. The
government has partially or fully privatized many large companies,
banks, and insurers, and has ceded stakes in such leading firms as
Air France, France Telecom, Renault, and Thales. It maintains a
strong presence in some sectors, particularly power, public
transport, and defense industries. With at least 75 million foreign
tourists per year, France is the most visited country in the world
and maintains the third largest income in the world from tourism.
France's leaders remain committed to a capitalism in which they
maintain social equity by means of laws, tax policies, and social
spending that reduce income disparity and the impact of free markets
on public health and welfare. France has weathered the global
economic crisis better than most other big EU economies because of
the relative resilience of domestic consumer spending, a large
public sector, and less exposure to the downturn in global demand
than in some other countries. Nonetheless, France's real GDP
contracted 2.5% in 2009, but recovered somewhat in 2010, while the
unemployment rate increased from 7.4% in 2008 to 9.5% in 2010. The
government pursuit of aggressive stimulus and investment measures in
response to the economic crisis, however, are contributing to a
deterioration of France's public finances. The government budget
deficit rose sharply from 3.4% of GDP in 2008 to 7.8% of GDP in
2010, while France's public debt rose from 68% of GDP to 84% over
the same period. Paris is terminating stimulus measures, eliminating
tax credits, and freezing most government spending to bring the
budget deficit under the 3% euro-zone ceiling by 2013, and to
highlight France's commitment to fiscal discipline at a time of
intense financial market scrutiny of euro zone debt levels.
President SARKOZY - who secured passage of pension reform in 2010 -
is expected to seek passage of some tax reforms in 2011, but he may
delay additional, more costly, reforms until after the 2012 election.

French Polynesia
Since 1962, when France stationed military
personnel in the region, French Polynesia has changed from a
subsistence agricultural economy to one in which a high proportion
of the work force is either employed by the military or supports the
tourist industry. With the halt of French nuclear testing in 1996,
the military contribution to the economy fell sharply. Tourism
accounts for about one-fourth of GDP and is a primary source of hard
currency earnings. Other sources of income are pearl farming and
deep-sea commercial fishing. The small manufacturing sector
primarily processes agricultural products. The territory benefits
substantially from development agreements with France aimed
principally at creating new businesses and strengthening social
services.

French Southern and Antarctic Lands
Economic activity is limited to
servicing meteorological and geophysical research stations, military
bases, and French and other fishing fleets. The fish catches landed
on Iles Kerguelen by foreign ships are exported to France and
Reunion.

Gabon
Gabon enjoys a per capita income four times that of most
sub-Saharan African nations, but because of high income inequality,
a large proportion of the population remains poor. Gabon depended on
timber and manganese until oil was discovered offshore in the early
1970s. The oil sector now accounts for more than 50% of GDP although
the industry is in decline as fields pass their peak production.
Gabon continues to face fluctuating prices for its oil, timber, and
manganese exports and the global recession led to a GDP contraction
of 1.4% in 2009. Despite the abundance of natural wealth, poor
fiscal management hobbles the economy. In 1997, an IMF mission to
Gabon criticized the government for overspending on off-budget
items, overborrowing from the central bank, and slipping on its
schedule for privatization and administrative reform. The rebound of
oil prices from 1999 to 2008 helped growth, but drops in production
have hampered Gabon from fully realizing potential gains. Gabon
signed a 14-month Stand-By Arrangement with the IMF in May 2007, and
later that year issued a $1 billion sovereign bond to buy back a
sizable portion of its Paris Club debt.

Gambia, The
The Gambia has sparse natural resource deposits and a
limited agricultural base, and relies in part on remittances from
workers overseas and tourist receipts. About three-quarters of the
population depends on the agricultural sector for its livelihood.
Small-scale manufacturing activity features the processing of
peanuts, fish, and hides. The Gambia's natural beauty and proximity
to Europe has made it one of the larger markets for tourism in West
Africa, boosted by government and private sector investments in
eco-tourism and upscale facilities. In the past few years, The
Gambia's re-export trade - traditionally a major segment of economic
activity - has declined, but its banking sector has grown rapidly.
Unemployment and underemployment rates remain high; economic
progress depends on sustained bilateral and multilateral aid, on
responsible government economic management, and on continued
technical assistance from multilateral and bilateral donors. The
quality of fiscal management, however, is weak. The government has
promised to raise civil service wages over the next two years and
the deficit is projected to worsen.